Taxation – Page 183 – NewzIntel.com

MIL-OSI NGOs: Australia releases coordinates of coral destruction by NZ fishers to Greenpeace

Source: Greenpeace Statement –

SYDNEY, Friday 28 FEB 2025 – Despite the New Zealand government refusing to release the location where a New Zealand bottom trawler hauled up deep sea coral in the Tasman Sea late last year, Australia has released the coordinates on request from Greenpeace, a move the group applauded as “promising ocean protection leadership”.

The Tasman Viking, a New Zealand bottom trawler, pulled up 37kg of deep sea coral in the Lord Howe Rise area, renowned for diverse marine life in October 2024. This triggered a rule under the South Pacific Regional Fisheries Management Organisation (SPRFMO), to temporarily close the area.

Under SPRFMO, the best available information is meant to be provided on the nature of an encounter with coral such as this, and Greenpeace has offered to document the site as part of their Seamounts Expedition, due to commence in March 2025.

But requests from Greenpeace for the coordinates of the closed area were declined by the New Zealand Government due to ‘commercial sensitivity’. The Australian SPRFMO Commissioner has now released these coordinates in response to requests from Greenpeace.

Georgia Whitaker, Greenpeace Australia Pacific Senior Campaigner, said:

“It’s promising to see the Australian Government prioritising ocean protection and scientific research over commercial interests. By releasing the coordinates of bottom-trawling vandalism, the Australian government has proven it can and will stand up for the ocean.

“What we need to see now is the Australian Government take a step further to protect these waters by finally ratifying the Global Ocean Treaty into Australian law, and proposing that rich biodiverse areas like the Tasman Sea can become ocean sanctuaries free from destructive industrial fishing.”

Earlier this week, both major Australian political parties indicated their intent to take ocean protection seriously this election. Labor has acknowledged that only 24% of Australia’s waters are highly protected from industrial fishing and oil and gas – Greenpeace is calling for that number to be increased, not just in domestic waters but in adjoining international waters.

“True ocean protection leadership on the global stage is about hoisting the sails and facing the wind — we need strong policies that protect the ocean and the high seas between Australia and New Zealand, with no loopholes for industry,” Whitaker added.

Greenpeace Aotearoa expedition lead Ellie Hooper is calling the New Zealand government’s refusal to share the coordinates “ludicrous” and “a blatant example of the Luxon-led government running interference for the fishing industry.”

Hooper says: “These coordinates have already been shared with all fishing companies and SPRFMO countries, so why is the information being hidden in order to prevent research and documentation?

“Australia clearly has a more progressive and transparent approach when it comes to deep-sea management, and has provided us with the chance to go to this area and attempt to survey it.”

It’s estimated that coral brought to the surface by trawlers is only a small fraction of what’s destroyed on the seafloor.1

New Zealand is the only country still bottom trawling in the high seas of the South Pacific and has faced criticism for blocking protection measures at SPRFMO this month.

Notes:
Coral in nets to destroyed on seafloor ratios:
1. Geange, S. et al 2017, SC7-DW14, and Stephenson, F. et al 2022, SC10-DW04

—ENDS—

MIL OSI NGO –

February 28, 2025

MIL-OSI USA: What They Are Saying: Broadband Industry Leaders Applaud Introduction of the Broadband Grant Tax Treatment Act

US Senate News:

Source: United States Senator for Kansas – Jerry Moran

WASHINGTON – U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.) led the introduction of the Broadband Grant Tax Treatment Act to amend the Internal Revenue Code to make certain that federal broadband deployment funding will not be considered taxable income. This legislation received support from businesses, universities and associations across Kansas and the nation. Statements in support of the Broadband Grant Tax Treatment Act can be found below:

“We appreciate the leadership of Senators Moran and Warner for their efforts to eliminate the tax on broadband grants to ensure more investment can connect more of our citizens and communities. Their bill is as pro-consumer as it gets.” – Brandon Heiner, Senior Vice President of Government Affairs at USTelecom – The Broadband Association

“CTIA commends the bipartisan work of Senators Warner and Moran to reintroduce the Broadband Grant Tax Treatment Act in this Congress. Guaranteeing that grant funds can be optimally spent as intended will encourage the investments that reinforce and accelerate broadband deployment. This legislation will help ensure all Americans have access to world-leading wireless networks and that the United States is first globally in technology.” – Kelly Cole, Senior Vice President of Government Affairs at CTIA

“NTCA and its members greatly appreciate Congress’s commitment to funding broadband deployment programs that help further the mission of connecting all Americans. However, when these funds are taxed, providers are required to pay the federal government a portion of the same award that they received from the federal government, instead of using the funds to serve the hardest-to-reach communities. NTCA thanks Sens. Moran and Warner for their leadership in introducing this commonsense legislation to ensure that every dollar granted for broadband deployment is used effectively to further the mission of connecting all Americans.” – Shirley Bloomfield, CEO of NTCA – The Rural Broadband Association

“Grant funding has the potential to make sure that our rural and underserved communities receive connectivity through wireless and broadband services, but the impact that these grants can have is limited if those grants are taxed, undercutting the potential of federal broadband programs. Federal broadband grants should be free from taxation to ensure that every dollar goes towards connecting Americans. I applaud Sens. Moran (R-KS) and Warner (D-VA) for leading this bill in the Senate and urge its swift passage.” – Tim Donovan, President & CEO of The Competitive Carriers Association (CCA)

“INCOMPAS members are building networks of the future with a mission to connect all Americans. Public-private partnerships are a critical component to help achieve this goal. This bill will ensure every single dollar allocated to deploying broadband goes to deploying broadband. INCOMPAS wholeheartedly supports this commonsense measure and urges Congress to act swiftly to ensure our members can continue to use critical grant resources to bridge the digital divide.” – Chip Pickering, CEO of INCOMPAS

“ACA Connects thanks Senators Jerry Moran and Mark Warner for leading on the Broadband Grant Tax Treatment Act. This bipartisan legislation will ensure 100 percent of broadband grants are used to close the digital divide. America’s small and independent providers support this bill to make every dollar count as they invest in their communities, deploy infrastructure, and connect more people to high-speed internet.” – Grant Spellmeyer, President & CEO of ACA Connects

“We applaud Senators Moran and Warner for reintroducing this bipartisan legislation to make sure the small, rural broadband providers we represent don’t get stuck with a major tax bill when they accept government grants to build broadband networks – Advocates for Rural Broadband. Congress has made an historic level of investment in broadband over the past several years and we want to see it pay dividends. Every dollar diverted to paying taxes on government grants is a dollar that is not invested in the network and connecting all Americans to broadband.” – Derrick Owens, Senior Vice President for Government and Industry Affairs for WTA – Advocates for Rural Broadband

“TIA is pleased to see the reintroduction of the Broadband Grant Tax Treatment Act (BGTTA) by Senators Warner and Moran. This crucial legislation addresses a significant issue affecting the deployment of high-speed broadband networks across the United States. The broadband programs established under the Infrastructure Investment and Jobs Act (IIJA), particularly the $42.5 billion Broadband Equity, Affordability, and Deployment (BEAD) program, have the potential to connect all Americans to high-speed broadband. However, the current tax treatment of all federal broadband grants, including BEAD, as taxable income significantly reduces the funds available for building these networks. This unintentional tax burden significantly limits potential applicants for larger projects and could deter small service providers from seeking broadband funding. As Congress and President Trump’s administration work on streamlining BEAD requirements, it is imperative that Congress passes the BGTTA to ensure these dollars are used for their intended purpose: Connecting Americans with high speed, secure broadband.” – The Telecommunications Industry Association (TIA)

“The Infrastructure Investment and Jobs Act’s purpose is to spur infrastructure deployment, but short-sighted tax policy currently limits the potential reach of broadband grants, undercutting our goal of enabling connectivity everywhere. Senators Moran and Warner’s common sense Broadband Grant Tax Treatment Act will ensure we can finish the job and close the digital divide.” – The Wireless Infrastructure Association (WIA)

“Since the pandemic, Congress has appropriated billions of dollars to accelerate the deployment of broadband networks in unserved areas so all Americans, no matter where they live, can get online. Significant portions of that funding are presently taxable, and every dollar returned to Washington is one less dollar available to connect unserved communities. We therefore commend Senators Warner and Moran for introducing the Broadband Grant Tax Treatment Act, a pragmatic solution which eliminates the tax on broadband grants so that those funds can more ably meet Congress’ important universal service goals. Connected communities are more prosperous communities, which is the ultimate goal of Internet-for-All.” – Matt Mandel, Vice President of Government Affairs at The Wireless Internet Service Providers Association (WISPA)

“The Communications Infrastructure Contractors Association and our 1,000 member companies from coast to coast are proud to support the Broadband Grant Tax Treatment Act that was recently introduced in the 119th Congress. NATE member companies are on the front lines of deployment and will play an instrumental role in closing the digital divide. It is imperative that the entirety of federal broadband dollars allocated for these purposes go towards connectivity, rather than making their way back to the government through taxes. We thank Senators Jerry Moran and Mark Warner for bringing this legislation forward in the Senate and also applaud Representatives Mike Kelly and Jimmy Panetta for spearheading this important proposal in the House of Representatives.” – Todd Schlekeway, President & CEO of NATE – The Communications Infrastructure Contractors Association

“I would like to thank Senator Moran on his leadership in the effort to address the taxation challenge on federal broadband grants. Nex-Tech is a broadband provider committed to expanding high-speed internet access in rural Kansans, and I wholeheartedly support the Broadband Grant Tax Treatment Act. This legislation ensures that every dollar of federal grant funding can be fully utilized for broadband deployment, rather than being diminished by taxes. By removing this financial barrier, it will allow us to fully utilize funding for the delivery of essential internet services to underserved areas, fostering economic growth and improving quality of life for areas served by Nex-Tech.” – Jimmy Todd, CEO & General Manager of Nex-Tech

