Finance – Page 782 – NewzIntel.com

MIL-OSI: iRhythm Technologies to Report Fourth Quarter and Full Year 2024 Financial Results on February 20, 2025

Source: GlobeNewswire (MIL-OSI)

SAN FRANCISCO, Feb. 06, 2025 (GLOBE NEWSWIRE) — iRhythm Technologies, Inc. (NASDAQ:IRTC), a leading digital health care company focused on creating trusted solutions that detect, prevent, and predict disease, today announced that it will release financial results for the fourth quarter and full year 2024 after the close of trading on Thursday, February 20, 2025. The company’s management team will host a corresponding conference call beginning at 1:30 p.m. PT / 4:30 p.m. ET.

Interested parties may access a live and archived webcast of the conference call on the “Quarterly Results” section of the company’s investor website at investors.irhythmtech.com.

About iRhythm Technologies, Inc.
iRhythm is a leading digital health care company that creates trusted solutions that detect, predict, and prevent disease. Combining wearable biosensors and cloud-based data analytics with powerful proprietary algorithms, iRhythm distills data from millions of heartbeats into clinically actionable information. Through a relentless focus on patient care, iRhythm’s vision is to deliver better data, better insights, and better health for all.

Investor Contact
Stephanie Zhadkevich
investors@irhythmtech.com

Media Contact
Kassandra Perry
irhythm@highwirepr.com

The MIL Network –

February 7, 2025

MIL-OSI: Lantronix Reports Results for Second Quarter of Fiscal 2025

Source: GlobeNewswire (MIL-OSI)

Second Quarter Net Revenue of $31.2 Million
Second Quarter GAAP EPS of ($0.06)
Second Quarter Non-GAAP EPS of $0.04

IRVINE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — Lantronix Inc. (NASDAQ: LTRX), a global leader of compute and connectivity for the Internet of Things (IoT) solutions enabling Artificial Intelligence (AI) Edge Intelligence, today reported results for its second quarter of fiscal 2025.

Net revenue totaled $31.2 million, near the midpoint of the guidance range provided for the quarter.

GAAP EPS of ($0.06), compared to ($0.07) in the prior year and $(0.07) in the prior quarter.

Non-GAAP EPS of $0.04, compared to $0.08 in the prior year and $0.06 in the prior quarter.

“Lantronix has the key assets in Compute and Connect to drive Edge Intelligence, and the company remains focused on three key vertical markets: Enterprise; Smart Cities including critical infrastructure; and Transportation,” said Lantronix President and CEO Saleel Awsare. “We are actively advancing Edge AI solutions, integrating the recently acquired IoT assets from Netcomm, and positioning Lantronix for exciting future growth.”

Business Outlook

For the third fiscal quarter of 2025, the company expects revenue in a range of $27.0 million to $31.0 million and non-GAAP EPS of $0.01 to $0.05 per share.

Conference Call and Webcast

Management will host an investor conference call and audio webcast on Thursday, Feb. 6, 2025, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its results for the second quarter of fiscal 2025 that ended Dec. 31, 2024. To access the live conference call, investors should dial 1-844-802-2442 (US) or 1-412-317-5135 (international) and indicate that they are participating in the Lantronix Q2 FY 2025 call. The webcast will be available simultaneously via the investor relations section of the company’s website.

Investors can access a replay of the conference call starting at approximately 7:00 p.m. Pacific Time on Feb. 6, 2025, at the Lantronix website. A telephonic replay will also be available through Feb. 13, 2025, by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) or Canada toll-free at 1-855-669-9658 and entering passcode 3433776.

About Lantronix

Lantronix Inc. is a global leader of compute and connectivity IoT solutions that target high-growth markets, including Smart Cities, Enterprise and Transportation. Lantronix’s products and services empower companies to succeed in the growing IoT markets by delivering customizable solutions that enable AI Edge Intelligence. Lantronix’s advanced solutions include Intelligent Substations infrastructure, Infotainment systems and Video Surveillance, supplemented with advanced Out-of-Band Management (OOB) for Cloud and Edge Computing.

For more information, visit the Lantronix website.

Discussion of Non-GAAP Financial Measures

Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP net income consists of net loss excluding (i) share-based compensation and the employer portion of withholding taxes on stock grants, (ii) depreciation and amortization, (iii) interest income (expense), (iv) other income (expense), (v) income tax provision (benefit), (vi) restructuring, severance and related charges, (vii) acquisition related costs, (viii) impairment of long-lived assets, (ix) amortization of purchased intangibles, (x) amortization of manufacturing profit in acquired inventory, (xi) fair value remeasurement of earnout consideration, and (xii) loss on extinguishment of debt.

Non-GAAP EPS is calculated by dividing non-GAAP net loss by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP EPS, the calculation of GAAP weighted-average shares outstanding (diluted) is adjusted to exclude share-based compensation, which for GAAP purposes is treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Guidance on earnings per share growth is provided only on a non-GAAP basis due to the inherent difficulty of forecasting the timing or amount of certain items that have been excluded from the forward-looking non-GAAP measures, and a reconciliation to the comparable GAAP guidance has not been provided because certain factors that are materially significant to Lantronix’s ability to estimate the excluded items are not accessible or estimable on a forward-looking basis without unreasonable effort.

Forward-Looking Statements

This news release contains forward-looking statements, including statements concerning our revenue and earnings expectations for the third fiscal quarter of 2025, the market opportunities offered by the current shift towards edge computing and our positioning to capitalize on this trend, and our expectations regarding the benefits of our acquisition of Netcomm Wireless Pty Ltd. and our cost reduction initiatives. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our results or experiences, or 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 news release. Other factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: the effects of negative or worsening regional and worldwide economic conditions or market instability on our business, including effects on purchasing decisions by our customers; our ability to mitigate any disruption in our and our suppliers’ and vendors’ supply chains due to a pandemic or similar outbreak, wars and recent conflicts in Europe, Asia and the Middle East, hostilities in the Red Sea, or other causes; our ability to successfully convert our backlog and current demand; the impact of a pandemic or similar outbreak on our business, employees, customers, supply and distribution chains and the global economy; our ability to successfully implement our acquisition strategy or integrate acquired companies; uncertainty as to the future profitability of acquired businesses, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions; acquiring, managing and integrating new operations, businesses or assets, and the associated diversion of management attention or other related costs or difficulties; our ability to continue to generate revenue from products sold into mature markets; our ability to develop, market, and sell new products; our ability to succeed with our new software offerings; our use of AI may result in reputational, competitive or financial harm and liability; fluctuations in our revenue due to the project-based timing of orders from certain customers; unpredictable timing of our revenues due to the lengthy sales cycle for our products and services and potential delays in customer completion of projects; our ability to accurately forecast future demand for our products; delays in qualifying revisions of existing products; constraints or delays in the supply of, or quality control issues with, certain materials or components; difficulties associated with the delivery, quality or cost of our products from our contract manufacturers or suppliers; risks related to the outsourcing of manufacturing and international operations; difficulties associated with our distributors or resellers; intense competition in our industry and resultant downward price pressure; rises in inventory levels and inventory obsolescence; undetected software or hardware errors or defects in our products; cybersecurity risks; our ability to obtain appropriate industry certifications or approvals from governmental regulatory bodies; changes in applicable U.S. and foreign government laws, regulations, and tariffs; our ability to protect patents and other proprietary rights and avoid infringement of others’ proprietary technology rights; issues relating to the stability of our financial and banking institutions and relationships; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; the impact of rising interest rates; our ability to attract and retain qualified management; and any additional factors included in our Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the Securities and Exchange Commission (the “SEC”) on Sept. 9, 2024, including in the section entitled “Risk Factors” in Item 1A of Part I of that report; in our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2024, to be filed with the SEC on Feb. 7, 2025, including in the section entitled “Risk Factors” in Item 1A of Part II of such report; and in our other public filings with the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the Nasdaq Stock Market LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections.

Lantronix Investor Relations Contact:
investors@lantronix.com

LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	December 31,			June 30,
		2024			2024
Assets
Current assets:
Cash and cash equivalents	$	19,210		$	26,237
Accounts receivable, net		30,472			31,279
Inventories, net		29,070			27,698
Contract manufacturers’ receivables		3,473			1,401
Prepaid expenses and other current assets		3,329			2,335
Total current assets		85,554			88,950
Property and equipment, net		3,155			4,016
Goodwill		30,491			27,824
Intangible assets, net		4,910			5,251
Lease right-of-use assets		9,430			9,567
Other assets		683			600
Total assets	$	134,223		$	136,208

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	15,975		$	10,347
Accrued payroll and related expenses		2,968			5,836
Current portion of long-term debt, net		3,056			3,002
Other current liabilities		11,436			10,971
Total current liabilities		33,435			30,156
Long-term debt, net		11,630			13,219
Other non-current liabilities		11,245			11,478
Total liabilities		56,310			54,853

Commitments and contingencies

Stockholders’ equity:
Common stock		4			4
Additional paid-in capital		305,433			304,001
Accumulated deficit		(227,895	)		(223,021	)
Accumulated other comprehensive income		371			371
Total stockholders’ equity		77,913			81,355
Total liabilities and stockholders’ equity	$	134,223		$	136,208

LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)


	Three Months Ended									Six Months Ended
	December 31,			September 30,			December 31,			December 31,
		2024			2024			2023			2024			2023
Net revenue	$	31,161		$	34,423		$	37,038		$	65,584		$	70,069
Cost of revenue		17,877			19,948			22,007			37,825			40,941
Gross profit		13,284			14,475			15,031			27,759			29,128
Operating expenses:
Selling, general and administrative		8,811			9,467			10,224			18,278			19,394
Research and development		4,984			4,956			4,725			9,940			9,831
Restructuring, severance and related charges		193			900			530			1,093			550
Acquisition-related costs		208			29			–			237			–
Fair value remeasurement of earnout consideration		–			–			–			–			(9	)
Amortization of intangible assets		1,248			1,251			1,310			2,499			2,694
Total operating expenses		15,444			16,603			16,789			32,047			32,460
Loss from operations		(2,160	)		(2,128	)		(1,758	)		(4,288	)		(3,332	)
Interest expense, net		(126	)		(119	)		(232	)		(245	)		(570	)
Other income (loss), net		8			(37	)		(23	)		(29	)		(4	)
Loss before income taxes		(2,278	)		(2,284	)		(2,013	)		(4,562	)		(3,906	)
Provision for income taxes		94			218			580			312			573
Net loss	$	(2,372	)	$	(2,502	)	$	(2,593	)	$	(4,874	)	$	(4,479	)
Net loss per share – basic and diluted	$	(0.06	)	$	(0.07	)	$	(0.07	)	$	(0.13	)	$	(0.12	)
Weighted-average common shares – basic and diluted		38,631			38,024			37,354			38,330			37,170

LANTRONIX, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(In thousands, except per share data)

	Three Months Ended									Six Months Ended
	December 31,			September 30,			December 31,			December 31,
		2024			2024			2023			2024			2023

GAAP net loss	$	(2,372	)	$	(2,502	)	$	(2,593	)	$	(4,874	)	$	(4,479	)
Non-GAAP adjustments:
Cost of revenue:
Share-based compensation		48			64			64			112			105
Employer portion of withholding taxes on stock grants		2			5			1			7			5
Amortization of manufacturing profit in acquired inventory		–			–			189			–			506
Depreciation and amortization		114			123			109			237			195
Total adjustments to cost of revenue		164			192			363			356			811
Selling, general and administrative:
Share-based compensation		1,044			1,126			1,628			2,170			2,901
Employer portion of withholding taxes on stock grants		20			78			10			98			47
Depreciation and amortization		348			351			338			699			672
Total adjustments to selling, general and administrative		1,412			1,555			1,976			2,967			3,620
Research and development:
Share-based compensation		421			410			484			831			912
Employer portion of withholding taxes on stock grants		2			19			5			21			18
Depreciation and amortization		111			69			52			180			160
Total adjustments to research and development		534			498			541			1,032			1,090
Restructuring, severance and related charges		193			900			530			1,093			550
Acquisition related costs		208			29			–			237			–
Fair value remeasurement of earnout consideration		–			–			–			–			(9	)
Amortization of purchased intangible assets		1,248			1,251			1,310			2,499			2,694
Litigation settlement cost		158			40			–			198			–
Total non-GAAP adjustments to operating expenses		3,753			4,273			4,357			8,026			7,945
Interest expense, net		126			119			232			245			570
Other (income) expense, net		(8	)		37			23			29			4
Provision for income taxes		94			218			580			312			573
Total non-GAAP adjustments		4,129			4,839			5,555			8,968			9,903
Non-GAAP net income	$	1,757		$	2,337		$	2,962		$	4,094		$	5,424


Non-GAAP net income per share – diluted	$	0.04		$	0.06		$	0.08		$	0.10		$	0.14

Denominator for GAAP net income (loss) per share – diluted		38,631			38,024			37,354			38,330			37,170
Non-GAAP adjustment		953			1,257			1,228			901			938
Denominator for non-GAAP net income per share – diluted		39,584			39,281			38,582			39,231			38,108

GAAP cost of revenue	$	17,877		$	19,948		$	22,007		$	37,825		$	40,941
Non-GAAP adjustments to cost of revenue		(164	)		(192	)		(363	)		(356	)		(811	)
Non-GAAP cost of revenue		17,713			19,756			21,644			37,469			40,130
Non-GAAP gross profit	$	13,448		$	14,667		$	15,394		$	28,115		$	29,939
Non-GAAP gross margin		43.2	%		42.6	%		41.6	%		42.9	%		42.7	%

LANTRONIX, INC.
UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION
(In thousands)

	Three Months Ended						Six Months Ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Embedded IoT Solutions	$	10,784	$	13,387	$	11,764	$	24,171	$	23,137
IoT System Solutions		18,592		18,759		23,022		37,351		42,058
Software & Services		1,785		2,277		2,252		4,062		4,874
	$	31,161	$	34,423	$	37,038	$	65,584	$	70,069


	Three Months Ended						Six Months Ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Americas	$	16,386	$	17,420	$	20,601	$	33,806	$	43,534
EMEA		9,036		10,484		12,886		19,520		19,477
Asia Pacific Japan		5,739		6,519		3,551		12,258		7,058
	$	31,161	$	34,423	$	37,038	$	65,584	$	70,069

The MIL Network –

February 7, 2025

MIL-OSI: Global-e to Announce Financial Results for the Fourth Quarter and Year End 2024 on February 19, 2025

Source: GlobeNewswire (MIL-OSI)

PETAH-TIKVA, Israel, Feb. 06, 2025 (GLOBE NEWSWIRE) — Global-e (Nasdaq: GLBE), the platform powering global direct-to-consumer e-commerce, today announced it will report financial results for the fourth quarter and full year ended December 31, 2024, before market open on Wednesday, February 19, 2025.

Global-e management will host a conference call to review its financial results and outlook.

Date:	Wednesday, February 19, 2025
Time:	8:00 AM ET
United States/Canada Toll Free:	+1-800-717-1738
International Toll:	+1-646-307-1865

Please join the call 5-10 minutes prior to the scheduled start time, to avoid a delay in connecting. A live webcast will be available in the Investor Relations section of Global-e’s website at https://investors.global-e.com/news-events/events-presentations

A replay of the webcast will be available in the Investor Relations section of Global-e’s website at https://investors.global-e.com/news-events/events-presentations approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Global-e Online Ltd.

Global-e (Nasdaq: GLBE) is the world’s leading platform enabling and accelerating global, Direct-To-Consumer e-commerce. The chosen partner of over 1,000 brands and retailers across the United States, EMEA and APAC, Global-e makes selling internationally as simple as selling domestically. The company enables merchants to increase the conversion of international traffic into sales by offering online shoppers in over 200 destinations worldwide a seamless, localized shopping experience. Global-e’s end-to-end e-commerce solutions combine best-in-class localization capabilities, big-data best-practice business intelligence models, streamlined international logistics and vast global e-commerce experience, enabling international shoppers to buy seamlessly online and retailers to sell to, and from, anywhere in the world. For more information, please visit: www.global-e.com.

Investor Contact:
Erica Mannion or Mike Funari
Sapphire Investor Relations, LLC
IR@global-e.com
+1 617-542-6180

Press Contact:
Sarah Schloss
Headline Media
sarah.schloss@headline.media
+1 914-506-5104

The MIL Network –

February 7, 2025

MIL-OSI: StepStone Group Reports Third Quarter Fiscal Year 2025 Results

Source: GlobeNewswire (MIL-OSI)

NEW YORK, Feb. 06, 2025 (GLOBE NEWSWIRE) — StepStone Group Inc. (Nasdaq: STEP), a global private markets investment firm focused on providing customized investment solutions and advisory and data services, today reported results for the quarter ended December 31, 2024. This represents results for the third quarter of the fiscal year ending March 31, 2025. The Board of Directors of the Company has declared a quarterly cash dividend of $0.24 per share of Class A common stock, payable on March 14, 2025, to the holders of record as of the close of business on February 28, 2025.

StepStone issued a full detailed presentation of its third quarter fiscal 2025 results, which can be accessed by visiting the Company’s website at https://shareholders.stepstonegroup.com.

Webcast and Earnings Conference Call

Management will host a webcast and conference call today, Thursday, February 6, 2025, at 5:00 pm ET to discuss the Company’s results for the third quarter of the fiscal year ending March 31, 2025. The webcast will be made available on the Shareholders section of the Company’s website at https://shareholders.stepstonegroup.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register. A replay will also be available on the Shareholders section of the Company’s website approximately two hours after the conclusion of the event.

To join as a live participant in the question and answer portion of the call, participants must register at https://register.vevent.com/register/BI4d11263234d648c092cf5d1e8339df8d. Upon registering you will receive the dial-in number and a PIN to join the call as well as an email confirmation with the details.

About StepStone

StepStone Group Inc. (Nasdaq: STEP) is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. As of December 31, 2024, StepStone was responsible for approximately $698 billion of total capital, including $179 billion of assets under management. StepStone’s clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients, which include high-net-worth and mass affluent individuals. StepStone partners with its clients to develop and build private markets portfolios designed to meet their specific objectives across the private equity, infrastructure, private debt and real estate asset classes.

Forward-Looking Statements

Some of the statements in this release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. Words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions identify forward-looking statements. Forward-looking statements reflect management’s current plans, estimates and expectations and are inherently uncertain. The inclusion of any forward-looking information in this release should not be regarded as a representation that the future plans, estimates or expectations contemplated will be achieved. Forward-looking statements are subject to various risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, global and domestic market and business conditions, our successful execution of business and growth strategies, the favorability of the private markets fundraising environment, successful integration of acquired businesses and regulatory factors relevant to our business, as well as assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity and the risks and uncertainties described in greater detail under the “Risk Factors” section of our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on May 24, 2024, as such factors may be updated from time to time. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use the following non-GAAP financial measures: adjusted management and advisory fees, net, adjusted revenues, adjusted net income (on both a pre-tax and after-tax basis), adjusted net income per share, adjusted weighted-average shares, fee-related earnings, fee-related earnings margin, gross realized performance fees and net realized performance fees. We have provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, the non-GAAP financial measures in this earnings release may not be comparable to similarly titled measures used by other companies in our industry or across different industries. For definitions of these non-GAAP measures and reconciliations to applicable GAAP measures, please see the section titled “Non-GAAP Financial Measures: Definitions and Reconciliations.”


Financial Highlights and Key Business Drivers/Operating Metrics

	Three Months Ended															Nine Months Ended December 31,						Percentage Change
(in thousands, except share and per share amounts and where noted)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024		vs. FQ3’24		vs. FQ3’24 YTD
Financial Highlights
GAAP Results
Management and advisory fees, net	$	151,492		$	153,410		$	178,015		$	184,758		$	190,840		$	431,730		$	553,613		26	%	28	%
Total revenues		(14,612	)		356,810			186,401			271,677			339,023			354,821			797,101		na		125	%
Total performance fees		(166,104	)		203,400			8,386			86,919			148,183			(76,909	)		243,488		na		na
Net income (loss)		(23,419	)		82,542			48,045			53,138			(287,163	)		85,278			(185,980	)	na		na
Net income (loss) per share of Class A common stock:
Basic	$	(0.32	)	$	0.48		$	0.20		$	0.26		$	(2.61	)	$	0.43		$	(2.32	)	(725)	%	na
Diluted	$	(0.32	)	$	0.48		$	0.20		$	0.26		$	(2.61	)	$	0.43		$	(2.32	)	(725)	%	na
Weighted-average shares of Class A common stock:
Basic		64,068,952			64,194,859			66,187,754			68,772,051			73,687,289			63,255,604			69,561,254		15	%	10	%
Diluted		64,068,952			67,281,567			68,593,761			69,695,315			73,687,289			66,299,982			69,561,254		15	%	5	%
Quarterly dividend per share of Class A common stock⁽¹⁾	$	0.21		$	0.21		$	0.21		$	0.24		$	0.24		$	0.62		$	0.69		14	%	11	%
Supplemental dividend per share of Class A common stock⁽²⁾	$	—		$	—		$	0.15		$	—		$	—		$	0.25		$	0.15		na		(40)	%
Accrued carried interest allocations		1,203,847			1,354,051			1,328,853			1,381,110			1,474,543								22	%

Non-GAAP Results⁽³⁾
Adjusted management and advisory fees, net⁽⁴⁾	$	151,943		$	153,808		$	178,514		$	185,481		$	191,832		$	432,571		$	555,827		26	%	28	%
Adjusted revenues		185,123			177,357			221,165			208,788			243,905			487,703			673,858		32	%	38	%
Fee-related earnings (“FRE”)		50,664			50,900			71,656			72,349			74,118			138,893			218,123		46	%	57	%
FRE margin⁽⁵⁾		33	%		33	%		40	%		39	%		39	%		32	%		39	%
Gross realized performance fees		33,180			23,549			42,651			23,307			52,073			55,132			118,031		57	%	114	%
Adjusted net income (“ANI”)		42,116			37,716			57,241			53,569			52,659			101,677			163,469		25	%	61	%
Adjusted weighted-average shares		115,232,927			115,512,301			118,510,499			118,774,233			118,935,179			115,009,445			118,740,805		3	%	3	%
ANI per share	$	0.37		$	0.33		$	0.48		$	0.45		$	0.44		$	0.88		$	1.38		19	%	57	%

Key Business Drivers/Operating Metrics (in billions)
Assets under management (“AUM”)⁽⁶⁾	$	149.0		$	156.6		$	169.3		$	176.1		$	179.2								20	%
Assets under advisement (“AUA”)⁽⁶⁾		510.5			521.1			531.4			505.9			518.7								2	%
Fee-earning AUM (“FEAUM”)		89.4			93.9			100.4			104.4			114.2								28	%
Undeployed fee-earning capital (“UFEC”)		21.4			22.6			27.6			29.7			21.7								1	%

_______________________________
(1)      Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.
(2)      The supplemental cash dividend relates to earnings in respect of our full fiscal years 2023 and 2024, respectively.
(3)      Adjusted management and advisory fees, net, adjusted revenues, FRE, FRE margin, gross realized performance fees, ANI, adjusted weighted-average shares and ANI per share are non-GAAP measures. See the definitions of these measures and reconciliations to the respective, most comparable GAAP measures under “Non-GAAP Financial Measures: Definitions and Reconciliations.”
(4)      Excludes the impact of consolidating the Consolidated Funds. See reconciliation of GAAP measures to adjusted measures that follows.
(5)      FRE margin is calculated by dividing FRE by adjusted management and advisory fees, net.
(6)      AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented. Does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.


StepStone Group Inc. GAAP Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share amounts)

	As of
	December 31, 2024			March 31, 2024
Assets
Cash and cash equivalents	$	223,103		$	143,430
Restricted cash		720			718
Fees and accounts receivable		63,521			56,769
Due from affiliates		96,590			67,531
Investments:
Investments in funds		172,748			135,043
Accrued carried interest allocations		1,474,543			1,354,051
Legacy Greenspring investments in funds and accrued carried interest allocations⁽¹⁾		572,459			631,197
Deferred income tax assets		356,122			184,512
Lease right-of-use assets, net		90,567			97,763
Other assets and receivables		66,114			60,611
Intangibles, net		274,122			304,873
Goodwill		580,542			580,542
Assets of Consolidated Funds:
Cash and cash equivalents		55,681			38,164
Investments, at fair value		320,482			131,858
Other assets		2,333			1,745
Total assets	$	4,349,647		$	3,788,807
Liabilities and stockholders’ equity
Accounts payable, accrued expenses and other liabilities	$	139,068		$	127,417
Accrued compensation and benefits		690,321			101,481
Accrued carried interest-related compensation		730,218			719,497
Legacy Greenspring accrued carried interest-related compensation⁽¹⁾		439,898			484,154
Due to affiliates		315,739			212,918
Lease liabilities		112,175			119,739
Debt obligations		168,942			148,822
Liabilities of Consolidated Funds:
Other liabilities		9,860			1,645
Total liabilities		2,606,221			1,915,673
Redeemable non-controlling interests in Consolidated Funds		286,822			102,623
Redeemable non-controlling interests in subsidiaries		6,552			115,920
Stockholders’ equity:
Class A common stock, $0.001 par value, 650,000,000 authorized; 75,841,118 and 65,614,902 issued and outstanding as of December 31, 2024 and March 31, 2024, respectively		76			66
Class B common stock, $0.001 par value, 125,000,000 authorized; 40,127,254 and 45,030,959 issued and outstanding as of December 31, 2024 and March 31, 2024, respectively		40			45
Additional paid-in capital		415,059			310,293
Retained earnings (accumulated deficit)		(205,674	)		13,768
Accumulated other comprehensive income		341			304
Total StepStone Group Inc. stockholders’ equity		209,842			324,476
Non-controlling interests in subsidiaries		1,051,919			974,559
Non-controlling interests in legacy Greenspring entities⁽¹⁾		132,561			147,042
Non-controlling interests in the Partnership		55,730			208,514
Total stockholders’ equity		1,450,052			1,654,591
Total liabilities and stockholders’ equity	$	4,349,647		$	3,788,807

(1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests.


StepStone Group Inc. GAAP Condensed Consolidated Statements of Income (Loss) (Unaudited) (in thousands, except share and per share amounts)

	Three Months Ended December 31,						Nine Months Ended December 31,
		2024			2023			2024			2023
Revenues
Management and advisory fees, net	$	190,840		$	151,492		$	553,613		$	431,730
Performance fees:
Incentive fees		22,369			17,891			26,365			22,843
Carried interest allocations:
Realized		24,282			15,289			83,718			31,347
Unrealized		93,325			(129,584	)		120,370			(24,849	)
Total carried interest allocations		117,607			(114,295	)		204,088			6,498
Legacy Greenspring carried interest allocations⁽¹⁾		8,207			(69,700	)		13,035			(106,250	)
Total performance fees		148,183			(166,104	)		243,488			(76,909	)
Total revenues		339,023			(14,612	)		797,101			354,821
Expenses
Compensation and benefits:
Cash-based compensation		85,203			73,619			246,298			218,551
Equity-based compensation		486,418			14,032			542,929			28,420
Performance fee-related compensation:
Realized		25,477			15,444			55,092			26,266
Unrealized		49,670			(62,243	)		66,495			(9,320	)
Total performance fee-related compensation		75,147			(46,799	)		121,587			16,946
Legacy Greenspring performance fee-related compensation⁽¹⁾		8,207			(69,700	)		13,035			(106,250	)
Total compensation and benefits		654,975			(28,848	)		923,849			157,667
General, administrative and other		43,130			48,001			134,202			113,007
Total expenses		698,105			19,153			1,058,051			270,674
Other income (expense)
Investment income (loss)		1,064			(2,051	)		5,710			4,115
Legacy Greenspring investment income (loss)⁽¹⁾		1,167			(2,222	)		(4,119	)		(9,054	)
Investment income of Consolidated Funds		15,037			11,223			30,878			22,357
Interest income		2,559			827			7,632			2,235
Interest expense		(3,008	)		(2,562	)		(9,510	)		(6,682	)
Other income (loss)		(2,452	)		4,408			(1,626	)		3,763
Total other income		14,367			9,623			28,965			16,734
Income (loss) before income tax		(344,715	)		(24,142	)		(231,985	)		100,881
Income tax expense (benefit)		(57,552	)		(723	)		(46,005	)		15,603
Net income (loss)		(287,163	)		(23,419	)		(185,980	)		85,278
Less: Net income attributable to non-controlling interests in subsidiaries		27,226			13,552			62,966			32,797
Less: Net income (loss) attributable to non-controlling interests in legacy Greenspring entities⁽¹⁾		1,167			(2,222	)		(4,119	)		(9,054	)
Less: Net income (loss) attributable to non-controlling interests in the Partnership		(134,760	)		(20,111	)		(107,856	)		22,677
Less: Net income attributable to redeemable non-controlling interests in Consolidated Funds		10,905			5,588			23,101			11,590
Less: Net income attributable to redeemable non-controlling interests in subsidiaries		314			—			983			—
Net income (loss) attributable to StepStone Group Inc.	$	(192,015	)	$	(20,226	)	$	(161,055	)	$	27,268
Net income (loss) per share of Class A common stock:
Basic	$	(2.61	)	$	(0.32	)	$	(2.32	)	$	0.43
Diluted	$	(2.61	)	$	(0.32	)	$	(2.32	)	$	0.43
Weighted-average shares of Class A common stock:
Basic		73,687,289			64,068,952			69,561,254			63,255,604
Diluted		73,687,289			64,068,952			69,561,254			66,299,982

(1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests.

Non-GAAP Financial Measures: Definitions and Reconciliations

Adjusted Management and Advisory Fees, Net

The following table presents the components of adjusted management and advisory fees, net. We believe adjusted management and advisory fees, net is useful to investors because it removes the impact of consolidating the Consolidated Funds which we are required to consolidate under GAAP.

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
Focused commingled funds⁽¹⁾⁽²⁾	$	78,633	$	80,434	$	104,798	$	107,855	$	105,718	$	216,233	$	318,371
Separately managed accounts		55,838		55,945		57,376		61,393		66,245		168,013		185,014
Advisory and other services		16,069		16,147		14,769		14,907		17,458		43,910		47,134
Fund reimbursement revenues⁽¹⁾		1,403		1,282		1,571		1,326		2,411		4,415		5,308
Adjusted management and advisory fees, net	$	151,943	$	153,808	$	178,514	$	185,481	$	191,832	$	432,571	$	555,827

_______________________________
(1) Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(2) Includes income-based incentive fees of $2.1 million for the three months ended December 31, 2024, $1.3 million for the three months ended September 30, 2024, $1.1 million for the three months ended June 30, 2024, $0.8 million for the three months ended March 31, 2024, $0.6 million for the three months ended December 31, 2023, and $4.6 million and $0.6 million for the nine months ended December 31, 2024 and 2023, respectively, from certain funds.

Adjusted Revenues

Adjusted revenues represents the components of revenues used in the determination of ANI and comprise adjusted management and advisory fees, net, adjusted incentive fees (including the deferred portion) and realized carried interest allocations. We believe adjusted revenues is useful to investors because it presents a measure of realized revenues.

The table below shows a reconciliation of revenues to adjusted revenues.

	Three Months Ended														Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024		September 30, 2024			December 31, 2024				2023		2024
Total revenues	$	(14,612	)	$	356,810		$	186,401	$	271,677		$	339,023		$	354,821	$	797,101
Unrealized carried interest allocations		129,584			(151,757	)		25,170		(52,215	)		(93,325	)		24,849		(120,370	)
Deferred incentive fees		—			1,450			6		2,445			—			942		2,451
Legacy Greenspring carried interest allocations		69,700			(31,093	)		9,089		(13,917	)		(8,207	)		106,250		(13,035	)
Management and advisory fee revenues for the Consolidated Funds⁽¹⁾		451			398			499		723			992			841		2,214
Incentive fees for the Consolidated Funds⁽²⁾		—			1,549			—		75			5,422			—		5,497
Adjusted revenues	$	185,123		$	177,357		$	221,165	$	208,788		$	243,905		$	487,703	$	673,858

_______________________________
(1) Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(2) Reflects the add-back of incentive fees for the Consolidated Funds, which have been eliminated in consolidation.

Adjusted Net Income

Adjusted net income, or “ANI,” is a non-GAAP performance measure that we present before the consolidation of StepStone Funds on a pre-tax and after-tax basis used to evaluate profitability. ANI represents the after-tax net realized income attributable to us. ANI does not reflect legacy Greenspring carried interest allocation revenues, legacy Greenspring carried interest-related compensation and legacy Greenspring investment income (loss) as none of the economics are attributable to us. The components of revenues used in the determination of ANI (“adjusted revenues”) comprise adjusted management and advisory fees, net, adjusted incentive fees (including the deferred portion) and realized carried interest allocations. In addition, ANI excludes: (a) unrealized carried interest allocation revenues and related compensation, (b) unrealized investment income (loss), (c) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (d) amortization of intangibles, (e) net income (loss) attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary, (f) charges associated with acquisitions and corporate transactions, and (g) certain other items that we believe are not indicative of our core operating performance (as listed in the table below). ANI is fully taxed at our blended statutory rate. We believe ANI and adjusted revenues are useful to investors because they enable investors to evaluate the performance of our business across reporting periods.

Fee-Related Earnings

Fee-related earnings, or “FRE,” is a non-GAAP performance measure used to monitor our baseline earnings from recurring management and advisory fees. FRE is a component of ANI and comprises adjusted management and advisory fees, net, less adjusted expenses which are operating expenses other than (a) performance fee-related compensation, (b) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (c) amortization of intangibles, (d) charges associated with acquisitions and corporate transactions, and (e) certain other items that we believe are not indicative of our core operating performance (as listed in the table below). FRE is presented before income taxes. We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business and our ability to cover direct base compensation and operating expenses from total fee revenue.