“We are pleased to hear the about the introduction of the ‘Broadband Grant Tax Treatment Act’ by Senator Moran and his colleagues. The current method of taxing grant dollars greatly limits the dollars available to build out broadband networks to these unserved parts of Kansas in need of reliable broadband. We support this legislation and appreciate the work Senator Moran has done to introduce this bill as we continue work to close the digital divide.” – Greg Reed, CEO of Wheat State Technologies

MIL OSI USA News –

February 28, 2025

MIL-OSI USA: Senators Marshall and Fischer Introduce the Nationwide Consumer and Fuel Retailer Choice Act of 2025

US Senate News:

Source: United States Senator for Kansas Roger Marshall
Washington, DC – U.S. Senators Roger Marshall, M.D. (R-Kansas) and Deb Fischer (R-Nebraska) introduced the Nationwide Consumer and Fuel Retailer Choice Act of 2025, which would allow the year-round, nationwide sale of E15, a gasoline blend that contains 15% ethanol.
Increasing the availability of biofuels like E15 would benefit the economy by lowering fuel prices and providing certainty in fuel markets for farmers and consumers. This legislation is the only permanent, nationwide solution to fulfilling President Donald Trump’s mandate for energy independence and rolling back years of burdensome regulations.
“America’s biofuels industry provides consumers with a carbon-reducing fuel option at the gas pump. This bipartisan legislation ensures E15 can be sold at gas stations year-round and guarantees farmers will continue to make the world cleaner, safer, and better for years to come,” said Senator Marshall.
“It’s time to once and for all solidify President Trump’s pledge to allow the sale of year-round E15—giving America’s producers and consumers the certainty they deserve. My bill will put an end to years of patchwork regulations and finally make nationwide, year-round E15 a reality. I look forward to working with my colleagues in the House and the Senate, as well as with President Trump, to get this bill signed into law,” said Senator Fischer.
Joining Senators Marshall and Fischer are Majority Leader John Thune (R-South Dakota) and Senators Tammy Duckworth (D-Illinois), Shelley Moore Capito (R-West Virginia), Amy Klobuchar (D-Minnesota), Pete Ricketts (R-Nebraska), Dick Durbin (D-Illinois), Jerry Moran (R-Kansas), Chuck Grassley (R-Iowa), Tammy Baldwin (D-Wisconsin), Joni Ernst (R-Iowa), Tina Smith (D-Minnesota), and Mike Rounds (R-South Dakota).
U.S. Representatives Adrian Smith (R-Nebraska-03) and Angie Craig (D-Minnesota-02) introduced the companion legislation in the House.
This legislation is supported by American Petroleum Institute, Renewable Fuels Association, Growth Energy, National Corn Growers Association, National Farmer Union, and National Association of Convenience Stores.
Click HERE to read the bill text.
Background:
Under President Biden, there were restrictions on sales of E15 gasoline in summer months due to alleged environmental concerns.
Last month, President Trump took steps to make E15 available year-round through his Executive Order Declaring a National Energy Emergency.
This legislation would make President Trump’s executive order permanent.
Senator Marshall has been a leader on this issue in the Senate, fighting for the U.S. Treasury Department to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically sourced feedstocks, like Kansas soybean oil and corn oil.
Read more about Senator Marshall’s leadership on this issue below:

MIL OSI USA News –

February 28, 2025

MIL-OSI Canada: Budget 2025: Meeting the challenge

Source: Government of Canada regional news (2)

To help Albertans with the high cost of living, Budget 2025 delivers on the promised tax cut that will save Albertans hundreds of dollars starting this year. The new eight per cent personal income tax bracket for income up to $60,000 is starting two years ahead of schedule and will save Albertan families up to $1,500 in 2025.

To meet the needs of a population that has grown rapidly in the last few years, Budget 2025 also makes the highest-ever investment in health care and education while moving forward with the Alberta government’s commitment to build schools and classroom spaces faster. The budget continues to support vulnerable Albertans and keep communities and provincial borders safe while supporting the economy, communities and sectors outside the oil and gas industry.

“Budget 2025 is a budget of tough but measured choices that meet the needs of Albertans and maintains our Alberta advantage. It cuts taxes, steadfastly supports public services and solidifies our economic foundation so it can withstand future headwinds.”

Nate Horner, President of Treasury Board and Minister of Finance

Budget 2025 takes a cautious approach in its economic outlook, reflecting the high risk of a Canada-U.S. trade conflict and the potential significant impact on the Alberta economy. The outlook assumes a moderate trade conflict where Canada will face an average 15 per cent tariffs on all goods, while energy products will face a 10 per cent tariff. Alberta will continue to work with federal, provincial and territorial partners to find solutions. Even in light of tariffs, the province expects moderate but continued growth in oil production and investment to keep the province’s economic engine humming. Alberta’s responsible crude oil exports are expected to continue to meet critical U.S energy needs, and the Trans Mountain Pipeline expansion will provide more export capacity for producers.

Investment will continue in existing major projects that are driving activity in industrial building construction, including Dow’s Path2Zero project, Air Products’ new hydrogen facility and Imperial Oil’s Strathcona Refinery renewable diesel expansion project.

Alberta’s housing market is expected to stand out as a bright spot in the economy as homebuilders work to meet the needs of a growing population A slower population growth will help the labour market gradually rebalance over the next few years.

While the province is facing significant economic uncertainty and revenue volatility, the government remains committed to making prudent spending decisions to keep operating expense growth below population growth plus inflation and to sustainably deliver important programs and services to Albertans and Alberta businesses.

Budget 2025 invests:

$9.9 billion in operating expenses for education, an increase of 4.5 per cent from 2024-25, to help with enrolment pressures, hire more teachers and other educational staff, and support complex classrooms and students.
$2.6 billion over three years for educational (K-12) infrastructure, an increase of $505 million or 23.9 per cent from Budget 2024. This funding will support the construction of more than 200,000 new and modernized student spaces over the next seven years (almost 90,000 within the next four years).
$28 billion in operating expense, an increase of $1.4 billion or 5.4 per cent, across the refocused health care system including:
- $22.1 billion to health care to improve access to quality health services close to home, prioritize patients, build capacity at hospitals and rural facilities, expand surgeries and compensate and retain health professionals.
- $1.7 billion for implementing the compassionate intervention framework and Recovery Alberta Services.
- $3.8 billion to focus on making the full continuum of care available to all Albertans, from assisted living, home care and community care, to housing and social supports with wraparound social services.
$1.3 billion for operating expense for Public Safety and Emergency Services, an increase of 3.7 per cent from 2024-25, to support Alberta Sheriffs, Correctional Services and emergency management in the work to keep Alberta communities safe and secure the southern border.
$1.6 billion, or a six per cent increase from last year, for Children and Family Services to strengthen the programs vulnerable children and families rely on.
$6.2 billion, or an 8.8 per cent increase from 2024-25, to support core social programs, including a short-term bump to support more people affected by potential U.S. tariffs and rising grants for housing programs.
Overall, Budget 2025’s Capital Plan includes $26.1 billion over three years, an increase of 4.4 per cent or $1.1 billion more than Budget 2024, to meet the challenge of growth and build and enhance schools, hospitals, roads and bridges in the province. The plan is projected to support an average of 26,500 direct and 12,000 indirect jobs annually through 2027-28.

The province is also continuing to focus on building the Heritage Fund to $250 billion by 2050. The fund was valued at $25 billion in the third fiscal quarter of 2024-25 and is expected to grow to about $27 billion by the end of the fiscal year. A renewed Heritage Fund that earns money year over year will secure a resilient and prosperous Alberta for generations to come and lessen the province’s reliance on natural resource revenues. An independent board of directors and a new Heritage Fund Opportunities Corporation will unlock access to new opportunities and partnerships with global sovereign wealth funds.

Revenue

Total revenue in 2025-26 is forecast at $74.1 billion, a decrease of $6.6 billion from the 2024-25 forecast of $80.7 billion. Total revenue is forecast to grow to $77.4 billion in 2026-27 and $80 billion by 2027-28, with broad-based revenue growth led primarily by income taxes.
- The decrease in 2025-26 comes mainly from a $4.4 billion drop in non-renewable resource revenue, driven by an anticipated decline in oil prices. This revenue source is forecast at $17.1 billion in 2025-26, compared to the $21.5 billion forecast for 2024-25.
- Revenue from personal income taxes is estimated to decrease to $15.5 billion in 2025-26, down from the $16.1 billion at the third quarter, due to the new eight per cent income tax bracket and negative impacts associated with potential tariffs. Personal income tax revenue is forecast to grow moderately in the following two years as more people continue to move to Alberta.
- Corporate income tax revenue is estimated at $6.8 billion in 2025-26, down $586 million from the third-quarter forecast for 2024-25, but rising over the next two years.

Expense

Total expense in 2025-26 is forecast at $79.3 billion, an increase of $4.4 billion or 5.9 per cent from the 2024-25 third quarter forecast.
- Total expense is expected to be $79.8 billion in 2026-27 and $82 billion in 2027-28, or an increase of about 1.7 per cent per year.
Operating expense is estimated at $64.3 billion, an increase of $2.2 billion or 3.6 per cent from the 2024-25 third quarter forecast.
- Operating expense grows to $64.8 billion in 2026-27 and $66.5 billion in 2027-28, an average increase of 1.7 per cent per year.
A contingency of $4 billion will help to provide government with more flexibility to address unforeseen implications of increased economic uncertainty as well as compensation expense for collective bargaining currently underway.

Deficit

A deficit of $5.2 billion is forecast for 2025-26.
The deficit is forecast to drop to $2.4 billion and $2 billion for 2026-27 and 2027-28, respectively.
The government’s fiscal framework includes allowable exceptions for when the government can run a deficit, including when there is a significant drop in revenue.
This deficit is largely the result of falling non-renewable resource revenues and increases in costs necessary to provide world-class services to Albertans.

Debt

Debt servicing costs are forecast to decrease by $231 million in 2025-26 from the 2024-25 forecast, to $3 billion, as funds pre-borrowed in 2024-25 will be used to repay sizeable debt maturities coming due in early 2025-26.