The table below shows a reconciliation of GAAP measures to additional non-GAAP measures. We use the non-GAAP measures presented below as components when calculating FRE and ANI (as defined below). We believe these additional non-GAAP measures are useful to investors in evaluating both the baseline earnings from recurring management and advisory fees, which provide additional insight into the operating profitability of our business, and the after-tax net realized income attributable to us, allowing investors to evaluate the performance of our business. These additional non-GAAP measures remove the impact of Consolidated Funds that we are required to consolidate under GAAP, and certain other items that we believe are not indicative of our core operating performance.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
GAAP management and advisory fees, net	$	151,492		$	153,410		$	178,015		$	184,758		$	190,840		$	431,730		$	553,613
Management and advisory fee revenues for the Consolidated Funds⁽¹⁾		451			398			499			723			992			841			2,214
Adjusted management and advisory fees, net	$	151,943		$	153,808		$	178,514		$	185,481		$	191,832		$	432,571		$	555,827

GAAP incentive fees	$	17,891		$	2,496		$	841		$	3,155		$	22,369		$	22,843		$	26,365
Incentive fee revenues for the Consolidated Funds⁽²⁾		—			1,549			—			75			5,422			—			5,497
Adjusted incentive fees	$	17,891		$	4,045		$	841		$	3,230		$	27,791		$	22,843		$	31,862

GAAP cash-based compensation	$	73,619		$	74,411		$	78,224		$	82,871		$	85,203		$	218,551		$	246,298
Adjustments⁽³⁾		(574	)		(461	)		(428	)		(285	)		339			(1,679	)		(374	)
Adjusted cash-based compensation	$	73,045		$	73,950		$	77,796		$	82,586		$	85,542		$	216,872		$	245,924

GAAP equity-based compensation	$	14,032		$	13,937		$	19,179		$	37,332		$	486,418		$	28,420		$	542,929
Adjustments⁽⁴⁾		(12,610	)		(12,210	)		(16,785	)		(34,947	)		(483,958	)		(24,425	)		(535,690	)
Adjusted equity-based compensation	$	1,422		$	1,727		$	2,394		$	2,385		$	2,460		$	3,995		$	7,239

GAAP general, administrative and other	$	48,001		$	54,310		$	41,011		$	50,061		$	43,130		$	113,007		$	134,202
Adjustments⁽⁵⁾		(21,189	)		(27,079	)		(14,343	)		(21,900	)		(13,418	)		(40,196	)		(49,661	)
Adjusted general, administrative and other	$	26,812		$	27,231		$	26,668		$	28,161		$	29,712		$	72,811		$	84,541

GAAP interest income	$	827		$	1,429		$	2,057		$	3,016		$	2,559		$	2,235		$	7,632
Interest income earned by the Consolidated Funds⁽⁶⁾		(540	)		(612	)		(907	)		(1,363	)		(887	)		(1,033	)		(3,157	)
Adjusted interest income	$	287		$	817		$	1,150		$	1,653		$	1,672		$	1,202		$	4,475

GAAP other income (loss)	$	4,408		$	(1,308	)	$	(351	)	$	1,177		$	(2,452	)	$	3,763		$	(1,626	)
Adjustments⁽⁷⁾		(4,301	)		395			(72	)		(1,082	)		1,883			(4,274	)		729
Adjusted other income (loss)	$	107		$	(913	)	$	(423	)	$	95		$	(569	)	$	(511	)	$	(897	)

______________________________
(1)      Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(2)      Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(3)      Reflects the removal of compensation paid to certain employees as part of an acquisition earn-out.
(4)      Reflects the removal of equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.
(5)      Reflects the removal of lease remeasurement adjustments, accelerated depreciation of leasehold improvements for changes in lease terms, amortization of intangibles, transaction-related costs and other non-core operating income and expenses.
(6)      Reflects the removal of interest income earned by the Consolidated Funds.
(7)      Reflects the removal of amounts for Tax Receivable Agreements adjustments recognized as other income (loss), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters, loss on sale of subsidiary and the impact of consolidation of the Consolidated Funds.

The table below shows a reconciliation of income (loss) before income tax to ANI and FRE.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
Income (loss) before income tax	$	(24,142	)		94,515		$	54,842		$	57,888		$	(344,715	)	$	100,881		$	(231,985	)
Net income attributable to non-controlling interests in subsidiaries⁽¹⁾		(15,537	)		(12,822	)		(18,951	)		(17,812	)		(32,765	)		(36,398	)		(69,528	)
Net (income) loss attributable to non-controlling interests in legacy Greenspring entities		2,222			33			1,255			4,031			(1,167	)		9,054			4,119
Unrealized carried interest allocations		129,584			(151,757	)		25,170			(52,215	)		(93,325	)		24,849			(120,370	)
Unrealized performance fee-related compensation		(62,243	)		84,014			(10,923	)		27,748			49,670			(9,320	)		66,495
Unrealized investment (income) loss		5,559			(2,280	)		(1,180	)		(430	)		656			1,373			(954	)
Impact of Consolidated Funds		(11,068	)		(4,138	)		(7,731	)		(9,267	)		(6,892	)		(21,938	)		(23,890	)
Deferred incentive fees		—			1,450			6			2,445			—			942			2,451
Equity-based compensation⁽²⁾		12,610			12,210			16,785			34,947			483,958			24,425			535,690
Amortization of intangibles		10,661			10,423			10,250			10,250			10,250			31,983			30,750
Tax Receivable Agreements adjustments through earnings		222			90			—			—			—			222			—
Non-core items⁽³⁾		6,335			16,780			4,137			11,349			2,094			4,785			17,580
Pre-tax ANI		54,203			48,518			73,660			68,934			67,764			130,858			210,358
Income taxes⁽⁴⁾		(12,087	)		(10,802	)		(16,419	)		(15,365	)		(15,105	)		(29,181	)		(46,889	)
ANI		42,116			37,716			57,241			53,569			52,659			101,677			163,469
Income taxes⁽⁴⁾		12,087			10,802			16,419			15,365			15,105			29,181			46,889
Realized carried interest allocations		(15,289	)		(18,054	)		(41,804	)		(17,632	)		(24,282	)		(31,347	)		(83,718	)
Realized performance fee-related compensation⁽⁵⁾		15,444			11,421			20,848			8,767			25,477			26,266			55,092
Realized investment income		(3,508	)		(1,057	)		(1,415	)		(1,621	)		(1,720	)		(5,488	)		(4,756	)
Adjusted incentive fees⁽⁶⁾		(17,891	)		(4,045	)		(841	)		(3,230	)		(27,791	)		(22,843	)		(31,862	)
Deferred incentive fees		—			(1,450	)		(6	)		(2,445	)		—			(942	)		(2,451	)
Adjusted interest income⁽⁶⁾		(287	)		(817	)		(1,150	)		(1,653	)		(1,672	)		(1,202	)		(4,475	)
Interest expense		2,562			2,649			2,990			3,512			3,008			6,682			9,510
Adjusted other (income) loss⁽⁶⁾⁽⁷⁾		(107	)		913			423			(95	)		569			511			897
Net income attributable to non-controlling interests in subsidiaries⁽¹⁾		15,537			12,822			18,951			17,812			32,765			36,398			69,528
FRE	$	50,664		$	50,900		$	71,656		$	72,349		$	74,118		$	138,893		$	218,123

_______________________________
(1) Reflects the portion of pre-tax ANI attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary:

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
FRE attributable to non-controlling interests in subsidiaries and profits interests	$	10,518	$	11,559	$	13,308	$	14,969	$	21,063	$	30,515	$	49,340
Performance related earnings / other (income) loss attributable to non-controlling interests in subsidiaries and profits interests		5,019		1,263		5,643		2,843		11,702		5,883		20,188
Net income attributable to non-controlling interests in subsidiaries	$	15,537	$	12,822	$	18,951	$	17,812	$	32,765	$	36,398	$	69,528

The contribution to total FRE attributable to non-controlling interests in subsidiaries and profits interests and performance related earnings / other (income) loss attributable to non-controlling interests in subsidiaries and profits interests presented above specifically related to the profits interests issued in the private wealth subsidiary is presented below.

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
FRE attributable to profits interests issued in the private wealth subsidiary	$	—	$	—	$	574	$	2,051	$	2,956	$	—	$	5,581
Performance related earnings / other (income) loss attributable to profits interests issued in the private wealth subsidiary		3,074		—		51		206		11,137		3,074		11,394
Amounts attributable to profits interests issued in the private wealth subsidiary	$	3,074	$	—	$	625	$	2,257	$	14,093	$	3,074	$	16,975

(2) Reflects equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.
(3) Includes (income) expense related to the following non-core operating income and expenses:

	Three Months Ended												Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024				2023			2024
Transaction costs	$	670		$	3,985	$	672	$	140	$	12		$	870		$	824
Lease remeasurement adjustments		(106	)		—		—		—		—			(106	)		—
Accelerated depreciation of leasehold improvements for changes in lease terms		631			—		—		—		—			1,893			—
Loss on change in fair value for contingent consideration obligation		9,054			12,280		2,953		10,888		2,476			4,937			16,317
Compensation paid to certain employees as part of an acquisition earn-out		574			515		482		321		(394	)		1,679			409
Gain from negotiation of certain corporate matters		(5,300	)		—		—		—		—			(5,300	)		—
Loss on sale of subsidiary		812			—		—		—		—			812			—
Other non-core items		—			—		30		—		—			—			30
Total non-core operating income and expenses	$	6,335		$	16,780	$	4,137	$	11,349	$	2,094		$	4,785		$	17,580

(4) Represents corporate income taxes at a blended statutory rate applied to pre-tax ANI:

	Three Months Ended										Nine Months Ended December 31,
	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024		2023		2024
Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%
Combined state, local and foreign rate	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%
Blended statutory rate	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%

(5) Includes carried interest-related compensation expense related to the portion of net carried interest allocation revenue attributable to equity holders of the Company’s consolidated subsidiaries that are not 100% owned:

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
Realized carried interest-related compensation	$	660	$	910	$	—	$	—	$	—	$	2,849	$	—

(6) Excludes the impact of consolidating the Consolidated Funds.
(7) Excludes amounts for Tax Receivable Agreements adjustments recognized as other income (loss) ($(0.1) million for the three months ended March 31, 2024 and $(0.2) million for the three and nine months ended December 31, 2023), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters ($5.3 million for the three and nine months ended December 31, 2023), and loss on sale of subsidiary ($0.8 million for the three and nine months ended December 31, 2023).

Fee-Related Earnings Margin

FRE margin is a non-GAAP performance measure which is calculated by dividing FRE by adjusted management and advisory fees, net. We believe FRE margin is an important measure of profitability on revenues that are largely recurring by nature. We believe FRE margin is useful to investors because it enables them to better evaluate the operating profitability of our business across periods.

The table below shows a reconciliation of FRE to FRE margin.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
FRE	$	50,664		$	50,900		$	71,656		$	72,349		$	74,118		$	138,893		$	218,123
Adjusted management and advisory fees, net		151,943			153,808			178,514			185,481			191,832			432,571			555,827
FRE margin		33	%		33	%		40	%		39	%		39	%		32	%		39	%

Gross Realized Performance Fees

Gross realized performance fees represents realized carried interest allocations and adjusted incentive fees, including the deferred portion. We believe gross realized performance fees is useful to investors because it presents the total performance fees realized by us.

Net Realized Performance Fees

Net realized performance fees represents gross realized performance fees, less realized performance fee-related compensation. We believe net realized performance fees is useful to investors because it presents the performance fees attributable to us, net of amounts paid to employees as performance fee-related compensation.

The table below shows a reconciliation of total performance fees to gross and net realized performance fees.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
Incentive fees	$	17,891		$	2,496		$	841		$	3,155		$	22,369		$	22,843		$	26,365
Realized carried interest allocations		15,289			18,054			41,804			17,632			24,282			31,347			83,718
Unrealized carried interest allocations		(129,584	)		151,757			(25,170	)		52,215			93,325			(24,849	)		120,370
Legacy Greenspring carried interest allocations		(69,700	)		31,093			(9,089	)		13,917			8,207			(106,250	)		13,035
Total performance fees		(166,104	)		203,400			8,386			86,919			148,183			(76,909	)		243,488
Unrealized carried interest allocations		129,584			(151,757	)		25,170			(52,215	)		(93,325	)		24,849			(120,370	)
Legacy Greenspring carried interest allocations		69,700			(31,093	)		9,089			(13,917	)		(8,207	)		106,250			(13,035	)
Incentive fee revenues for the Consolidated Funds⁽¹⁾		—			1,549			—			75			5,422			—			5,497
Deferred incentive fees		—			1,450			6			2,445			—			942			2,451
Gross realized performance fees		33,180			23,549			42,651			23,307			52,073			55,132			118,031
Realized performance fee-related compensation		(15,444	)		(11,421	)		(20,848	)		(8,767	)		(25,477	)		(26,266	)		(55,092	)
Net realized performance fees	$	17,736		$	12,128		$	21,803		$	14,540		$	26,596		$	28,866		$	62,939

______________________________
(1) Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.

Adjusted Weighted-Average Shares and Adjusted Net Income Per Share

ANI per share measures our per-share earnings assuming all Class B units, Class C units and Class D units in the Partnership were exchanged for Class A common stock in SSG, including the dilutive impact of outstanding equity-based awards. ANI per share is calculated as ANI divided by adjusted weighted-average shares outstanding. We believe adjusted weighted-average shares and ANI per share are useful to investors because they enable investors to better evaluate per-share operating performance across reporting periods.

The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted weighted-average shares outstanding used in the computation of ANI per share.

	Three Months Ended										Nine Months Ended December 31,
	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
ANI	$	42,116	$	37,716	$	57,241	$	53,569	$	52,659	$	101,677	$	163,469

Weighted-average shares of Class A common stock outstanding – Basic		64,068,952		64,194,859		66,187,754		68,772,051		73,687,289		63,255,604		69,561,254
Assumed vesting of RSUs		333,402		512,946		673,854		921,166		491,014		511,889		695,423
Assumed vesting and exchange of Class B2 units		2,553,899		2,573,762		1,732,153		—		—		2,532,489		573,185
Assumed purchase under ESPP		—		—		—		2,098		—		—		702
Exchange of Class B units in the Partnership⁽¹⁾		46,314,543		46,272,227		45,827,707		45,212,921		41,729,937		46,384,046		44,251,143
Exchange of Class C units in the Partnership⁽¹⁾		1,962,131		1,958,507		1,849,846		1,626,812		1,016,737		2,325,417		1,496,518
Exchange of Class D units in the Partnership⁽¹⁾		—		—		2,239,185		2,239,185		2,010,202		—		2,162,580
Adjusted weighted-average shares		115,232,927		115,512,301		118,510,499		118,774,233		118,935,179		115,009,445		118,740,805

ANI per share	$	0.37	$	0.33	$	0.48	$	0.45	$	0.44	$	0.88	$	1.38

_______________________________
(1) Assumes the full exchange of Class B units, Class C units or Class D units in the Partnership for Class A common stock of SSG pursuant to the Class B Exchange Agreement, Class C Exchange Agreement or Class D Exchange Agreement, respectively.

Key Operating Metrics

We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business. Refer to the Glossary below for a definition of each of these metrics.

Fee-Earning AUM

	Three Months Ended															Nine Months Ended December 31,						Percentage Change
(in millions)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024		vs. FQ3’24
Separately Managed Accounts
Beginning balance	$	56,380		$	56,660		$	58,897		$	60,272		$	62,121		$	55,345		$	58,897		10	%
Contributions⁽¹⁾		1,109			2,757			2,085			1,723			9,033			3,570			12,841		715	%
Distributions⁽²⁾		(1,397	)		(795	)		(830	)		(535	)		(1,000	)		(3,285	)		(2,365	)	(28)	%
Market value, FX and other⁽³⁾		568			275			120			661			(180	)		1,030			601		na
Ending balance	$	56,660		$	58,897		$	60,272		$	62,121		$	69,974		$	56,660		$	69,974		23	%

Focused Commingled Funds
Beginning balance	$	30,905		$	32,772		$	34,961		$	40,084		$	42,294		$	30,086		$	34,961		37	%
Contributions⁽¹⁾		1,898			2,429			5,653			2,122			2,520			3,686			10,295		33	%
Distributions⁽²⁾		(274	)		(327	)		(661	)		(282	)		(682	)		(1,514	)		(1,625	)	149	%
Market value, FX and other⁽³⁾		243			87			131			370			60			514			561		(75)	%
Ending balance	$	32,772		$	34,961		$	40,084		$	42,294		$	44,192		$	32,772		$	44,192		35	%

Total
Beginning balance	$	87,285		$	89,432		$	93,858		$	100,356		$	104,415		$	85,431		$	93,858		20	%
Contributions⁽¹⁾		3,007			5,186			7,738			3,845			11,553			7,256			23,136		284	%
Distributions⁽²⁾		(1,671	)		(1,122	)		(1,491	)		(817	)		(1,682	)		(4,799	)		(3,990	)	1	%
Market value, FX and other⁽³⁾		811			362			251			1,031			(120	)		1,544			1,162		na
Ending balance	$	89,432		$	93,858		$	100,356		$	104,415		$	114,166		$	89,432		$	114,166		28	%

_______________________________
(1)      Contributions consist of new capital commitments that earn fees on committed capital and capital contributions to funds and accounts that earn fees on net invested capital or NAV.
(2)      Distributions consist of returns of capital from funds and accounts that pay fees on net invested capital or NAV and reductions in fee-earning AUM from funds that moved from a committed capital to net invested capital fee basis or from funds and accounts that no longer pay fees.
(3)      Market value, FX and other primarily consist of changes in market value appreciation (depreciation) for funds that pay on NAV and the effect of foreign exchange rate changes on non-U.S. dollar denominated commitments.

Asset Class Summary

	Three Months Ended										Percentage Change
(in millions)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024		vs. FQ3’24
FEAUM
Private equity	$	48,258	$	49,869	$	54,855	$	57,136	$	62,811	30	%
Infrastructure		19,789		20,114		20,377		20,986		23,411	18	%
Private debt		15,460		15,477		16,161		16,975		17,882	16	%
Real estate		5,925		8,398		8,963		9,318		10,062	70	%
Total	$	89,432	$	93,858	$	100,356	$	104,415	$	114,166	28	%

Separately managed accounts	$	56,660	$	58,897	$	60,272	$	62,121	$	69,974	23	%
Focused commingled funds		32,772		34,961		40,084		42,294		44,192	35	%
Total	$	89,432	$	93,858	$	100,356	$	104,415	$	114,166	28	%

AUM⁽¹⁾
Private equity	$	78,221	$	81,942	$	89,329	$	91,891	$	93,404	19	%
Infrastructure		28,307		30,003		32,756		35,392		36,156	28	%
Private debt		27,782		28,491		30,336		31,854		31,987	15	%
Real estate		14,646		16,201		16,912		16,996		17,665	21	%
Total	$	148,956	$	156,637	$	169,333	$	176,133	$	179,212	20	%

Separately managed accounts	$	88,890	$	93,938	$	103,003	$	107,252	$	109,305	23	%
Focused commingled funds		45,508		48,545		51,682		53,870		55,142	21	%
Advisory AUM		14,558		14,154		14,648		15,011		14,765	1	%
Total	$	148,956	$	156,637	$	169,333	$	176,133	$	179,212	20	%

AUA
Private equity	$	266,246	$	270,350	$	279,909	$	255,125	$	263,420	(1	)%
Infrastructure		57,528		60,339		62,599		62,891		67,100	17	%
Private debt		17,916		21,976		22,280		19,328		19,325	8	%
Real estate		168,802		168,455		166,659		168,519		168,807	—	%
Total	$	510,492	$	521,120	$	531,447	$	505,863	$	518,652	2	%

Total capital responsibility⁽²⁾	$	659,448	$	677,757	$	700,780	$	681,996	$	697,864	6	%

_____________________________
Note: Amounts may not sum to total due to rounding. AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented, and does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.
(1) Allocation of AUM by asset class is presented by underlying investment asset classification.
(2) Total capital responsibility equals assets under management (AUM) plus assets under advisement (AUA).

Contacts

Shareholder Relations:
Seth Weiss
shareholders@stepstonegroup.com
1-212-351-6106

Media:
Brian Ruby / Chris Gillick / Matt Lettiero, ICR
StepStonePR@icrinc.com
1-203-682-8268

Glossary

Assets under advisement, or “AUA,” consists of client assets for which we do not have full discretion to make investment decisions but play a role in advising the client or monitoring their investments. We generally earn revenue for advisory-related services on a contractual fixed fee basis. Advisory-related services include asset allocation, strategic planning, development of investment policies and guidelines, screening and recommending investments, legal negotiations, monitoring and reporting on investments, and investment manager review and due diligence. Advisory fees vary by client based on the scope of services, investment activity and other factors. Most of our advisory fees are fixed, and therefore, increases or decreases in AUA do not necessarily lead to proportionate changes in revenue. We believe AUA is a useful metric for assessing the relative size of our advisory business.

Our AUA is calculated as the sum of (i) the NAV of client portfolio assets for which we do not have full discretion and (ii) the unfunded commitments of clients to the underlying investments. Our AUA reflects the investment valuations in respect of the underlying investments of our client accounts on a three-month lag, adjusted for new client account activity through the period end. Our AUA does not include post-period investment valuation or cash activity. AUA as of December 31, 2024 reflects final data for the prior period (September 30, 2024), adjusted for net new client account activity through December 31, 2024. NAV data for underlying investments is as of September 30, 2024, as reported by underlying managers up to the business day occurring on or after 100 days following September 30, 2024. When NAV data is not available by the business day occurring on or after 100 days following September 30, 2024, such NAVs are adjusted for cash activity following the last available reported NAV.

Assets under management, or “AUM,” primarily reflects the assets associated with our separately managed accounts (“SMAs”) and focused commingled funds. We classify assets as AUM if we have full discretion over the investment decisions in an account or have responsibility or custody of assets. Although management fees are based on a variety of factors and are not linearly correlated with AUM, we believe AUM is a useful metric for assessing the relative size and scope of our asset management business.

Our AUM is calculated as the sum of (i) the net asset value (“NAV”) of client portfolio assets, including the StepStone Funds and (ii) the unfunded commitments of clients to the underlying investments and the StepStone Funds. Our AUM reflects the investment valuations in respect of the underlying investments of our funds and accounts on a three-month lag, adjusted for new client account activity through the period end. Our AUM does not include post-period investment valuation or cash activity. AUM as of December 31, 2024 reflects final data for the prior period (September 30, 2024), adjusted for net new client account activity through December 31, 2024. NAV data for underlying investments is as of September 30, 2024, as reported by underlying managers up to the business day occurring on or after 100 days following September 30, 2024. When NAV data is not available by the business day occurring on or after 100 days following September 30, 2024, such NAVs are adjusted for cash activity following the last available reported NAV.

Consolidated Funds refer to the StepStone Funds that we are required to consolidate as of the applicable reporting period. We consolidate funds and other entities in which we hold a controlling financial interest.

Consolidated VIEs refer to the variable interest entities that we are required to consolidate as of the applicable reporting period. We consolidate VIEs in which we hold a controlling financial interest.

Fee-earning AUM, or “FEAUM,” reflects the assets from which we earn management fee revenue (i.e., fee basis) and includes assets in our SMAs, focused commingled funds and assets held directly by our clients for which we have fiduciary oversight and are paid fees as the manager of the assets. Our SMAs and focused commingled funds typically pay management fees based on capital commitments, net invested capital and, in certain cases, NAV, depending on the fee terms. Management fees are only marginally affected by market appreciation or depreciation because substantially all of the StepStone Funds pay management fees based on capital commitments or net invested capital. As a result, management fees and FEAUM are not materially affected by changes in market value. We believe FEAUM is a useful metric in order to assess assets forming the basis of our management fee revenue.

Legacy Greenspring entities refers to certain entities for which the Company, indirectly through its subsidiaries, became the sole and/or managing member in connection with the Greenspring acquisition.

SSG refers solely to StepStone Group Inc., a Delaware corporation, and not to any of its subsidiaries.

StepStone Funds refer to SMAs and focused commingled funds of the Company, including acquired Greenspring funds, for which the Partnership or one of its subsidiaries acts as both investment adviser and general partner or managing member.

The Partnership refers solely to StepStone Group LP, a Delaware limited partnership, and not to any of its subsidiaries.

Total capital responsibility equals AUM plus AUA. AUM includes any accounts for which StepStone Group has full discretion over the investment decisions, has responsibility to arrange or effectuate transactions, or has custody of assets. AUA refers to accounts for which StepStone Group provides advice or consultation but for which the firm does not have discretionary authority, responsibility to arrange or effectuate transactions, or custody of assets.

Undeployed fee-earning capital represents the amount of capital commitments to StepStone Funds that has not yet been invested or considered active but will generate management fee revenue once invested or activated. We believe undeployed fee-earning capital is a useful metric for measuring the amount of capital that we can put to work in the future and thus earn management fee revenue thereon.

The MIL Network –

February 7, 2025

MIL-OSI: Cerence Announces First Quarter Fiscal 2025 Results

Source: GlobeNewswire (MIL-OSI)

BURLINGTON, Mass., Feb. 06, 2025 (GLOBE NEWSWIRE) — Cerence Inc. (NASDAQ: CRNC) (“Cerence AI”), a global industry leader in AI for transportation, today reported its first quarter fiscal year 2025 results for the quarter ended December 31, 2024.


ResultsSummary^(1,2) (in millions, except per share data)

	Three Months Ended
	December 31,
	2024			2023
GAAP revenue	$	50.9		$	138.3
GAAP gross margin		65.0	%		81.0	%
Non-GAAP gross margin		65.9	%		81.5	%
GAAP operating margin		-33.3	%		42.3	%
Non-GAAP operating margin		-1.0	%		49.4	%
GAAP net (loss) income	$	(24.3	)	$	23.9
GAAP net (loss) income margin		-47.7	%		17.2	%
Non-GAAP net (loss) income	$	(1.5	)	$	54.3
Adjusted EBITDA	$	1.4		$	70.4
Adjusted EBITDA margin		2.7	%		50.9	%
GAAP net (loss) income per share – diluted	$	(0.57	)	$	0.53
Non-GAAP net (loss) income per share – diluted	$	(0.03	)	$	1.12

(1)	As previously disclosed, Q1FY24 revenue includes the non-cash revenue associated with the Toyota “Legacy” contract and related impacts totaling $86.6M.
(2)	Please refer to the “Discussion of Non-GAAP Financial Measures” and “Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures” included elsewhere in this release for more information regarding our use of non-GAAP financial measures.

“I’m incredibly proud of the team’s progress and our performance in Q1, most notably beating the upper end of guidance on top-line revenue and adjusted EBITDA and showing strong free cash flow,” said Brian Krzanich, CEO, Cerence AI. “We believe we have solid momentum for 2025: we’ve made significant progress on our generative AI roadmap, achieving critical development milestones for our next-gen agentic, conversational AI platform. We have continued momentum with our automaker customers, including six design wins and two wins for our generative AI solutions, as well as six major customer SOPs and two generative AI SOPs within the quarter. In addition, our transformation and cost reduction initiatives are having a solid impact on the business. As we look to the future, we believe we are well positioned to continue on our path to long-term, sustainable growth and profitability.”

Cerence Key Performance Indicators
To help investors gain further insight into the Cerence business and its performance, management provides a set of key performance indicators that includes:

Key Performance Indicator¹	Q1FY25
Percent of worldwide auto production with Cerence Technology (TTM)		51	%
Change in number of Cerence connected cars shipped² (TTM over prior year TTM)		5	%
Change in Adjusted Total Billings (TTM over prior year TTM)		3	%

(1)	Please refer to the “Key Performance Indicators” section included elsewhere in this release for more information regarding the definitions and our use of key performance indicators.
(2)	Based on IHS Markit data, global auto production decreased 2% over the same time period ended on December 31, 2024.

Second Quarter and Full Year Fiscal 2025 Outlook
For the fiscal quarter ending March 31, 2025, revenue is expected to be in the range of $74 million to $77 million. This includes $20 million of projected Fixed License revenue expected to be signed during the quarter. Gross margins are projected between 74% and 76% and net income is projected in the range of $1 million to $5 million. Adjusted EBITDA is expected to be in the range of $18 million to $22 million.

Guidance for the full fiscal year ending September 30, 2025 remains unchanged.

The adjusted EBITDA guidance excludes amortization of acquired intangible assets, stock-based compensation, restructuring and other costs.

Additional details regarding guidance will be provided during the earnings call.

Cerence Conference Call and Webcast
The company will host a live conference call and webcast with slides to discuss the results today at 5:00pm Eastern Time / 2:00pm Pacific Time. Interested investors and analysts are invited to dial into the conference call by registering here.

Webcast access will also be available on the Investor Information section of the company’s website at https://www.cerence.com/investors/events-and-resources.

A replay of the webcast can be accessed by visiting the company’s website 90 minutes following the conference call at https://www.cerence.com/investors/events-and-resources.

Forward Looking Statements
Statements in this press release regarding: Cerence’s future performance, results and financial condition; expected growth and profitability; outlook and momentum; transformation plans and cost efficiency initiatives, including the estimated net annualized cost savings; strategy; opportunities; business, industry and market trends; strategy regarding fixed contracts and its impact on financial results; backlog; revenue visibility; revenue timing and mix; demand for Cerence products; innovation and new product offerings, including AI technology; expected benefits of technology partnerships; cost efficiency initiatives; and management’s future expectations, estimates, assumptions, beliefs, goals, objectives, targets, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “goal,” “anticipates,” “projects,” “forecasts,” “expects,” “intends,” “continues,” “will,” “may,” or “estimates” or similar expressions) should also be considered to be forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risk, uncertainties and other factors, which may cause actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements including but not limited to: the highly competitive and rapidly changing market in which we operate; adverse conditions in the automotive industry, the related supply chain and semiconductor shortage, or the global economy more generally; volatility in the political, legal and regulatory environment in which we operate, including trade, tariffs and other policies implemented by the new administration or actions taken by other countries in response; automotive production delays; changes in customer forecasts; the impacts of the COVID-19 pandemic on our and our customers’ businesses; the ongoing conflicts in Ukraine and the Middle East; our inability to control and successfully manage our expenses and cash position; our inability to deliver improved financial results from process optimization efforts and cost reduction actions; escalating pricing pressures from our customers; the impact on our business of the transition to a lower level of fixed contracts, including the failure to achieve such a transition; our failure to win, renew or implement service contracts; the cancellation or postponement of existing contracts; the loss of business from any of our largest customers; effects of customer defaults; our inability to successfully introduce new products, applications and services; our strategies to increase cloud offerings and deploy generative AI and large language models (LLMs); the inability to expand into adjacent markets; the inability to recruit and retain qualified personnel; disruptions arising from transitions in management personnel, including the transition to our new Chief Executive Officer; cybersecurity and data privacy incidents; failure to protect our intellectual property; defects or interruptions in service with respect to our products; fluctuating currency rates and interest rates; inflation; financial and credit market volatility; restrictions on our current and future operations under the terms of our debt, the use of cash to service or repay our debt; and our inability to generate sufficient cash from our operations; and the other factors discussed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this document.

Discussion of Non-GAAP Financial Measures
We believe that providing the non-GAAP information in addition to the GAAP presentation, allows investors to view the financial results in the way management views the operating results. We further believe that providing this information allows investors to not only better understand our financial performance, but more importantly, to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. The non-GAAP information should not be considered superior to, or a substitute for, financial statements prepared in accordance with GAAP.

We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions and for forecasting and planning for future periods. While our management uses these non-GAAP financial measures as a tool to enhance their understanding of certain aspects of our financial performance, our management does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial statements.

Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial statements, allows for greater transparency in the review of our financial and operational performance. In assessing the overall health of the business during the three months ended December 31, 2024 and 2023, our management has either included or excluded the following items in general categories, each of which is described below.

Adjusted EBITDA.
Adjusted EBITDA is defined as net income attributable to Cerence Inc. before net income (loss) attributable to income tax (benefit) expense, other income (expense) items, net, depreciation and amortization expense, and excluding amortization of acquired intangible assets, stock-based compensation, and restructuring and other costs, net or impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets, if any. From time to time we may exclude from Adjusted EBITDA the impact of events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. Other income (expense) items, net include interest expense, interest income, and other income (expense), net (as stated in our Condensed Consolidated Statement of Operations). Our management and Board of Directors use this financial measure to evaluate our operating performance. It is also a significant performance measure in our annual incentive compensation programs.

Restructuring and other costs, net.
Restructuring and other costs, net include restructuring expenses as well as other charges that are unusual in nature, are the result of unplanned events, and arise outside the ordinary course of our business such as employee severance costs, consulting costs relating to our transformation initiatives, and costs for consolidating duplicate facilities.

Amortization of acquired intangible assets.
We exclude the amortization of acquired intangible assets from non-GAAP expense and income measures. These amounts are inconsistent in amount and frequency and are significantly impacted by the timing and size of acquisitions. Providing a supplemental measure which excludes these charges allows management and investors to evaluate results “as-if” the acquired intangible assets had been developed internally rather than acquired and, therefore, provides a supplemental measure of performance in which our acquired intellectual property is treated in a comparable manner to our internally developed intellectual property. Although we exclude amortization of acquired intangible assets from our non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Future acquisitions may result in the amortization of additional intangible assets.