Economic Outlook

In 2025, real gross domestic product is expected to decelerate to 1.8 per cent, then 1.7 per cent in 2026.
Population growth is expected to moderate, growing at 2.5 per cent in the 2025 census year, down from the record 4.4 per cent growth in 2024. Growth will shift down to 1.4 per cent over the following two years, then 1.6 per cent in 2028.

Energy and economic assumptions, 2025-26

West Texas Intermediate oil (USD/bbl) $68
Western Canadian Select @ Hardisty (CND/bbl) $73.10
Light-heavy differential (USD/bbl) $17.10
ARP natural gas (CND/GJ) $2.50
Conventional crude production (000s barrels/day) 519
Raw bitumen production (000s barrels/day) 3,558
Canadian dollar exchange rate (USD¢/CAD$) 69.60
Interest rate (10-year Canada bonds, per cent) 3.10

Related information

Budget 2025

Related news

Budget 2025: Investing in Alberta’s future (Feb 27, 2025)
Budget 2025: Meeting the challenge in health and education (Feb 27, 2025)

Multimedia

Watch the Budget address
Watch the news conference
Listen to the news conference

MIL OSI Canada News –

February 28, 2025

MIL-OSI USA: Cassidy, Hirono Introduce Bill to Enhance Efficiency, Quality of Health Care for Veterans

US Senate News:

Source: United States Senator for Louisiana Bill Cassidy

WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA) and Mazie Hirono (D-HI) introduced the VetPAC Act to enhance the efficiency and quality of health care services provided to American veterans. The legislation creates a new Veterans Health Administration Policy Advisory Commission (VetPAC) to facilitate a transparent, expert-driven review process for the Veterans Health Administration’s (VHA) operations.
“American veterans deserve the best health care our nation can offer,” said Dr. Cassidy. “The VHA must be held to the highest standard, and regular reports will allow Congress to hold them to this.”
“Veterans have made unimaginable sacrifices in service to our country and it is crucial that we continue working to ensure our veterans can access the high-quality health care they deserve,” said Senator Hirono. “I’m proud to reintroduce the VetPAC Act to create a new, independent commission to address challenges within the VHA and improve health care access, delivery, and quality for our veterans.”
The VetPAC would:

Establish a 17-member independent commission of medical experts and veterans.
Ensure critical areas such as technology, staffing, and patient care are continuously improved.
Mandate the commission to provide regular reports to Congress.
Allow the commission to conduct special studies as requested by Congress.
Direct the commission to assess the budget implication of proposed recommendations.

The VetPAC is modeled after the successful MACPAC and MedPAC. Click here for a one-pager.
Background
As a member of the U.S. Senate Veterans’ Affairs Committee, Cassidy is a champion of veteran affairs issues. In January, Cassidy reintroduced the Restore VA Accountability Act to strengthen accountability by unlocking expedited disciplinary processes for VA employees who fail to adequately serve veterans.
In December 2024, the Senate passed Cassidy’s Veteran Service Organization (VSO) Equal Tax Treatment (VETT) Act, sending the bill to the president’s desk. The bill would expand the deductibility of charitable contributions to all federally chartered tax-exempt organizations serving current and former members of the Armed Forces. The Senate also unanimously passed Cassidy’s bipartisan Gold Star and Surviving Spouse Career Services Act. The legislation increases access to job counseling services for spouses of members of the Armed Forces who died while on active duty through the Disabled Veterans Outreach Program at the U.S. Department of Labor.
In August 2024, Cassidy penned an op-ed in the American Press highlighting federal resources that support American veterans’ physical and mental health. The op-ed came on the heels of the 43rd National Veteran Wheelchair Games, which was hosted in New Orleans.
In 2022, the Senate unanimously passed Cassidy’s Solid Start Act to strengthen the VA’s Solid Start program to contact every veteran three times by phone in the first year after they leave active duty. The program helps connect veterans with VA programs and benefits, including mental health resources.

MIL OSI USA News –

February 28, 2025

MIL-OSI Security: Kentucky Man Pleads Guilty to Role in Scheme to Defraud Boone County Schools Out of $3.4 Million

Source: Office of United States Attorneys

CHARLESTON, W.Va. – Jesse Marks, 65, of Rush, Kentucky, pleaded guilty today to conspiracy to commit mail fraud. Marks admitted to conspiring with Michael David Barker to overbill the Boone County Schools system while Barker was its maintenance director.

According to court documents and statements made in court, Marks was the sole owner and operator of Rush Enterprises when Barker contacted him in November 2019 about Rush Enterprises selling custodial and janitorial supplies to Boone County Schools. Marks agreed and began supplying Boone County Schools with supplies including hand soap, trash can liners, facemasks, face shields, and hand sanitizer.

Marks admitted that he and Barker entered into the overbilling scheme in November 2019. Barker submitted invoices to Boone County Schools on behalf of Rush Enterprises that significantly inflated the number of products that it was delivering. Boone County Schools relied on the fraudulent invoices and mailed checks to Rush Enterprises using the United States Postal Service.

As part of the agreement with Barker, Marks deposited the checks from Boone County Schools into the business bank account for Rush Enterprises, wrote himself checks on that account that he cashed at various banks, and personally delivered some of that cash to Barker in manila envelopes. Marks admitted that he and Barker initially agreed to evenly split the proceeds of the overbilling scheme after deducting the cost of the products actually delivered to Boone County Schools. Marks further admitted that their agreement changed in October 2020, when Barker began receiving 55 percent of the fraudulent profits.

Marks estimated that approximately 80 percent of the total payments received by Rush enterprises from Boone County Schools, or $3,448,571.85 out of $4,310,714.82, was for products never delivered.

Marks is scheduled to be sentenced on June 16, 2025, and faces a maximum penalty of 20 years in prison, up to three years of supervised release, and a $250,000 fine. Marks also owes restitution in an amount to be determined by the Court.

A federal grand jury returned an 18-count indictment on December 11, 2024, charging Barker, 47, of Foster, with mail fraud, conspiracy to commit mail fraud, theft concerning programs receiving federal funds, and money laundering. Barker’s trial is scheduled for April 15, 2025. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI), the U.S. Department of Education, Office of Inspector General, the Internal Revenue Service-Criminal Investigations (IRS-CI), the West Virginia State Police, and the West Virginia State Auditor’s Office (WVSAO) Public Integrity and Fraud Unit (PIFU), and the assistance provided by the West Virginia Department of Education.

United States District Judge Thomas E. Johnston presided over the hearing. Assistant United States Attorney Gabriel Price is prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:25-cr-6.

###

MIL Security OSI –

February 28, 2025

MIL-OSI USA: Secretary Dev Sangvai Visits Western North Carolina

Source: US State of North Carolina

Headline: Secretary Dev Sangvai Visits Western North Carolina

Secretary Dev Sangvai Visits Western North Carolina
jwerner
Thu, 02/27/2025 – 16:33

North Carolina Health and Human Services Secretary Dev Sangvai traveled to western North Carolina this week to meet with health care and social services partners to learn more about the status of Hurricane Helene recovery efforts and discuss the impacts of staffing shortages and other challenges they face. Together, we are committed to recovery efforts and supporting staff as we continue to create a healthier North Carolina for all.

Black Mountain Neuro-Medical Treatment Center

Secretary Sangvai began the first day of his trip on Tuesday, Feb. 25, in Buncombe County for a site visit and informational meeting with staff at the Black Mountain Neuro-Medical Treatment Center (BMNTC), one of three state-operated facilities in North Carolina that serves adults with chronic and complex medical conditions that co-exist with neurodevelopmental and/or neurocognitive disorders and/or a diagnosis of severe and persistent mental illness.

Secretary Sangvai was led on a tour of the facility, including one of the residential units, to learn more about the quality care received by patients both during and after Hurricane Helene. He also visited the third floor of the Gravely Wing at BMNTC to assess the status of renovations that were planned prior to Helene and are estimated to be completed by July 2025.

Secretary Sangvai met with the BMNTC Executive Committee to discuss the successes and areas of concern among staff members. The facility has largely recovered from the devastation left by Hurricane Helene, returning to normal operations with all evacuated residents returning to BMNTC. Employees shared concerns regarding staffing shortages as well as recruitment and retention challenges, particularly in nursing positions. BMNTC has ramped up recruitment efforts this quarter as unemployment in the region has spiked due to business closures in the wake of Helene.

NCDHHS Secretary Dev Sangvai and Chief Deputy Secretary for Operational Excellence Dr. ClarLynda Williams-Devane travel to western North Carolina to meet with health care and social services partners.

Julian F. Keith Alcohol and Drug Abuse Treatment Center

Following the visit to BMNTC, Secretary Sangvai continued his travels through Black Mountain to the Julian F. Keith Alcohol and Drug Abuse Treatment Center (JFK). There, he met with staff to learn more about the facility and services offered as well as the status of recovery efforts. He also went on a tour to get a more comprehensive look at the various services JFK staff provide their patients.

Secretary Sangvai heard from JFK staff about their continued work to recover from the effects of Hurricane Helene, all while battling staffing shortages, closures to the facility and increased mental health challenge among the community they serve. JFK staff cared for and assisted in the evacuation of patients during Hurricane Helene, standing up a detox unit at Broughton Hospital to provide a place of respite for those unable to seek care at JFK. A huge win for JFK staff recently came in the form of the treatment center reopening their kitchen after a seven-month long closure .

“I am so grateful for the work being done at our facilities as recovery continues from the devastation left behind by Hurricane Helene,” said Secretary Sangvai. “These teams have worked tirelessly to provide life-changing care. This commitment matches what I have seen across the department, as we work to improve access to care and ensure people receive the care they need no matter where they live or how much money they make.”

Cherokee Indian Hospital Authority

On Wednesday, Feb. 26, Secretary Sangvai traveled to Cherokee, NC, to meet with the Eastern Band of Cherokee Indians (EBCI) and the Cherokee Indian Hospital Authority (CIHA). EBCI has contracted with NCDHHS to participate in NC Medicaid, thereby providing access to Medicaid managed care services for federally recognized Tribal Members and other individuals eligible to receive Indian Health Services. Through this partnership with NCDHHS, EBCI is the first Tribal-led Medicaid managed care entity in the country, aligning Medicaid services with Tribal health priorities and providing care for enrolled EBCI members.

During his visit, Secretary Sangvai learned about the status of NCDHHS and CIHA’s multiple partnerships, including the development of a Child Crisis Stabilization Unit on the Qualla Boundary, the location of CIHA’s main hospital. The new unit will provide emergency mental health stabilization services for youth experiencing an acute psychiatric crisis. A revolutionary care model for western North Carolina, the unit will serve both tribal and non-tribal youth, ensuring that all children in the region have access to these critical resources.

Secretary Sangvai saw first-hand during his trip that CIHA has also been battling recruitment difficulties, struggling to address rural health care workforce shortages and retention issues. Despite these challenges, CIHA is a pillar of health care excellence for the EBCI, working diligently to deliver high-quality, patient-centered care that honors and integrates the rich heritage of Cherokee culture.

Broughton Hospital

Later in the day, Secretary Sangvai visited Broughton Hospital, one of three psychiatric hospitals operated by the NCDHHS Division of State Operated Healthcare Facilities, to tour the facility and learn more about the hospital’s priorities as western North Carolina moves forward from Hurricane Helene. He spoke with staff as he toured the patient care center, gym, chapel and treatment mall.

Broughton staff emphasized their struggles to recruit and retain staff with a high number of vacancies in full-time positions at the facility. These staffing shortages directly impact the hospital’s ability to serve more patients, limiting the number of beds that can be filled and increasing wait times prospective patients may face before receiving care. Hospitals are growing increasingly reliant on temporary employees, especially for nursing and medical staff, due in part to salaries that struggle to compete with others on the job market.

“The staff at our state operated psychiatric hospitals work incredibly hard to provide critical support to their patients every day,” Secretary Sangvai said. “I will continue to advocate for the resilient staff that serve our state and support NCDHHS’ efforts to strengthen the health care workforce in order to improve capacity limitations, so more patients are able to quickly access needed care.”

J. Iverson Riddle Developmental Center

On Thursday morning, Feb. 26, Secretary Sangvai traveled to Burke County, making his first stop at J. Iverson Riddle Developmental Center (JIRDC), one of three State Developmental Centers which provides services and support to individuals with intellectual and developmental disabilities (I/DD), complex behavioral challenges and/or medical conditions whose clinical treatment needs exceed the supports currently available in the community. He toured JIRDC, making a visit to one of the homes at the facility to greet staff and residents.

Facility leadership voiced concerns regarding recruitment, including filling key positions at JIRDC. Despite recent measures taken to increase Direct Support Professionals and Registered Nurses salaries, JIRDC still struggles from a 23% vacancy rate, impacting staff’s ability to serve more patients.

In addition to staff’s efforts to recover from Hurricane Helene, JIRDC housed approximately one-third of BMNTC residents during local infrastructure repairs. As many employees face burnout amidst an unprecedented crisis, Secretary Sangvai pledged to continue to prioritize the well-being of the health care workforce in North Carolina and to ensure the sustainability and functionality of state operated healthcare facilities for patients and staff.

Burke County DSS

The Secretary then traveled to the Burke County Department of Social Services, where he toured facilities and met with local social services staff. Staff at Burke County DSS worked to quickly respond to issues as Hurricane Helene hit their community. Their team had to navigate a total loss of communications systems, staffing shortages, burnout and the increased stress of managing a large-scale recovery operation in the wake of the storm. Today, Burke County DSS has fortunately largely returned to “normal” operations. This is partially because as a county on the eastern edge of Helene’s path, Burke County saw fewer individuals permanently displaced than some other counties impacted by the storm.

Secretary Sangvai spoke with Burke County DSS Director Korey Fisher-Wellman to form a better understanding of the issues facing their office and other county DSS offices across the state. The Secretary reinforced NCDHHS’ ongoing commitment to support recovery efforts as western North Carolina continues to recover and rebuild.

Blue Ridge Regional Hospital

Secretary Sangvai concluded his trip on Thursday at Blue Ridge Regional Hospital, which has served as a Critical Access Hospital for the people of western North Carolina since 1955. The Secretary was joined by CEO and Chief Nurse Tonia Hale, and the Vice President of Government Relations for HCA Healthcare Lori Kroll , for a tour of the hospital and a presentation on workforce development and Hurricane Helene recovery. The team highlighted the hospital’s efforts to bounce back from the hurricane, and Secretary Sangvai shared NCDHHS’ commitment to work with hospitals across the state to address the impacts of staffing shortages and support recruitment and retention efforts.

Please see more photos from Secretary Sangvai’s visit.

Feb 27, 2025

MIL OSI USA News –

February 28, 2025

MIL-OSI: ECN Capital Reports US$0.02 in Adjusted Net Income per Common Share in Q4-2024

Source: GlobeNewswire (MIL-OSI)

TORONTO, Feb. 27, 2025 (GLOBE NEWSWIRE) — ECN Capital Corp. (TSX: ECN) (“ECN Capital” or the “Company”) today reported financial results for the fourth quarter and the year ended December 31, 2024.

For the three-month period ended December 31, 2024, ECN Capital reported Adjusted net income (loss) applicable to common shareholders of $4.4 million or $0.02 per share (basic) versus $13.1 million or $0.05 per share (basic) for the previous three-month period and ($13.5) million or ($.05) per share (basic) for the prior year comparable period.

“Our Q4 results, while impacted by severe weather disruptions, further underline that 2024 marked the completion of our turnaround and we are well positioned and confident in our businesses going ahead,” said Steven Hudson, CEO of ECN Capital Corp. “Adjusted net income per share to common shareholders of $0.02 in the quarter was vastly improved from prior year period loss of ($0.05). Our management teams have led this significant pivot by enhancing operations, profitability and performance. We believe that Manufactured Housing remains a primary solution to the affordable housing crisis, while our RV and Marine businesses continue to effectively capture market share.”

Originations for the three-month period ended December 31, 2024 were $547.6 million, versus $625.7 million in the previous three-month period and $503.1 million for the prior year comparable period. Originations for the three-month period ended December 31, 2024 include $348.5 million of originations from our Manufactured Housing Finance segment and $199.1 million of originations from our Recreational Vehicle and Marine Finance segment.

Managed Assets as at December 31, 2024 were $6.9 billion versus $6.7 billion as at September 30, 2024 and $4.9 billion as at December 31, 2023.

Adjusted EBITDA for the three-month period ended December 31, 2024 was $24.1 million versus $36.1 million for the previous three-month period and $5.5 million for the prior year comparable period.

Operating Expenses for the three-month period ended December 31, 2024 were $31.1 million versus $30.3 million for the previous three-month period and $34.7 million for the prior year comparable period.

Net (Loss) Income attributable to common shareholders for the three-month period ended December 31, 2024 was ($3.9) million versus $6.8 million for the previous three-month period and ($56.0) million for the prior year comparable period.

Dividends Declared

The Company’s Board of Directors has authorized and declared a quarterly dividend of C$0.01 per outstanding common share to be paid on March 31, 2025 to shareholders of record at the close of business on March 20, 2025. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).

The Company’s Board of Directors has authorized and declared a quarterly dividend of C$0.4960625 per outstanding Cumulative 5-Year Rate Reset Preferred Share, Series C (TSX: ECN.PR.C) to be paid on March 31, 2025 to shareholders of record on the close of business on March 20, 2025. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).

Webcast

The Company will host an analyst briefing to discuss these results commencing at 5:30 PM (ET) on Thursday, February 27, 2025. The call can be accessed as follows:

A telephone replay of the conference call may also be accessed until March 27, 2025, by dialing 1-800-645-7964 and entering the passcode 5036#.

Non-IFRS Measures

The Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2024, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and the accounting policies we adopted in accordance with IFRS.

The Company believes that certain Non-IFRS Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business of a given period. Throughout this news release, management uses a number of terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other organizations, including adjusted EBITDA, adjusted net income, adjusted net income per common share and managed assets. A full description of these measures, along with a reconciliation to the most directly comparable IFRS measure, where applicable, can be found in the Management Discussion & Analysis (“MD&A”) that accompanies ECN Capital’s annual audited consolidated financial statements for the year ended December 31, 2024.

ECN Capital’s MD&A for the year ended December 31, 2024 has been filed on SEDAR+ (www.sedarplus.com) and is available under the investor section of the Company’s website (www.ecncapitalcorp.com).

About ECN Capital Corp.

With managed assets of US$6.9 billion, ECN Capital Corp. (TSX: ECN) is a leading provider of business services to North American-based banks, institutional investors, insurance company, pension plan, bank and credit union partners (collectively, its “Partners”). ECN Capital originates, manages and advises on credit assets on behalf of its Partners, specifically consumer (manufactured housing and recreational vehicle and marine) loans and commercial (floorplan and rental) loans. Its Partners are seeking high-quality assets to match with their deposits, term insurance or other liabilities. These services are offered through two operating segments: (i) Manufactured Housing Finance, and (ii) Recreational Vehicle and Marine Finance.