Non-cash expenses.
We provide non-GAAP information relative to the following non-cash expenses: (i) stock-based compensation; and (ii) non-cash interest. These items are further discussed as follows:

i)	Stock-based compensation. Because of varying valuation methodologies, subjective assumptions and the variety of award types, we exclude stock-based compensation from our operating results. We evaluate performance both with and without these measures because compensation expense related to stock-based compensation is typically non-cash and awards granted are influenced by the Company’s stock price and other factors such as volatility that are beyond our control. The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. As such, we do not include such charges in operating plans. Stock-based compensation will continue in future periods.
ii)	Non-cash interest. We exclude non-cash interest because we believe that excluding this expense provides management, as well as other users of the financial statements, with a valuable perspective on the cash-based performance and health of the business, including the current near-term projected liquidity. Non-cash interest expense will continue in future periods.

Other expenses.
We exclude certain other expenses that result from unplanned events outside the ordinary course of continuing operations, in order to measure operating performance and current and future liquidity both with and without these expenses. By providing this information, we believe management and the users of the financial statements are better able to understand the financial results of what we consider to be our organic, continuing operations. Included in these expenses are items such as other charges (credits), net, (gains) losses from extinguishment of debt, and changes in indemnification assets corresponding with the release of pre-spin liabilities for uncertain tax positions.

Adjustments to income tax provision.
Adjustments to our GAAP income tax provision to arrive at non-GAAP net income is determined based on our non-GAAP pre-tax income. Additionally, as our non-GAAP profitability is higher based on the non-GAAP adjustments, we adjust the GAAP tax provision to remove valuation allowances and related effects based on the higher level of reported non-GAAP profitability. We also exclude from our non-GAAP tax provision certain discrete tax items as they occur.

Key Performance Indicators
We believe that providing key performance indicators (“KPIs”) allows investors to gain insight into the way management views the performance of the business. We further believe that providing KPIs allows investors to better understand information used by management to evaluate and measure such performance. KPIs should not be considered superior to, or a substitute for, operating results prepared in accordance with GAAP. In assessing the performance of the business during the three months ended December 31, 2024, our management has reviewed the following KPIs, each of which is described below:

Percent of worldwide auto production with Cerence Technology: The number of Cerence enabled cars shipped as compared to IHS Markit car production data.
Change in number of Cerence connected cars shipped: The year-over-year change in the number of cars shipped with Cerence connected solutions. Amounts calculated on a TTM basis.
Change in Adjusted total billings YoY (TTM): The year over year change in total billings excluding Professional Services, prepay billings and adjusted for prepay consumption.

____________

See the tables at the end of this press release for non-GAAP reconciliations to the most directly comparable GAAP measures.

To learn more about Cerence AI, visit www.cerence.ai, and follow the company on LinkedIn.

About Cerence Inc.
Cerence Inc. (NASDAQ: CRNC) is a global industry leader in creating intuitive, seamless, AI-powered experiences across automotive and transportation. Leveraging decades of innovation and expertise in voice, generative AI, and large language models, Cerence powers integrated experiences that create safer, more connected, and more enjoyable journeys for drivers and passengers alike. With more than 500 million cars shipped with Cerence technology, the company partners with leading automakers, transportation OEMs, and technology companies to advance the next generation of user experiences. Cerence is headquartered in Burlington, Massachusetts, with operations globally and a worldwide team dedicated to pushing the boundaries of AI innovation. For more information, visit www.cerence.ai.

Contact Information
Investor Relations | Email: investorrelations@cerence.com


CERENCE INC. Condensed Consolidated Statements of Operations (in thousands, except per share data)

	Three Months Ended
	December 31,
	2024			2023
Revenues:
License	$	22,725		$	20,823
Connected services		13,707			96,820
Professional services		14,464			20,692
Total revenues		50,896			138,335
Cost of revenues:
License		1,782			1,604
Connected services		6,311			7,303
Professional services		9,731			17,325
Amortization of intangible assets		—			103
Total cost of revenues		17,824			26,335
Gross profit		33,072			112,000
Operating expenses:
Research and development		20,869			33,306
Sales and marketing		4,766			6,071
General and administrative		12,754			12,793
Amortization of intangible assets		554			545
Restructuring and other costs, net		11,062			705
Total operating expenses		50,005			53,420
(Loss) income from operations		(16,933	)		58,580
Interest income		1,437			1,432
Interest expense		(3,393	)		(3,236	)
Other income, net		272			1,422
(Loss) income before income taxes		(18,617	)		58,198
Provision for income taxes		5,671			34,341
Net (loss) income	$	(24,288	)	$	23,857
Net (loss) income per share:
Basic	$	(0.57	)	$	0.58
Diluted	$	(0.57	)	$	0.53
Weighted-average common share outstanding:
Basic		42,897			41,186
Diluted		42,897			49,255


CERENCE INC. Condensed Consolidated Balance Sheets (in thousands, except per share amounts)

	December 31,			September 30,
	2024			2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	104,103			121,485
Marketable securities		3,889			5,502
Accounts receivable, net of allowances of $53 and $1,613		47,671			62,755
Deferred costs		4,739			5,286
Prepaid expenses and other current assets		39,670			70,481
Total current assets		200,072			265,509
Long-term marketable securities		2,552			3,453
Property and equipment, net		29,371			30,139
Deferred costs		15,539			18,051
Operating lease right of use assets		13,156			12,879
Goodwill		288,886			296,858
Intangible assets, net		1,059			1,706
Deferred tax assets		46,035			51,398
Other assets		20,858			22,365
Total assets	$	617,528		$	702,358
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,609		$	3,959
Deferred revenue		47,626			52,822
Short-term operating lease liabilities		3,828			4,528
Short-term debt		59,954			87,094
Accrued expenses and other current liabilities		32,967			68,405
Total current liabilities		151,984			216,808
Long-term debt		196,208			194,812
Deferred revenue, net of current portion		113,444			114,354
Long-term operating lease liabilities		10,071			8,803
Other liabilities		25,119			26,484
Total liabilities		496,826			561,261
Stockholders’ Equity:
Common stock, $0.01 par value, 560,000 shares authorized; 42,988 and 41,924 shares issued and outstanding, respectively		430			419
Accumulated other comprehensive loss		(29,785	)		(25,912	)
Additional paid-in capital		1,096,085			1,088,330
Accumulated deficit		(946,028	)		(921,740	)
Total stockholders’ equity		120,702			141,097
Total liabilities and stockholders’ equity	$	617,528		$	702,358


CERENCE INC. Condensed Consolidated Statements of Cash Flows (in thousands)

	Three Months Ended
	December 31,
	2024			2023
Cash flows from operating activities:
Net (loss) income	$	(24,288	)	$	23,857
Adjustments to reconcile net (loss) income to net cash provided by (used in) operations:
Depreciation and amortization		2,445			2,686
Provision for expected credit loss reserve		207			–
Stock-based compensation		7,771			8,380
Non-cash interest expense		1,861			1,468
Gain on debt extinguishment		(327	)		–
Deferred tax provision		4,927			30,298
Unrealized foreign currency transaction losses (gains)		1,997			(2,012	)
Other, net		(33	)		382
Changes in operating assets and liabilities:
Accounts receivable		8,800			4,933
Prepaid expenses and other assets		27,201			1,170
Deferred costs		1,859			2,589
Accounts payable		3,814			2,382
Accrued expenses and other liabilities		(33,087	)		3,712
Deferred revenue		6,107			(82,660	)
Net cash provided by (used in) operating activities		9,254			(2,815	)
Cash flows from investing activities:
Capital expenditures		(1,360	)		(931	)
Sale and maturities of marketable securities		2,493			2,442
Other investing activities		(374	)		(322	)
Net cash provided by investing activities		759			1,189
Cash flows from financing activities:
Principal payments of short-term debt		(26,964	)		–
Common stock repurchases for tax withholdings for net settlement of equity awards		(1,369	)		(6,209	)
Principal payment of lease liabilities arising from a finance lease		(115	)		(122	)
Proceeds from the issuance of common stock		1,364			6,201
Net cash used in financing activities		(27,084	)		(130	)
Effects of exchange rate changes on cash and cash equivalents		(311	)		(662	)
Net change in cash and cash equivalents		(17,382	)		(2,418	)
Cash and cash equivalents at beginning of period		121,485			101,154
Cash and cash equivalents at end of period	$	104,103		$	98,736


CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (unaudited – in thousands)

	Three Months Ended
	December 31,
	2024			2023
GAAP revenue	$	50,896		$	138,335

GAAP gross profit	$	33,072		$	112,000
Stock-based compensation		490			641
Amortization of intangible assets		–			103
Non-GAAP gross profit	$	33,562		$	112,744
GAAP gross margin		65.0	%		81.0	%
Non-GAAP gross margin		65.9	%		81.5	%

GAAP operating (loss) income	$	(16,933	)	$	58,580
Stock-based compensation*		4,808			8,380
Amortization of intangible assets		554			648
Restructuring and other costs, net*		11,062			705
Non-GAAP operating (loss) income	$	(509	)	$	68,313
GAAP operating margin		-33.3	%		42.3	%
Non-GAAP operating margin		-1.0	%		49.4	%

GAAP net (loss) income	$	(24,288	)	$	23,857
Stock-based compensation*		4,808			8,380
Amortization of intangible assets		554			648
Restructuring and other costs, net*		11,062			705
Depreciation		1,891			2,038
Total other expense, net		(1,684	)		(382	)
Provision for income taxes		5,671			34,341
Adjusted EBITDA	$	1,382		$	70,351
GAAP net (loss) income margin		-47.7	%		17.2	%
Adjusted EBITDA margin		2.7	%		50.9	%
* – $3.0 million in stock-based compensation is included in Restructuring and other costs, net for Q1’25.


CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited – in thousands, except per share data)

	Three Months Ended
	December 31,
	2024			2023
GAAP net (loss) income	$	(24,288	)	$	23,857
Stock-based compensation*		4,808			8,380
Amortization of intangible assets		554			648
Restructuring and other costs, net*		11,062			705
Gain on debt extinguishment		(327	)		–
Non-cash interest expense		1,861			1,468
Other		(33	)		(27	)
Adjustments to income tax expense		4,895			19,259
Non-GAAP net (loss) income	$	(1,468	)	$	54,290

Adjusted EPS:
GAAP Numerator:
Net (loss) income attributed to common shareholders – basic	$	(24,288	)	$	23,857
Interest on the Notes, net of tax		–			2,250
Net (loss) income attributed to common shareholders – diluted	$	(24,288	)	$	26,107

Non-GAAP Numerator:
Net (loss) income attributed to common shareholders – basic	$	(1,468	)	$	54,290
Interest on the Notes, net of tax		–			1,120
Net (loss) income attributed to common shareholders – diluted	$	(1,468	)	$	55,410

GAAP Denominator:
Weighted-average common shares outstanding – basic		42,897			41,186
Adjustment for diluted shares		–			8,069
Weighted-average common shares outstanding – diluted		42,897			49,255

Non-GAAP Denominator:
Weighted-average common shares outstanding- basic		42,897			41,186
Adjustment for diluted shares		–			8,069
Weighted-average common shares outstanding – diluted		42,897			49,255

GAAP net (loss) income per share – diluted	$	(0.57	)	$	0.53
Non-GAAP net (loss) income per share – diluted	$	(0.03	)	$	1.12

GAAP net cash provided by (used in) operating activities	$	9,254		$	(2,815	)
Capital expenditures		(1,360	)		(931	)
Free Cash Flow	$	7,894		$	(3,746	)
* – $3.0 million in stock-based compensation is included in Restructuring and other costs, net for Q1’25.


CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited – in thousands)

	Q2 2025						FY2025
	Low			High			Low			High
GAAP revenue	$	74,000		$	77,000		$	236,000		$	247,000

GAAP gross profit	$	54,700		$	58,700		$	158,400		$	169,400
Stock-based compensation		700			700			2,500			2,500
Amortization of intangible assets		–			–			–			–
Non-GAAP gross profit	$	55,400		$	59,400		$	160,900		$	171,900
GAAP gross margin		74	%		76	%		67	%		69	%
Non-GAAP gross margin		75	%		77	%		68	%		70	%

GAAP operating income (loss)	$	7,100		$	11,100		$	(27,100	)	$	(16,100	)
Stock-based compensation		7,000			7,000			22,500			22,500
Amortization of intangible assets		500			500			1,600			1,600
Restructuring and other costs, net		1,300			1,300			8,100			8,100
Non-GAAP operating income	$	15,900		$	19,900		$	5,100		$	16,100
GAAP operating margin		10	%		14	%		-11	%		-7	%
Non-GAAP operating margin		21	%		26	%		2	%		7	%

GAAP net income (loss)	$	1,200		$	5,200		$	(39,600	)	$	(28,600	)
Stock-based compensation		7,000			7,000			22,500			22,500
Amortization of intangible assets		500			500			1,600			1,600
Restructuring and other costs, net		1,300			1,300			8,100			8,100
Depreciation		1,900			1,900			10,200			10,200
Total other expense, net		(1,300	)		(1,300	)		(5,100	)		(5,100	)
Provision for income taxes		4,600			4,600			7,400			7,400
Adjusted EBITDA	$	17,800		$	21,800		$	15,300		$	26,300
GAAP net income (loss) margin		2	%		7	%		-17	%		-12	%
Adjusted EBITDA margin		24	%		28	%		6	%		11	%


CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited – in thousands)

	Q2 2025				FY2025
	Low		High		Low			High
GAAP net income (loss)	$	1,200	$	5,200	$	(39,600	)	$	(28,600	)
Stock-based compensation		7,000		7,000		22,500			22,500
Amortization of intangibles		500		500		1,600			1,600
Restructuring and other costs, net		1,300		1,300		8,100			8,100
Non-cash interest expense		1,500		1,500		5,500			5,500
Other		–		–		(100	)		(100	)
Adjustments to income tax expense		1,500		1,500		(4,600	)		(4,600	)
Non-GAAP net income (loss)	$	13,000	$	17,000	$	(6,600	)	$	4,400

Adjusted EPS:
GAAP Numerator:
Net income (loss) attributed to common shareholders – basic and diluted	$	1,200	$	5,200	$	(39,600	)	$	(28,600	)

Non-GAAP Numerator:
Net income (loss) attributed to common shareholders – basic	$	13,000	$	17,000	$	(6,600	)	$	4,400
Interest on the Notes, net of tax		900		900		–			–
Net income (loss) attributed to common shareholders – diluted	$	13,900	$	17,900	$	(6,600	)	$	4,400

GAAP Denominator:
Weighted-average common shares outstanding – basic		43,000		43,000		43,000			43,000
Adjustment for diluted shares		100		100		–			–
Weighted-average common shares outstanding – diluted		43,100		43,100		43,000			43,000

Non-GAAP Denominator:
Weighted-average common shares outstanding- basic		43,000		43,000		43,000			43,000
Adjustment for diluted shares		6,800		6,800		–			100
Weighted-average common shares outstanding – diluted		49,800		49,800		43,000			43,100

GAAP net income (loss) per share – diluted	$	0.03	$	0.12	$	(0.92	)	$	(0.67	)
Non-GAAP net income (loss) per share – diluted	$	0.28	$	0.36	$	(0.15	)	$	0.10

GAAP net cash provided by operating activities					$	34,000		$	40,000
Capital expenditures						(14,000	)		(10,000	)
Free Cash Flow					$	20,000		$	30,000

The MIL Network –

February 7, 2025

MIL-OSI: ACM Research to Release Fourth Quarter and Fiscal Year 2024 Financial Results on February 26, 2025

Source: GlobeNewswire (MIL-OSI)

FREMONT, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — ACM Research, Inc. (“ACM”) (NASDAQ: ACMR) announced today that it will release its financial results for the fourth quarter and fiscal year 2024 before the U.S. market open on Wednesday, February 26, 2025. ACM will conduct a corresponding conference call at 8:00 a.m. U.S. Eastern Time (9:00 p.m. China Time) to discuss the results.

What:	ACM Fourth Quarter and Fiscal Year (ended December 31, 2024) Earnings Call
When:	8:00 a.m. U.S. Eastern Time on Wednesday, February 26, 2025
Webcast:	ir.acmr.com/news-events

To join the conference call via telephone, participants must use the following link to complete an online registration process. Upon registering, each participant will receive email instructions to access the conference call, including dial-in information and a PIN number allowing access to the conference call. This pre-registration process is designed by the operator to reduce delays due to operator congestion when accessing the live call.

Online Registration: https://register.vevent.com/register/BI70ae79d80e0348a880269ad7a9dec2f9

Participants who have not pre-registered may join the webcast by accessing the link at ir.acmr.com/news-events.

A live and archived webcast of the conference call will be available on the Investors section of ACM’s website at www.acmr.com.

About ACM Research, Inc.

ACM develops, manufactures and sells semiconductor process equipment spanning cleaning, electroplating, stress-free polishing, vertical furnace processes, track, PECVD, and wafer- and panel-level packaging tools, enabling advanced and semi-critical semiconductor device manufacturing. ACM is committed to delivering customized, high-performance, cost-effective process solutions that semiconductor manufacturers can use in numerous manufacturing steps to improve productivity and product yield. For more information, visit www.acmr.com.

© ACM Research, Inc. The ACM Research logo is a trademark of ACM Research, Inc. For convenience, this trademark appears in this press release without a ™ symbol, but that practice does not mean that ACM will not assert, to the fullest extent under applicable law, its rights to such trademark.

For investor and media inquiries, please contact:

In the United States:	The Blueshirt Group Steven C. Pelayo, CFA +1 (360) 808-5154 steven@blueshirtgroup.co

In China:	The Blueshirt Group Asia Gary Dvorchak, CFA +86 (138) 1079-1480 gary@blueshirtgroup.co

The MIL Network –

February 7, 2025

MIL-OSI: Nutanix Announces Date and Conference Call Information for Second Quarter Fiscal Year 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

SAN JOSE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced that it will report its financial results for the second quarter of fiscal year 2025, which ended January 31, 2025, after U.S. markets close on Wednesday, February 26, 2025.

Nutanix will host a conference call and earnings webcast beginning at 4:30 p.m. EST / 1:30 p.m. PST on the same day to discuss the company’s financial results. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com.

An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

About Nutanix
Nutanix is a global leader in cloud software, offering organizations a single platform for running applications and managing data, anywhere. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2025 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. in the United States and other countries. Other brand names and marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release contains links to external websites that are not part of Nutanix.com. Nutanix does not control these sites and disclaims all responsibility for the content or accuracy of any external site. Our decision to link to an external site should not be considered an endorsement of any content on such a site.

Investor Contact
Richard Valera
ir@nutanix.com

The MIL Network –

February 7, 2025

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

Source: GlobeNewswire (MIL-OSI)

Fourth Quarter 2024 Highlights

Total revenue of $1.66 billion, up 17% year over year
Product revenue of $574 million, up 18% year over year
Billings of $2.00 billion, up 7% year over year¹
Record GAAP operating margin of 35%
Record Non-GAAP operating margin of 39%¹
Unified SASE ARR²up 28% and Security Operations ARR²up 32%, year over year
Ranked #7 on the Forbes Most Trusted Companies in America 2025 list, the only cybersecurity company in the top 50

Full Year 2024 Highlights

Total revenue of $5.96 billion, up 12% year over year
Service revenue of $4.05 billion, up 20% year over year
Record GAAP operating margin of 30%
Record Non-GAAP operating margin of 35%¹
Remaining performance obligations of $6.42 billion, up 12% year over year
Cash flow from operations of $2.26 billion
Free cash flow of $1.88 billion¹
Exceeded the ‘Rule of 45’ for the fifth consecutive year

SUNNYVALE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the fourth quarter of 2024 and full year ended December 31, 2024.

“In the fourth quarter, we successfully balanced growth and profitability as our non-GAAP operating margin increased 720 basis points year-over-year to a company record of 39%, while revenue grew 17%,” said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. “We continue to execute our strategy of investing in the high-growth Unified SASE and Security Operations markets, while strengthening our position in Secure Networking. Our customers are increasingly recognizing the benefits of a single-vendor approach to SASE, and we expect to emerge as a leader in this space, being the only company to natively develop all SASE functions within a unified operating system, FortiOS, which seamlessly integrates networking and security capabilities.”

Financial Summary for the Fourth Quarter of 2024

Revenue: Total revenue was $1.66 billion for the fourth quarter of 2024, an increase of 17.3% compared to $1.42 billion for the same quarter of 2023.
Service Revenue: Service revenue was $1.09 billion for the fourth quarter of 2024, an increase of 17.2% compared to $927.0 million for the same quarter of 2023.
Product Revenue: Product revenue was $574.0 million for the fourth quarter of 2024, an increase of 17.6% compared to $488.1 million for the same quarter of 2023.
Billings¹: Total billings were $2.00 billion for the fourth quarter of 2024, an increase of 7.4% compared to $1.86 billion for the same quarter of 2023.
Unified SASE ARR²: Unified SASE ARR was $1.12 billion for the fourth quarter of 2024, an increase of 27.9% compared to $875.3 million for the same quarter of 2023.
Security Operations ARR²: Security Operations ARR was $422.4 million for the fourth quarter of 2024, an increase of 32.2% compared to $319.6 million for the same quarter of 2023.
GAAP Operating Income and Margin: GAAP operating income was $574.1 million for the fourth quarter of 2024, representing a GAAP operating margin of 34.6%. GAAP operating income was $385.4 million for the same quarter of 2023, representing a GAAP operating margin of 27.2%.
Non-GAAP Operating Income and Margin¹: Non-GAAP operating income was $650.9 million for the fourth quarter of 2024, representing a non-GAAP operating margin of 39.2%. Non-GAAP operating income was $453.5 million for the same quarter of 2023, representing a non-GAAP operating margin of 32.0%.
GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $526.2 million for the fourth quarter of 2024, compared to GAAP net income of $310.9 million for the same quarter of 2023. GAAP diluted net income per share was $0.68 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.40 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding.
Non-GAAP Net Income and Diluted Net Income Per Share¹: Non-GAAP net income was $571.5 million for the fourth quarter of 2024, compared to non-GAAP net income of $392.0 million for the same quarter of 2023. Non-GAAP diluted net income per share was $0.74 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to $0.51 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding.
Cash Flow: Cash flow from operations was $477.6 million for the fourth quarter of 2024, compared to $191.7 million for the same quarter of 2023.
Free Cash Flow¹: Free cash flow was $380.0 million for the fourth quarter of 2024, compared to $164.8 million for the same quarter of 2023.

Financial Summary for the Full Year 2024

Revenue: Total revenue was $5.96 billion for 2024, an increase of 12.3% compared to $5.30 billion in 2023.
Service Revenue: Service revenue was $4.05 billion for 2024, an increase of 19.8% compared to $3.38 billion in 2023.
Product Revenue: Product revenue was $1.91 billion for 2024, a decrease of 1.0% compared to $1.93 billion in 2023.
Billings¹: Total billings were $6.53 billion for 2024, an increase of 2.1% compared to $6.40 billion in 2023.
Remaining performance obligations: Remaining performance obligations were $6.42 billion as of December 31, 2024, an increase of 11.7% compared to $5.75 billion as of December 31, 2023.
Deferred Revenue: Total deferred revenue was $6.36 billion as of December 31, 2024, an increase of 10.9% compared to $5.74 billion as of December 31, 2023.
GAAP Operating Income and Margin: GAAP operating income was $1.80 billion for 2024, representing a GAAP operating margin of 30.3%. GAAP operating income was $1.24 billion for 2023, representing a GAAP operating margin of 23.4%.
Non-GAAP Operating Income and Margin¹: Non-GAAP operating income was $2.09 billion for 2024, representing a non-GAAP operating margin of 35.0%. Non-GAAP operating income was $1.51 billion for 2023, representing a non-GAAP operating margin of 28.4%.
GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $1.75 billion for 2024, compared to GAAP net income of $1.15 billion for 2023. GAAP diluted net income per share was $2.26 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $1.46 for 2023, based on 788.2 million diluted weighted-average shares outstanding.
Non-GAAP Net Income and Diluted Net Income Per Share¹: Non-GAAP net income was $1.83 billion for 2024, compared to non-GAAP net income of $1.29 billion for 2023. Non-GAAP diluted net income per share was $2.37 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to $1.63 for 2023, based on 788.2 million diluted weighted-average shares outstanding.
Cash Flow: Cash flow from operations was $2.26 billion in 2024 compared to $1.94 billion in 2023.
Free Cash Flow¹: Free cash flow was $1.88 billion in 2024, compared to $1.73 billion in 2023.

Guidance

For the first quarter of 2025, Fortinet currently expects:

Revenue in the range of $1.500 billion to $1.560 billion
Billings in the range of $1.520 billion to $1.600 billion
Non-GAAP gross margin in the range of 80.0% to 81.0%
Non-GAAP operating margin in the range of 30.0% to 31.0%
Diluted non-GAAP net income per share in the range of $0.52 to $0.54, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 774 million to 780 million.

For the fiscal year 2025, Fortinet currently expects:

Revenue in the range of $6.650 billion to $6.850 billion
Service revenue in the range of $4.575 billion to $4.725 billion
Billings in the range of $7.200 billion to $7.400 billion
Non-GAAP gross margin in the range of 79.0% to 81.0%
Non-GAAP operating margin in the range of 31.0% to 33.0%
Diluted non-GAAP net income per share in the range of $2.41 to $2.47, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 773 million to 783 million.

These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, charges in connection with litigation settlement, gain on intellectual property matters, gain on bargain purchase related to acquisition, non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.

¹ A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.
² ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value.

Conference Call Details

Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.

First Quarter 2025 Conference Participation Schedule:

Morgan Stanley Technology, Media & Telecom Conference
March 4, 2025

Members of Fortinet’s management team are expected to present at this conference and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change.

About Fortinet (www.fortinet.com)

Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet’s solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams (“CERTs”), government entities, and academia, is a fundamental aspect of Fortinet’s commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet’s elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs.

Copyright © 2025 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail, FortiSandbox, FortiADC, FortiAgent, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAppSec, FortiAuthenticator, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCART, FortiCASB, FortiCentral, FortiCNP, FortiConnect, FortiController, FortiConverter, FortiCSPM, FortiCWP, FortiDAST, FortiDATA, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevice, FortiDevSec, FortiDLP, FortiEdge, FortiEDR, FortiEndpoint, FortiExplorer, FortiExtender, FortiFirewall, FortiFlex, FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC, FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPoint, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiScanner, FortiSDNConnector, FortiSEC, FortiSIEM, FortiSMS, FortiSOAR, FortiSRA, FortiStack, FortiSwitch, FortiTester, FortiTIP, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM, FortiXDR and Lacework FortiCNAPP. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments.

FTNT-F

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future growth and market share gains, our strategy going forward, and guidance and expectations around future financial results, including guidance and expectations for the first quarter of 2025 and full year 2025, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by economic challenges, a possible economic downturn or recession and the effects of inflation or stagflation, rising interest rates or reduced information technology spending; supply chain challenges; negative impacts from the ongoing war in Ukraine and its related macroeconomic effects and our decision to reduce operations in Russia; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; sales execution risks, including risks in connection with the timing and completion of large strategic deals; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or perceived breach of our network or our customers’ networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive, including advances in artificial intelligence; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by competition and pricing pressure; excess product inventory for any reason, including those caused by the effects of increased inflation and interest rates in certain geographies and the war in Ukraine; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine or tensions between China and Taiwan, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies, including the impact of any future shutdowns of the U.S. government and the transition in administrations; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events.

Non-GAAP Financial Measures

We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.

Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.

Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure.

Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation, amortization of acquired intangible assets and charges in connection with litigation settlement, less gain on intellectual property matter and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.

Non-GAAP net income and diluted net income per share. We define non-GAAP net income as net income plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a gain on bargain purchase related to acquisition, a non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP.

FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions)

	December 31, 2024			December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,875.9		$	1,397.9
Short-term investments		1,126.4			1,021.5
Marketable equity securities		64.2			21.0
Accounts receivable—net		1,463.4			1,402.0
Inventory		315.5			484.8
Prepaid expenses and other current assets		126.1			101.1
Total current assets		5,971.5			4,428.3
PROPERTY AND EQUIPMENT—NET		1,349.5			1,044.4
DEFERRED CONTRACT COSTS		622.9			605.6
DEFERRED TAX ASSETS		1,335.6			868.8
GOODWILL AND OTHER INTANGIBLE ASSETS—NET		350.4			161.8
OTHER ASSETS		133.2			150.0
TOTAL ASSETS	$	9,763.1		$	7,258.9
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	190.9		$	204.3
Accrued liabilities		337.9			423.7
Accrued payroll and compensation		255.7			242.3
Deferred revenue		3,276.2			2,848.7
Total current liabilities		4,060.7			3,719.0
DEFERRED REVENUE		3,084.7			2,886.3
LONG-TERM DEBT		994.3			992.3
OTHER LIABILITIES		129.6			124.7
Total liabilities		8,269.3			7,722.3
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock		0.8			0.8
Additional paid-in capital		1,636.2			1,416.4
Accumulated other comprehensive loss		(26.1	)		(18.9	)
Accumulated deficit		(117.1	)		(1,861.7	)
Total stockholders’ equity (deficit)		1,493.8			(463.4	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	9,763.1		$	7,258.9

FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts)

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
REVENUE:
Product	$	574.0		$	488.1		$	1,908.7		$	1,927.3
Service		1,086.1			927.0			4,047.1			3,377.5
Total revenue		1,660.1			1,415.1			5,955.8			5,304.8
COST OF REVENUE:
Product		178.0			197.2			652.0			763.6
Service		136.5			118.7			505.6			473.6
Total cost of revenue		314.5			315.9			1,157.6			1,237.2
GROSS PROFIT:
Product		396.0			290.9			1,256.7			1,163.7
Service		949.6			808.3			3,541.5			2,903.9
Total gross profit		1,345.6			1,099.2			4,798.2			4,067.6
OPERATING EXPENSES:
Research and development		191.1			152.5			716.8			613.8
Sales and marketing		526.5			507.4			2,044.8			2,006.0
General and administrative		55.1			55.1			237.8			211.3
Gain on intellectual property matter		(1.2	)		(1.2	)		(4.6	)		(4.6	)
Total operating expenses		771.5			713.8			2,994.8			2,826.5
OPERATING INCOME		574.1			385.4			1,803.4			1,241.1
INTEREST INCOME		42.3			30.5			155.2			119.7
INTEREST EXPENSE		(4.9	)		(5.4	)		(20.0	)		(21.0	)
GAIN ON BARGAIN PURCHASE		—			—			106.3			—
OTHER INCOME (EXPENSE)—NET		6.9			5.1			13.6			(6.1	)
INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS		618.4			415.6			2,058.5			1,333.7
PROVISION FOR INCOME TAXES		86.7			95.2			283.9			143.8
LOSS FROM EQUITY METHOD INVESTMENTS		(5.5	)		(9.5	)		(29.4	)		(42.1	)
NET INCOME	$	526.2		$	310.9		$	1,745.2		$	1,147.8
Net income per share:
Basic	$	0.69		$	0.41		$	2.28		$	1.47
Diluted	$	0.68		$	0.40		$	2.26		$	1.46
Weighted-average shares outstanding:
Basic		766.5			764.9			764.4			778.6
Diluted		775.2			772.3			771.9			788.2

FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions)

	Year Ended
	December 31, 2024			December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,745.2		$	1,147.8
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		257.9			249.0
Amortization of deferred contract costs		293.7			266.3
Depreciation and amortization		122.8			113.4
Amortization of investment discounts		(48.8	)		(27.7	)
Loss from equity method investments		29.4			42.1
Gain on bargain purchase		(106.3	)		—
Other		(15.2	)		18.5
Changes in operating assets and liabilities, net of impact of business combinations:
Accounts receivable—net		(45.4	)		(146.4	)
Inventory		131.2			(253.5	)
Prepaid expenses and other current assets		(13.7	)		(27.6	)
Deferred contract costs		(311.1	)		(353.5	)
Deferred tax assets		(223.2	)		(301.9	)
Other assets		(11.0	)		17.7
Accounts payable		(10.2	)		(43.1	)
Accrued liabilities		(106.7	)		137.4
Accrued payroll and compensation		—			23.4
Other liabilities		(8.3	)		(21.7	)
Deferred revenue		577.8			1,095.3
Net cash provided by operating activities		2,258.1			1,935.5
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments		(1,948.6	)		(1,855.8	)
Sales of investments		0.5			4.0
Maturities of investments		1,891.7			1,414.8
Purchases of property and equipment		(378.9	)		(204.1	)
Purchase of investment in privately held company		—			(8.5	)
Payments made in connection with business combinations, net of cash acquired		(275.5	)		—
Purchases of marketable equity securities		(16.7	)		—
Other		0.1			0.3
Net cash used in investing activities		(727.4	)		(649.3	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase and retirement of common stock		(0.6	)		(1,500.5	)
Proceeds from issuance of common stock		63.1			43.8
Taxes paid related to net share settlement of equity awards		(100.9	)		(112.5	)
Other		(11.7	)		(1.2	)
Net cash used in financing activities		(50.1	)		(1,570.4	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(2.6	)		(0.8	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,478.0			(285.0	)
CASH AND CASH EQUIVALENTS—Beginning of year		1,397.9			1,682.9
CASH AND CASH EQUIVALENTS—End of year	$	2,875.9		$	1,397.9

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures
(Unaudited, in millions, except per share amounts)

Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income and diluted net income per share

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Reconciliation of non-GAAP operating income:
GAAP operating income	$	574.1		$	385.4		$	1,803.4		$	1,241.1
GAAP operating margin		34.6	%		27.2	%		30.3	%		23.4	%
Add back:
Stock‐based compensation		66.5			64.0			260.2			251.6
Amortization of acquired intangible assets		11.5			5.3			23.1			18.9
Litigation-related matter ^(a)		—			—			3.2			—
Gain on intellectual property matter		(1.2	)		(1.2	)		(4.6	)		(4.6	)
Non‐GAAP operating income	$	650.9		$	453.5		$	2,085.3		$	1,507.0
Non‐GAAP operating margin		39.2	%		32.0	%		35.0	%		28.4	%

Reconciliation of non-GAAP net income:
GAAP net income	$	526.2		$	310.9		$	1,745.2		$	1,147.8
Add back:
Stock‐based compensation		66.5			64.0			260.2			251.6
Amortization of acquired intangible assets		11.5			5.3			23.1			18.9
Litigation-related matter ^(a)		—			—			3.2			—
Gain on intellectual property matter		(1.2	)		(1.2	)		(4.6	)		(4.6	)
Gain on bargain purchase ^(b)		—			—			(106.3	)		—
Tax adjustment ^(c)		(31.5	)		13.0			(95.9	)		(128.1	)
Non-cash charge on equity method investment ^(d)		—			—			8.0			—
Non-GAAP net income	$	571.5		$	392.0		$	1,832.9		$	1,285.6

Non-GAAP net income per share, diluted
Non-GAAP net income	$	571.5		$	392.0		$	1,832.9		$	1,285.6
Non-GAAP shares used in diluted net income per share calculations		775.2			772.3			771.9			788.2
Non-GAAP net income per share, diluted	$	0.74		$	0.51		$	2.37		$	1.63

Reconciliation of non-GAAP net income per share, diluted
GAAP net income per share, diluted	$	0.68		$	0.40		$	2.26		$	1.46
Add back:
Non-GAAP adjustments to net income per share		0.06			0.11			0.11			0.17
Non-GAAP net income per share, diluted	$	0.74		$	0.51		$	2.37		$	1.63

(a) To exclude a $3.2 million adjustment for a litigation settlement in the three months ended September 30, 2024.
(b) To exclude a $106.3 million gain on bargain purchase related to our acquisition of Lacework Inc in the three months ended September 30, 2024.
(c) Non-GAAP financial information is adjusted to an effective tax rate of 17% in the three months and year ended December 31, 2024 and 2023, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate.
(d) To exclude an $8.0 million non-cash charge of impairment on our equity method investment in Linksys.