Contact

Katherine Moradiellos
561-631-8739
kmoradiellos@ecncapitalcorp.com

Forward-looking Statements

This news release includes forward-looking statements regarding ECN Capital and its business. Such statements are based on the current expectations and views of future events of ECN Capital’s management. In some cases the forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Forward-looking statements in this news release include those relating to the future financial and operating performance of ECN Capital, the strategic advantages, business plans and future opportunities of ECN Capital and the ability of ECN Capital to access adequate funding sources, identify and execute on acquisition opportunities and transition to an asset management business. The forward-looking events and circumstances discussed in this news release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting ECN Capital, including risks regarding the finance industry, economic factors, and many other factors beyond the control of ECN Capital. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. A discussion of the material risks and assumptions associated with this outlook can be found in ECN Capital’s MD&A for the year ended December 31, 2024 and ECN Capital’s 2024 Annual Information Form dated February 27, 2025 for the year ended December 31, 2024 which have been filed on SEDAR+ and can be accessed at www.sedarplus.com. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and ECN Capital does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

The MIL Network –

February 28, 2025

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

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

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

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

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

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

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

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

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

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

MIL Security OSI –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

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

First quarter GAAP diluted net earnings per share (“EPS”) of $0.59, within the previously provided outlook of $0.57 to $0.63 per share
First quarter non-GAAP diluted net EPS of $0.74, within the previously provided outlook of $0.70 to $0.76 per share
First quarter net revenue of $13.5 billion, up 2.4% from the prior-year period
First quarter net cash provided by operating activities of $0.4 billion, free cash flow of $0.1 billion
First quarter returned $0.4 billion to shareholders in the form of share repurchases and dividends
Estimated $300 million increase in Future Ready plan annualized gross run rate structural cost savings, to $1.9 billion by end of fiscal year 2025 and estimated $150 million increase in restructuring and other charges to approximately $1.2 billion by the end of fiscal year 2025

*HP Inc.’s fiscal 2025 first quarter financial performance*
	Q1 FY25		Q1 FY24		Y/Y
GAAP net revenue ($B)	$	13.5	$	13.2	2.4 %
GAAP operating margin		6.3 %		7.1 %	(0.8) pts
GAAP net earnings ($B)	$	0.6	$	0.6	(9)%
GAAP diluted net EPS	$	0.59	$	0.62	(5)%
Non-GAAP operating margin		7.3 %		8.4 %	(1.1)pts
Non-GAAP net earnings ($B)	$	0.7	$	0.8	(13)%
Non-GAAP diluted net EPS	$	0.74	$	0.81	(9)%
Net cash provided by operating activities ($B)	$	0.4	$	0.1	209 %
Free cash flow ($B)	$	0.1	$	0.0	180 %

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

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

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

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

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

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

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

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

Fiscal 2025 first quarter segment results

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

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

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

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

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

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

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

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

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

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

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

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

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

Editorial contacts

HP Inc. Media Relations
MediaRelations@hp.com

HP Inc. Investor Relations
InvestorRelations@hp.com

HP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) (In millions, except per share amounts)

	Three months ended
	January 31, 2025			October 31, 2024			January 31, 2024
Net revenue:
Products	$	12,695		$	13,241		$	12,419
Services		809			814			766
Total net revenue		13,504			14,055			13,185
Cost of net revenue:
Products		10,194			10,593			9,871
Services		470			461			426
Total cost of net revenue		10,664			11,054			10,297
Gross profit		2,840			3,001			2,888
Research and development		397			392			399
Selling, general and administrative		1,459			1,409			1,383
Restructuring and other charges		70			121			63
Acquisition and divestiture charges		6			12			27
Amortization of intangible assets		63			76			81
Total operating expenses		1,995			2,010			1,953
Earnings from operations		845			991			935
Interest and other, net		(141	)		(129	)		(142	)
Earnings before taxes		704			862			793
(Provision for) benefit from taxes		(139	)		44			(171	)
Net earnings	$	565		$	906		$	622

Net earnings per share:
Basic	$	0.60		$	0.94		$	0.63
Diluted	$	0.59		$	0.93		$	0.62

Cash dividends declared per share	$	0.58		$	—		$	0.55

Weighted-average shares used to compute net earnings per share:
Basic		948			959			995
Diluted		957			971			1,002

HP INC. AND SUBSIDIARIES ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS, OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE (Unaudited) (In millions, except per share amounts)

	Three months ended
	January 31, 2025						October 31, 2024						January 31, 2024
	Amounts			Diluted net earnings per share			Amounts			Diluted net earnings per share			Amounts			Diluted net earnings per share
GAAP net earnings	$	565		$	0.59		$	906		$	0.93		$	622		$	0.62
Non-GAAP adjustments:
Restructuring and other charges		70			0.07			121			0.13			63			0.06
Acquisition and divestiture charges		6			0.01			12			0.01			27			0.03
Amortization of intangible assets		63			0.07			76			0.08			81			0.08
Debt extinguishment costs		—			—			3			—			—			—
Non-operating retirement-related credits		(5	)		(0.01	)		(2	)		—			(2	)		—
Tax adjustments^(a)		5			0.01			(216	)		(0.22	)		17			0.02
Non-GAAP net earnings	$	704		$	0.74		$	900		$	0.93		$	808		$	0.81

GAAP earnings from operations	$	845					$	991					$	935
Non-GAAP adjustments:
Restructuring and other charges		70						121						63
Acquisition and divestiture charges		6						12						27
Amortization of intangible assets		63						76						81
Non-GAAP earnings from operations	$	984					$	1,200					$	1,106

GAAP operating margin		6.3	%					7.1	%					7.1	%
Non-GAAP adjustments		1.0	%					1.4	%					1.3	%
Non-GAAP operating margin		7.3	%					8.5	%					8.4	%

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

HP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (In millions)

	As of
	January 31, 2025			October 31, 2024
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	2,894		$	3,253
Accounts receivable, net		4,188			5,117
Inventory		8,443			7,720
Other current assets		4,309			4,670
Total current assets		19,834			20,760
Property, plant and equipment, net		2,900			2,914
Goodwill		8,599			8,627
Other non-current assets		7,597			7,608
Total assets	$	38,930		$	39,909

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable and short-term borrowings	$	1,418		$	1,406
Accounts payable		16,483			16,903
Other current liabilities		9,533			10,378
Total current liabilities		27,434			28,687
Long-term debt		8,273			8,263
Other non-current liabilities		4,295			4,282
Stockholders’ deficit		(1,072	)		(1,323	)
Total liabilities and stockholders’ deficit	$	38,930		$	39,909

HP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In millions)

	Three months ended
	January 31, 2025			January 31, 2024
Cash flows from operating activities:
Net earnings	$	565		$	622
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		197			205
Stock-based compensation expense		192			177
Restructuring and other charges		70			63
Deferred taxes on earnings		(23	)		(5	)
Other, net		35			(20	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivables		966			446
Inventory		(751	)		(47	)
Accounts payable		(397	)		(744	)
Net investment in lease related to integrated financing		2			(62	)
Taxes on earnings		12			49
Restructuring and other		(74	)		(87	)
Other assets and liabilities		(420	)		(476	)
Net cash provided by operating activities		374			121
Cash flows from investing activities:
Investment in property, plant, equipment and purchased intangible		(302	)		(158	)
Purchases of available-for-sale securities and other investments		(3	)		—
Maturities and sales of available-for-sale securities and other investments		5			—
Collateral posted for derivative instruments		—			(70	)
Net cash used in investing activities		(300	)		(228	)
Cash flows from financing activities:
Proceeds from short-term borrowings with original maturities less than 90 days, net		—			100
Proceeds from debt		82			92
Payment of debt and associated costs		(50	)		(49	)
Stock-based award activities and others		(92	)		(76	)
Repurchase of common stock		(100	)		(500	)
Cash dividends paid		(273	)		(275	)
Net cash used in financing activities		(433	)		(708	)
Decrease in cash, cash equivalents and restricted cash		(359	)		(815	)
Cash, cash equivalents and restricted cash at beginning of period		3,253			3,232
Cash, cash equivalents and restricted cash at end of period	$	2,894		$	2,417

HP INC. AND SUBSIDIARIES SEGMENT/BUSINESS UNIT INFORMATION (Unaudited) (In millions)

	Three months ended									Change (%)
	January 31, 2025			October 31, 2024			January 31, 2024			Q/Q	Y/Y
Net revenue:
Commercial PS	$	6,645		$	6,522		$	6,045		2 %	10 %
Consumer PS		2,579			3,069			2,764		(16)%	(7)%
Personal Systems		9,224			9,591			8,809		(4)%	5 %
Supplies		2,826			2,865			2,863		(1)%	(1)%
Commercial Printing		1,144			1,262			1,227		(9)%	(7)%
Consumer Printing		299			325			285		(8)%	5 %
Printing		4,269			4,452			4,375		(4)%	(2)%
Corporate Investments^(a)		11			11			2		NM	NM
Total segment net revenue		13,504			14,054			13,186		(4)%	2 %
Other^(a)		—			1			(1	)	NM	NM
Total net revenue	$	13,504		$	14,055		$	13,185		(4)%	2 %

Earnings before taxes:
Personal Systems	$	507		$	550		$	537
Printing		810			874			872
Corporate Investments		(27	)		(37	)		(37	)
Total segment earnings from operations		1,290			1,387			1,372
Corporate and unallocated cost and other		(114	)		(102	)		(89	)
Stock-based compensation expense		(192	)		(85	)		(177	)
Restructuring and other charges		(70	)		(121	)		(63	)
Acquisition and divestiture charges		(6	)		(12	)		(27	)
Amortization of intangible assets		(63	)		(76	)		(81	)
Interest and other, net		(141	)		(129	)		(142	)
Total earnings before taxes	$	704		$	862		$	793

(a) “NM” represents not meaningful.

HP INC. AND SUBSIDIARIES
SEGMENT OPERATING MARGIN SUMMARY
(Unaudited)

Three months ended

Change (pts)

January 31, 2025

October 31, 2024

January 31, 2024

Q/Q

Y/Y

Segment operating margin:

Personal Systems

5.5 %

5.7 %

6.1 %

(0.2)pts

(0.6)pts

Printing

19.0%

19.6 %

19.9 %

(0.6)pts

(0.9)pts

Corporate Investments^(a)

NM

Total segment

9.6 %

9.9 %

10.4 %

(0.3)pts

(0.8)pts

(a) “NM” represents not meaningful.