Reconciliation of net cash provided by operating activities to free cash flow

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net cash provided by operating activities	$	477.6		$	191.7		$	2,258.1		$	1,935.5
Less: Purchases of property and equipment		(97.6	)		(26.9	)		(378.9	)		(204.1	)
Free cash flow	$	380.0		$	164.8		$	1,879.2		$	1,731.4
Net cash used in investing activities	$	(79.9	)	$	(71.6	)	$	(727.4	)	$	(649.3	)
Net cash used in financing activities	$	(8.8	)	$	(910.1	)	$	(50.1	)	$	(1,570.4	)

Reconciliation of total revenue to total billings

	Three Months Ended					Year Ended
	December 31, 2024			December 31, 2023		December 31, 2024			December 31, 2023
Total revenue	$	1,660.1		$	1,415.1	$	5,955.8		$	5,304.8
Add: Change in deferred revenue		349.2			449.7		625.9			1,094.7
Less: Deferred revenue balance acquired in business acquisitions		(6.8	)		—		(49.2	)		—
Total billings	$	2,002.5		$	1,864.8	$	6,532.5		$	6,399.5

Investor Contact:	Media Contact:

Aaron Ovadia	Michelle Zimmermann
Fortinet, Inc.	Fortinet, Inc.
408-235-7700	408-235-7700
investors@fortinet.com	pr@fortinet.com

The MIL Network –

February 7, 2025

MIL-OSI: Globalink Investment Inc. Announces Extension of the Deadline to Complete a Business Combination to March 9, 2025

Source: GlobeNewswire (MIL-OSI)

New York, NY, Feb. 06, 2025 (GLOBE NEWSWIRE) — Globalink Investment Inc. (OTC Pink: GLLI, GLLIW, GLLIR, GLLIU) (“Globalink” or the “Company”), a special purpose acquisition company, announced today that on February 5, 2025, it caused to be deposited $60,000 (the “Extension Payment”) into its trust account (the “Trust Account”) with Continental Stock Transfer and Trust Company (“Continental”) to extend the deadline to complete its initial business combination from February 9, 2025 to March 9, 2025. The extension is the twentieth extension since the consummation of the Company’s initial public offering on December 9, 2021, and the third of up to six extensions permitted under the Company’s governing documents currently in effect.

About Globalink Investment Inc.

Globalink is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although there is no restriction or limitation on what industry or geographic region, Globalink intends to pursue targets in North America, Europe, Southeast Asia, and Asia (excluding China, Hong Kong and Macau) in the medical technology and green energy industry.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “outlook,” “guidance” or the negative of those terms or other comparable terminology. These statements are based on the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause future events to differ materially from those in the forward-looking statements, many of which are outside of the Company’s control. These factors include, but are not limited to, a variety of risk factors affecting the Company’s business and prospects, see the section titled “Risk Factors” in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on April 2, 2024 and the prospectus filed with the SEC on December 6, 2021 and subsequent reports filed with the SEC, as amended from time to time. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Globalink Contact:

Say Leong Lim
Globalink Investment Inc.
Telephone: +6012 405 0015
Email: sllim@globalinkinvestment.com

The MIL Network –

February 7, 2025

MIL-OSI: APA Corporation Declares Cash Dividend on Common Shares

Source: GlobeNewswire (MIL-OSI)

HOUSTON, Feb. 06, 2025 (GLOBE NEWSWIRE) — The board of directors of APA Corporation (Nasdaq: APA) has declared a regular cash dividend on the company’s common shares.

The dividend on common shares is payable May 22, 2025, to stockholders of record on April 22, 2025, at a rate of 25 cents per share on the corporation’s common stock.

About APA
APA Corporation owns consolidated subsidiaries that explore for and produce oil and natural gas in the United States, Egypt and the United Kingdom and that explore for oil and natural gas offshore Suriname and elsewhere. APA posts announcements, operational updates, investor information and press releases on its website, www.apacorp.com.

Contacts
Investor: (281) 302-2286 Ben Rodgers
Media: (713) 296-7276 Alexandra Franceschi
Website: www.apacorp.com

APA-F

The MIL Network –

February 7, 2025

MIL-OSI: Greystone Housing Impact Investors LP Schedules Fourth Quarter 2024 Earnings Conference Call for Thursday, February 20, 2025 at 4:30 p.m. Eastern Time

Source: GlobeNewswire (MIL-OSI)

OMAHA, Neb., Feb. 06, 2025 (GLOBE NEWSWIRE) — Greystone Housing Impact Investors LP (NYSE: GHI) (the “Partnership”) announced today that it will host a conference call for investors on Thursday, February 20, 2025 at 4:30 p.m. Eastern Time to discuss the Partnership’s Fourth Quarter 2024 results.

For those interested in participating in the question-and-answer session, participants may dial-in toll free at (877) 407-8813. International participants may dial-in at +1 (201) 689-8521. No pin or code number is needed.

The call is also being webcast live in listen-only mode. The webcast can be accessed via the Partnership’s website under “Events & Presentations” or via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=T0wdPGmd

It is recommended that you join 15 minutes before the conference call begins (although you may register, dial-in or access the webcast at any time during the call).

A recorded replay of the webcast will be made available on the Partnership’s Investor Relations website at http://www.ghiinvestors.com.

About Greystone Housing Impact Investors LP

Greystone Housing Impact Investors LP was formed in 1998 under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds which have been issued to provide construction and/or permanent financing for affordable multifamily, seniors and student housing properties. The Partnership is pursuing a business strategy of acquiring additional mortgage revenue bonds and other investments on a leveraged basis. The Partnership expects and believes the interest earned on these mortgage revenue bonds is excludable from gross income for federal income tax purposes. The Partnership seeks to achieve its investment growth strategy by investing in additional mortgage revenue bonds and other investments as permitted by its Second Amended and Restated Limited Partnership Agreement, dated December 5, 2022, taking advantage of attractive financing structures available in the securities market, and entering into interest rate risk management instruments. Greystone Housing Impact Investors LP press releases are available at www.ghiinvestors.com.

Safe Harbor Statement

Information contained in this press release contains “forward-looking statements,” which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, risks involving current maturities of our financing arrangements and our ability to renew or refinance such maturities, fluctuations in short-term interest rates, collateral valuations, mortgage revenue bond investment valuations and overall economic and credit market conditions. For a further list and description of such risks, see the reports and other filings made by the Partnership with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The Partnership disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Ken Rogozinski
Chief Executive Officer
402-952-1235

The MIL Network –

February 7, 2025

MIL-OSI: ESCO Reports First Quarter Fiscal 2025 Results

Source: GlobeNewswire (MIL-OSI)

St. Louis, Feb. 06, 2025 (GLOBE NEWSWIRE) — ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the first quarter ended December 31, 2024 (Q1 2025).

Operating Highlights

Q1 2025 Sales increased $28.7 million (13.2 percent) to $247.0 million compared to $218.3 million in Q1 2024.
Q1 2025 Entered Orders were $275.0 million for a book-to-bill ratio of 1.11x, resulting in record backlog of $907 million.
Q1 2025 GAAP EPS increased 54 percent to $0.91 per share compared to $0.59 per share in Q1 2024.
Q1 2025 Adjusted EPS as defined in prior guidance increased 48 percent to $0.92 per share compared to $0.62 per share in Q1 2024.
Beginning in Q1 2025 we are excluding acquisition related amortization (which was $0.15 per share in Q1 2025) from our Adjusted EPS calculation. Q1 2025 Adjusted EPS excluding acquisition related amortization increased 41 percent to $1.07 per share compared to $0.76 per share in Q1 2024.
Net cash provided by operating activities was $34 million in Q1 2025, an increase of $25 million compared to the prior year period, as cash flow was positively impacted by higher net earnings and favorable working capital impacts.

Bryan Sayler, Chief Executive Officer and President, commented, “Our fiscal year got off to an outstanding start as we delivered 13 percent top line growth, over 200 basis points of Adjusted EBITDA margin expansion, and a 41 percent increase in Adjusted EPS compared to the prior year. All three segments delivered solid revenue growth, highlighted by notable strength across our Navy, commercial aerospace and utility end-markets. It was also great to see our Test business deliver a solid quarter with improving order flow, double digit revenue growth, and over 500 basis points of margin expansion.

“The ESCO team continues to build upon our strong position in attractive markets to increase value across the enterprise. Overall, it was a great way to start the year, with continuing momentum across our end markets giving us the confidence to raise our full year earnings guidance.”

Segment Performance

Aerospace & Defense (A&D)

Sales increased $19.6 million (21 percent) to $114.3 million in Q1 2025 from $94.7 million in Q1 2024. The Q1 increase was driven by strength in Navy and commercial aerospace, partially offset by lower defense aerospace.
Q1 2025 EBIT and Adjusted EBIT both increased $4.9 million to $21.6 million (18.9 percent margin) from $16.7 million (17.6 percent margin) in Q1 2024. Margin improvement was driven by leverage on higher volume and price increases, partially offset by inflationary pressures and mix.
Entered Orders decreased $51 million (30 percent) to $121 million in Q1 2025 compared to $172 million in Q1 2024. The decrease in orders was primarily driven by large Navy orders for Virginia Class Block V surface hull tiles and Block VI long lead material procurement for the Light-Weight Wide Aperture Array (LWWAA) in Q1 2024, partially offset by higher Q1 2025 Navy ejection valve and spares orders. Orders in the quarter resulted in a segment book-to-bill of 1.06x and record ending backlog of $607 million.

Utility Solutions Group (USG)

Sales increased $3.7 million (4 percent) to $86.7 million in Q1 2025 from $83.0 million in Q1 2024. Doble’s sales increased by $7.9 million (12 percent) driven by a strong quarter for offline and protection testing products and services. NRG sales decreased $4.2 million (22 percent) due to moderation in renewable energy projects in the quarter.
EBIT increased $2.9 million in Q1 2025 to $20.5 million from $17.6 million in Q1 2024. Adjusted EBIT increased $2.8 million to $20.5 million (23.6 percent margin) from $17.7 million (21.4 percent margin) in Q1 2024. Margin was favorably impacted by leverage on higher volume, price increases, and mix, partially offset by inflationary pressures.
Entered Orders increased $13 million (16 percent) to $90 million in Q1 2025. Doble orders increased by $10 million (15 percent) on strength across their product portfolio and highlighted by a $4.3 million order for offline test equipment at Phenix. NRG orders increased by $3 million in the quarter. The segment book-to-bill was 1.03x in the quarter and resulted in an ending backlog of $123 million.

RF Test & Measurement (Test)

Sales increased $5.5 million (13 percent) to $46.1 million in Q1 2025 from $40.6 million in Q1 2024. Sales growth primarily related to higher U.S. shielding, Test and Measurement in EMEA, and MPE filter sales.
EBIT increased $2.6 million in Q1 2025 to $4.4 million from $1.8 million in Q1 2024. Adjusted EBIT increased $2.8 million in Q1 2025 to $4.9 million (10.6 percent margin) from $2.1 million (5.1 percent margin) in Q1 2024. Margin was favorably impacted by leverage on higher volume, price increases, and cost reduction efforts, partially offset by inflationary pressures and mix.
Entered Orders increased $20 million (43 percent) to $65 million in Q1 2025. The increase was driven by a strong quarter for EMC Test & Measurement, A&D, and medical and industrial shielding orders. The segment book-to-bill was 1.41x in the quarter and resulted in ending backlog of $177 million.

Business Outlook – 2025
Beginning in Q1 2025, acquisition related amortization will be excluded from our Adjusted Earnings calculation. Our current assessment of FY 2025 acquisition related amortization does not include the impact of the pending SM&P acquisition. The initial fiscal 2025 guidance issued in our November press release is revised as follows:

	Guidance Range
November FY 2025 Adjusted EPS Guidance	$	4.70	$	4.90
Acquisition Related Amortization	$	0.60	$	0.60
Revised November FY 2025 Adjusted EPS Guidance	$	5.30	$	5.50

Due to strong market conditions and continued improvement in operational performance, we are raising our full-year guidance by $0.25 to a range of $5.55 to $5.75 (16 to 21 percent growth over the prior year) from $5.30 to $5.50. This guidance is in line with our initial revenue guidance range of $1.09 to $1.11 billion (6 to 8 percent annual growth).

	Guidance Range
Revised November FY 2025 Adjusted EPS Guidance	$	5.30	$	5.50
Guidance Increase	$	0.25	$	0.25
Revised FY 2025 Adjusted EPS Guidance	$	5.55	$	5.75

Management’s current expectation is for Q2 Adjusted EPS in the range of $1.20 to $1.30, which represents 10 to 19 percent growth over the prior year quarter.

	Guidance Range
Q2 2025 Adjusted EPS Guidance (prior methodology)	$	1.05	$	1.15
Acquisition Related Amortization	$	0.15	$	0.15
Q2 2025 Adjusted EPS Guidance	$	1.20	$	1.30

SM&P Acquisition
As announced on July 8, 2024, ESCO has agreed to acquire the Signature Management & Power (SM&P) business of Ultra Maritime for a purchase price of $550 million. The closing of the transaction is subject to certain conditions, including the completion of the regulatory approval processes in the United States (US) and the United Kingdom (UK). The US closing conditions have been met. We are in the final stages of the UK government assessment of the transaction and we are optimistic that the assessment will be positively resolved in the near term. Our current expectation would be to close the transaction either in our second or early in our third fiscal quarter. SM&P’s sole source product offerings will add significant scale to the ESCO Navy business, providing increased content on domestic Navy submarine and surface ship programs and expansion into vital UK and AUKUS navy platforms.

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on April 17, 2025 to stockholders of record on April 2, 2025.

Conference Call
The Company will host a conference call today, February 6, at 4:00 p.m. Central Time, to discuss the Company’s Q1 2025 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website.

Forward-Looking Statements
Statements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2025, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this presentation, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and the following: the timing and outcome, if any, of the Company’s strategic alternatives review of VACCO and its Space business; of the Company’s pending acquisition of SM&P; the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components or supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses.

Non-GAAP Financial Measures
The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation, and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

About ESCO
ESCO is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products for the aviation, Navy, space, and process markets worldwide and composite-based products and solutions for Navy, defense, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit the Company’s website at www.escotechnologies.com.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)

					Three Months Ended December 31, 2024				Three Months Ended December 31, 2023

Net Sales				$	247,026				218,314
Cost and Expenses:
		Cost of sales			148,642				134,151
		Selling, general and administrative expenses			58,784				53,968
		Amortization of intangible assets			7,993				7,868
		Interest expense			2,257				2,667
		Other (income) expenses, net			(591	)			206
			Total costs and expenses		217,085				198,860

Earnings before income taxes					29,941				19,454
Income tax expense					6,468				4,285

			Net earnings	$	23,473				15,169

			Earnings Per Share (EPS)

			Diluted – GAAP	$	0.91				0.59

			Diluted – As Adjusted Basis	$	1.07		(1	)	0.76	(2	)

			Diluted average common shares O/S:		25,834				25,846

(1	)	Q1 2025 Adjusted EPS excludes $0.16 per share of after-tax charges consisting primarily of $0.01 of restructuring charges within the Test segment and acquisition related costs at Corporate and $0.15 of acquisition related amortization.

(2	)	Q1 2024 Adjusted EPS excludes $0.17 per share of after-tax charges consisting primarily of $0.03 of MPE acquisition inventory step-up and backlog charges and acquisition related costs and $0.14 of acquisition related amortization.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)

				GAAP				As Adjusted
				Q1 2025		Q1 2024		Q1 2025		Q1 2024
Net Sales
	Aerospace & Defense		$	114,301		94,733		114,301		94,733
	USG			86,660		82,984		86,660		82,984
	Test			46,065		40,597		46,065		40,597
		Totals	$	247,026		218,314		247,026		218,314

EBIT
	Aerospace & Defense		$	21,596		16,663		21,622		16,663
	USG			20,489		17,625		20,489		17,745
	Test			4,422		1,779		4,887		2,052
	Corporate			(14,309	)	(13,946	)	(9,310	)	(8,600	)
		Consolidated EBIT		32,198		22,121		37,688		27,860
		Less: Interest expense		(2,257	)	(2,667	)	(2,257	)	(2,667	)
		Less: Income tax expense		(6,468	)	(4,285	)	(7,730	)	(5,605	)
		Net earnings	$	23,473		15,169		27,701		19,588

Note 1: Adjusted net earnings of $27.7 million in Q1 2025 exclude $4.2 million (or $0.16 per share) of after-tax charges consisting primarily of restructuring charges within the Test segment and acquisition related costs at Corporate, and acquisition related amortization.

Note 2: Adjusted net earnings of $19.6 million in Q1 2024 exclude $4.4 million (or $0.17 per share) of after-tax charges consisting primarily of MPE acquisition inventory step-up and backlog charges and acquisition related costs, and acquisition related amortization.

EBITDA Reconciliation to Net earnings:								Adjusted		Adjusted
				Q1 2025		Q1 2024		Q1 2025		Q1 2024
Consolidated EBITDA			$	46,005		35,573		46,498		36,408
Less: Depr & Amort				(13,807	)	(13,452	)	(8,810	)	(8,548	)
Consolidated EBIT				32,198		22,121		37,688		27,860
Less: Interest expense				(2,257	)	(2,667	)	(2,257	)	(2,667	)
Less: Income tax expense				(6,468	)	(4,285	)	(7,730	)	(5,605	)
Net earnings			$	23,473		15,169		27,701		19,588

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)

				December 31, 2024	September 30, 2024

Assets
	Cash and cash equivalents		$	71,284	65,963
	Accounts receivable, net			202,661	240,680
	Contract assets			131,404	130,534
	Inventories			219,383	209,164
	Other current assets			20,779	22,308
		Total current assets		645,511	668,649
	Property, plant and equipment, net			168,468	170,596
	Intangible assets, net			396,302	407,602
	Goodwill			532,312	539,899
	Operating lease assets			38,710	37,744
	Other assets			13,761	14,130
			$	1,795,064	1,838,620

Liabilities and Shareholders’ Equity
	Current maturities of long-term debt		$	20,000	20,000
	Accounts payable			75,881	98,371
	Contract liabilities			129,737	124,845
	Other current liabilities			90,491	106,638
		Total current liabilities		316,109	349,854
	Deferred tax liabilities			75,520	75,333
	Non-current operating lease liabilities			36,400	34,810
	Other liabilities			38,102	39,273
	Long-term debt			92,000	102,000
	Shareholders’ equity			1,236,933	1,237,350
			$	1,795,064	1,838,620

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)

		Three Months Ended December 31, 2024		Three Months Ended December 31, 2023
Cash flows from operating activities:
Net earnings	$	23,473		15,169
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization		13,807		13,452
Stock compensation expense		2,524		2,180
Changes in assets and liabilities		(7,151	)	(22,539	)
Effect of deferred taxes		1,521		484
Net cash provided by operating activities		34,174		8,746

Cash flows from investing activities:
Acquisition of business, net of cash acquired		–		(56,179	)
Capital expenditures		(5,208	)	(7,848	)
Additions to capitalized software		(2,587	)	(2,942	)
Net cash used by investing activities		(7,795	)	(66,969	)

Cash flows from financing activities:
Proceeds from long-term debt		42,000		99,000
Principal payments on long-term debt and short-term borrowings		(52,000	)	(29,000	)
Dividends paid		(2,064	)	(2,064	)
Purchases of common stock into treasury		–		–
Other		(6,031	)	(1,432	)
Net cash (used) provided by financing activities		(18,095	)	66,504

Effect of exchange rate changes on cash and cash equivalents		(2,963	)	1,249

Net increase in cash and cash equivalents		5,321		9,530
Cash and cash equivalents, beginning of period		65,963		41,866
Cash and cash equivalents, end of period	$	71,284		51,396

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)

Backlog And Entered Orders – Q1 2025			A&D		USG		Test		Total
	Beginning Backlog – 10/1/24	$	600,382		119,943		158,644		878,969
	Entered Orders		120,606		89,574		64,825		275,005
	Sales		(114,301	)	(86,660	)	(46,065	)	(247,026	)
	Ending Backlog – 12/31/24	$	606,687		122,857		177,404		906,948

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)

EPS – Adjusted Basis Reconciliation – Q1 2025
	EPS – GAAP Basis – Q1 2025	$	0.91
	Adjustments (defined below)		0.16
	EPS – As Adjusted Basis – Q1 2025	$	1.07

	Adjustments exclude $0.16 per share consisting primarily of $0.01 of restructuring
	charges within the Test segment and acquisition related costs at Corporate and
	$0.15 of acquisition related amortization.
	The $0.16 of EPS adjustments per share consists of $5,490K of pre-tax charges
	offset by $1,262K of tax benefit for net impact of $4,228K.

EPS – Adjusted Basis Reconciliation – Q1 2024
	EPS – GAAP Basis – Q1 2024	$	0.59
	Adjustments (defined below)		0.17
	EPS – As Adjusted Basis – Q1 2024	$	0.76

	Adjustments exclude $0.17 per share consisting primarily of $0.03 of MPE
	acquisition inventory step-up and backlog charges and acquisition related costs and
	$0.14 of acquisition related amortization.
	The $0.17 of EPS adjustments per share consists of $5,739K of pre-tax charges
	offset by $1,320K of tax benefit for net impact of $4,419K.

EPS – Adjusted Basis Reconciliation – Q2 2025 Guidance			Low	High
	EPS – GAAP Basis – Q2 2025	$	1.05	1.15
	Adjustments (defined below)		0.15	0.15
	EPS – As Adjusted Basis – Q2 2025	$	1.20	1.30

	Adjustments exclude an estimated $0.15 of acquisition related amortization.
	The estimated $0.15 of EPS adjustment per share consists of $5.0 million of pre-tax charges
	offset by $1.15 million of tax benefit for net impact of $3.85 million.

EPS – Adjusted Basis Reconciliation – FY 2025 Guidance			Low	High
	EPS – GAAP Basis – FY 2025	$	4.94	5.14
	Adjustments (defined below)		0.61	0.61
	EPS – As Adjusted Basis – FY 2025	$	5.55	5.75

	Adjustments exclude $0.61 per share consisting primarily of $0.01 of restructuring charges within
	the Test segment and acquisition related costs at Corporate and an estimated $0.60 of acquisition
	related amortization. The estimated $0.61 of EPS adjustments per share consists of $20.5
	million of pre-tax charges offset by $4.7 million of tax benefits for net impact of $15.8 million.

SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277

The MIL Network –

February 7, 2025

MIL-OSI: Northeast Bank Reports Second Quarter Results and Declares Dividend

Source: GlobeNewswire (MIL-OSI)

PORTLAND, Maine, Feb. 06, 2025 (GLOBE NEWSWIRE) — Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $22.4 million, or $2.74 per diluted common share, for the quarter ended December 31, 2024, compared to net income of $14.1 million, or $1.85 per diluted common share, for the quarter ended December 31, 2023. Net income for the six months ended December 31, 2024 was $39.5 million, or $4.85 per diluted common share, compared to $29.2 million, or $3.86 per diluted common share, for the six months ended December 31, 2023.

The Board of Directors declared a cash dividend of $0.01 per share, payable on March 4, 2025, to shareholders of record as of February 18, 2025.

Discussing these results, Rick Wayne, Chief Executive Officer, said, “Our National Lending Division generated $260.4 million in originated and purchased volume for the quarter, including record originations of $246.4 million. Our small balance SBA 7(a) program with Newity LLC as our loan service provider has continued to grow. For the quarter, we originated $100.3 million, compared to $82.4 million for the quarter ended September 30, 2024 and $13.6 million for the quarter ended December 31, 2023. During the current quarter we sold $64.5 million of the guaranteed portion of our SBA loans, generating a gain on sale of $5.6 million. Additionally, we approved and initiated an additional at-the-market (“ATM”) offering of up to $75.0 million of our voting common stock, which provides the Bank with the ability to raise capital if and as needed. We are reporting earnings of $2.74 per diluted common share, a return on average equity of 21.1%, and a return on average assets of 2.2%.”

As of December 31, 2024, total assets were $4.08 billion, an increase of $950.9 million, or 30.4%, from total assets of $3.13 billion as of June 30, 2024.

1. The following table highlights the changes in the loan portfolio, including loans held for sale, for the six months ended December 31, 2024:

	Loan Portfolio Changes
	December 31, 2024 Balance		June 30, 2024 Balance			Change ($)		Change (%)
	(Dollars in thousands)
National Lending Purchased	$	2,392,417	$	1,708,551	$	683,866		40.03	%
National Lending Originated		1,109,192		981,497		127,695		13.01	%
SBA National		103,554		48,405		55,149		113.92	%
Community Banking		20,857		22,704		(1,847	)	(8.14	%)
Total	$	3,626,020	$	2,761,157	$	864,863		31.32	%

Loans generated by the Bank’s National Lending Division for the quarter ended December 31, 2024 totaled $260.5 million, which consisted of $14.0 million of purchased loans at an average price of 94.8% of unpaid principal balance, and $246.4 million of originated loans.

An overview of the Bank’s National Lending Division portfolio follows:

		National Lending Portfolio
		Three Months Ended December 31,
	2024								2023
	Purchased				Originated		Total		Purchased		Originated		Total
	(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance	$		14,815		$	246,417	$	261,232	$	208,045	$	63,485	$	271,530
Initial net investment basis (1)			14,039			246,417		260,456		186,131		63,485		249,616

Loan returns during the period:
Yield			8.84%			9.06%		8.91%		9.19%		9.81%		9.43%
Total Return on Purchased Loans (2)			8.86%			N/A		8.86%		9.21%		N/A		9.21%

	Six Months Ended December 31,
	2024								2023
	Purchased				Originated		Total		Purchased		Originated		Total
	(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance	$		822,549		$	373,309	$	1,195,858	$	271,741	$	131,528	$	403,269
Initial net investment basis (1)			746,932			373,309		1,120,241		238,477		131,528		370,005

Loan returns during the period:
Yield			8.84	%		9.18%		8.95%		9.10%		9.92%		9.41%
Total Return on Purchased Loans (2)			8.85%			N/A		8.85%		9.13%		N/A		9.13%

Total loans as of period end:
Unpaid principal balance	$		2,598,354		$	1,109,192	$	3,707,546	$	1,831,183	$	910,213	$	2,741,396
Net investment basis			2,392,417			1,109,192		3,501,609		1,646,756		910,213		2,556,969

^{(1) Initial net investment basis on purchased loans is the initial amortized cost basis net of initial allowance for credit losses (credit mark).}
^{(2) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains (losses) on real estate owned, release of allowance for credit losses on purchased loans, and other noninterest income recorded during the period divided by the average invested balance on an annualized basis. The total return on purchased loans does not include the effect of purchased loan charge-offs or recoveries during the period. Total return on purchased loans is considered a non-GAAP financial measure. See reconciliation in below table entitled “Total Return on Purchased Loans.”}

2. Deposits increased by $811.9 million, or 34.7%, from June 30, 2024. The increase was primarily attributable to increases in time deposits of $773.5 million, or 59.2%. The significant drivers in the change in time deposits were the increase in brokered time deposits, which increased by $660.5 million, and Community Banking Division time deposits, which increased by $90.5 million compared to June 30, 2024.

3. Federal Home Loan Bank (“FHLB”) advances increased by $62.6 million, or 18.1%, from June 30, 2024. The increase was attributable to one new short-term borrowing, partially offset by net paydowns on amortizing advances.

4. Shareholders’ equity increased by $67.5 million, or 17.9%, from June 30, 2024, primarily due to net income of $39.5 million and $28.1 million of net proceeds on shares issued in connection with the Bank’s ATM program.

Net income increased by $8.4 million to $22.4 million for the quarter ended December 31, 2024, compared to net income of $14.1 million for the quarter ended December 31, 2023.

1. Net interest and dividend income before provision for credit losses increased by $11.5 million to $48.5 million for the quarter ended December 31, 2024, compared to $37.0 million for the quarter ended December 31, 2023. The increase was primarily due to the following:

An increase in interest income earned on loans of $20.2 million, primarily due to higher average balances in the National Lending Division purchased and originated and Small Business Administration (“SBA”) portfolios, partially offset by lower rates earned across the portfolio;
An increase in interest income earned on short-term investments of $925 thousand, due to higher average balances, partially offset by lower rates earned; and
A decrease in FHLB borrowings interest expense of $2.0 million, primarily due to lower average balances; partially offset by,
An increase in deposit interest expense of $11.6 million, primarily due to higher average balances, partially offset by lower rates on interest-bearing deposits.

The following table summarizes interest income and related yields recognized on the loan portfolios:

	Interest Income and Yield on Loans
	Three Months Ended December 31,
	2024						2023
	Average		Interest				Average		Interest
	Balance (1)		Income		Yield		Balance (1)		Income		Yield
	(Dollars in thousands)
Community Banking	$	21,481	$	369	6.82	%	$	25,559	$	419	6.51	%
SBA National		93,831		2,751	11.63	%		28,331		888	12.47	%
National Lending:
Originated		1,041,301		23,769	9.06	%		939,383		23,155	9.81	%
Purchased		2,407,132		53,655	8.84	%		1,551,038		35,849	9.19	%
Total National Lending		3,448,433		77,424	8.91	%		2,490,421		59,004	9.43	%
Total	$	3,563,745	$	80,544	8.97	%	$	2,544,311	$	60,311	9.43	%
	Six Months Ended December 31,
	2024						2023
	Average		Interest				Average		Interest
	Balance (1)		Income		Yield		Balance (1)		Income		Yield
	(Dollars in thousands)
Community Banking	$	21,945	$	738	6.67	%	$	26,355	$	857	6.47	%
SBA National		76,788		5,170	13.36	%		27,294		1,674	12.20	%
National Lending:
Originated		1,019,347		47,176	9.18	%		950,006		47,375	9.92	%
Purchased		2,082,969		92,797	8.84	%		1,520,215		69,519	9.10	%
Total National Lending		3,102,316		139,973	8.95	%		2,470,221		116,894	9.41	%
Total	$	3,201,049	$	145,881	9.04	%	$	2,523,870	$	119,425	9.41	%

^{(1) Includes loans held for sale.}

The components of total income on purchased loans are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the quarter ended December 31, 2023, transactional income increased by $541 thousand for the quarter ended December 31, 2024, and regularly scheduled interest and accretion increased by $17.3 million primarily due to the increase in average balances. The total return on purchased loans for the quarter ended December 31, 2024 was 8.9%, a decrease from 9.2% for the quarter ended December 31, 2023. The following table details the total return on purchased loans:

	Total Return on Purchased Loans
	Three Months Ended December 31,
	2024				2023
	Income		Return (1)		Income		Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	50,747	8.36	%	$	33,430	8.57		%
Transactional income:
Release of allowance for credit losses on purchased loans		97	0.02	%		46	0.02		%
Accelerated accretion and loan fees		2,908	0.48	%		2,419	0.62		%
Total transactional income		3,005	0.50	%		2,465	0.64		%
Total	$	53,752	8.86	%	$	35,895	9.21		%

	Six Months Ended December 31,
	2024				2023
	Income		Return (1)		Income			Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	87,906	8.37	%	$	64,460		8.44	%
Transactional income:
Release of allowance for credit losses on purchased loans		161	0.01	%		226		0.03	%
Accelerated accretion and loan fees		4,891	0.47	%		5,059		0.66	%
Total transactional income		5,052	0.48	%		5,285		0.69	%
Total	$	92,958	8.85	%	$	69,745		9.13	%

^{(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, and gains (losses) on real estate owned, and release of allowance for credit losses on purchased loans recorded during the period divided by the average invested balance on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. Total return is considered a non-GAAP financial measure.}

2. Provision for credit losses increased by $1.5 million to $1.9 million for the quarter ended December 31, 2024, compared to $436 thousand in the quarter ended December 31, 2023. The increase was primarily related to loan growth and increases in specific reserves on certain loans.

3. Noninterest income increased by $4.5 million for the quarter ended December 31, 2024, compared to the quarter ended December 31, 2023, primarily due to an increase in gain on sale of SBA loans of $5.0 million, due to the sale of $64.5 million in SBA loans during the quarter ended December 31, 2024 as compared to the sale of $11.5 million during the quarter ended December 31, 2023.

4. Noninterest expense increased by $3.4 million for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023, primarily due to the following:

An increase in salaries and employee benefits expense of $1.4 million, primarily due to increases in regular and stock compensation expense;
An increase in loan expense of $1.1 million primarily related to increased expenses in connection with the origination of SBA 7(a) loans; and
An increase in FDIC insurance expense of $669 thousand, due to the growth of the Bank’s asset size and an increased assessment rate.

5. Income tax expense increased by $2.7 million to $11.0 million, or an effective tax rate of 32.9%, for the quarter ended December 31, 2024, compared to $8.3 million, or an effective tax rate of 37.1%, for the quarter ended December 31, 2023. The decrease in effective tax rate is primarily due to a write-down of the Bank’s deferred tax asset of $957 thousand in the quarter ended December 31, 2023 as a result of a change in Massachusetts income tax law.

As of December 31, 2024, nonperforming assets totaled $31.3 million, or 0.77% of total assets, compared to $28.3 million, or 0.90% of total assets, as of June 30, 2024.

As of December 31, 2024, past due loans totaled $30.5 million, or 0.85% of total loans, compared to past due loans totaling $26.3 million, or 0.95% of total loans, as of June 30, 2024.

As of December 31, 2024, the Bank’s Tier 1 leverage capital ratio was 11.2%, compared to 12.3% at June 30, 2024, and the Total risk-based capital ratio was 13.9% at December 31, 2024, compared to 14.8% at June 30, 2024. Capital ratios decreased primarily due to the increase in risk-weighted assets and average assets from significant loan growth during the six months ended December 31, 2024, partially offset by increased retained earnings and additional capital raised under the Bank’s ATM program.

Investor Call Information
Rick Wayne, Chief Executive Officer, Richard Cohen, Chief Financial Officer, and Pat Dignan, Chief Operating Officer and Chief Credit Officer of Northeast Bank, will host a conference call to discuss second quarter earnings and business outlook at 10:00 a.m. Eastern Time on Friday, February 7^th. To access the conference call by phone, please go to this link (Phone Registration), and you will be provided with dial in details. The call will be available via live webcast, which can be viewed by accessing the Bank’s website at www.northeastbank.com and clicking on the About Us – Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

About Northeast Bank
Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via seven branches. Our National Lending Division purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found at www.northeastbank.com.

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures, including tangible common shareholders’ equity, tangible book value per share, total return on purchased loans, and efficiency ratio. The Bank’s management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Forward-Looking Statements
Statements in this press release that are not historical facts 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, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Federal Deposit Insurance Corporation (the “FDIC”), in our annual reports to our shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Although the Bank believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, contingencies, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Bank’s control. The Bank’s actual results could differ materially from those expressed or implied by such the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; changes in employment levels, general business and economic conditions on a national basis and in the local markets in which the Bank operates; changes in customer behavior due to changing business and economic conditions (including inflation and concerns about liquidity) or legislative or regulatory initiatives; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of credit loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changes in legislation and regulation under the new U.S. presidential administration; operational risks including, but not limited to, cybersecurity, fraud, natural disasters, climate change and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Bank’s Annual Report on Form 10-K, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A as updated in the Bank’s Quarterly Reports on Form 10-Q and other filings submitted to the FDIC. These statements speak only as of the date of this release and the Bank does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

NBN-F


NORTHEAST BANK
BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
	December 31, 2024		June 30, 2024
Assets
Cash and due from banks	$	2,538	$	2,711
Short-term investments		362,332		239,447
Total cash and cash equivalents		364,870		242,158


Available-for-sale debt securities, at fair value		27,616		48,978
Equity securities, at fair value		7,171		7,013
Total investment securities		34,787		55,991

SBA loans held for sale		35,234		14,506

Loans:
Commercial real estate		2,703,938		2,028,280
Commercial and industrial		778,189		618,846
Residential real estate		108,427		99,234
Consumer		232		291
Total loans		3,590,786		2,746,651
Less: Allowance for credit losses		44,773		26,709
Loans, net		3,546,013		2,719,942


Premises and equipment, net		25,739		27,144
Real estate owned and other possessed collateral, net		1,200		–
Federal Home Loan Bank stock, at cost		17,798		15,751
Loan servicing rights, net		841		984
Bank-owned life insurance		19,078		18,830
Accrued interest receivable		16,939		15,163
Other assets		20,555		21,734
Total assets	$	4,083,054	$	3,132,203

Liabilities and Shareholders’ Equity
Deposits:
Demand	$	159,002	$	146,727
Savings and interest checking		782,570		732,029
Money market		130,063		154,504
Time		2,079,703		1,306,203
Total deposits		3,151,338		2,339,463

Federal Home Loan Bank and other advances		407,824		345,190
Lease liability		19,461		20,252
Other liabilities		60,330		50,664
Total liabilities		3,638,953		2,755,569

Commitments and contingencies		–		–

Shareholders’ equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares
issued and outstanding at December 31 and June 30, 2024		–		–
Voting common stock, $1.00 par value, 25,000,000 shares authorized;
8,492,856 and 8,127,690 shares issued and outstanding at
December 31 and June 30, 2024, respectively		8,493		8,128
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;
No shares issued and outstanding at December 31 and June 30, 2024		–		–
Additional paid-in capital		92,292		64,762
Retained earnings		343,302		303,927
Accumulated other comprehensive income (loss)		14		(183	)
Total shareholders’ equity		444,101		376,634
Total liabilities and shareholders’ equity	$	4,083,054	$	3,132,203


NORTHEAST BANK
STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
		Three Months Ended December 31,							Six Months Ended December 31,
		2024				2023			2024		2023
	Interest and dividend income:
	Interest and fees on loans		$	80,544		$	60,311		$	145,881	$	119,425
	Interest on available-for-sale securities			436			560			1,031		1,043
	Other interest and dividend income			4,186			3,261			8,108		6,361
	Total interest and dividend income			85,166			64,132			155,020		126,829

	Interest expense:
	Deposits			32,777			21,175			59,367		40,433
	Federal Home Loan Bank advances			3,666			5,701			7,696		11,847
	Obligation under capital lease agreements			233			256			467		425
	Total interest expense			36,676			27,132			67,530		52,705

	Net interest and dividend income before provision for credit losses			48,490			37,000			87,490		74,124
	Provision for credit losses			1,944			436			2,366		625
	Net interest and dividend income after provision for credit losses			46,546			36,564			85,124		73,499

	Noninterest income:
	Fees for other services to customers			391			492			834		899
	Gain on sales of SBA loans			5,570			570			8,901		822
	Net unrealized gain (loss) on equity securities			(163	)		230			27		72
	Loss on real estate owned, other repossessed collateral and premises and equipment, net			–			(9	)		–		(9	)
	Bank-owned life insurance income			125			116			248		231
	Correspondent fee income			23			52			54		143
	Other noninterest income			3			15			5		87
	Total noninterest income			5,949			1,466			10,069		2,245

	Noninterest expense:
	Salaries and employee benefits			11,287			9,905			22,470		19,625
	Occupancy and equipment expense			1,103			1,101			2,182		2,206
	Professional fees			562			499			1,315		1,281
	Data processing fees			1,622			1,347			3,109		2,447
	Marketing expense			94			221			230		482
	Loan acquisition and collection expense			2,063			939			3,355		1,589
	FDIC insurance expense			956			287			1,288		644
	Other noninterest expense			1,379			1,370			2,802		2,784
	Total noninterest expense			19,066			15,669			36,751		31,058

	Income before income tax expense			33,429			22,361			58,442		44,686
	Income tax expense			10,989			8,307			18,896		15,460
	Net income		$	22,440		$	14,054		$	39,546	$	29,226

	Weighted-average shares outstanding:
	Basic			8,044,345			7,505,109			7,965,486		7,492,310
	Diluted			8,197,568			7,590,913			8,153,368		7,572,450
	Earnings per common share:
	Basic		$	2.79		$	1.87		$	4.96	$	3.90
	Diluted			2.74			1.85			4.85		3.86
	Cash dividends declared per common share		$	0.01		$	0.01		$	0.02	$	0.02


NORTHEAST BANK
AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
	Three Months Ended December 31,
	2024						2023
			Interest		Average				Interest		Average
	Average		Income/		Yield/		Average		Income/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Assets:
Interest-earning assets:
Investment securities	$	40,004	$	436	4.32	%	$	59,797	$	560	3.73	%
Loans (1) (2) (3)		3,563,745		80,544	8.97	%		2,544,311		60,311	9.43	%
Federal Home Loan Bank stock		15,458		346	8.88	%		21,222		468	8.77	%
Short-term investments (4)		325,118		3,840	4.69	%		206,090		2,793	5.39	%
Total interest-earning assets		3,944,325		85,166	8.57	%		2,831,420		64,132	9.01	%
Cash and due from banks		2,216						2,508
Other non-interest earning assets		30,982						69,245
Total assets	$	3,977,523					$	2,903,173

Liabilities & Shareholders’ Equity:
Interest-bearing liabilities:
NOW accounts	$	581,969	$	5,932	4.04	%	$	511,217	$	5,636	4.39	%
Money market accounts		128,787		953	2.94	%		229,154		2,009	3.49	%
Savings accounts		187,701		1,653	3.49	%		122,643		917	2.97	%
Time deposits		2,080,911		24,239	4.62	%		1,022,767		12,613	4.91	%
Total interest-bearing deposits		2,979,368		32,777	4.36	%		1,885,781		21,175	4.47	%
Federal Home Loan Bank advances		336,762		3,666	4.32	%		481,824		5,701	4.71	%
Lease liability		19,599		233	4.72	%		21,361		256	4.77	%
Total interest-bearing liabilities		3,335,729		36,676	4.36	%		2,388,966		27,132	4.52	%

Non-interest bearing liabilities:
Demand deposits and escrow accounts		190,135						167,358
Other liabilities		30,501						24,616
Total liabilities		3,556,365						2,580,940
Shareholders’ equity		421,158						322,233
Total liabilities and shareholders’ equity	$	3,977,523					$	2,903,173

Net interest income			$	48,490					$	37,000

Interest rate spread					4.21	%					4.49	%
Net interest margin (5)					4.88	%					5.20	%

Cost of funds (6)					4.13	%					4.22	%

(1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory tax rate. (2) Includes loans held for sale.
(3) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4) Short-term investments include FHLB overnight deposits and other interest-bearing deposits. (5) Net interest margin is calculated as net interest income divided by total interest-earning assets. (6) Cost of funds is calculated as total interest expense divided by total interest-bearing liabilities plus demand deposits and escrow accounts.

NORTHEAST BANK
AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
	Six Months Ended December 31,
	2024						2023
			Interest		Average				Interest		Average
	Average		Income/		Yield/		Average		Income/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Assets:
Interest-earning assets:
Investment securities	$	47,708	$	1,031	4.29	%	$	59,986	$	1,043	3.46	%
Loans (1) (2) (3)		3,201,049		145,881	9.04	%		2,523,870		119,425	9.41	%
Federal Home Loan Bank stock		15,961		676	8.40	%		21,790		881	8.04	%
Short-term investments (4)		285,330		7,432	5.17	%		203,946		5,480	5.34	%
Total interest-earning assets		3,550,048		155,020	8.66	%		2,809,592		126,829	8.98	%
Cash and due from banks		2,164						2,500
Other non-interest earning assets		62,527						62,753
Total assets	$	3,614,739					$	2,874,845

Liabilities & Shareholders’ Equity:
Interest-bearing liabilities:
NOW accounts	$	572,849	$	12,312	4.26	%	$	499,331	$	10,781	4.29	%
Money market accounts		138,738		2,219	3.17	%		243,725		4,142	3.38	%
Savings accounts		183,141		3,210	3.48	%		106,820		1,477	2.75	%
Time deposits		1,735,372		41,626	4.76	%		999,993		24,033	4.78	%
Total interest-bearing deposits		2,630,100		59,367	4.48	%		1,849,869		40,433	4.35	%
Federal Home Loan Bank advances		349,678		7,696	4.37	%		496,169		11,847	4.75	%
Lease liability		19,808		467	4.68	%		21,568		425	3.92	%
Total interest-bearing liabilities		2,999,586		67,530	4.47	%		2,367,606		52,705	4.43	%

Non-interest bearing liabilities:
Demand deposits and escrow accounts		182,648						168,348
Other liabilities		28,337						24,842
Total liabilities		3,210,571						2,560,796
Shareholders’ equity		404,168						314,049
Total liabilities and shareholders’ equity	$	3,614,739					$	2,874,845

Net interest income			$	87,490					$	74,124

Interest rate spread					4.19	%					4.55	%
Net interest margin (5)					4.89	%					5.25	%

Cost of funds (6)					4.21	%					4.04	%

(1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory tax rate.
(2) Includes loans held for sale. (3) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4) Short-term investments include FHLB overnight deposits and other interest-bearing deposits. (5) Net interest margin is calculated as net interest income divided by total interest-earning assets. (6) Cost of funds is calculated as total interest expense divided by total interest-bearing liabilities plus demand deposits and escrow accounts.

NORTHEAST BANK
SELECTED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
	Three Months Ended
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Net interest income	$	48,490	$	39,000	$	37,935	$	36,512	$	37,000
Provision for credit losses		1,944		422		547		596		436
Noninterest income		5,949		4,119		2,092		1,542		1,466
Noninterest expense		19,066		17,685		17,079		16,429		15,669
Net income		22,440		17,106		15,140		13,865		14,054

Weighted-average common shares outstanding:
Basic		8,044,345		7,886,148		7,765,868		7,509,320		7,505,109
Diluted		8,197,568		8,108,688		7,910,692		7,595,124		7,590,913
Earnings per common share:
Basic	$	2.79	$	2.17	$	1.95	$	1.85	$	1.87
Diluted		2.74		2.11		1.91		1.83		1.85

Dividends declared per common share	$	0.01	$	0.01	$	0.01	$	0.01	$	0.01

Return on average assets		2.24%		2.09%		1.99%		1.87%		1.93%
Return on average equity		21.14%		17.53%		16.56%		16.45%		17.35%
Net interest rate spread (1)		4.21%		4.18%		4.41%		4.27%		4.49%
Net interest margin (2)		4.88%		4.90%		5.13%		5.01%		5.20%
Efficiency ratio (non-GAAP) (3)		35.02%		41.01%		42.67%		43.17%		40.73%
Noninterest expense to average total assets		1.90%		2.16%		2.24%		2.21%		2.15%
Average interest-earning assets to average interest-bearing liabilities		118.24%		118.48%		118.78%		119.28%		118.52%

	As of:
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Nonperforming loans:
Originated portfolio:
Residential real estate	$	2,446	$	3,976	$	2,502	$	2,573	$	2,582
Commercial real estate		3,662		4,682		1,407		2,075		2,075
Commercial and industrial		6,696		6,684		6,520		6,928		6,950
Consumer		5		–		–		–		–
Total originated portfolio		12,809		15,342		10,429		11,576		11,607
Total purchased portfolio		17,257		21,830		17,832		16,370		19,165
Total nonperforming loans		30,066		37,172		28,261		27,946		30,772
Real estate owned and other repossessed collateral, net		1,200		–		–		–		–
Total nonperforming assets	$	31,266	$	37,172	$	28,261	$	27,946	$	30,772

Past due loans to total loans		0.85%		0.89%		0.95%		1.13%		1.22%
Nonperforming loans to total loans		0.84%		1.06%		1.02%		1.05%		1.18%
Nonperforming assets to total assets		0.77%		0.94%		0.90%		0.93%		1.04%
Allowance for credit losses to total loans		1.25%		1.25%		0.97%		0.98%		1.06%
Allowance for credit losses to nonperforming loans		148.92%		117.40%		94.51%		92.83%		89.67%
Net charge-offs (recoveries)	$	869	$	1,604	$	1,347	$	2,225	$	995
Commercial real estate loans to total capital (4)		542.12%		604.38%		482.13%		509.08%		544.34%
Net loans to deposits		112.52%		110.70%		116.88%		118.15%		121.31%
Purchased loans to total loans		66.63%		69.11%		61.88%		60.99%		63.07%
Equity to total assets		10.88%		9.96%		12.02%		11.73%		11.03%
Common equity tier 1 capital ratio		12.66%		11.45%		13.84%		13.24%		12.63%
Total risk-based capital ratio		13.91%		12.70%		14.82%		14.22%		13.71%
Tier 1 leverage capital ratio		11.16%		12.06%		12.30%		11.79%		11.28%

Total shareholders’ equity	$	444,101	$	392,557	$	376,634	$	351,913	$	327,540
Less: Preferred stock		–		–		–		–		–
Common shareholders’ equity		444,101		392,557		376,634		351,913		327,540
Less: Intangible assets (5)		–		–		–		–		–
Tangible common shareholders’ equity (non-GAAP)	$	444,101	$	392,557	$	376,634	$	351,913	$	327,540

Common shares outstanding		8,492,856		8,212,026		8,127,690		7,977,690		7,804,052
Book value per common share	$	52.29	$	47.80	$	46.34	$	44.11	$	41.97
Tangible book value per share (non-GAAP) (6)		52.29		47.80		46.34		44.11		41.97

(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3) The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the credit loss provision) plus noninterest income.
(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Includes the loan servicing rights asset. (6) Tangible book value per share represents total shareholders’ equity less the sum of preferred stock and intangible assets divided by common shares outstanding.

For More Information:
Richard Cohen, Chief Financial Officer
Northeast Bank, 27 Pearl Street, Portland, Maine 04101
207.786.3245 ext. 3249
www.northeastbank.com

The MIL Network –

February 7, 2025

MIL-OSI Security: Dallas, Texas, Man Admits Making Threats of Violence Against Sikh Organization

Source: Federal Bureau of Investigation (FBI) State Crime Alerts (c)

CAMDEN, N.J. – A man from Dallas County, Texas admitted to a federal hate crime and for making interstate threats against the employees of a Sikh nonprofit organization, Acting U.S. Attorney Vikas Khanna for the District of New Jersey and Deputy Assistant Attorney General Kathleen Wolfe of the Justice Department’s Civil Rights Division announced.

Bushan Athale, 49, of Dallas, Texas, pleaded guilty today before U.S. District Judge Edward S. Kiel in Camden federal court to an Information charging him with one count of interfering with federally protected activities through the threatened use of a dangerous weapon and one count of transmitting an interstate threat to injure another person. Sentencing is scheduled for June 3, 2025.

“Threats of violence have no place in our society,” said Vikas Khanna, Acting U.S. Attorney for the District of New Jersey. “Every individual in this country must be free to practice their religion without fear of violence or persecution. We will continue to ensure the safety of our communities by prosecuting those who threaten our basic American freedoms.”

“Every citizen has the right to feel safe, secure, and free from fear of violence or hate,” said Wayne A. Jacobs, Special Agent in Charge of the FBI’s Philadelphia Field Office. “We are deeply grateful to our law enforcement and community partners who stand with us daily. Together, we remain steadfast in pursuing those who threaten the safety and well-being of the people we are sworn to protect.”

According to documents filed in the case and statements made in court:

On or about September 17, 2022, Athale called the main number of an organization that advocates for the civil rights of Sikh individuals within the United States. Over the course of the next hour, Athale left seven voicemails expressing hatred toward Sikh individuals working at this same organization and threatening to injure or kill these individuals with a razor.

Athale’s voicemails, which were filled with violent imagery and obscenity, contained references to places, people, and tenets that are particularly significant within the Sikh religion. Among other things, Athale stated his intention to “catch” the Sikhs at Organization 1, forcibly shave their “top and bottom hair,” use a “razor” to “cut” their hair and “make” them bald, “make” them smoke and eat tobacco, and “show [them] the heaven.”

On March 21, 2024, Athale again called the same Sikh organization and left two more voicemails. In these voicemails, Athale again used violent, sexual imagery to express his hatred toward Sikhs as well as Muslims, and spouted antisemitic rhetoric.

During his guilty plea, Athale also admitted to additional conduct reflecting his long history of making violent threats rooted in religious animus. For example, Athale admitted that on November 6, 2021 and November 7, 2021, he had sent electronic messages to a former co-worker, in which he stated that he “hate[d] Pakistan” and “hate[d] Muslims.” Athale wrote, “I hate you, I just don’t know how to kill your whole family including you? Tell me??? I will figure it out […] Probably I will hire a Jew, they will be most happy.”

Athale also admitted that, from May 28, 2024 to May 31, 2024, he had sent threatening electronic messages to a recruiter who he believed to be a Muslim. Athale wrote statements such as “you will be dead, get out [expletive] Muslim” and “If you dont [sic] back off you are killed.”

The charge of interfering with federally protected activities carries a maximum potential penalty of ten years in prison and the charge of transmitting an interstate threat carries a maximum potential penalty of five years in prison. Both charges also carry a maximum potential penalty of up to a $250,000 fine. The defendant also may be sentenced to a term of supervised release after any term of imprisonment imposed.

Acting U.S. Attorney Khanna credited the special agents of the FBI of the Philadelphia Division, under the direction of Special Agent in Charge Wayne A. Jacobs, with the investigation leading up to this guilty plea.

The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the Special Prosecutions Division in Camden, Assistant U.S. Attorney Jason M. Richardson of the Civil Rights Division in Camden, and Trial Attorney Eric Peffley of the Justice Department’s Civil Rights Division.

###

Defense Counsel: AFPD Maggie Moy

MIL Security OSI –

February 7, 2025

MIL-OSI: First Pacific Bancorp Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

WHITTIER, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — First Pacific Bancorp (the “Company”) (OTC Pink: FPBC), the holding company for First Pacific Bank (the “Bank”), today reported consolidated results for the fourth quarter and year ending December 31, 2024, marking its seventh consecutive quarter of profitability. The Company remains well-capitalized, with a robust liquidity position supported by a stable core deposit base and access to substantial sources of liquidity.

Highlights for the fourth quarter and full year 2024 include:

Total assets ended 2024 at $433 million, up $13 million from $420 million at year end 2023.
Total deposits ended 2024 at $351 million, up $18 million since year end 2023.
Total loans ended 2024 at $277 million, up $2 million from year end 2023.
Asset quality remains excellent with minimal levels of classified or non-performing assets.
The Bank ended the fourth quarter with a strong capital position, with a leverage capital ratio of 9.0% and a total risk-based capital ratio of 13.4%.
As of December 31, 2024, cash and cash equivalents totaled $41 million, including funds invested overnight, up $19 million since year end 2023.
Unused borrowing capacity from credit facilities in place on December 31, 2024, totaled $167 million.

For the fourth quarter ending December 31, 2024, the Company realized a pre-tax, pre-provision profit of $702 thousand, compared to a pre-tax, pre-provision profit of $345 thousand in Q3 2024. Net income for the fourth quarter of 2024 was $500 thousand, up from $249 thousand in Q3 2024. For the twelve months ending December 31, 2024, the Company reported $1.1 million in net income, up from a net loss of $164 thousand reported for the twelve months ending December 31, 2023.

Asset quality remains excellent with minimal non-performing assets and the allowance for credit losses is 1.15% of total loans. There was no provision for credit losses recognized for the year ending 2024, compared to $906 thousand for the year ending December 31, 2023.

“We are pleased to close out 2024 on a strong note, achieving seven consecutive quarters of profitability and demonstrating the success of our strategic approach,” said Joe Matranga, Chairman of the Board of Directors. “With a solid capital position, strong liquidity, and sound financial standing, we are well-positioned to continue to execute our strategy and drive sustainable, long-term value for our stakeholders.”

“We delivered another strong quarter of financial results highlighted by loan and deposit growth, excellent asset quality, and a solid capital and liquidity position,” said Nathan Rogge, President and Chief Executive Officer. “We enter 2025 with strong momentum and a clear growth strategy, driven by strategic investments in technology and innovation designed to enhance the banking experience and reinforce our competitive advantage.”

“As a Southern California-based company, we are deeply saddened by the devastation caused by the recent wildfires. Our thoughts and prayers are with everyone impacted by this disaster and we are committed to helping Los Angeles move forward.”

ABOUT FIRST PACIFIC BANK

First Pacific Bank is a wholly owned subsidiary of First Pacific Bancorp (OTC Pink: FPBC) and is a growing community bank catering to individuals, professionals, and small-to-medium sized businesses throughout Southern California. Since opening in 2006, the Bank has offered a personalized approach, access to decision makers, a broad range of solutions, and a commitment to delivering an exceptional customer experience. First Pacific Bank operates locations in Los Angeles County, Orange County, San Diego County, and the Inland Empire. For more information, visit firstpacbank.com or call 888.BNK.AT.FPB.

FORWARD-LOOKING STATEMENTS

This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, and First Pacific Bancorp intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. Forward-looking statements relate to, among other things, our business plan, and strategies, and can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and similar expressions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Factors that might cause such differences include, but are not limited to: successfully realizing the benefits of our business strategy and plans,; changes in general economic and financial market conditions, either nationally or locally, in areas in which First Pacific Bank conducts its operations; effects of inflation and changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; impact of any natural disasters, including earthquakes; effect of governmental supervision and regulation, including any regulatory or other enforcement actions; legislation or regulatory changes which adversely affect First Pacific Bank’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events, or circumstances after the date of such statements except as required by law.

— Summary Financial Tables Follow —

First PacificBancorp
Consolidated Balance Sheets
(Unaudited)
	Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023
ASSETS
Cash and due from banks	$	4,708,926		$	23,584,084		$	4,671,483		$	7,317,500		$	4,308,149
Fed funds sold & int-bearing balances		36,290,000			25,520,000			37,860,000			37,575,000			18,060,000
Total cash and cash equivalents		40,998,926			49,104,084			42,531,483			44,892,500			22,368,149

Debt securities (AFS)		1,866,022			3,041,852			3,077,666			5,138,340			5,257,049
Debt securities (HTM)		100,257,560			101,260,391			102,202,926			103,474,749			104,343,133
Total debt securities		102,123,582			104,302,243			105,280,592			108,613,089			109,600,182

Construction & land development		23,320,351			23,067,204			24,651,513			25,480,398			27,070,749
1-4 Family residential		58,588,090			58,082,570			68,588,393			68,521,663			66,567,165
Multifamily residential		28,561,276			28,966,811			26,800,829			26,947,419			27,128,177
Nonfarm, nonresidential real estate		100,066,570			99,715,860			94,643,169			97,893,840			99,627,812
Commercial & industrial		62,322,690			57,342,017			53,504,969			54,785,564			53,938,659
Consumer & Other		4,525,108			780,639			1,831,036			1,123,918			865,849
Total loans		277,384,085			267,955,101			270,019,909			274,752,802			275,198,411
Allowance for credit losses (loans)		(3,179,637	)		(3,109,975	)		(3,109,975	)		(3,109,975	)		(3,109,975	)
Total loans, net		274,204,448			264,845,126			266,909,934			271,642,827			272,088,436

Premises, equipment, and ROU net		1,328,964			1,452,886			1,714,833			1,992,588			2,268,671
Goodwill, core deposit & other intangibles		1,273,134			1,287,129			1,298,084			1,313,367			1,328,651
Bank owned life insurance		5,287,738			5,257,550			5,227,763			5,198,654			5,170,521
Accrued interest and other assets		7,755,355			7,505,380			7,476,554			7,415,609			7,392,301

Total Assets	$	432,972,147		$	433,754,398		$	430,439,243		$	441,068,634		$	420,216,911

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	131,515,568		$	129,473,091		$	144,240,187		$	133,945,262		$	121,348,095
Interest-bearing transaction accounts		28,454,639			24,660,000			24,797,108			28,166,207			34,716,150
Money market and savings		146,423,126			143,270,628			143,497,864			148,732,230			139,011,862
Time deposits		44,302,867			44,388,137			41,060,590			38,662,227			38,235,413
Total deposits		350,696,200			341,791,856			353,595,749			349,505,926			333,311,520

Borrowings		40,000,000			50,000,000			35,000,000			50,000,000			45,000,000
Accrued interest and other liabilities		3,122,902			3,430,132			3,781,444			3,936,909			4,530,208
Total liabilities		393,819,102			395,221,988			392,377,193			403,442,835			382,841,728

Shareholders’ Equity:
Capital stock and APIC		37,272,567			37,117,627			36,970,386			36,788,606			36,699,786
Retained earnings		2,650,877			2,151,305			1,902,788			1,705,174			1,543,264
Accum other comprehensive income		(770,399	)		(736,522	)		(811,124	)		(867,981	)		(867,867	)
Total shareholders’ equity		39,153,045			38,532,410			38,062,050			37,625,799			37,375,183

Total Liabilities and Shareholders’ Equity	$	432,972,147		$	433,754,398		$	430,439,243		$	441,068,634		$	420,216,911

First PacificBancorp
Consolidated Income Statements – Quarterly
(Unaudited)

	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023
INTEREST INCOME
Loans, including fees	$	4,814,128	$	4,817,174	$	4,655,844	$	4,700,535	$	4,653,303
Debt securities		484,508		499,268		514,613		543,857		544,330
Fed funds & int-bearing balances		419,597		450,166		573,022		410,685		258,178
Total interest income		5,718,233		5,766,608		5,743,479		5,655,077		5,455,811

INTEREST EXPENSE
Deposits		1,777,351		1,790,578		1,687,121		1,746,032		1,542,541
Borrowings		332,375		444,250		524,599		507,390		705,324
Total interest expense		2,109,726		2,234,828		2,211,720		2,253,422		2,247,865

Net interest income		3,608,507		3,531,780		3,531,759		3,401,655		3,207,946

Provision for credit losses		–		–		–		–		101,538

Net interest income after provision		3,608,507		3,531,780		3,531,759		3,401,655		3,106,408

NONINTEREST INCOME
Service charges, fees and other income		119,173		106,628		96,460		108,365		108,769
Sublease income		–		53,975		52,970		53,872		53,872
Gains (losses) on sale of assets		–		15,335		–		–		(12,982	)
Gains on early payoff of debt		54,125		–		144,325		–		–
Total noninterest income		173,298		175,938		293,755		162,237		149,659

NONINTEREST EXPENSE
Salaries and benefits		1,984,774		2,154,290		2,182,674		2,178,486		1,954,029
Occupancy and equipment		258,180		374,069		363,695		368,816		384,088
Other expense		836,692		834,281		1,007,247		794,158		894,440
Total noninterest expense		3,079,646		3,362,640		3,553,616		3,341,460		3,232,557

Income before income tax expense		702,159		345,078		271,898		222,432		23,510

Income tax expense (benefit)		202,586		96,563		74,281		60,524		(31,955	)

Net Income	$	499,573	$	248,515	$	197,617	$	161,908	$	55,465

Earnings per share basic (QTR)	$	0.12	$	0.06	$	0.05	$	0.04	$	0.01
Weighted average shares outstanding (QTR)		4,293,829		4,288,851		4,283,351		4,281,653		4,231,841

First PacificBancorp
Consolidated Income Statements – Year-to-Date
(Unaudited)

	Dec 31, 2024		Dec 31, 2023
INTEREST INCOME
Loans, including fees	$	18,987,681	$	16,705,212
Investment securities		2,042,246		2,279,349
Fed funds & int-bearing balances		1,853,470		1,000,827
Total interest income		22,883,397		19,985,388

INTEREST EXPENSE
Deposits		7,001,082		4,744,486
Borrowings		1,808,614		2,440,727
Total interest expense		8,809,696		7,185,213

Net interest income		14,073,701		12,800,175

Provision for credit losses		–		905,966

Net interest income after provision		14,073,701		11,894,209

NONINTEREST INCOME
Service charges, fees and other income		430,626		455,823
Sublease income		160,817		212,074
Gains (losses) on sale of assets		15,335		129,093
Gains on early payoff of debt		198,450		123,077
Total noninterest income		805,228		920,067

NON INTEREST EXPENSE
Salaries and benefits		8,500,224		8,558,603
Occupancy and equipment		1,364,760		1,470,277
Other expense		3,472,378		3,124,577
Total noninterest expense		13,337,362		13,153,457

Income before income tax expense		1,541,567		(339,181	)

Income tax expense (benefit)		433,954		(175,262	)

Net Income (loss)	$	1,107,613	$	(163,919	)

Earnings (loss) per share basic (YTD)	$	0.26	$	(0.04	)
Weighted average shares outstanding (YTD)		4,286,945		3,992,738

First PacificBancorp
Quarterly Financial Highlights
(Unaudited)
		Quarterly
		2024		2024		2024		2024		2023
($ in thousands except per share data)		4th Qtr		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr
EARNINGS
Net interest income	$	3,609		3,532		3,532		3,402		3,208
Provision for loan losses	$	0		0		0		0		102
Noninterest income	$	173		176		294		162		150
Noninterest expense	$	3,080		3,363		3,554		3,341		3,233
Income tax expense	$	203		97		74		61		(32	)
Net income	$	500		249		198		162		55

Earnings per share basic	$	0.12		0.06		0.05		0.04		0.01
Weighted average shares outstanding		4,293,829		4,288,851		4,283,351		4,281,653		4,231,841
Ending shares outstanding		4,294,500		4,291,927		4,283,351		4,283,351		4,231,841

PERFORMANCE RATIOS
Return on average assets		0.47	%	0.23	%	0.18	%	0.15	%	0.05	%
Return on average common equity		5.12	%	2.58	%	2.10	%	1.73	%	0.59	%
Yield on loans		6.91	%	6.98	%	6.97	%	6.84	%	6.69	%
Yield on earning assets		5.50	%	5.58	%	5.52	%	5.49	%	5.35	%
Cost of deposits		1.98	%	2.05	%	1.96	%	2.05	%	1.89	%
Cost of funding		2.18	%	2.32	%	2.28	%	2.35	%	2.37	%
Net interest margin		3.47	%	3.42	%	3.40	%	3.31	%	3.15	%
Efficiency ratio		81.4	%	90.7	%	92.9	%	93.8	%	96.3	%

CAPITAL
Tangible equity to tangible assets		8.77	%	8.61	%	8.57	%	8.26	%	8.61	%
Book value (BV) per common share	$	9.12		8.98		8.89		8.78		8.83
Tangible BV per common share	$	8.82		8.68		8.58		8.48		8.52

ASSET QUALITY
Net loan charge-offs (recoveries)	$	0		0		0		0		0
Allowance for credit losses (loans)	$	3,180		3,110		3,110		3,110		3,110
Allowance to total loans		1.15	%	1.16	%	1.15	%	1.13	%	1.13	%
Nonperforming loans	$	672		991		77		160		61

END OF PERIOD BALANCES
Total loans	$	277,384		267,955		270,020		274,753		275,198
Total assets	$	432,972		433,754		430,439		441,069		420,217
Deposits	$	350,696		341,792		353,596		349,506		333,312
Loans to deposits		79.1	%	78.4	%	76.4	%	78.6	%	82.6	%
Shareholders’ equity	$	39,153		38,532		38,062		37,626		37,375
Full-time equivalent employees		49		44		44		46		45

AVERAGE BALANCES (QTRLY)
Total loans	$	276,294		273,960		267,766		275,578		276,016
Earning assets	$	412,417		410,298		416,965		412,791		404,210
Total assets	$	425,750		424,199		430,830		426,592		417,595
Deposits	$	355,369		346,142		346,032		341,226		323,300
Shareholders’ equity	$	38,746		38,267		37,788		37,443		37,179

The MIL Network –

February 7, 2025

MIL-OSI: NMI Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results; Announces Additional $250 Million Share Repurchase Authorization

Source: GlobeNewswire (MIL-OSI)

EMERYVILLE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $86.2 million, or $1.07 per diluted share, for the fourth quarter ended December 31, 2024, which compares to $92.8 million, or $1.15 per diluted share, for the third quarter ended September 30, 2024 and $83.4 million, or $1.01 per diluted share, for the fourth quarter ended December 31, 2023. Adjusted net income for the quarter was $86.1 million, or $1.07 per diluted share, which compares to $92.8 million, or $1.15 per diluted share, for the third quarter ended September 30, 2024 and $83.4 million, or $1.01 per diluted share, for the fourth quarter ended December 31, 2023.