HP INC. AND SUBSIDIARIES CALCULATION OF DILUTED NET EARNINGS PER SHARE (Unaudited) (In millions, except per share amounts)

	Three months ended
	January 31, 2025		October 31, 2024		January 31, 2024
Numerator:
GAAP net earnings	$	565	$	906	$	622
Non-GAAP net earnings	$	704	$	900	$	808

Denominator:
Weighted-average shares used to compute basic net earnings per share		948		959		995
Dilutive effect of employee stock plans^(a)		9		12		7
Weighted-average shares used to compute diluted net earnings per share		957		971		1,002

GAAP diluted net earnings per share	$	0.59	$	0.93	$	0.62
Non-GAAP diluted net earnings per share	$	0.74	$	0.93	$	0.81

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

Use of non-GAAP financial measures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The MIL Network –

February 28, 2025

MIL-OSI: Global Net Lease Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

– Completed $835 Million in Dispositions in 2024, Surpassing High-End of Increased Guidance

– Reduced Net Debt by $734 million in 2024; Improved Net Debt to Adjusted EBITDA to 7.6x

– Company Meets and Exceeds its Full-Year 2024 Earnings Guidance

– Recently Announced $1.8 Billion Multi-Tenant Portfolio Sale Would Significantly Reduce Leverage and Improve Liquidity Position

– Proposed Transaction Would Create Pure-Play, Single-Tenant Net Lease Company with Enhanced Portfolio Metrics

– Company Initiates Opportunistic $300 Million Share Repurchase Program

NEW YORK, Feb. 27, 2025 (GLOBE NEWSWIRE) — Global Net Lease, Inc. (NYSE: GNL) (“GNL” or the “Company”), an internally managed real estate investment trust that focuses on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, announced today its financial and operating results for the quarter and year ended December 31, 2024.

Fourth Quarter and Full Year 2024 Highlights

Revenue was $199.1 million in fourth quarter 2024 compared to $206.7 million in fourth quarter 2023, primarily as a result of $835 million of dispositions closed throughout the year
Net loss attributable to common stockholders was $17.5 million in fourth quarter 2024, compared to $59.5 million in fourth quarter 2023
Core Funds From Operations (“Core FFO”) was $68.5 million, or $0.30 per share, in fourth quarter 2024, compared to $48.3 million, or $0.21 per share, in fourth quarter 2023
Adjusted Funds From Operations (“AFFO”)¹ was $78.3 million², or $0.34 per share, in fourth quarter 2024, compared to $71.7 million, or $0.31 per share, in fourth quarter 2023; full-year 2024 AFFO was $303.8 million, or $1.32 per share
Closed $835 million of dispositions in 2024 at a cash cap rate of 7.1% with a weighted average lease term of 4.9 years
Reduced net debt by $734 million in 2024, improving Net Debt to Adjusted EBITDA from 8.4x to 7.6x²
Exceeded projected cost synergies, reaching $85.0 million versus the expected $75.0 million, highlighting the Company’s successful integration efforts and ability to drive value through strategic initiatives
Increased portfolio occupancy from 93% as of the end of first quarter 2024 to 97% as of the end of the fourth quarter of 2024
Leased 1.2 million square feet across the portfolio, resulting in nearly $17.0 million of new straight-line rent
Renewal leasing spread of 6.8% with a weighted average lease term of 9.7 years; new leases completed in the quarter had a weighted average lease term of 6.5 years
Weighted average annual rent increase of 1.3% provides organic rental growth, excluding 14.8% of the portfolio with CPI linked leases that have historically experienced significantly higher rental increase
Sector-leading 61% of annualized straight-line rent comes from investment-grade or implied investment-grade tenants³

Multi-Tenant Portfolio Sale

Entered into a binding agreement to sell its multi-tenant portfolio of 100 non-core properties for approximately $1.8 billion
This strategic transaction would accelerate GNL’s disposition initiative and position the Company for sustained growth and value creation as a pure-play, single-tenant net lease company

“We are incredibly proud of our achievements at GNL in 2024 and even more excited about what lies ahead,” stated Michael Weil, CEO of GNL. “The sale of our multi-tenant portfolio would mark a pivotal moment, reinforcing the strong momentum we have built. This transaction would reshape GNL into a pure-play, single-tenant net lease company, eliminating the operational complexities, G&A expenses and capital expenditures tied to multi-tenant retail properties. More importantly, it would accelerate our deleveraging strategy and fortify our balance sheet. This strategic transformation, including the recently announced share repurchase program, underscores our long-term vision, reinforcing our commitment to prudent management, sustainable growth and driving meaningful shareholder value.”

Full Year 2025 Guidance and Dividend Update⁴
The Company is establishing initial 2025 guidance, which is contingent on the sale of our multi-tenant portfolio with respect to AFFO and Net Debt to Adjusted EBITDA.

AFFO per share range of $0.90 to $0.96
Net Debt to Adjusted EBITDA range of 6.5x to 7.1x
Reduced annual dividend to $0.190 per share of common stock beginning with the dividend expected to be declared in April 2025 which would generate $78 million in incremental annual cash flow

Summary Fourth Quarter 2024 Results

	Three Months Ended December 31,
(In thousands, except per share data)	2024			2023
Revenue from tenants	$	199,115		$	206,726

Net loss attributable to common stockholders	$	(17,458	)	$	(59,514	)
Net loss per diluted common share	$	(0.08	)	$	(0.26	)

NAREIT defined FFO attributable to common stockholders	$	64,334		$	43,165
NAREIT defined FFO per diluted common share	$	0.28		$	0.19

Core FFO attributable to common stockholders	$	68,538		$	48,331
Core FFO per diluted common share	$	0.30		$	0.21

AFFO attributable to common stockholders	$	78,297		$	71,656
AFFO per diluted common share	$	0.34		$	0.31

Property Portfolio

At December 31, 2024, the Company’s portfolio consisted of 1,121 net leased properties located in ten countries and territories and comprised of 60.7 million rentable square feet. The Company operates in four reportable segments: (1) Industrial & Distribution, (2) Multi-Tenant Retail, (3) Single-Tenant Retail and (4) Office. The real estate portfolio metrics include:

97% leased with a remaining weighted-average lease term of 6.2 years⁵
81% of the portfolio contains contractual rent increases based on annualized straight-line rent
61% of portfolio annualized straight-line rent derived from investment grade and implied investment grade rated tenants
80% U.S. and Canada, 20% Europe (based on annualized straight-line rent)
34% Industrial & Distribution, 28% Multi-Tenant Retail, 21% Single-Tenant Retail and 17% Office (based on an annualized straight-line rent)

Capital Structure and Liquidity Resources⁶

As of December 31, 2024, the Company had liquidity of $492.2 million and $460.0 million of capacity under the Company’s revolving credit facility. The Company had net debt of $4.6 billion⁷, including $2.3 billion of mortgage debt.

As of December 31, 2024, the percentage of debt that is fixed rate (including variable rate debt fixed with swaps) was 91%, compared to approximately 80% as of December 31, 2023. The Company’s total combined debt had a weighted average interest rate of 4.8% resulting in an interest coverage ratio of 2.5 times⁸. Weighted average debt maturity was 3.0 years as of December 31, 2024 as compared to 3.2 years as of December 31, 2023.

Footnotes/Definitions

¹	While we consider AFFO a useful indicator of our performance, we do not consider AFFO as an alternative to net income (loss) or as a measure of liquidity. Furthermore, other REITs may define AFFO differently than we do. Projected AFFO per share data included in this release is for informational purposes only and should not be relied upon as indicative of future dividends or as a measure of future liquidity. AFFO for the fourth quarter 2024 also contains a number of adjustments for items that the Company believes were non-recurring, one-time items including adjustments for items that were settled in cash such as merger and proxy related expenses.

²	Includes the collection of $4.5 million in past-due funds from Children of America and approximately $3.0 million in termination fees.

³	As used herein, “Investment Grade Rating” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied Investment Grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. The term “parent” for these purposes includes any entity, including any governmental entity, owning more than 50% of the voting stock in a tenant. Ratings information is as of December 31, 2024. Comprised of 31.4% leased to tenants with an actual investment grade rating and 29.1% leased to tenants with an Implied Investment Grade rating based on annualized cash rent as of December 31, 2024.

⁴	We do not provide guidance on net income. We only provide guidance on AFFO per share and our Net Debt to Adjusted EBITDA ratio and do not provide reconciliations of this forward-looking non-GAAP guidance to net income per share or our debt to net income due to the inherent difficulty in quantifying certain items necessary to provide such reconciliations as a result of their unknown effect, timing and potential significance. Examples of such items include impairment of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions and other non-recurring expenses.

⁵	Weighted-average remaining lease term in years is based on square feet as of December 31, 2024.

⁶	During the year ended December 31, 2024, the Company did not sell any shares of Common Stock or Series B Preferred Stock through its Common Stock or Series B Preferred Stock under its “at-the-market” programs.

⁷	Comprised of the principal amount of GNL’s outstanding debt totaling $4.7 billion less cash and cash equivalents totaling $159.7 million, as of December 31, 2024.

⁸	The interest coverage ratio is calculated by dividing adjusted EBITDA for the applicable quarter by cash paid for interest (calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net). Management believes that interest coverage ratio is a useful supplemental measure of our ability to service our debt obligations. Adjusted EBITDA and cash paid for interest are Non-GAAP metrics and are reconciled below.

Conference Call

GNL will host a webcast and conference call on February 28, 2025 at 11:00 a.m. ET to discuss its financial and operating results.

To listen to the live call, please go to GNL’s “Investor Relations” section of the website at least 15 minutes prior to the start of the call to register and download any necessary audio software.

Dial-in instructions for the conference call and the replay are outlined below.

Conference Call Details

Live Call

Dial-In (Toll Free): 1-877-407-0792
International Dial-In: 1-201-689-8263

Conference Replay

For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the GNL website at www.globalnetlease.com.

Or dial-in below:

Domestic Dial-In (Toll Free): 1-844-512-2921
International Dial-In: 1-412-317-6671
Conference Number: 13746750
*Available from 2:00 p.m. ET on February 28, 2025 through May 28, 2025.

Supplemental Schedules

The Company will file supplemental information packages with the Securities and Exchange Commission (the “SEC”) to provide additional disclosure and financial information. Once posted, the supplemental package can be found under the “Presentations” tab in the Investor Relations section of GNL’s website at www.globalnetlease.com and on the SEC website at www.sec.gov.

About Global Net Lease, Inc.

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded internally managed real estate investment trust that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe. Additional information about GNL can be found on its website at www.globalnetlease.com.