Net income for the full year ended December 31, 2024 was $360.1 million, or $4.43 per diluted share, which compares to $322.1 million, or $3.84 per diluted share, for the year ended December 31, 2023. Adjusted net income for the year was $365.6 million, or $4.50 per diluted share, which compares to $322.1 million, or $3.84 per diluted share, for the year ended December 31, 2023. The non-GAAP financial measures adjusted net income and adjusted diluted earnings per share are presented in this release to enhance the comparability of financial results between periods. See “Use of Non-GAAP Financial Measures” and our reconciliation of such measures to their most comparable GAAP measures, below.

The company also announced today that its Board of Directors has authorized an additional $250 million share repurchase plan effective through December 31, 2027.

Adam Pollitzer, President and Chief Executive Officer of National MI, said, “The fourth quarter capped another year of standout success for National MI. In 2024, we delivered strong operating performance, generated significant NIW volume and consistent growth in our insured portfolio, and achieved record financial results and a 17.4% return on equity. We have a strong customer franchise, a talented team driving us forward every day, an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, and a robust balance sheet supported by the significant earnings power of our platform. Looking forward, we’re well-positioned to continue delivering differentiated growth, returns and value for our shareholders, and today’s incremental $250 million share repurchase authorization will provide investors with further ability to access value as we continue to perform, grow our earnings and compound book value.”

Selected fourth quarter 2024 highlights include:

Primary insurance-in-force at quarter end was $210.2 billion, compared to $207.5 billion at the end of the third quarter and $197.0 billion at the end of the fourth quarter of 2023.
Net premiums earned were $143.5 million, compared to $143.3 million in the third quarter and $132.9 million in the fourth quarter of 2023.
Total revenue was $166.5 million, compared to $166.1 million in the third quarter and $151.4 million in the fourth quarter of 2023.
Insurance claims and claim expenses were $17.3 million, compared to $10.3 million in the third quarter and $8.2 million in the fourth quarter of 2023. Loss ratio was 12.0%, compared to 7.2% in the third quarter and 6.2% in the fourth quarter of 2023.
Underwriting and operating expenses were $31.1 million, compared to $29.2 million in the third quarter and $29.7 million in the fourth quarter of 2023. Expense ratio was 21.7%, compared to 20.3% in the third quarter and 22.4% in the fourth quarter of 2023.
Net income was $86.2 million, compared to $92.8 million in the third quarter and $83.4 million in the fourth quarter of 2023. Diluted EPS was $1.07, compared to $1.15 in the third quarter and $1.01 in the fourth quarter of 2023.
Shareholders’ equity was $2.2 billion at quarter end and book value per share was $28.21. Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $29.80, up 4% compared to $28.71 in the third quarter and 17% compared to $25.54 in the fourth quarter of 2023.
Annualized return on equity for the quarter was 15.6%, compared to 17.5% in the third quarter and 18.0% in the fourth quarter of 2023.
At quarter-end, total PMIERs available assets were $3.1 billion and net risk-based required assets were $1.8 billion.

	Quarter Ended			Quarter Ended			Quarter Ended			*Change*⁽¹⁾		*Change*⁽¹⁾
	*12/31/2024*			*9/30/2024*			*12/31/2023*			*Q/Q*		*Y/Y*
INSURANCE METRICS ($billions)
Primary Insurance-in-Force	$	210.2		$	207.5		$	197.0		1	%	7	%
New Insurance Written – NIW		11.9			12.2			8.9		(2	)%	34	%

FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts)
Net Premiums Earned	$	143.5		$	143.3		$	132.9		0	%	8	%
Net Investment Income		22.7			22.5			18.2		1	%	25	%
Insurance Claims and Claim Expenses		17.3			10.3			8.2		67	%	110	%
Underwriting and Operating Expenses		31.1			29.2			29.7		7	%	5	%
Net Income		86.2			92.8			83.4		(7	)%	3	%
Diluted EPS	$	1.07		$	1.15		$	1.01		(7	)%	6	%
Book Value per Share (excluding net unrealized gains and losses) ⁽²⁾	$	29.80		$	28.71		$	25.54		4	%	17	%
Loss Ratio		12.0	%		7.2	%		6.2	%
Expense Ratio		21.7	%		20.3	%		22.4	%

(1) Percentages may not be replicated based on the rounded figures presented in the table.
(2) Book value per share (excluding net unrealized gains and losses) is defined as total shareholders’ equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.

Conference Call and Webcast Details

The company will hold a conference call, which will be webcast live today, February 6, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The webcast will be available on the company’s website, www.nationalmi.com, in the “Investor Relations” section. The conference call can also be accessed by dialing (844) 481-2708 in the U.S., or (412) 317-0664 internationally, by referencing NMI Holdings, Inc.

About NMI Holdings, Inc.

NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower’s default. To learn more, please visit www.nationalmi.com.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995 (the “PSLRA”). The PSLRA provides a “safe harbor” for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believe,” “can,” “could,” “may,” “predict,” “assume,” “potential,” “should,” “will,” “estimate,” “perceive,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: changes in general economic, market and political conditions and policies (including changes in interest rates and inflation) and investment results or other conditions that affect the U.S. housing market or the U.S. markets for home mortgages, mortgage insurance, reinsurance and credit risk transfer markets, including the risk related to geopolitical instability, inflation, an economic downturn (including any decline in home prices) or recession, and their impacts on our business, operations and personnel; changes in the charters, business practices, policies, pricing or priorities of Fannie Mae and Freddie Mac (collectively, the GSEs), which may include decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; or changes in the direction of housing policy objectives of the Federal Housing Finance Agency (“FHFA”), such as the FHFA’s priority to increase the accessibility to and affordability of homeownership for low-and-moderate income borrowers and underrepresented communities; our ability to remain an eligible mortgage insurer under the private mortgage insurer eligibility requirements (“PMIERs”) and other requirements imposed by the GSEs, which they may change at any time; retention of our existing certificates of authority in each state and the District of Columbia (“D.C.”) and our ability to remain a mortgage insurer in good standing in each state and D.C.; our future profitability, liquidity and capital resources; actions of existing competitors, including other private mortgage insurers and government mortgage insurers such as the Federal Housing Administration, the U.S. Department of Agriculture’s Rural Housing Service and the U.S. Department of Veterans Affairs, and potential market entry by new competitors or consolidation of existing competitors; adoption of new or changes to existing laws, rules and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the implementation of the final rules defining and/or concerning “Qualified Mortgage” and “Qualified Residential Mortgage”; U.S. federal tax reform and other potential changes in tax law and their impact on us and our operations; legislative or regulatory changes to the GSEs’ role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential legal and regulatory claims, investigations, actions, audits or inquiries that could result in adverse judgements, settlements, fines or other reliefs that could require significant expenditures or have other negative effects on our business; our ability to successfully execute and implement our capital plans, including our ability to access the equity, credit and reinsurance markets and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; lenders, the GSEs, or other market participants seeking alternatives to private mortgage insurance; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; decrease in the length of time our insurance policies are in force; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; climate risk and efforts to manage or regulate climate risk by government agencies could affect our business and operations; potential adverse impacts arising from the occurrence of any man-made disasters or public health emergencies, including pandemics; the inability of our counter-parties, including third party reinsurers, to meet their obligations to us; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; effectiveness and security of our information technology systems and digital products and services, including the risks these systems, products or services may fail to operate as expected or planned, or expose us to cybersecurity or third-party risks (including the exposure of our confidential customer and other information); and ability to recruit, train and retain key personnel. These risks and uncertainties also include, but are not limited to, those set forth under the heading “Risk Factors” detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023, as subsequently updated through other reports we file with the SEC. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

Use of Non-GAAP Financial Measures

We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors. These non-GAAP financial measures align with the way the company’s business performance is evaluated by management. These measures are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance. These measures have been presented to increase transparency and enhance the comparability of our fundamental operating trends across periods. Other companies may calculate these measures differently; their measures may not be comparable to those we calculate and present.

Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred. Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods.

Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding is defined as weighted average diluted shares outstanding, adjusted for changes in the dilutive effect of non-vested shares that would otherwise have occurred had GAAP net income been calculated in accordance with adjusted net income. There will be no adjustment to weighted average diluted shares outstanding in the periods that non-vested shares are anti-dilutive under GAAP.

Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders’ equity for the period.

Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned.

Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned.

Book value per share (excluding net unrealized gains and losses) is defined as total shareholders’ equity, excluding the after-tax effects of unrealized gains and losses on investments, divided by shares outstanding.

Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items: (1) are not viewed as part of the operating performance of our primary activities; or (2) are impacted by market, economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, and the reasons for their treatment, are described below.

(1) Net realized investment gains and losses. The recognition of the net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.
(2) Capital markets transaction costs. Capital markets transaction costs result from activities that are undertaken to improve our debt profile or enhance our capital position through activities such as debt refinancing and capital markets reinsurance transactions that may vary in their size and timing due to factors such as market opportunities, tax and capital profile, and overall market cycles.
(3) Other infrequent, unusual or non-operating items. Items that are the result of unforeseen or uncommon events, and are not expected to recur with frequency in the future. Identification and exclusion of these items provides clarity about the impact special or rare occurrences may have on our current financial performance. Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in September 2021 and the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017. We believe such items are infrequent or non-recurring in nature, and are not indicative of the performance of, or ongoing trends in, our primary operating activities or business.
(4) Net unrealized gains and losses on investments. The recognition of the net unrealized gains or losses on investment can vary significantly across periods and is influenced by factors such as interest rate movement, overall market and economic conditions, and tax and capital profiles. These valuation adjustments may not necessarily result in economic gains or losses and not reflective of ongoing operations.

Investor Contact
Gregory Epps
Manager, Investor Relations and Treasury
Investor.relations@nationalmi.com

Consolidated statements of operations and comprehensive income (unaudited)	For the three months ended December 31,						For the year ended December 31,
		2024			2023			2024			2023
	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	143,520		$	132,940		$	564,688		$	510,768
Net investment income		22,718			18,247			85,316			67,512
Net realized investment gains (losses)		33			—			23			(33	)
Other revenues		233			193			944			756
Total revenues		166,504			151,380			650,971			579,003
Expenses
Insurance claims and claim expenses		17,253			8,232			31,544			22,618
Underwriting and operating expenses		31,092			29,716			118,397			110,699
Service expenses		184			185			723			771
Interest expense		7,102			8,066			36,896			32,212
Total expenses		55,631			46,199			187,560			166,300

Income before income taxes		110,873			105,181			463,411			412,703
Income tax expense		24,706			21,768			103,305			90,593
Net income	$	86,167		$	83,413		$	360,106		$	322,110

Earnings per share
Basic	$	1.09		$	1.03		$	4.51		$	3.91
Diluted	$	1.07		$	1.01		$	4.43		$	3.84

Weighted average common shares outstanding
Basic		78,997			81,005			79,844			82,407
Diluted		80,623			82,685			81,273			83,854

Loss ratio ⁽¹⁾		12.0	%		6.2	%		5.6	%		4.4	%
Expense ratio ⁽²⁾		21.7	%		22.4	%		21.0	%		21.7	%
Combined ratio ⁽³⁾		33.7	%		28.5	%		26.6	%		26.1	%

Net income	$	86,167		$	83,413		$	360,106		$	322,110
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains in accumulated other comprehensive loss, net of tax (benefit) expense of $(11,374) and $19,580 for the three months ended December 31, 2024 and 2023, and $3,921 and $17,113 for the years ended December 31, 2024 and 2023, respectively		(42,787	)		73,660			15,113			64,380
Reclassification adjustment for realized (gains) losses included in net income, net of tax expense (benefit) of $7 and $0 for the three months ended December 31, 2024 and 2023, and $0 and $(7) for the years ended December 31, 2024, and 2023, respectively		(26	)		—			—			26
Other comprehensive (loss) income, net of tax		(42,813	)		73,660			15,113			64,406
Comprehensive income	$	43,354		$	157,073		$	375,219		$	386,516

(1) Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3) Combined ratio may not foot due to rounding.

Consolidated balance sheets (unaudited)	December 31, 2024			December 31, 2023
Assets	(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,876,343 and $2,542,862 as of December 31, 2024 and December 31, 2023, respectively)	$	2,723,541		$	2,371,021
Cash and cash equivalents (including restricted cash of $90 and $1,338 as of December 31, 2024 and December 31, 2023, respectively)		54,308			96,689
Premiums receivable, net		82,804			76,456
Accrued investment income		22,386			19,785
Deferred policy acquisition costs, net		64,327			62,905
Software and equipment, net		25,681			30,252
Intangible assets and goodwill		3,634			3,634
Reinsurance recoverable		32,260			27,514
Prepaid federal income taxes		322,175			235,286
Other assets		18,857			16,965
Total assets	$	3,349,973		$	2,940,507

Liabilities
Debt	$	415,146		$	397,595
Unearned premiums		65,217			92,295
Accounts payable and accrued expenses		103,164			86,189
Reserve for insurance claims and claim expenses		152,071			123,974
Deferred tax liability, net		386,192			301,573
Other liabilities		10,751			12,877
Total liabilities		1,132,541			1,014,503

Shareholders’ equity
Common stock – $0.01 par value; 87,902,626 shares issued and 78,600,726 shares outstanding as of December 31, 2024 and 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 (250,000,000 shares authorized)		879			873
Additional paid-in capital		1,004,692			990,816
Treasury stock, at cost: 9,301,900 and 6,452,858 common shares as of December 31, 2024 and December 31, 2023, respectively		(246,594	)		(148,921	)
Accumulated other comprehensive loss, net of tax		(124,804	)		(139,917	)
Retained earnings		1,583,259			1,223,153
Total shareholders’ equity		2,217,432			1,926,004
Total liabilities and shareholders’ equity	$	3,349,973		$	2,940,507

Non-GAAP Financial Measure Reconciliations (unaudited)
	As of and for the three months ended									For the year ended December 31,
	12/31/2024			9/30/2024			12/31/2023				2024			2023
As Reported	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	143,520		$	143,343		$	132,940		$	564,688		$	510,768
Net investment income		22,718			22,474			18,247			85,316			67,512
Net realized investment gains (losses)		33			(10	)		—			23			(33	)
Other revenues		233			285			193			944			756
Total revenues		166,504			166,092			151,380			650,971			579,003
Expenses
Insurance claims and claim expenses		17,253			10,321			8,232			31,544			22,618
Underwriting and operating expenses		31,092			29,160			29,716			118,397			110,699
Service expenses		184			208			185			723			771
Interest expense		7,102			7,076			8,066			36,896			32,212
Total expenses		55,631			46,765			46,199			187,560			166,300

Income before income taxes		110,873			119,327			105,181			463,411			412,703
Income tax expense		24,706			26,517			21,768			103,305			90,593
Net income	$	86,167		$	92,810		$	83,413		$	360,106		$	322,110

Adjustments:
Net realized investment (gains) losses		(33	)		10			—			(23	)		33
Capital markets transaction costs		—			—			—			6,966			—
Adjusted income before taxes		110,840			119,337			105,181			470,354			412,736

Income tax (benefit) expense on adjustments ⁽¹⁾		(7	)		2			—			1,458			7
Adjusted net income	$	86,141		$	92,818		$	83,413		$	365,591		$	322,136

Weighted average diluted shares outstanding		80,623			81,045			82,685			81,273			83,854

Diluted EPS	$	1.07		$	1.15		$	1.01		$	4.43		$	3.84
Adjusted diluted EPS	$	1.07		$	1.15		$	1.01		$	4.50		$	3.84

Return on equity		15.6	%		17.5	%		18.0	%		17.4	%		18.2	%
Adjusted return on equity		15.6	%		17.5	%		18.0	%		17.6	%		18.2	%

Expense ratio ⁽²⁾		21.7	%		20.3	%		22.4	%		21.0	%		21.7	%
Adjusted expense ratio ⁽³⁾		21.7	%		20.3	%		22.4	%		21.0	%		21.7	%

Combined ratio ⁽⁴⁾		33.7	%		27.5	%		28.5	%		26.6	%		26.1	%
Adjusted combined ratio ⁽⁵⁾		33.7	%		27.5	%		28.5	%		26.6	%		26.1	%

Book value per share ⁽⁶⁾	$	28.21		$	27.67		$	23.81
Book value per share (excluding net unrealized gains and losses) ⁽⁷⁾	$	29.80		$	28.71		$	25.54

(1) Marginal tax impact of non-GAAP adjustments is calculated based on our statutory U.S. federal corporate income tax rate of 21%, except for those items that are not eligible for an income tax deduction.
(2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3) Adjusted expense ratio is calculated by dividing adjusted underwriting and operating expense (underwriting and operating expenses excluding costs related to capital markets reinsurance transactions) by net premiums earned.
(4) Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claim expenses by net premiums earned.
(5) Adjusted combined ratio is calculated by dividing the total of adjusted underwriting and operating expenses (underwriting and operating expenses excluding costs related to capital market reinsurance transaction) and insurance claims and claim expenses by net premiums earned.
(6) Book value per share is calculated by dividing total shareholders’ equity by shares outstanding.
(7) Book value per share (excluding net unrealized gains and losses) is defined as total shareholders’ equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.

Historical Quarterly Data	2024												2023
	December 31			September 30			June 30			March 31			December 31
	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	143,520		$	143,343		$	141,168		$	136,657		$	132,940
Net investment income		22,718			22,474			20,688			19,436			18,247
Net realized investment gains (losses)		33			(10	)		—			—			—
Other revenues		233			285			266			160			193
Total revenues		166,504			166,092			162,122			156,253			151,380
Expenses
Insurance claims and claim expenses		17,253			10,321			276			3,694			8,232
Underwriting and operating expenses		31,092			29,160			28,330			29,815			29,716
Service expenses		184			208			194			137			185
Interest expense		7,102			7,076			14,678			8,040			8,066
Total expenses		55,631			46,765			43,478			41,686			46,199

Income before income taxes		110,873			119,327			118,644			114,567			105,181
Income tax expense		24,706			26,517			26,565			25,517			21,768
Net income	$	86,167		$	92,810		$	92,079		$	89,050		$	83,413

Earnings per share
Basic	$	1.09		$	1.17		$	1.15		$	1.10		$	1.03
Diluted	$	1.07		$	1.15		$	1.13		$	1.08		$	1.01

Weighted average common shares outstanding
Basic		78,997			79,549			80,117			80,726			81,005
Diluted		80,623			81,045			81,300			82,099			82,685

Other data
Loss ratio ⁽¹⁾		12.0	%		7.2	%		0.2	%		2.7	%		6.2	%
Expense ratio ⁽²⁾		21.7	%		20.3	%		20.1	%		21.8	%		22.4	%
Combined ratio ⁽³⁾		33.7	%		27.5	%		20.3	%		24.5	%		28.5	%

(1) Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3) Combined ratio may not foot due to rounding.

Portfolio Statistics

The table below highlights trends in our primary portfolio as of the date and for the periods indicated.

Primary portfolio trends	As of and for the three months ended
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
	($ Values In Millions, except as noted below)
New insurance written (NIW)	$	11,925		$	12,218		$	12,503		$	9,398		$	8,927
New risk written		3,134			3,245			3,335			2,486			2,354
Insurance-in-force (IIF) ⁽¹⁾		210,183			207,538			203,501			199,373			197,029
Risk-in-force (RIF) ⁽¹⁾		56,113			55,253			53,956			52,610			51,796
Policies in force (count) ⁽¹⁾		659,567			654,374			645,276			635,662			629,690
Average loan size ($ value in thousands) ⁽¹⁾	$	319		$	317		$	315		$	314		$	313
Coverage percentage ⁽²⁾		26.7	%		26.6	%		26.5	%		26.4	%		26.3	%
Loans in default (count) ⁽¹⁾		6,642			5,712			4,904			5,109			5,099
Default rate ⁽¹⁾		1.01	%		0.87	%		0.76	%		0.80	%		0.81	%
Risk-in-force on defaulted loans ⁽¹⁾	$	545		$	468		$	401		$	414		$	408
Average net premium yield ⁽³⁾		0.27	%		0.28	%		0.28	%		0.28	%		0.27	%
Earnings from cancellations	$	0.8		$	0.8		$	1.0		$	0.6		$	1.0
Annual persistency ⁽⁴⁾		84.6	%		85.5	%		85.4	%		85.8	%		86.1	%
Quarterly run-off ⁽⁵⁾		4.5	%		4.0	%		4.2	%		3.6	%		3.4	%

(1) Reported as of the end of the period.
(2) Calculated as end of period RIF divided by end of period IIF.
(3) Calculated as net premiums earned, divided by average primary IIF for the period, annualized.
(4) Defined as the percentage of IIF that remains on our books after a given twelve-month period.
(5) Defined as the percentage of IIF that is no longer on our books after a given three-month period.

NIW, IIF and Premiums

The tables below present primary NIW and primary IIF, as of the dates and for the periods indicated.

Primary NIW	For the three months ended
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
	(In Millions)
Monthly	$	11,688	$	11,978	$	12,288	$	9,175	$	8,614
Single		237		240		215		223		313
Total	$	11,925	$	12,218	$	12,503	$	9,398	$	8,927

Primary IIF	As of
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
	(In Millions)
Monthly	$	192,228	$	189,241	$	184,862	$	180,343	$	177,764
Single		17,955		18,297		18,639		19,030		19,265
Total	$	210,183	$	207,538	$	203,501	$	199,373	$	197,029

The following table presents the amounts related to the company’s quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction, 2020 QSR Transaction, 2021 QSR Transaction, 2022 QSR Transaction, 2022 Seasoned QSR Transaction, 2023 QSR Transaction, and 2024 QSR Transaction and collectively, the QSR Transactions), insurance-linked note transactions (the 2021-1 ILN Transaction, and 2021-2 ILN Transaction and collectively, the ILN Transactions), and traditional reinsurance transactions (the 2022-1 XOL Transaction, 2022-2 XOL Transaction, 2022-3 XOL Transaction, 2023-1 XOL Transaction, 2023-2 XOL Transaction, and 2024 XOL Transaction and collectively, the XOL Transactions) for the periods indicated.

	For the three months ended
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
	(In Thousands)
The QSR Transactions
Ceded risk-in-force	$	13,024,200		$	12,968,039		$	12,815,434		$	12,669,207		$	12,626,541
Ceded premiums earned		(41,596	)		(41,761	)		(41,555	)		(41,269	)		(41,218	)
Ceded claims and claim expenses (benefits)		4,075			2,449			(138	)		659			2,447
Ceding commission earned		9,997			10,152			10,222			10,292			9,561
Profit commission		20,149			21,883			24,351			23,407			22,057

The ILN Transactions ⁽¹⁾
Ceded premiums	$	(4,217	)	$	(4,302	)	$	(5,858	)	$	(5,976	)	$	(6,305	)

The XOL Transactions
Ceded premiums	$	(9,969	)	$	(9,760	)	$	(9,403	)	$	(9,223	)	$	(8,302	)

(1) Effective July 25, 2024 and December 27, 2024, NMIC exercised its optional termination rights to terminate and commute its previously outstanding excess-of-loss reinsurance agreements with Oaktown Re III Ltd. and Oaktown Re V Ltd., respectively. In connection with the terminations and commutations, the insurance-linked notes issued by Oaktown Re III Ltd. and Oaktown Re V Ltd. were redeemed in full with a distribution of remaining collateral assets.

The tables below present our total primary NIW by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for the periods indicated.

Primary NIW by FICO	For the three months ended						For the year ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
	(In Millions)
>= 760	$	6,508	$	6,615	$	4,564	$	24,808	$	22,995
740-759		2,090		2,057		1,542		8,098		6,769
720-739		1,621		1,529		1,280		5,907		5,484
700-719		890		1,040		816		3,794		2,816
680-699		575		652		568		2,392		1,946
<=679		241		325		157		1,045		463
Total	$	11,925	$	12,218	$	8,927	$	46,044	$	40,473
Weighted average FICO		758		757		755		757		760

Primary NIW by LTV	For the three months ended									For the year ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
	(In Millions)
95.01% and above	$	1,510		$	1,568		$	990		$	5,908		$	3,713
90.01% to 95.00%		5,370			5,720			4,107			21,149			18,929
85.01% to 90.00%		3,740			3,584			2,947			13,994			13,597
85.00% and below		1,305			1,346			883			4,993			4,234
Total	$	11,925		$	12,218		$	8,927		$	46,044		$	40,473
Weighted average LTV		92.1	%		92.3	%		92.2	%		92.3	%		92.1	%

Primary NIW by purchase/refinance mix	For the three months ended						For the year ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
	(In Millions)
Purchase	$	10,799	$	11,708	$	8,759	$	43,921	$	39,629
Refinance		1,126		510		168		2,123		844
Total	$	11,925	$	12,218	$	8,927	$	46,044	$	40,473

The table below presents a summary of our primary IIF and RIF by book year as of December 31, 2024.

Primary IIF and RIF	As of December 31, 2024
	IIF		RIF
Book Year	(In Millions)
2024	$	43,560	$	11,552
2023		34,284		9,047
2022		47,598		12,703
2021		50,699		13,634
2020		21,145		5,795
2019 and before		12,897		3,382
Total	$	210,183	$	56,113

The tables below present our total primary IIF and RIF by FICO and LTV, and total primary RIF by loan type as of the dates indicated.

Primary IIF by FICO	As of
	December 31, 2024		September 30, 2024		December 31, 2023
	(In Millions)
>= 760	$	105,315	$	103,764	$	98,034
740-759		37,321		36,830		34,829
720-739		29,343		28,930		27,755
700-719		19,766		19,654		18,734
680-699		13,374		13,326		12,867
<=679		5,064		5,034		4,810
Total	$	210,183	$	207,538	$	197,029

Primary RIF by FICO	As of
	December 31, 2024		September 30, 2024		December 31, 2023
	(In Millions)
>= 760	$	27,883	$	27,396	$	25,523
740-759		10,006		9,850		9,207
720-739		7,926		7,788		7,387
700-719		5,383		5,337		5,021
680-699		3,615		3,590		3,433
<=679		1,300		1,292		1,225
Total	$	56,113	$	55,253	$	51,796

Primary IIF by LTV	As of
	December 31, 2024		September 30, 2024		December 31, 2023
	(In Millions)
95.01% and above	$	23,555	$	22,644	$	19,609
90.01% to 95.00%		103,472		101,872		95,415
85.01% to 90.00%		64,290		63,568		60,348
85.00% and below		18,866		19,454		21,657
Total	$	210,183	$	207,538	$	197,029

Primary RIF by LTV	As of
	December 31, 2024		September 30, 2024		December 31, 2023
	(In Millions)
95.01% and above	$	7,345	$	7,054	$	6,062
90.01% to 95.00%		30,563		30,100		28,184
85.01% to 90.00%		15,956		15,777		14,961
85.00% and below		2,249		2,322		2,589
Total	$	56,113	$	55,253	$	51,796

Primary RIF by Loan Type	As of
	December 31, 2024		September 30, 2024		December 31, 2023

Fixed	98	%	98	%	98	%
Adjustable rate mortgages:
Less than five years	—		—		—
Five years and longer	2		2		2
Total	100	%	100	%	100	%

The table below presents a summary of the change in total primary IIF during the periods indicated.

Primary IIF	As of and for the three months ended
	December 31, 2024			September 30, 2024			December 31, 2023
	(In Millions)
IIF, beginning of period	$	207,538		$	203,501		$	194,781
NIW		11,925			12,218			8,927
Cancellations, principal repayments and other reductions		(9,280	)		(8,181	)		(6,679	)
IIF, end of period	$	210,183		$	207,538		$	197,029

Geographic Dispersion

The following table shows the distribution by state of our primary RIF as of the periods indicated:

Top 10 primary RIF by state	As of
	December 31, 2024		September 30, 2024		December 31, 2023
California	10.1	%	10.1	%	10.2	%
Texas	8.6		8.7		8.7
Florida	7.3		7.4		7.6
Georgia	4.1		4.1		4.1
Washington	3.9		3.9		4.0
Illinois	3.8		3.9		4.0
Virginia	3.7		3.8		3.9
Pennsylvania	3.4		3.4		3.4
Ohio	3.3		3.2		3.0
North Carolina	3.2		3.1		3.0
Total	51.4	%	51.6	%	51.9	%

The table below presents selected primary portfolio statistics, by book year, as of December 31, 2024.

	As of December 31, 2024
Book year	Original Insurance Written		Remaining Insurance in Force		% Remaining of Original Insurance		Policies Ever in Force	Number of Policies in Force	Number of Loans in Default	# of Claims Paid	Incurred Loss Ratio (Inception to Date)⁽¹⁾		Cumulative Default Rate⁽²⁾		Current Default Rate⁽³⁾
	($ Values in Millions)
2015 and prior	$	16,035	$	885	6	%	67,989	4,903	99	208	2.7	%	0.5	%	2.0	%
2016		21,187		1,498	7	%	83,626	8,076	158	187	1.7	%	0.4	%	2.0	%
2017		21,582		1,867	9	%	85,897	10,577	267	184	1.9	%	0.5	%	2.5	%
2018		27,295		2,433	9	%	104,043	13,152	420	184	2.5	%	0.6	%	3.2	%
2019		45,141		6,214	14	%	148,423	27,442	511	97	2.0	%	0.4	%	1.9	%
2020		62,702		21,145	34	%	186,174	73,926	598	51	1.4	%	0.3	%	0.8	%
2021		85,574		50,699	59	%	257,972	167,892	1,679	74	3.5	%	0.7	%	1.0	%
2022		58,734		47,598	81	%	163,281	138,915	2,002	68	17.9	%	1.3	%	1.4	%
2023		40,473		34,284	85	%	111,994	98,711	725	10	14.4	%	0.7	%	0.7	%
2024		46,044		43,560	95	%	120,747	115,973	183	—	6.2	%	0.2	%	0.2	%
Total	$	424,767	$	210,183			1,330,146	659,567	6,642	1,063

(1) Calculated as total claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance.
(2) Calculated as the sum of the number of claims paid ever to date and number of loans in default divided by policies ever in force.
(3) Calculated as the number of loans in default divided by number of policies in force.

The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claim expenses:

	For the three months ended December 31,						For the year ended December 31,
		2024			2023			2024			2023
	(In Thousands)
Beginning balance	$	135,520		$	116,078		$	123,974		$	99,836
Less reinsurance recoverables ⁽¹⁾		(29,214	)		(25,956	)		(27,514	)		(21,587	)
Beginning balance, net of reinsurance recoverables		106,306			90,122			96,460			78,249

Add claims incurred:
Claims and claim expenses incurred:
Current year ⁽²⁾		21,674			17,298			93,206			78,285
Prior years ⁽³⁾		(4,421	)		(9,789	)		(61,662	)		(56,390	)
Total claims and claim expenses incurred ⁽⁴⁾		17,253			7,509			31,544			21,895

Less claims paid:
Claims and claim expenses paid:
Current year ⁽²⁾		458			481			638			600
Prior years ⁽³⁾		3,290			1,181			7,555			3,575
Reinsurance terminations		—			(491	)		—			(491	)
Total claims and claim expenses paid		3,748			1,171			8,193			3,684

Reserve at end of period, net of reinsurance recoverables		119,811			96,460			119,811			96,460
Add reinsurance recoverables ⁽¹⁾		32,260			27,514			32,260			27,514
Ending balance	$	152,071		$	123,974		$	152,071		$	123,974

(1) Related to ceded losses recoverable under the QSR Transactions
(2) Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $83.5 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the year ended December 31, 2024, $70.6 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2023.
(3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $54.1 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2024, $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023.
(4) Excludes a $0.7 million termination fee for the year ended December 31, 2023 incurred in connection with the amendment of the 2020 QSR Transaction.

The following table provides a reconciliation of the beginning and ending count of loans in default:

	For the three months ended December 31,				For the year ended December 31,
	2024		2023		2024		2023
Beginning default inventory	5,712		4,594		5,099		4,449
Plus: new defaults	2,742		2,039		8,757		6,758
Less: cures	(1,684	)	(1,458	)	(6,899	)	(5,892	)
Less: claims paid	(108	)	(70	)	(276	)	(199	)
Less: rescission and claims denied	(20	)	(6	)	(39	)	(17	)
Ending default inventory	6,642		5,099		6,642		5,099

The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions, for the periods indicated:

	For the three months ended December 31,						For the year ended December 31,
		2024			2023			2024			2023
	($ Values In Thousands)
Number of claims paid ⁽¹⁾		108			70			276			199
Total amount paid for claims	$	4,777		$	2,060		$	10,491		$	5,192
Average amount paid per claim	$	44		$	29		$	38		$	26
Severity ⁽²⁾		65	%		64	%		61	%		55	%

(1) Count includes 32 and 88 claims settled without payment during the three months and year ended December 31, 2024, respectively, and 23 and 70 claims settled without payment during the three months and year ended December 31, 2023, respectively.
(2) Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment.

The following table shows our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the dates indicated:

Average reserve per default:	As of
	December 31, 2024		December 31, 2023
	(In Thousands)
Case ⁽¹⁾	$	21.0	$	22.4
IBNR ^{(1) (2)}		1.9		1.9
Total	$	22.9	$	24.3

(1) Defined as the gross reserve per insured loan in default.
(2) Amount includes claims adjustment expenses.

The following table provides a comparison of the PMIERs available assets and net risk-based required asset amount as reported by NMIC as of the dates indicated:

	As of
	December 31, 2024		September 30, 2024		December 31, 2023
	(In Thousands)
Available assets	$	3,108,211	$	3,006,892	$	2,717,804
Net risk-based required assets		1,828,807		1,735,790		1,516,140

The MIL Network –

February 7, 2025

MIL-OSI: Monolithic Power Systems Earnings Commentary for the Quarter and Year Ended December 31, 2024

Source: GlobeNewswire (MIL-OSI)

KIRKLAND, Wash., Feb. 06, 2025 (GLOBE NEWSWIRE) — MPS will report its results after the market closes on February 6, 2025 and host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The live event will be held via a Zoom webcast, which can be accessed at https://mpsic.zoom.us/j/96816578886.

2024 Financial Summary	(Unaudited)
GAAP

		2024			2023		YoY Change	YoY Change (%)
Revenue ($k)	$	2,207,100		$	1,821,072		Up $ 386,028	Up 21.2%
Gross Margin		55.3	%		56.1	%	Down 0.8 pts	Down 1.4%
Opex ($k)	$	681,512		$	539,383		Up $ 142,129	Up 26.4%
Operating Margin		24.4	%		26.5	%	Down 2.1 pts	Down 7.9%
Net income ($k)	$	1,786,700		$	427,374		Up $ 1,359,326	Up 318.1%
Diluted EPS	$	36.59		$	8.76		Up $ 27.83	Up 317.7%

		2024			2023		YoY Change	YoY Change (%)
Revenue ($k)	$	2,207,100		$	1,821,072		Up $ 386,028	Up 21.2%
Gross Margin		55.8	%		56.4	%	Down 0.6 pts	Down 1.1%
Opex ($k)	$	466,379		$	385,395		Up $ 80,984	Up 21.0%
Operating Margin		34.6	%		35.2	%	Down 0.6 pts	Down 1.7%
Net income ($k)	$	689,755		$	574,647		Up $ 115,108	Up 20.0%
Diluted EPS	$	14.12		$	11.78		Up $ 2.34	Up 19.9%

Revenue by End Market

	Revenue					YoY Change					% of Total Rev
End Market ($M)		2024			2023		$		%		2024		2023
Enterprise Data	$	716.2	$	323.0		$	393.2		121.7	%	32.5	%	17.7	%
Storage & Computing		501.6		491.1			10.5		2.1	%	22.7		27.0
Automotive		414.0		394.7			19.3		4.9	%	18.8		21.7
Communications		225.9		204.9			21.0		10.2	%	10.2		11.3
Consumer		202.0		234.7			(32.7	)	(13.9	%)	9.1		12.9
Industrial		147.4		172.7			(25.3	)	(14.6	%)	6.7		9.4
Total	$	2,207.1	$	1,821.1		$	386.0		21.2	%	100	%	100	%

Q4 2024 Financial Summary	(Unaudited)
GAAP

		Q4’24			Q3’24			Q4’23		QoQ Change	YoY Change
Revenue ($k)	$	621,665		$	620,119		$	454,012		Up 0.2%	Up 36.9%
Gross Margin		55.4	%		55.4	%		55.3	%	Flat	Up 0.1 pts
Opex ($k)	$	181,101		$	179,415		$	141,554		Up 0.9%	Up 27.9%
Operating Margin		26.3	%		26.5	%		24.1	%	Down 0.2 pts	Up 2.2 pts
Net income ($k)	$	1,449,363		$	144,430		$	96,905		Up 903.5%	Up 1395.7%
Diluted EPS	$	29.88		$	2.95		$	1.98		Up 912.9%	Up 1409.1%

	Q4’24				Q3’24			Q4’23		QoQ Change	YoY Change
Revenue ($k)	$	621,665		$	620,119		$	454,012		Up 0.2%	Up 36.9%
Gross Margin		55.8	%		55.8	%		55.7	%	Flat	Up 0.1 pts
Opex ($k)	$	126,117		$	125,169		$	96,745		Up 0.8%	Up 30.4%
Operating Margin		35.5	%		35.6	%		34.4	%	Down 0.1 pts	Up 1.1 pts
Net income ($k)	$	198,401		$	198,786		$	140,852		Down 0.2%	Up 40.9%
Diluted EPS	$	4.09		$	4.06		$	2.88		Up 0.7%	Up 42.0%

Revenue by End Market

	Revenue					YoY Change				% of Total Rev
End Market ($M)		Q4’24			Q4’23	$			%	Q4’24		Q4’23
Enterprise Data	$	194.9	$	128.9		$	66.0	51.2	%	31.3	%	28.4	%
Storage & Computing		136.5		117.3			19.2	16.4	%	22.0		25.8
Automotive		128.4		89.8			38.6	43.0	%	20.6		19.8
Communications		63.8		40.9			22.9	55.9	%	10.3		9.0
Consumer		57.3		43.7			13.6	31.0	%	9.2		9.6
Industrial		40.8		33.4			7.4	22.3	%	6.6		7.4
Total	$	621.7	$	454.0		$	167.7	36.9	%	100	%	100	%

Ongoing Business Conditions

In 2024, MPS’s revenue grew 21.2% year-over-year and achieved record revenue of $2.2 billion. This is our 13th consecutive year of revenue growth driven by consistent execution, continued innovation, and strong customer focus.

Highlights from 2024 include:

We introduced a Silicon Carbide inverter for high power clean energy applications. Initial revenue is expected to ramp in late 2025. Other Silicon Carbide-based applications are expected to be introduced in multiple geographies during 2025 and 2026.
We developed a family of high quality, cost efficient automotive audio products utilizing DSP technology from our 2024 Axign acquisition powered by MPS solutions.
For enterprise notebooks, we launched a battery management solution and are sampling our new mini-phase power stage. These products enable faster charge time and significantly improve notebook battery life.
Building on our first analog to digital converter design win in 2024, we are developing new high accuracy 24-bit converters which are expected to ramp in the second half of 2025.
We executed a $640M stock repurchase program offsetting dilution for our shareholders.

In Q4 2024, MPS achieved record quarterly revenue of $621.7 million, slightly higher than revenue in the third quarter of 2024 and 36.9% higher than revenue in the fourth quarter of 2023. Our performance during the quarter reflected the continued strength of our diversified market strategy and a continued trend of the improved ordering patterns we saw in Q3 2024.

MPS continues to focus on innovation, solving our customers’ most challenging problems, and maintaining the highest level of quality. We continue to invest in new technology, expand into new markets, and to diversify our end-market applications and global supply chain. This will allow us to capture future growth opportunities, maintain supply stability, and swiftly adapt to market changes as they occur.

“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.

2024 Full Year Revenue Results

Our full year 2024 revenue by market segment was as follows:

Full year 2024 Enterprise Data revenue grew $393.2 million to $716.2 million. This 121.7% increase was due to higher sales of our power management solutions for AI and server applications. Enterprise Data revenue represented 32.5% of MPS’s total revenue in 2024 compared with 17.7% in 2023.

Communications revenue grew by $21.0 million in 2024 to $225.9 million. This 10.2% increase was a result of higher sales of power solutions for optical modules and routers, partially offset by lower sales of networking solutions. Communications revenue represented 10.2% of our 2024 revenue compared with 11.3% in 2023.

Automotive revenue grew $19.3 million year-over-year to $414.0 million in 2024. This 4.9% gain was driven by increased sales of our highly integrated applications supporting advanced driver assistance systems. Automotive revenue represented 18.8% of MPS’s full year 2024 revenue compared with 21.7% in 2023.

Storage and Computing revenue for 2024 grew $10.5 million over the prior year to $501.6 million. This 2.1% increase was primarily driven by increased sales of products for notebooks. Storage and Computing revenue represented 22.7% of MPS’s total revenue in 2024 compared with 27.0% in 2023.

Consumer revenue decreased $32.7 million to $202.0 million in 2024. This 13.9% year-over-year decrease was a result of broad market weakness. Consumer revenue represented 9.1% of MPS’s full year 2024 revenue compared with 12.9% in 2023.

Industrial revenue fell by $25.3 million to $147.4 million in 2024. This 14.6% decrease was due to general market weakness across all industrial segments. Industrial revenue represented 6.7% of MPS’s full year 2024 revenue compared with 9.4% in 2023.

Q4’24 Revenue Results

MPS reported fourth quarter revenue of $621.7 million, slightly higher than the third quarter of 2024 and 36.9% higher than the fourth quarter of 2023. Compared with the third quarter of 2024, sales in Automotive and Enterprise Data improved sequentially.

Fourth quarter Automotive revenue of $128.4 million increased 15.3% from the third quarter of 2024 primarily from higher sales in ADAS and infotainment power solutions. Fourth quarter 2024 Automotive revenue was up 43.0% year over year. Automotive revenue represented 20.6% of MPS’s fourth quarter 2024 revenue compared with 19.8% in the fourth quarter of 2023.

In our Enterprise Data market, fourth quarter 2024 revenue of $194.9 million increased 5.6% from the third quarter of 2024. Fourth quarter 2024 Enterprise Data revenue was up 51.2% year over year. Enterprise Data revenue represented 31.3% of MPS’s fourth quarter 2024 revenue compared with 28.4% in the fourth quarter of 2023.

Fourth quarter 2024 Storage and Computing revenue of $136.5 million decreased 5.2% from the third quarter of 2024. The sequential decrease was primarily driven by lower sales in notebooks, partially offset by stronger sales in graphic cards. Fourth quarter 2024 Storage and Computing revenue was up 16.4% year over year. Storage and Computing revenue represented 22.0% of MPS’s fourth quarter 2024 revenue compared with 25.8% in the fourth quarter of 2023.

Fourth quarter 2024 Industrial revenue of $40.8 million decreased 7.3% from the third quarter of 2024 due to lower sales for security and power sources. Fourth quarter 2024 Industrial revenue was up 22.3% year over year. Industrial revenue represented 6.6% of our total fourth quarter 2024 revenue compared with 7.4% in the fourth quarter of 2023.

Fourth quarter Consumer revenue of $57.3 million decreased 11.0% from the third quarter of 2024 primarily from lower sales in smart TVs, home appliance and gaming solutions. Fourth quarter 2024 Consumer revenue was up 31.0% year over year. Consumer revenue represented 9.2% of MPS’s fourth quarter 2024 revenue compared with 9.6% in the fourth quarter of 2023.

Fourth quarter 2024 Communications revenue of $63.8 million was down 11.2% from the third quarter of 2024 reflecting lower sales in networking solutions, partially offset by higher sales in optical solutions. Fourth quarter 2024 Communications revenue was up 55.9% year over year. Communications sales represented 10.3% of our total fourth quarter 2024 revenue compared with 9.0% in the fourth quarter of 2023.

Q4’24 Gross Margin & Operating Income

GAAP gross margin was 55.4%, flat to the third quarter of 2024. Our GAAP operating income was approximately $163.3 million compared to $164.0 million reported in the third quarter of 2024.

Non-GAAP gross margin for the fourth quarter of 2024 was 55.8%, flat to the third quarter of 2024. Our non-GAAP operating income was $220.7 million compared to $220.8 million reported in the third quarter of 2024.

Q4’24 Operating Expenses

Our GAAP operating expenses were $181.1 million in the fourth quarter of 2024 compared with $179.4 million in the third quarter of 2024.

Our Non-GAAP operating expenses were approximately $126.1 million, up from $125.2 million in the third quarter of 2024.

The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock-based compensation and related expense and deferred compensation plan expense.

Total stock-based compensation and related expenses, including approximately $1.7 million charged to cost of goods sold, was $56.3 million compared with $52.4 million recorded in the third quarter of 2024.

The Bottom Line

Fourth quarter 2024 GAAP net income was $1.4 billion or $29.88 per fully diluted share, compared with $144.4 million or $2.95 per share in the third quarter of 2024. Fourth quarter GAAP net income and EPS included the recognition of a tax benefit granted to a foreign subsidiary.

Fourth quarter 2024 non-GAAP net income was $198.4 million or $4.09 per fully diluted share, compared with $198.8 million or $4.06 per fully diluted share in the third quarter of 2024.

There were 48.5 million fully diluted shares outstanding at the end of the fourth quarter of 2024. MPS repurchased $622M in stock during the fourth quarter of 2024.

Balance Sheet and Cash Flow

Cash, cash equivalents and short-term investments were $862.9 million at the end of the fourth quarter of 2024 compared to $1.46 billion at the end of the third quarter of 2024. The change was driven primarily by the share repurchases made in the fourth quarter. For the fourth quarter of 2024, MPS generated operating cash flow of approximately $167.7 million compared with the third quarter of 2024 operating cash flow of $231.7 million.

Accounts receivable at the end of the fourth quarter of 2024 at $172.5 million, representing 25 days of sales outstanding, which was 1 day higher than the 24 days reported at the end of the third quarter of 2024.

Our internal inventories at the end of the fourth quarter of 2024 were $419.6 million, down from $424.9 million at the end of the third quarter of 2024. Days of inventory of 138 days at the end of the fourth quarter of 2024 was 2 days lower than at the end of the third quarter of 2024.

We have carefully managed our internal inventories throughout the year, balancing the uncertainty in the market with being prepared to capture market upturns when they occur. Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the fourth quarter of 138 days was 2 days lower than at the end of the third quarter of 2024.

Selected Balance Sheet and Inventory Data				(Unaudited)

	Q4’24	Q3’24	Q4’23
Cash, Cash Equivalents, and Short-Term Investments	$ 862.9 M	$ 1,462.4 M	$ 1,108.5 M
Operating Cash Flow	$ 167.7 M	$ 231.7 M	$ 153.3 M
Accounts Receivable	$ 172.5 M	$ 164.7 M	$ 179.9 M
Days of Sales Outstanding	25 Days	24 Days	36 Days
Internal Inventories	$ 419.6 M	$ 424.9 M	$ 383.7 M
Days of Inventory (current quarter revenue)	138 Days	140 Days	172 Days
Days of Inventory (next quarter revenue)	138 Days	140 Days	170 Days

Q1’25 Business Outlook

For the first quarter of 2025 ending March 31, we are forecasting:

Revenue in the range of $610 million to $630 million.
GAAP gross margin in the range of 55.1% to 55.7%.
Non-GAAP gross margin in the range of 55.4% to 56.0%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
Total stock-based compensation and related expenses in the range of $55.0 million to $57.0 million including approximately $1.7 million that would be charged to cost of goods sold.
GAAP operating expenses between $180.2 million and $186.2 million.
Non-GAAP operating expenses in the range of $126.9 million to $130.9 million. This estimate excludes stock-based compensation and related expenses in the range of $53.3 million to $55.3 million.
Interest and other income in the range from $5.8 million to $6.2 million before foreign exchange gains or losses.
Non-GAAP tax rate of 15% for 2025.
Fully diluted shares outstanding in the range of 47.8 to 48.2 million shares.

Our quarterly dividend will increase 25% to $1.56 per share from $1.25 per share for stockholders of record as of March 31, 2025.

In addition, our board of directors has authorized a new $500 million stock repurchase program effective over the next 3 years. The $640 million share repurchase program authorized in October of 2023 has been fully executed.

For further information, contact:

Bernie Blegen
Executive Vice President and Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
MPSInvestor.Relations@monolithicpower.com

Safe Harbor Statement

This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Q1’25 Business Outlook” section herein, our statement regarding our business focus, our statement regarding the expansion and diversification of our global supply chain and the quote from our CEO and founder, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the first quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy and geopolitical uncertainties, including the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 29, 2024. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar.

Non-GAAP Financial Measures

This CFO Commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense, amortization of acquisition-related intangible assets and related tax effects. Non-GAAP net income and non-GAAP net income per share also exclude the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to Non-GAAP reconciliations in the tables set forth below.

RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME

(Unaudited, in thousands, except per share amounts)

	Three Months Ended December 31,					Year Ended December 31,
	2024			2023		2024			2023
Net income	$	1,449,363		$	96,905	$	1,786,700		$	427,374

Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation and related expenses*		56,320			41,107		213,209			149,711
Amortization of acquisition-related intangible assets		320			33		1,303			132
Deferred compensation plan expense, net		573			288		867			1,055
Tax effect of non-GAAP adjustments		(22,773	)		2,519		(26,922	)		(3,625	)
Recognition of a tax benefit granted to a foreign subsidiary		(1,285,402	)		–		(1,285,402	)		–
Non-GAAP net income	$	198,401		$	140,852	$	689,755		$	574,647

Non-GAAP net income per share:
Basic	$	4.11		$	2.94	$	14.19		$	12.07
Diluted	$	4.09		$	2.88	$	14.12		$	11.78

Shares used in the calculation of non-GAAP net income per share:
Basic		48,317			47,936		48,599			47,610
Diluted		48,506			48,881		48,835			48,771

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN

(Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Gross profit	$	344,408		$	251,123		$	1,220,870		$	1,021,119
Gross margin		55.4	%		55.3	%		55.3	%		56.1	%

Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation and related expenses*		1,745			1,228			6,975			4,545
Amortization of acquisition-related intangible assets		287			–			1,171			–
Deferred compensation plan expense		417			486			1,500			871
Non-GAAP gross profit	$	346,857		$	252,837		$	1,230,516		$	1,026,535
Non-GAAP gross margin		55.8	%		55.7	%		55.8	%		56.4	%

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES

(Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total operating expenses	$	181,101		$	141,554		$	681,512		$	539,383

Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation and related expenses*		(54,575	)		(39,879	)		(206,234	)		(145,166	)
Amortization of acquisition-related intangible assets		(33	)		(33	)		(132	)		(132	)
Deferred compensation plan expense		(376	)		(4,897	)		(8,767	)		(8,690	)
Non-GAAP operating expenses	$	126,117		$	96,745		$	466,379		$	385,395

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME

(Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total operating income	$	163,307	$	109,569	$	539,358	$	481,736

Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense		793		5,383		10,267		9,561
Non-GAAP operating income	$	220,740	$	156,092	$	764,137	$	641,140

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET

(Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total other income, net	$	6,224		$	9,976		$	33,554		$	24,105

Adjustments to reconcile other income, net to non-GAAP other income, net:
Deferred compensation plan income		(220	)		(5,095	)		(9,400	)		(8,506	)
Non-GAAP other income, net	$	6,004		$	4,881		$	24,154		$	15,599

RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES

(Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total income before income taxes	$	169,531	$	119,545	$	572,912	$	505,841

Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense, net		573		288		867		1,055
Non-GAAP income before income taxes	$	226,744	$	160,973	$	788,291	$	656,739

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

2025 FIRST QUARTER OUTLOOK

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN

(Unaudited)

	Three Months Ending March 31, 2025
	Three Months Ending March 31, 2025
	Low			High
Gross margin		55.1	%		55.7	%
Adjustment to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation and other expenses		0.3	%		0.3	%
Non-GAAP gross margin		55.4	%		56.0	%

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES

(Unaudited, in thousands)

	Three Months Ending March 31, 2025
	Three Months Ending March 31, 2025
	Low			High
Operating expenses	$	180,200		$	186,200
Adjustments to reconcile operating expenses to non-GAAP operating expenses:
Stock-based compensation and other expenses		(53,300	)		(55,300	)
Non-GAAP operating expenses	$	126,900		$	130,900

The MIL Network –

February 7, 2025

MIL-OSI: Monolithic Power Systems Announces $500 Million Stock Repurchase Program

Source: GlobeNewswire (MIL-OSI)

KIRKLAND, Wash., Feb. 06, 2025 (GLOBE NEWSWIRE) — Monolithic Power Systems, Inc. (“MPS”) (Nasdaq: MPWR), a global company that provides high-performance, semiconductor-based power electronics solutions, today announced its Board of Directors has approved a new stock repurchase program that authorizes MPS to repurchase up to $500 million in the aggregate of its common stock, which will expire on February 4, 2028.

Shares of common stock repurchased under the program will be retired. As of December 31, 2024, MPS had cash, cash equivalents and short-term investments of $862.9 million, and 47.8 million shares of common stock outstanding.

Stock repurchases under the program may be made through open market repurchases, privately negotiated transactions or other structures in accordance with applicable state and federal securities laws, at times and in amounts as management deems appropriate. The timing and the number of any repurchased common stock will be determined by MPS’s management based on its evaluation of market conditions, legal requirements, share price, and other factors. Repurchases of common stock may be made under a Rule 10b5-1 plan. The repurchase program does not obligate MPS to purchase any particular number of shares and may be suspended, modified, or discontinued at any time without prior notice.

Safe Harbor Statement
This news release includes “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements with respect to the intention to make purchases under the repurchase program. These forward-looking statements are based on MPS’s current expectations, estimates and projections about MPS’s business and industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “forecasts,” “intends,” “believes,” “plans,” “may,” “will,” or “continue,” and similar expressions and variations or negatives of these words. All such statements are subject to certain risks, assumptions and uncertainties, including the risk that MPS does not effect any or all of the repurchases under the repurchase program, the risk that repurchases are not made at favorable prices, the risk that the repurchase program is suspended or terminated, the risk that the intended benefits of the repurchase program are not realized and those risks described under the caption “Risk Factors” and elsewhere in MPS’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Qs, and in other documents that MPS files or furnishes with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those projected, and may affect MPS’s future operating results, financial position and cash flows. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, MPS does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the initial distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

About Monolithic Power Systems
Monolithic Power Systems, Inc. is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Contact:
Bernie Blegen
Executive Vice President and Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
MPSInvestor.Relations@monolithicpower.com

The MIL Network –

February 7, 2025

MIL-OSI: Monolithic Power Systems Announces Results for the Fourth Quarter and Year Ended December 31, 2024 and an Increase in Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

KIRKLAND, Wash., Feb. 06, 2025 (GLOBE NEWSWIRE) — Monolithic Power Systems, Inc. (“MPS”) (Nasdaq: MPWR), a fabless global company that provides high-performance, semiconductor-based power electronics solutions, today announced financial results for the quarter and year ended December 31, 2024. MPS also announced that its Board of Directors has approved an increase in the quarterly cash dividend from $1.25 per share to $1.56 per share. The first quarter dividend of $1.56 per share will be paid on April 15, 2025 to all stockholders of record as of the close of business on March 31, 2025.

The financial results for the quarter ended December 31, 2024 were as follows:

Revenue was $621.7 million for the quarter ended December 31, 2024, a 0.2% increase from $620.1 million for the quarter ended September 30, 2024 and a 36.9% increase from $454.0 million for the quarter ended December 31, 2023.

GAAP gross margin was 55.4% for the quarter ended December 31, 2024, compared with 55.3% for the quarter ended December 31, 2023.

Non-GAAP gross margin (1) was 55.8% for the quarter ended December 31, 2024, excluding the impact of $1.7 million for stock-based compensation and related expenses, $0.4 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with 55.7% for the quarter ended December 31, 2023, excluding the impact of $1.2 million for stock-based compensation expense and $0.5 million for deferred compensation plan expense.

GAAP operating expenses were $181.1 million for the quarter ended December 31, 2024, compared with $141.6 million for the quarter ended December 31, 2023.

Non-GAAP operating expenses (1) were $126.1 million for the quarter ended December 31, 2024, excluding $54.6 million for stock-based compensation and related expenses, and $0.4 million for deferred compensation plan expense, compared with $96.7 million for the quarter ended December 31, 2023, excluding $39.9 million for stock-based compensation expense and $4.9 million for deferred compensation plan expense.

GAAP operating income was $163.3 million for the quarter ended December 31, 2024, compared with $109.6 million for the quarter ended December 31, 2023.

Non-GAAP operating income (1) was $220.7 million for the quarter ended December 31, 2024, excluding $56.3 million for stock-based compensation and related expenses, $0.8 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with $156.1 million for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense and $5.4 million for deferred compensation plan expense.

GAAP other income, net was $6.2 million for the quarter ended December 31, 2024, compared with $10.0 million for the quarter ended December 31, 2023.

Non-GAAP other income, net (1) was $6.0 million for the quarter ended December 31, 2024, excluding $0.2 million for deferred compensation plan income, compared with $4.9 million for the quarter ended December 31, 2023, excluding $5.1 million for deferred compensation plan income.

GAAP income before income taxes was $169.5 million for the quarter ended December 31, 2024, compared with $119.5 million for the quarter ended December 31, 2023.

Non-GAAP income before income taxes (1) was $226.7 million for the quarter ended December 31, 2024, excluding $56.3 million for stock-based compensation and related expenses, $0.6 million for net deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with $161.0 million for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense and $0.3 million for net deferred compensation plan expense.

GAAP net income was $1.4 billion and $29.88 per diluted share for the quarter ended December 31, 2024. Comparatively, GAAP net income was $96.9 million and $1.98 per diluted share for the quarter ended December 31, 2023. GAAP net income and income per diluted share for the quarter ended December 31, 2024 included $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary.

Non-GAAP net income (1) was $198.4 million and $4.09 per diluted share for the quarter ended December 31, 2024 excluding $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP net income (1) for the quarter ended December 31, 2024 also excluded $56.3 million for stock-based compensation and related expenses, $0.6 million for net deferred compensation plan expense, $0.3 million for amortization of acquisition-related intangible assets and $22.8 million for the related tax effects, compared with $140.9 million and $2.88 per diluted share for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense, $0.3 million for net deferred compensation plan expense and $2.5 million for the related tax effects.

The financial results for the year ended December 31, 2024 were as follows:

Revenue was $2.2 billion for the year ended December 31, 2024, a 21.2% increase from $1.8 billion for the year ended December 31, 2023.

GAAP gross margin was 55.3% for the year ended December 31, 2024, compared with 56.1% for the year ended December 31, 2023.

Non-GAAP gross margin (1) was 55.8% for the year ended December 31, 2024, excluding the impact of $7.0 million for stock-based compensation and related expenses, $1.5 million for deferred compensation plan expense and $1.2 million for amortization of acquisition-related intangible assets, compared with 56.4% for the year ended December 31, 2023, excluding the impact of $4.5 million for stock-based compensation expense and $0.9 million for deferred compensation plan expense.

GAAP operating expenses were $681.5 million for the year ended December 31, 2024, compared with $539.4 million for the year ended December 31, 2023.

Non-GAAP operating expenses (1) were $466.4 million for the year ended December 31, 2024, excluding $206.2 million for stock-based compensation and related expenses, $8.8 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets, compared with $385.4 million for the year ended December 31, 2023, excluding $145.2 million for stock-based compensation expense, $8.7 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.

GAAP operating income was $539.4 million for the year ended December 31, 2024, compared with $481.7 million for the year ended December 31, 2023.

Non-GAAP operating income (1) was $764.1 million for the year ended December 31, 2024, excluding $213.2 million for stock-based compensation and related expenses, $10.3 million for deferred compensation plan expense and $1.3 million for amortization of acquisition-related intangible assets, compared with $641.1 million for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $9.6 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.

GAAP other income, net was $33.6 million for the year ended December 31, 2024, compared with $24.1 million for the year ended December 31, 2023.

Non-GAAP other income, net (1) was $24.2 million for the year ended December 31, 2024, excluding $9.4 million for deferred compensation plan income, compared with $15.6 million for the year ended December 31, 2023, excluding $8.5 million for deferred compensation plan income.

GAAP income before income taxes was $572.9 million for the year ended December 31, 2024, compared with $505.8 million for the year ended December 31, 2023.

Non-GAAP income before income taxes (1) was $788.3 million for the year ended December 31, 2024, excluding $213.2 million for stock-based compensation and related expenses, $1.3 million for amortization of acquisition-related intangible assets and $0.9 million for net deferred compensation plan expense, compared with $656.7 million for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $1.1 million for net deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.

GAAP net income was $1.8 billion and $36.59 per diluted share for the year ended December 31, 2024. Comparatively, GAAP net income was $427.4 million and $8.76 per diluted share for the year ended December 31, 2023. GAAP net income and income per diluted share for the year ended December 31, 2024 included $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary.

Non-GAAP net income (1) was $689.8 million and $14.12 per diluted share for the year ended December 31, 2024 excluding $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP net income (1) for the year ended December 31, 2024 also excluded $213.2 million for stock-based compensation and related expenses, $1.3 million for amortization of acquisition-related intangible assets, $0.9 million for net deferred compensation plan expense and $26.9 million for the related tax effects, compared with $574.6 million and $11.78 per diluted share for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $1.1 million for net deferred compensation plan expense, $0.1 million for amortization of acquisition-related intangible assets and $3.6 million for the related tax effects.

The following is a summary of revenue by end market (in thousands):

	Three Months Ended December 31,				Year Ended December 31,
End Market	2024		2023		2024		2023
Enterprise Data	$	194,867	$	128,897	$	716,264	$	322,980
Storage and Computing		136,507		117,312		501,576		491,139
Automotive		128,344		89,758		413,973		394,665
Communications		63,810		40,926		225,905		204,911
Consumer		57,311		43,741		202,015		234,660
Industrial		40,826		33,378		147,367		172,717
Total	$	621,665	$	454,012	$	2,207,100	$	1,821,072

“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.

Business Outlook

The following are MPS’s financial targets for the first quarter ending March 31, 2025:

Revenue in the range of $610.0 million to $630.0 million.

GAAP gross margin between 55.1% and 55.7%. Non-GAAP gross margin (1) between 55.4% and 56.0%, which excludes estimated stock-based compensation and related expenses of $1.7 million as well as the impact from amortization of acquisition-related intangible assets.

GAAP operating expenses between $180.2 million and $186.2 million. Non-GAAP operating expenses (1) between $126.9 million and $130.9 million, which excludes estimated stock-based compensation and related expenses in the range of $53.3 million to $55.3 million.

Total stock-based compensation and related expenses of $55.0 million to $57.0 million including approximately $1.7 million that would be charged to cost of goods sold.

Interest and other income in the range of $5.8 million to $6.2 million before foreign exchange gains or losses.

Non-GAAP tax rate of 15.0% for 2025.

Fully diluted shares outstanding between 47.8 million and 48.2 million.

(1) Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense, amortization of acquisition-related intangible assets and related tax effects. Non-GAAP net income and non-GAAP net income per share also exclude the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to non-GAAP reconciliations in the tables set forth below.

Earnings Commentary
Earnings commentary on the results of operations for the quarter and year ended December 31, 2024 is available under the Investor Relations page on the MPS website.

Earnings Webinar
MPS plans to host a question-and-answer conference call covering its financial results at 2:00 p.m. PT / 5:00 p.m. ET, February 6, 2025. The live event will be held via a Zoom webcast, which can be accessed at: https://mpsic.zoom.us/j/96816578886. The Zoom webcast can also be accessed live over the phone by dialing (669) 444-9171; the webcast ID is 96816578886. A replay of the event will be archived and available for replay for one year under the Investor Relations page on the MPS website.

Safe Harbor Statement
This press release contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Business Outlook” section and the quote from our CEO herein, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the first quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy and geopolitical uncertainties, including the collapse of certain banks in the U.S. and elsewhere and the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 29, 2024. MPS assumes no obligation to update the information in this press release or in the accompanying webinar.