Forward-Looking Statements

The statements in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. The words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “expects,” “estimates,” “projects,” “potential,” “predicts,” “plans,” “intends,” “would,” “could,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks that any potential future acquisition or disposition (including the multi-tenant portfolio sale) by the Company is subject to market conditions, capital availability and timing considerations and may not be identified or completed on favorable terms, or at all. Some of the risks and uncertainties, although not all risks and uncertainties, that could cause the Company’s actual results to differ materially from those presented in the Company’s forward-looking statements are set forth in the “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and all of its other filings with the U.S. Securities and Exchange Commission, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

Contacts:

Investors and Media:
Email: investorrelations@globalnetlease.com
Phone: (332) 265-2020

Global Net Lease, Inc. Consolidated Balance Sheets (In thousands)

	December 31,
	2024			2023
ASSETS	(Unaudited)
Real estate investments, at cost:
Land	$	1,172,146		$	1,430,607
Buildings, fixtures and improvements		5,293,468			5,842,314
Construction in progress		4,350			23,242
Acquired intangible lease assets		1,057,967			1,359,981
Total real estate investments, at cost		7,527,931			8,656,144
Less: accumulated depreciation and amortization		(1,164,629	)		(1,083,824	)
Total real estate investments, net		6,363,302			7,572,320
Assets held for sale		17,406			3,188
Cash and cash equivalents		159,698			121,566
Restricted cash		64,510			40,833
Derivative assets, at fair value		2,471			10,615
Unbilled straight-line rent		99,501			84,254
Operating lease right-of-use asset		74,270			77,008
Prepaid expenses and other assets		108,562			121,997
Deferred tax assets		4,866			4,808
Goodwill		51,370			46,976
Deferred financing costs, net		9,808			15,412
Total Assets	$	6,955,764		$	8,098,977

LIABILITIES AND EQUITY
Mortgage notes payable, net	$	2,221,706		$	2,517,868
Revolving credit facility		1,390,292			1,744,182
Senior notes, net		906,101			886,045
Acquired intangible lease liabilities, net		76,800			95,810
Derivative liabilities, at fair value		3,719			5,145
Accounts payable and accrued expenses		75,735			99,014
Operating lease liability		48,333			48,369
Prepaid rent		28,734			46,213
Deferred tax liability		5,477			6,009
Dividends payable		11,909			11,173
Total Liabilities		4,768,806			5,459,828
Commitments and contingencies		—			—
Stockholders’ Equity:
7.25% Series A cumulative redeemable preferred stock		68			68
6.875% Series B cumulative redeemable perpetual preferred stock		47			47
7.50% Series D cumulative redeemable perpetual preferred stock		79			79
7.375% Series E cumulative redeemable perpetual preferred stock		46			46
Common stock		3,640			3,639
Additional paid-in capital		4,359,264			4,350,112
Accumulated other comprehensive loss		(25,844	)		(14,096	)
Accumulated deficit		(2,150,342	)		(1,702,143	)
Total Stockholders’ Equity		2,186,958			2,637,752
Non-controlling interest		—			1,397
Total Equity		2,186,958			2,639,149
Total Liabilities and Equity	$	6,955,764		$	8,098,977

Global Net Lease, Inc. Consolidated Statements of Operations (In thousands, except per share data)

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
	(Unaudited)			(Unaudited)			(Unaudited)
Revenue from tenants	$	199,115		$	206,726		$	805,010		$	515,070

Expenses:
Property operating		35,619			37,037			142,497			67,839
Operating fees to related parties		—			(580	)		—			28,283
Impairment charges		20,098			2,978			90,410			68,684
Merger, transaction and other costs		1,792			4,349			6,026			54,492
Settlement costs		—			—			—			29,727
General and administrative		13,763			16,867			57,734			40,187
Equity-based compensation		2,309			1,058			8,931			17,297
Depreciation and amortization		83,020			98,713			349,943			222,271
Total expenses		156,601			160,422			655,541			528,780
Operating income (loss) before gain on dispositions of real estate investments		42,514			46,304			149,469			(13,710	)
Gain (loss) on dispositions of real estate investments		21,326			(988	)		57,015			(1,672	)
Operating income (loss)		63,840			45,316			206,484			(15,382	)
Other income (expense):
Interest expense		(77,234	)		(83,575	)		(326,932	)		(179,411	)
Loss on extinguishment and modification of debt		(2,412	)		(817	)		(15,877	)		(1,221	)
Gain (loss) on derivative instruments		6,853			(4,478	)		4,229			(3,691	)
Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		1,917			—			3,249			—
Other income		1,476			435			1,720			2,270
Total other expense, net		(69,400	)		(88,435	)		(333,611	)		(182,053	)
Net loss before income tax		(5,560	)		(43,119	)		(127,127	)		(197,435	)
Income tax expense		(962	)		(5,459	)		(4,445	)		(14,475	)
Net loss		(6,522	)		(48,578	)		(131,572	)		(211,910	)
Preferred stock dividends		(10,936	)		(10,936	)		(43,744	)		(27,438	)
Net loss attributable to common stockholders	$	(17,458	)	$	(59,514	)	$	(175,316	)	$	(239,348	)

Basic and Diluted Loss Per Share:
Net loss per share attributable to common stockholders — Basic and Diluted	$	(0.08	)	$	(0.26	)	$	(0.76	)	$	(1.71	)
Weighted Average Shares Outstanding:
Basic and Diluted		230,596			230,320			230,440			142,584

Global Net Lease, Inc. Quarterly Reconciliation of Non-GAAP Measures (Unaudited) (In thousands)

		Three Months Ended												Year Ended
		March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Adjusted EBITDA
	Net loss	$	(23,751	)	$	(35,664	)	$	(65,635	)	$	(6,522	)	$	(131,572	)
	Depreciation and amortization		92,000			89,493			85,430			83,020			349,943
	Interest expense		82,753			89,815			77,130			77,234			326,932
	Income tax expense		2,388			(250	)		1,345			962			4,445
	EBITDA		153,390			143,394			98,270			154,694			549,748
	Impairment charges		4,327			27,402			38,583			20,098			90,410
	Equity-based compensation		1,973			2,340			2,309			2,309			8,931
	Merger, transaction and other costs ^[1]		761			1,572			1,901			1,792			6,026
	(Gain) loss on dispositions of real estate investments		(5,867	)		(34,102	)		4,280			(21,326	)		(57,015	)
	(Gain) loss on derivative instruments		(1,588	)		(530	)		4,742			(6,853	)		(4,229	)
	Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		(1,032	)		(300	)		—			(1,917	)		(3,249	)
	Loss on extinguishment and modification of debt		58			13,090			317			2,412			15,877
	Other expense (income)		16			(309	)		49			(1,476	)		(1,720	)
	Expenses attributable to European tax restructuring ^[2]		469			16			—			—			485
	Transition costs related to the Merger and Internalization ^[3]		2,826			995			138			527			4,486
	Adjusted EBITDA		155,333			153,568			150,589			150,260			609,750
	General and administrative		16,177			15,196			12,598			13,763			57,734
	Expenses attributable to European tax restructuring ^[2]		(469	)		(16	)		—			—			(485	)
	Transition costs related to the Merger and Internalization ^[3]		(2,826	)		(995	)		(138	)		(527	)		(4,486	)
	NOI		168,215			167,753			163,049			163,496			662,513
	Amortization related to above- and below-market lease intangibles and right-of-use assets, net		2,225			1,901			1,805			1,572			7,503
	Straight-line rent		(4,562	)		(5,349	)		(5,343	)		(3,896	)		(19,150	)
	Cash NOI	$	165,878		$	164,305		$	159,511		$	161,172		$	650,866

Cash Paid for Interest:
	Interest Expense	$	82,753		$	89,815		$	77,130		$	77,234		$	326,932
	Non-cash portion of interest expense		(2,394	)		(2,580	)		(2,496	)		(2,510	)		(9,980	)
	Amortization of discounts on mortgages and senior notes		(15,338	)		(24,080	)		(14,156	)		(15,017	)		(68,591	)
	Total cash paid for interest	$	65,021		$	63,155		$	60,478		$	59,707		$	248,361

[1]	These costs primarily consist of advisory, legal and other professional costs that were directly related to the Merger and Internalization.
[2]	Amounts relate to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased Adjusted EBITDA for these amounts.
[3]	Amounts include costs related to (i) compensation incurred for our former Co-Chief Executive Officer who retired effective March 31, 2024; (ii) a transition service agreement with the former Advisor and; (iii) insurance premiums related to expiring directors and officers insurance of former RTL directors. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased Adjusted EBITDA for these amounts.

Global Net Lease, Inc. Quarterly Reconciliation of Non-GAAP Measures (Unaudited) (In thousands, except per share data)

		Three Months Ended												Year Ended
		March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Funds from operations (FFO):
	Net loss attributable to common stockholders (in accordance with GAAP)	$	(34,687	)	$	(46,600	)	$	(76,571	)	$	(17,458	)	$	(175,316	)
	Impairment charges		4,327			27,402			38,583			20,098			90,410
	Depreciation and amortization		92,000			89,493			85,430			83,020			349,943
	(Gain) loss on dispositions of real estate investments		(5,867	)		(34,102	)		4,280			(21,326	)		(57,015	)
FFO (defined by NAREIT)			55,773			36,193			51,722			64,334			208,022
	Merger, transaction and other costs^[1]		761			1,572			1,901			1,792			6,026
	Loss on extinguishment and modification of debt		58			13,090			317			2,412			15,877
Core FFO attributable to common stockholders			56,592			50,855			53,940			68,538			229,925
	Non-cash equity-based compensation		1,973			2,340			2,309			2,309			8,931
	Non-cash portion of interest expense		2,394			2,580			2,496			2,510			9,980
	Amortization related to above- and below-market lease intangibles and right-of-use assets, net		2,225			1,901			1,805			1,572			7,503
	Straight-line rent		(4,562	)		(5,349	)		(5,343	)		(3,896	)		(19,150	)
	Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		(1,032	)		(300	)		—			(1,917	)		(3,249	)
	Eliminate unrealized (gains) losses on foreign currency transactions^[2]		(1,259	)		(230	)		4,360			(6,289	)		(3,418	)
	Amortization of discounts on mortgages and senior notes		15,338			24,080			14,156			15,017			68,591
	Expenses attributable to European tax restructuring^[3]		469			16			—			—			485
	Transition costs related to the Merger and Internalization^[4]		2,826			995			138			527			4,486
	Forfeited disposition deposit^[5]		—			(196	)		(5	)		(74	)		(275	)
Adjusted funds from operations (AFFO) attributable tocommon stockholders		$	74,964		$	76,692		$	73,856		$	78,297		$	303,809
Weighted average common shares outstanding – Basic and Diluted			230,320			230,381			230,463			230,596			230,440
Net loss per share attributable to common shareholders — Basic and Diluted		$	(0.15	)	$	(0.20	)	$	(0.33	)	$	(0.08	)	$	(0.76	)
FFO per diluted common share		$	0.24		$	0.16		$	0.22		$	0.28		$	0.90
Core FFO per diluted common share		$	0.25		$	0.22		$	0.23		$	0.30		$	1.00
AFFO per diluted common share		$	0.33		$	0.33		$	0.32		$	0.34		$	1.32
Dividends declared to common stockholders		$	81,923		$	63,754		$	63,722		$	63,484		$	272,883