About Monolithic Power Systems

Monolithic Power Systems, Inc. (“MPS”) is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Contact:
Bernie Blegen
Executive Vice President and Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
MPSInvestor.Relations@monolithicpower.com


Monolithic Power Systems, Inc. Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value)

	December 31,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	691,816		$	527,843
Short-term investments		171,130			580,633
Accounts receivable, net		172,518			179,858
Inventories		419,611			383,702
Other current assets		109,978			147,463
Total current assets		1,565,053			1,819,499
Property and equipment, net		494,945			368,952
Acquisition-related intangible assets, net		9,938			–
Goodwill		25,944			6,571
Deferred tax assets, net		1,326,840			28,054
Other long-term assets		194,377			211,277
Total assets	$	3,617,097		$	2,434,353

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	102,526		$	62,958
Accrued compensation and related benefits		63,918			56,286
Other accrued liabilities		128,123			115,791
Total current liabilities		294,567			235,035
Income tax liabilities		65,193			60,724
Other long-term liabilities		111,570			88,655
Total liabilities		471,330			384,414
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital: $0.001 par value; shares authorized: 150,000; shares issued and outstanding: 47,823 and 48,028, respectively		706,817			1,129,937
Retained earnings		2,487,461			947,064
Accumulated other comprehensive loss		(48,511	)		(27,062	)
Total stockholders’ equity		3,145,767			2,049,939
Total liabilities and stockholders’ equity	$	3,617,097		$	2,434,353


Monolithic Power Systems, Inc. Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share amounts)

	Three Months Ended December 31,					Year Ended December 31,
	2024			2023		2024			2023
Revenue	$	621,665		$	454,012	$	2,207,100		$	1,821,072
Cost of revenue		277,257			202,889		986,230			799,953
Gross profit		344,408			251,123		1,220,870			1,021,119
Operating expenses:
Research and development		85,762			71,459		324,748			263,643
Selling, general and administrative		95,339			70,095		356,764			275,740
Total operating expenses		181,101			141,554		681,512			539,383
Operating income		163,307			109,569		539,358			481,736
Other income, net		6,224			9,976		33,554			24,105
Income before income taxes		169,531			119,545		572,912			505,841
Income tax expense (benefit), net		(1,279,832	)		22,640		(1,213,788	)		78,467
Net income	$	1,449,363		$	96,905	$	1,786,700		$	427,374

Net income per share:
Basic	$	30.00		$	2.02	$	36.76		$	8.98
Diluted	$	29.88		$	1.98	$	36.59		$	8.76
Weighted-average shares outstanding:
Basic		48,317			47,936		48,599			47,610
Diluted		48,506			48,881		48,835			48,771


SUPPLEMENTAL FINANCIAL INFORMATION STOCK-BASED COMPENSATION EXPENSE (Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Cost of revenue	$	1,720	$	1,228	$	6,305	$	4,545
Research and development		12,166		10,204		45,626		36,611
Selling, general and administrative		42,124		29,675		153,709		108,555
Total stock-based compensation expense	$	56,010	$	41,107	$	205,640	$	149,711


RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME (Unaudited, in thousands, except per share amounts)

	Three Months Ended December 31,					Year Ended December 31,
	2024			2023		2024			2023
Net income	$	1,449,363		$	96,905	$	1,786,700		$	427,374

Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation and related expenses*		56,320			41,107		213,209			149,711
Amortization of acquisition-related intangible assets		320			33		1,303			132
Deferred compensation plan expense, net		573			288		867			1,055
Tax effect of non-GAAP adjustments		(22,773	)		2,519		(26,922	)		(3,625	)
Recognition of a tax benefit granted to a foreign subsidiary		(1,285,402	)		–		(1,285,402	)		–
Non-GAAP net income	$	198,401		$	140,852	$	689,755		$	574,647

Non-GAAP net income per share:
Basic	$	4.11		$	2.94	$	14.19		$	12.07
Diluted	$	4.09		$	2.88	$	14.12		$	11.78

Shares used in the calculation of non-GAAP net income per share:
Basic		48,317			47,936		48,599			47,610
Diluted		48,506			48,881		48,835			48,771

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Gross profit	$	344,408		$	251,123		$	1,220,870		$	1,021,119
Gross margin		55.4	%		55.3	%		55.3	%		56.1	%

Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation and related expenses*		1,745			1,228			6,975			4,545
Amortization of acquisition-related intangible assets		287			–			1,171			–
Deferred compensation plan expense		417			486			1,500			871
Non-GAAP gross profit	$	346,857		$	252,837		$	1,230,516		$	1,026,535
Non-GAAP gross margin		55.8	%		55.7	%		55.8	%		56.4	%

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total operating expenses	$	181,101		$	141,554		$	681,512		$	539,383

Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation and related expenses*		(54,575	)		(39,879	)		(206,234	)		(145,166	)
Amortization of acquisition-related intangible assets		(33	)		(33	)		(132	)		(132	)
Deferred compensation plan expense		(376	)		(4,897	)		(8,767	)		(8,690	)
Non-GAAP operating expenses	$	126,117		$	96,745		$	466,379		$	385,395

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME (Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total operating income	$	163,307	$	109,569	$	539,358	$	481,736

Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense		793		5,383		10,267		9,561
Non-GAAP operating income	$	220,740	$	156,092	$	764,137	$	641,140

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET (Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total other income, net	$	6,224		$	9,976		$	33,554		$	24,105

Adjustments to reconcile other income, net to non-GAAP other income, net:
Deferred compensation plan income		(220	)		(5,095	)		(9,400	)		(8,506	)
Non-GAAP other income, net	$	6,004		$	4,881		$	24,154		$	15,599


RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES (Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total income before income taxes	$	169,531	$	119,545	$	572,912	$	505,841

Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense, net		573		288		867		1,055
Non-GAAP income before income taxes	$	226,744	$	160,973	$	788,291	$	656,739

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


2025 FIRST QUARTER OUTLOOK RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited)

	Three Months Ending
	March 31, 2025
	Low			High
Gross margin		55.1	%		55.7	%
Adjustment to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation and other expenses		0.3	%		0.3	%
Non-GAAP gross margin		55.4	%		56.0	%


RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands)

	Three Months Ending
	March 31, 2025
	Low			High
Operating expenses	$	180,200		$	186,200
Adjustments to reconcile operating expenses to non-GAAP operating expenses:
Stock-based compensation and other expenses		(53,300	)		(55,300	)
Non-GAAP operating expenses	$	126,900		$	130,900

The MIL Network –

February 7, 2025

MIL-OSI: ARRAY Technologies, Inc. Announces Fourth Quarter and Full Year 2024 Earnings Release Date and Conference Call

Source: GlobeNewswire (MIL-OSI)

ALBUQUERQUE, N.M., Feb. 06, 2025 (GLOBE NEWSWIRE) — ARRAY Technologies, Inc. (the “Company” or “ARRAY”) (Nasdaq: ARRY) today announced that the company will release its fourth quarter and full year 2024 results after the market close on Thursday, February 27, 2025, to be followed by a conference call at 5:00 p.m. (Eastern Time) on the same day.

The conference call can be accessed live over the phone by dialing (877)-869-3847 (domestic) or (201)-689-8261 (international). A telephonic replay will be available approximately three hours after the call by dialing (877)-660-6853, or for international callers, (201)-612-7415. The passcode for the live call and the replay is 13750627. The replay will be available until 11:59 p.m. (ET) on March 13, 2025.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company’s website at http://ir.arraytechinc.com. The online replay will be available for a limited time beginning immediately following the call.

About ARRAY Technologies, Inc.

ARRAY Technologies (NASDAQ: ARRY) is a leading global renewable energy company and provider of utility-scale solar tracking technology. Engineered to withstand the harshest conditions on the planet, ARRAY’s high-quality solar trackers and sophisticated software maximize energy production, accelerating the adoption of cost-effective and sustainable energy. Founded and headquartered in the United States, ARRAY relies on its diversified global supply chain and customer-centric approach to deliver, commission, and support solar energy developments around the world, lighting the way to a brighter, smarter future for clean energy. For more news and information on ARRAY, please visit arraytechinc.com.

Investor Relations Contact:

ARRAY Technologies, Inc.
Investor Relations
505-437-0010
investors@arraytechinc.com

The MIL Network –

February 7, 2025

MIL-OSI Security: St. Louis County Man Admits Drug Robbery, Carjacking

Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)

ST. LOUIS – A convicted felon from St. Louis County, Missouri on Tuesday admitted possessing a machine gun and committing a drug robbery and a carjacking.

Walter C. Moore, 19, pleaded guilty in U.S. District Court in St. Louis Tuesday to charges of being a felon in possession of a firearm, possession of a machine gun, robbery, carjacking and brandishing a firearm in furtherance of a crime of violence.

Moore admitted using Facebook to arrange for the purchase of $900 worth of the painkiller Oxycodone on April 25, 2024. The seller drove to Moore’s house and invited him to sit in her 2014 Mazda6 to complete the sale. Moore pulled out a handgun, grabbed the Oxycodone pills and ordered the seller out, threatening to shoot her. Moore then sped off in her car.

St. Louis County police located the car near the 1800 block of Chambers Road. Moore ran as police approached, but he was quickly located and arrested. He had discarded a Glock handgun equipped with a “switch,” or machinegun conversion device, rendering it a fully automatic weapon. It also had an extended magazine and a laser sight. Moore’s phone contained pictures of him with that gun and others. As a convicted felon, he is barred from possessing firearms.

Moore is scheduled to be sentenced May 6. Both the U.S. Attorney’s Office and Moore’s lawyer have agreed to recommend a sentence of 15 years in prison.

The St. Louis County Police Department and the FBI investigated the case. Assistant U.S. Attorney Zachary Bluestone is prosecuting the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

MIL Security OSI –

February 7, 2025

MIL-OSI Security: Siblings Plead Guilty to COVID Relief Fraud

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

Hattiesburg, MS – A Forrest County man and woman pled guilty to conspiring with each other to fraudulently obtain unemployment insurance benefits related to the COVID-19 pandemic.

According to court documents and statements made in court, Artista Garner, 36, of Hattiesburg, assisted her brother, Thaddieus Cooper, 31, in applying for benefits with the Mississippi Department of Employment Security. As an inmate in the Mississippi Department of Corrections (MDOC), Cooper was not entitled to receive unemployment insurance benefits. Cooper was serving a sentence of six years in MDOC custody for armed robbery. Garner used the unemployment funds for her personal benefit and transferred some of the funds to Cooper via his commissary fund.

The unemployment insurance benefits were federally subsidized through the CARES Act in response to the pandemic.

A federal grand jury returned an indictment against Cooper and Garner on September 10, 2024. Both Cooper and Garner pled guilty on January 30, 2025, to conspiracy to commit wire fraud. They are scheduled to be sentenced on June 12, 2025, and they each face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Patrick A. Lemon, Mississippi State Auditor Shad White, and Special Agent in Charge Mathew Broadhurst of the U.S. Department of Labor, Office of Inspector General, Southeast Region made the announcement.

The U.S. Department of Labor, Office of Inspector General and the Mississippi Office of the State Auditor investigated the case.

Assistant U.S. Attorney Kimberly T. Purdie is prosecuting the case.

This case is being prosecuted as part of the Department of Justice’s National Unemployment Insurance Fraud Task Force (NUIFTF). In response to the unprecedented scope of Unemployment Insurance (UI) fraud, the Department of Justice established the NUIFTF. The NUIFTF is a prosecutor-led multi-agency task force with representatives from FBI, DOL-OIG, IRS-CI, HSI, DHS-OIG, USPIS, USSS, SSA-OIG, FDIC-OIG, and other agencies. Members of the NUIFTF are working with state workforce agencies, financial institutions, and other law enforcement partners across the country to fight UI fraud, and consumers should be vigilant in light of these threats and take the appropriate steps to safeguard themselves.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization that expands states’ ability to provide unemployment insurance for many workers impacted by COVID-19, including for workers who are not ordinarily eligible for unemployment insurance benefits.

Anyone with information about attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866‑720‑5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

MIL Security OSI –

February 7, 2025

MIL-OSI: Nokia Corporation: Repurchase of own shares on 06.02.2025

Source: GlobeNewswire (MIL-OSI)

Nokia Corporation
Stock Exchange Release
6 February 2025 at 22:30 EET

Nokia Corporation: Repurchase of own shares on 06.02.2025

Espoo, Finland – On 6 February 2025 Nokia Corporation (LEI: 549300A0JPRWG1KI7U06) has acquired its own shares (ISIN FI0009000681) as follows:

Trading venue (MIC Code)	Number of shares	Weighted average price / share, EUR*
XHEL	1,379,268	4.64
CEUX	–	–
BATE	–	–
AQEU	–	–
TQEX	–	–
Total	1,379,268	4.64

* Rounded to two decimals

On 22 November 2024, Nokia announced that its Board of Directors is initiating a share buyback program to offset the dilutive effect of new Nokia shares issued to the shareholders of Infinera Corporation and certain Infinera Corporation share-based incentives. The repurchases in compliance with the Market Abuse Regulation (EU) 596/2014 (MAR), the Commission Delegated Regulation (EU) 2016/1052 and under the authorization granted by Nokia’s Annual General Meeting on 3 April 2024 started on 25 November 2024 and end by 31 December 2025 and target to repurchase 150 million shares for a maximum aggregate purchase price of EUR 900 million.

Total cost of transactions executed on 6 February 2025 was EUR 6,405,596. After the disclosed transactions, Nokia Corporation holds 240,903,874 treasury shares.

Details of transactions are included as an appendix to this announcement.

On behalf of Nokia Corporation

BofA Securities Europe SA

About Nokia
At Nokia, we create technology that helps the world act together.

As a B2B technology innovation leader, we are pioneering networks that sense, think and act by leveraging our work across mobile, fixed and cloud networks. In addition, we create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs which is celebrating 100 years of innovation.

With truly open architectures that seamlessly integrate into any ecosystem, our high-performance networks create new opportunities for monetization and scale. Service providers, enterprises and partners worldwide trust Nokia to deliver secure, reliable and sustainable networks today – and work with us to create the digital services and applications of the future.

Inquiries:

Nokia Communications
Phone: +358 10 448 4900
Email: press.services@nokia.com
Maria Vaismaa, Global Head of External Communications

Nokia Investor Relations
Phone: +358 931 580 507
Email: investor.relations@nokia.com

Attachment

Daily Report 2025-02-06

The MIL Network –

February 7, 2025

MIL-OSI Security: Missouri Man Guilty of Traveling to Louisiana for Illicit Sexual Conduct with 12-Year-Old Girl

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

NEW ORLEANS – U.S. Attorney Duane A. Evans announced that ERIC CHARLES FULLER (“FULLER”), age 54, from Springfield, Missouri, pled guilty on February 4, 2025, before United States District Judge Greg Gerard Guidry, to interstate travel with intent to engage in illicit sexual conduct, in violation of Title 18, United States Code, Section 2423(b).

According to court documents, on or about December 7, 2023, law enforcement personnel, operating undercover online and pretending to be a twenty-nine-year-old mother with a twelve-year-old daughter, met FULLER on a social network and messaging application. Over approximately the next month, on numerous occasions, FULLER discussed his interest in engaging in various sexual acts with the “mother” and daughter.” These discussions culminated in FULLER making arrangements to travel from his residence in Springfield, Missouri, to the New Orleans, Louisiana area to engage in sexual contact, individually and collectively, with the ”mother” and “daughter.” During his conversations, FULLER described the contact he anticipated as “highly taboo,” “highly illegal,” “risky,” “not the worst way to be,” and “a way to have a happier life.” FULLER drove from Springfield, Missouri on about January 11, 2024, and arrived at a predetermined location in Mandeville, Louisiana, on January 12, 2024, in order to engage in sexual conduct with the individual FULLER believed to be a twelve-year-old female.

FULLER faces a maximum term of imprisonment of thirty (30) years. FULLER also faces at least five (5) years, and up to a lifetime of supervised release, up to a $250,000 fine and a $100 mandatory special assessment fee. FULLER may also be required to register as a sex offender. Sentencing before Judge Guidry has been scheduled for May 13, 2025.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

U.S. Attorney Evans praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg, Chief of the Public Integrity Unit, is in charge of the prosecution.

MIL Security OSI –

February 7, 2025

MIL-OSI USA: In Aftermath Of Tragedies, Cantwell Tells Trump She’ll Hold Him Accountable To Promises On Aviation Infrastructure

US Senate News:

Source: United States Senator for Washington Maria Cantwell

02.06.25

In Aftermath Of Tragedies, Cantwell Tells Trump She’ll Hold Him Accountable To Promises On Aviation Infrastructure

“The president says he wants to see an increase in aviation infrastructure […] So great, Mr. President, we will be calling on you for your help in that effort”; Cantwell is leading ongoing efforts to boost hiring of air traffic controllers & make flying safer

WASHINGTON, D.C. – Yesterday, U.S. Senator Maria Cantwell (D-WA), ranking member of the Senate Committee on Commerce, Science, and Transportation and senior member of the Finance Committee, committed to delivering answers to the families of the people who died in two major aviation tragedies in Washington, D.C., and Philadelphia last week.

In a meeting of the Senate Committee on Commerce, Science, and Transportation yesterday, Sen. Cantwell also called on President Donald Trump to make good on his promise to improve aviation infrastructure:

“Our heart goes out to these families for the tragedies they are suffering, for the long-term impacts that they will have from this, and the remaining questions that they want us to answer. I am dedicated, Mr. Chairman, to moving quickly once we have information on resolutions of issues that will enhance the air safety of our system.

“Having worked both during COVID, and in 25 days working with Senator Wicker, we came up with a transportation solution to what we needed to do for our airspace during that time period. And also working with Senator Wicker in short order after the two MAX crashes to push and finalize through Congress a major aviation safety bill.

“It is imperative that we tell the families we are going to have the same fervor now in getting aviation safety enhancements that will prevent this from happening again.

“I hope that we can work together in a very bipartisan fashion, along with our two colleagues, Senator Duckworth and Senator Moran, the subcommittee chair and ranking member on doing that.

“And I take the President at his word. The President says he wants to see an increase in aviation infrastructure. He’s frustrated by the fact that, on a global basis the system of digitizing our airspace off a radar has moved faster than the United States. So great, Mr. President, we will be calling on you for your help in that effort,” Sen. Cantwell said.

Last year, when Sen. Cantwell served as chair of the committee, she sounded the alarm about the staffing shortage of air traffic controllers, need for more FAA safety inspectors, a series of aviation incidents and near-misses on and around runways, and the midair blowout of an emergency exit door plug in January 2024. She led the passage of the FAA Reauthorization Act, signed into law in May 2024, which boosts controller staffing, ensuring a five-year commitment to maximum hiring and training to close the current staffing gap. The law requires upgraded safety technologies – giving controllers better visibility into all aircraft and ground traffic – to be installed at every large and medium airport nationwide, includes stricter safety standards for aircraft operators and plane manufacturers as well as provisions to boost staffing to put more FAA safety inspectors on factory floors.

In yesterday’s meeting, Sen. Cantwell also addressed:

Video of Sen. Cantwell’s remarks in yesterday’s committee meeting is HERE; audio is HERE; and a transcript is HERE.

MIL OSI USA News –

February 7, 2025

MIL-OSI Security: NURSE CHARGED WITH TAMPERING WITH VIALS OF FENTANYL

Source: Office of United States Attorneys

DETROIT – An indictment was unsealed charging registered nurse Travis Eskridge, 53, of Grosse Pointe Park, Michigan, with three counts of tampering with a consumer product, specifically the Schedule II controlled substance fentanyl. He also was charged with one count of theft of medical products by an employee and one count of obtaining a controlled substance by fraud. The announcement was made by Acting United States Attorney Julie Beck.

Beck was joined in the announcement by Special Agent in Charge Ronne Malham, FDA Office of Criminal Investigations Chicago Field Office.

According to the indictment, while working as a registered nurse in the emergency room at Ascension St. John Hospital, Eskridge tampered with vials containing fentanyl, a powerful narcotic pain reliever, which he knew were intended to be administered to patients in the hospital’s emergency room. The indictment charges that Eskridge removed fentanyl from the vials, replaced fentanyl with another liquid, and returned the tampered vials to the locked drug storage system. Eskridge did this with reckless disregard for the dangerous risk to patients that results from such tampering. The indictment also charges that he stole fentanyl vials as part of a pattern of thefts over a nine-month period and obtained fentanyl by fraud for his personal use. Nurse Eskridge was removed from his position at Ascension St. John Hospital in August of 2022 when the tampering and thefts were discovered.

Acting United States Attorney Beck stated, “Such crimes are a betrayal of the trust placed in licensed medical professionals. To protect the health and safety of our citizens, we take crimes like this seriously and pursue those in positions of trust who choose to harm others.”

Travis Eskridge made his initial appearance on the Indictment today before a Magistrate Judge of the United States District Court for the Eastern District of Michigan. He was released on a bond with conditions that included not seeking employment as a nurse.

The maximum penalties provided by statute for these offenses include up to 10 years of imprisonment for each of the three tampering counts, up to 5 years of imprisonment for the theft count, and up to 4 years of imprisonment for the acquiring by fraud count. Each count also carries a maximum fine of $250,000. The actual sentence imposed upon any conviction would be decided after consideration of the United States Sentencing Guidelines.

The case is investigated by special agents of the Food and Drug Administration.

An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

MIL Security OSI –

February 7, 2025

MIL-OSI Security: Two Individuals Found Guilty in Massive Drug Trafficking Operation in the Eastern Panhandle of West Virginia

Source: Office of United States Attorneys

MARTINSBURG, WEST VIRGINIA – Acting United States Attorney Randolph J. Bernard announced today that two men were found guilty for their roles in a massive drug trafficking conspiracy that operated in the Eastern Panhandle of West Virginia.

Lance Wade Cole, Jr., 53, of Martinsburg, West Virginia, and Damian Costello, 28, of Harpers Ferry, West Virginia, were found guilty by a federal trial jury of conspiracy to possess with intent to distribute and to distribute fentanyl, acetyl fentanyl, methamphetamine hydrochloride, cocaine, and cocaine base. Cole and Costello along with 80 other defendants were involved in the conspiracy. The leader of the Baltimore-based drug trafficking organization was co-defendant, Gary Brown, Jr. The investigation involved over 100 kilograms of fentanyl.

Prior to today’s verdict, seventy-seven (77) defendants had already entered guilty pleas. Fifty (50) defendants are awaiting sentencing. Twenty-seven (27) who have entered pleas have been sentenced. Some of those recently sentenced include:

Gregory O’Brien Long, Jr., 36, of Martinsburg, West Virginia, sentenced to 120 months in federal prison, three years of supervised release;
Amber Jean Davis, 41, of Bunker Hill, West Virginia, sentenced to 96 months in prison, three years of supervised release;
Zachary Thomas Doman, 24, of Martinsburg, West Virginia, sentenced to 70 months, three years of supervised release;
John Wesley Yates, 37, of Martinsburg, West Virginia, sentenced to 70 months in prison, three years of supervised release;
Jeremy Jason Crock, 43, of Romney, West Virginia, sentenced to 87 months in federal prison, three years of supervised release;
Michael Lee Engle, 47, of Martinsburg, West Virginia, sentenced to 57 months, three years of supervised release.

Two (2) defendants, Matthew David Viands, of Summit Point, West Virginia, and Charles Delroy Singletary, of Baltimore, Maryland, are fugitives.

Assistant U.S. Attorneys Lara Omps-Botteicher and Kyle Kane are prosecuting the case on behalf of the United States.

Investigative agencies include the Federal Bureau of Investigation (Pittsburgh Field Division and Baltimore Field Division); the Drug Enforcement Administration; the U.S. Department of Homeland Security Investigations; the United States Postal Inspection Service; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the United States Marshals Service; the Eastern Panhandle Drug Task Force, a HIDTA-funded initiative; the West Virginia State Police; the West Virginia Air National Guard; the Jefferson County Sheriff’s Office; the Berkeley County Sheriff’s Office; Ranson Police Department; Martinsburg Police Department; Charles Town Police Department; the Berkeley County Prosecuting Attorney’s Office; Stafford County Sheriff’s Office (Virginia); Frederick County Sheriff’s Office (Maryland); Frederick County Sheriff’s Office (Virginia); Winchester Police Department; and the Clarke County Sheriff’s Office (Virginia).

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

U.S. District Judge Gina M. Groh presided.

Original press release here: https://www.justice.gov/usao-ndwv/pr/investigators-dismantle-fentanyl-drug-trafficking-network-eastern-panhandle

MIL Security OSI –

February 7, 2025

MIL-OSI USA: Governor Newsom announces suite of new wildfire community hardening measures

Source: US State of California 2

Feb 6, 2025

What you need to know: Governor Gavin Newsom today announced he will issue an executive order to harden communities from wind-propelled wildfires that turn into urban firestorms.

Washington, D.C. — After meeting with key state and federal leaders on recovery efforts for Los Angeles firestorm survivors, Governor Gavin Newsom today will sign an executive order that directs his Administration to implement key initiatives to harden communities from urban firestorms.

The devastation in the Pacific Palisades and Altadena aren’t new lessons. They are the latest lessons in urban firestorms that have devastated communities across the globe. To meet the needs of increasingly extreme weather, where decades-old buildings weren’t planned and designed for today’s realities, these proposals are part of a bigger state strategy to build wildfire and forest resilience from forest management, to huge investments in firefighting personnel and equipment, community hardening, and adopting state-of-the-art response technologies.

Governor Gavin Newsom

As the state continues updating its research and utilizing the latest science to understand the state’s ever-evolving climate-induced challenges, the Governor will direct the State Board of Forestry to advance implementation of regulations known as “Zone 0,” which will require an ember-resistant zone within 5 feet of structures located in the highest fire severity zone in the state’s Fire Hazard Severity Zone local maps and the State Responsibility Area, mitigating the risk of conflagration in urban areas like what occurred during the Palisades and Eaton firestorms. In addition, the Governor will direct the CAL FIRE – Office of the State Fire Marshal to release updated Fire Hazard Severity Zone maps, adding 1.4 million new acres of land into the two higher tiers of fire severity, which will update building and local planning requirements for these communities statewide.

“These steps will spur proactive actions to defend the most vulnerable homes and eliminate combustible material within five feet of homes to reduce the risk of a home igniting in an ember-driven fire,” said California Natural Resources Secretary Wade Crowfoot. “These are important steps to limit wildland fires from becoming big urban fires.”

Plus, building on the already comprehensive work the state has done to deploy firefighting assets statewide, the Governor will direct his state emergency management and firefighting departments to work with local, federal and tribal partners on reviewing and proposing improvements to the federal resources dispatching system for wildfire response to ensure it can fulfill its purpose of supporting the rapid fulfillment of mutual aid requests during large-scale incidents.

Investing in wildfire prevention

Overall, the state has more than doubled investments in wildfire prevention and landscape resilience efforts, providing more than $2.5 billion in wildfire resilience since 2020, with an additional $1.5 billion from the 2024 Climate Bond to be committed beginning this year for proactive projects that protect communities from wildfire and promote healthy natural landscapes. Of note, since 2021, the State has made strategic investments in at least 61 fuels reduction projects near the Palisades and Eaton fire perimeters through projects treated over 14,500 acres.

The Newsom Administration has invested $2 billion to support CAL FIRE operations, a 47% increase since 2018, which has helped build CAL FIRE from 5,829 positions to 10,741 in that same period, and the Administration is now implementing shorter workweeks for state firefighters to prioritize firefighter well-being while adding 2,400 additional state firefighters to CAL FIRE’s ranks over the next five years.

Augmenting technological advancements and pre-deployment opportunities

The Newsom Administration has also overseen the expansion of California’s aerial firefighting fleet, including the addition of more than 16 helicopters with several equipped for night operations, expanded five helitack bases, and assumed ownership of seven C-130 air tankers, making it the largest fleet of its kind globally.

California is also leveraging AI-powered tools to spot fires quicker, has deployed the Fire Integrated Real-Time Intelligence System (FIRIS) to provide real-time mapping of wildfires, and has partnered with the U.S. Department of Defense to use satellites for wildfire detection and invested in LiDAR technology to create detailed 3D maps of high-risk areas, helping firefighters better understand and navigate complex terrains.

In anticipation of severe fire weather conditions in early January 2025, Cal OES approved the prepositioning of 65 fire engines, as well as more than 120 additional firefighting resources and personnel in Los Angeles, Orange, Santa Barbara, Ventura, Riverside, San Bernardino, and San Diego counties, and CAL FIRE moved firefighting resources to Southern California including 45 additional engines and six hand crews to the region.

During the wildfires, California was able to mobilize more than 16,000 personnel including firefighters, National Guard servicemembers, California Highway Patrol officers and transportation teams to support the response to the Los Angeles firestorms, and more than 2,000 firefighting apparatus composed of engines, aircraft, dozers and water tenders to aid in putting out the fires.

The Governor will sign the executive order upon his return from Washington, D.C. where he is advocating for federal aid for firestorm survivors.

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MIL OSI USA News –

February 7, 2025

MIL-OSI Australia: Update: Fatal crash at Beaufort

Source: South Australia Police

A man has died following a fatal crash at Beaufort, in the state’s mid-north last night.

At 5.25pm on Thursday 6 February emergency services were called to Augusta Highway, 4 kilometres north of Beaufort after reports of a crash between a road train and a Yamaha motorcycle.

Sadly the rider of the motorbike, a 28-year-old man from Hope Valley died at the scene.

The driver of the road train a 65-year-old man was not injured.

The Augusta Highway was closed for several hours while Major Crash Investigators examined the circumstances of the crash, but has since reopened.

The man’s death is the 14^th life lost on South Australia road so far this year.

Anyone who may have witnessed the crash or has dashcam footage is asked to contact Crimestoppers on 1800 333 000.

MIL OSI News –

February 7, 2025

MIL-Evening Report: Do investment tax breaks work? A new study finds the evidence is ‘mixed at best’

Source: The Conversation (Au and NZ) – By Kerrie Sadiq, Professor of Taxation, QUT Business School, and ARC Future Fellow, Queensland University of Technology

The Reserve Bank of Australia (RBA) released a discussion paper this week on investment tax breaks. The study looks at whether tax incentives, such as instant asset write-offs for utes, boost business investment.

Business investment is an important contributor to overall economic growth, and has been sluggish in recent years.

The authors conclude the evidence for these tax breaks is “mixed at best”. They say that income tax breaks used during the global financial crisis increased investment significantly, however:

[there is] no substantial evidence that other policies, including those implemented during the pandemic, increased investment.

In an election year, further promises of tax breaks for businesses are likely. The Coalition has already announced a tax break for meals and entertainment. But are they a good idea, and at what cost do these promises come?

Small business in Australia

Small businesses with fewer than 20 employees make up 97% of all Australian businesses. More than 92% of Australian businesses have an annual turnover of less than A$2 million. It is these businesses that are doing it tough.

These businesses are offered tax breaks for spending on capital assets such as equipment or vehicles. For the 2023-24 tax year, they can immediately write off the cost of eligible assets up to $20,000. In the May 2024 Budget, the government announced that the tax break would be extended to the 2024-25 tax year.

When a small business is operated as a company, the base tax rate is 25%. This effectively means that the business still contributes 75% of the cost of the asset. This requires businesses to have the cash flow to invest. Even if there is cash flow, businesses may not want to spend on large purchases.

It’s a question of trade-offs

Investment tax breaks are also costly in terms of government tax revenue. Each year, the Treasury estimates the cost of tax breaks. These tax breaks are known as tax expenditures.

For the 2023-34 tax year, the instant write-off tax break for small businesses is estimated to cost more than $4 billion by reducing taxes collected.

Tax expenditures are normally designed to offer incentives to one group of taxpayers. However, they come at the expense of broader groups of taxpayers and at a cost of lost revenue to the government. This is money that could be spent through direct spending programs.

Tax expenditures can be thought of as government spending programs hidden in plain sight.

The true cost of tax breaks

Tax expenditures play a central role in Australia’s collection of taxes and redistribution. During the pandemic, the instant asset write-off was increased to $150,000.

The current government introduced the latest instant asset write-off to improve cash flow and reduce compliance costs for small business. As the RBA discussion paper notes, these types of incentives are also designed to encourage additional business investment.

However, that study indicates this is not being achieved. They suggest the reasons may be the tax policies themselves or differences in the economic environment. Put simply, businesses may not want to invest.

If the stated benefits are not realised, the result is less tax collected. Take the $4 billion cost above. Without the incentive, the government would have an additional $4 billion to spend. The $4 billion in 2023-24 could have been directed to funding small businesses through a direct spending program.

Targeted programs

The RBA discussion paper highlights the need to determine whether investment tax breaks achieve their intended benefits. Many factors must be considered, and assessing the influence on the economy is vital.

However, evaluating these measures within the tax system means that important questions are not asked. This includes whether the benefits are distributed fairly, whether the program targets the right group of taxpayers, and whether there are unintended distorting effects.

The latest Treasury Tax Expenditures and Insights Statement provides data on 307 separate measures. This number continues to grow.

The government’s “Future Made in Australia” contains two examples. Its economic plan to support Australia’s transition to a net zero economy contains two tax incentives, one for hydrogen production and another for critical minerals.

The proposed hydrogen production tax incentive is estimated at a cost to the budget of $6.7 billion over ten years. The measure will provide a $2 incentive per kilogram of renewable hydrogen produced for up to ten years. Eligible companies will get a credit against their income tax liability.

The proposed critical minerals production tax incentive is estimated to cost the budget $7 billion over ten years. Eligible companies will get a refundable tax offset of 10% of certain expenses relating to processing and refining 31 critical minerals listed in Australia.

Support for tax breaks

Tax breaks for businesses, such as the immediate write-off, disproportionately benefit those that spend. Often, this is by design. If this is a government objective, supported by the general population, then it is viewed as a good use of public money.

The same principle applies to tax breaks in the Government’s Future Made in Australia plan. A government objective is to transition to a net zero economy. A stated priority is to attract “investment to make Australia a leader in renewable energy, adding value to our natural resources and strengthening economic activity”.

The question remains as to whether tax breaks are the best way to achieve this. The answer often changes when viewed as a direct spending program.

Kerrie Sadiq currently receives funding from the Australian Research Council. She has previously received research grants from CPA and CAANZ.

Ashesha Weerasinghe does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. Do investment tax breaks work? A new study finds the evidence is ‘mixed at best’ – https://theconversation.com/do-investment-tax-breaks-work-a-new-study-finds-the-evidence-is-mixed-at-best-249148

MIL OSI Analysis – EveningReport.nz –

February 7, 2025