[1]	These costs primarily consist of advisory, legal and other professional costs that were directly related to the Merger and Internalization.
[2]	For the three months ended March 31, 2024, the gain on derivative instruments was $1.6 million which consisted of unrealized gains of $1.3 million and realized gains of $0.3 million. For the three months ended June 30, 2024, the gain on derivative instruments was $0.5 million which consisted of unrealized gains of $0.2 million and realized gains of $0.3 million. For the three months ended September 30, 2024, the loss on derivative instruments was $4.7 million which consisted of unrealized losses of $4.4 million and realized losses of $0.3 million. For the three months ended December 31, 2024, the gain on derivative instruments was $6.9 million, which consisted of unrealized gains of $6.3 million and realized gains of $0.6 million. For the year ended December 31, 2024, the gain on derivative instruments was $4.2 million, which consisted of unrealized gains of $3.4 million and realized gains of $0.8 million.
[3]	Amounts relate to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for these amounts.
[4]	Amounts include costs related to (i) compensation incurred for our former Co-Chief Executive Officer who retired effective March 31, 2024; (ii) a transition service agreement with the former Advisor and; (iii) insurance premiums related to expiring directors and officers insurance of former RTL directors. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for these amounts.
[5]	Represents a forfeited deposit from a potential buyer of one of our properties, which is recorded in other income in our consolidated statement of operations. We do not consider this income to be part of our normal operating performance and have, accordingly, decreased AFFO for this amount.

The following table provides operating financial information for the Company’s four reportable segments:

		Three Months Ended December 31,				Year Ended December 31,
(In thousands)		2024		2023 ⁽¹⁾		2024		2023 ⁽¹⁾
Industrial & Distribution:
	Revenue from tenants	$	54,561	$	62,223	$	237,645	$	220,102
	Property operating expense		6,694		5,407		21,820		15,457
	Net operating income	$	47,867	$	56,816	$	215,825	$	204,645

Multi-Tenant Retail:
	Revenue from tenants	$	63,131	$	66,412	$	259,280	$	79,799
	Property operating expense		20,387		22,494		86,025		26,951
	Net operating income	$	42,744	$	43,918	$	173,255	$	52,848

Single-Tenant Retail:
	Revenue from tenants	$	42,648	$	41,288	$	164,514	$	65,478
	Property operating expense		4,012		4,286		15,787		6,045
	Net operating income	$	38,636	$	37,002	$	148,727	$	59,433

Office:
	Revenue from tenants	$	38,775	$	36,803	$	143,571	$	149,691
	Property operating expense		4,526		4,850		18,865		19,386
	Net operating income	$	34,249	$	31,953	$	124,706	$	130,305

(1)	Amounts in the Single-Tenant Retail segment and Office segment reflect changes to the reclassification of one tenant from the Office segment to the Single-Tenant Retail segment to conform to the current year presentation based on a re-evaluation of the property type.

Caution on Use of Non-GAAP Measures

Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Net Operating Income (“NOI”), Cash Net Operating Income (“Cash NOI”) and cash paid for interest should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.

Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate Core FFO or AFFO differently than we do. Consequently, our presentation of FFO, Core FFO and AFFO may not be comparable to other similarly-titled measures presented by other REITs in our peer group.

We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs.

As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO, Core FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Investors are cautioned that FFO, Core FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations

Funds From Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.

We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gain and loss from the sale of certain real estate assets, gain and loss from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, Core FFO, AFFO and NOI attributable to stockholders, as applicable. Our FFO calculation complies with NAREIT’s definition.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Core Funds From Operations

In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as merger, transaction and other costs, as well as certain other costs that are considered to be non-core, such as debt extinguishment or modification costs. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our core business plan to generate operational income and cash flows in order to make dividend payments to stockholders. In evaluating investments in real estate, we differentiate the costs to acquire the investment from the subsequent operations of the investment. We also add back non-cash write-offs of deferred financing costs, prepayment penalties and certain other costs incurred with the early extinguishment or modification of debt which are included in net income but are considered financing cash flows when paid in the statement of cash flows. We consider these write-offs and prepayment penalties to be capital transactions and not indicative of operations. By excluding expensed acquisition, transaction and other costs as well as non-core costs, we believe Core FFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.

Adjusted Funds From Operations

In calculating AFFO, we start with Core FFO, then we exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities or items, including items that were paid in cash that are not a fundamental attribute of our business plan or were one time or non-recurring items. These items include, for example, early extinguishment or modification of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent and equity-based compensation from AFFO, we believe we provide useful information regarding income and expense items which have a direct impact on our ongoing operating performance. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. We also include the realized gain or loss on foreign currency exchange contracts for AFFO as such items are part of our ongoing operations and affect our current operating performance.

In calculating AFFO, we also exclude certain expenses which under GAAP are treated as operating expenses in determining operating net income. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications and merger related expenses) and certain other expenses, including expenses related to our European tax restructuring and transition costs related to the Merger and Internalization, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are excluded by us as we believe they are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income. In addition, as discussed above, we view gain and loss from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gain or loss, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to, among other things, assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) calculated in accordance with GAAP and presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income and Cash Paid for Interest

We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition, transaction and other costs, other non-cash items and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications) and certain other expenses, including expenses related to our European tax restructuring and transition costs related to the Merger and Internalization, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are not reflective of on-going performance. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income (loss) as calculated in accordance with GAAP as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.

NOI is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, less discontinued operations, interest, other income and income from preferred equity investments and investment securities, plus corporate general and administrative expense, acquisition, transaction and other costs, depreciation and amortization, other non-cash expenses and interest expense. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets and to make decisions about resource allocations. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition activity on an unlevered basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity.

Cash NOI is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as net operating income (which is separately defined herein) excluding amortization of above/below market lease intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs calculate and present Cash NOI.

Cash Paid for Interest is calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net. Management believes that Cash Paid for Interest provides useful information to investors to assess our overall solvency and financial flexibility. Cash Paid for Interest should not be considered as an alternative to interest expense as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.

The MIL Network –

February 28, 2025

MIL-OSI: HCI Group Reports Fourth Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

Fourth Quarter Pre-Tax Income of $5.9 million and Diluted EPS of $0.23
Full Year 2024 Pre-Tax Income of $173.4 million and Diluted EPS of $8.89

TAMPA, Fla., Feb. 27, 2025 (GLOBE NEWSWIRE) — HCI Group, Inc. (NYSE:HCI) reported pre-tax income of $5.9 million and net income of $4.1 million in the fourth quarter of 2024. Net income after noncontrolling interests was $2.6 million compared with $38.1 million in the fourth quarter of 2023. Diluted earnings per share were $0.23 in the fourth quarter of 2024, compared with $3.40 diluted earnings per share, in the fourth quarter of 2023.

Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the fourth quarter of 2024 was $5.0 million, or $0.31 diluted earnings per share compared with adjusted net income of $38.8 million, or $3.22 diluted earnings per share, in the fourth quarter of 2023. This press release includes an explanation of adjusted net income as well as a reconciliation to net income and earnings per share calculated in accordance with generally accepted accounting principles (known as “GAAP”).

Management Commentary
“Even with the hurricanes in 2024, HCI Group is unwavering in its commitment to Florida and supporting our existing and new policyholders. As part of our ongoing efforts, we plan to keep rates flat for the foreseeable future,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “Given an increased level of catastrophe activity across the country, we are taking initial steps to make our best-in-class technology available to other carriers and in additional geographies.”

Fourth Quarter 2024 Commentary
Consolidated gross premiums earned in the fourth quarter increased by 38.0% to $297.5 million from $215.2 million in the fourth quarter of 2023 driven primarily by assumptions of policies from Citizens Property Insurance Corporation.

Premiums ceded for reinsurance in the fourth quarter were $151.1 million compared with $66.6 million in the fourth quarter of 2023. The fourth quarter included the reversal of $50.6 million of previously accrued benefits related to retrospective reinsurance provisions as a result of losses caused by Hurricane Milton.

Net investment income in the fourth quarter was $14.5 million compared with $10.3 million in the fourth quarter of 2023. The increase was primarily attributable to an increase in interest income from cash, cash equivalents and available-for-sale fixed maturity securities.

Losses and loss adjustment expenses in the fourth quarter were $110.7 million compared with $65.4 million in the fourth quarter of 2023. Loss expenses in the fourth quarter of 2024 include a net loss of $78.0 million from Hurricane Milton, partially offset by $24.5 million of favorable development mostly related to the 2024 accident year.

Policy acquisition and other underwriting expenses in the fourth quarter were $27.7 million compared with $22.7 million in the fourth quarter of 2023.

General and administrative personnel expenses in the fourth quarter decreased to $10.2 million from $12.2 million in the fourth quarter of 2023. The decrease was attributable to lower stock-based compensation as well as higher reinsurance recoveries related to claims processing for Hurricane Milton.

Full 2024 Results
For the year ended December 31, 2024, the company reported pre-tax income of $173.4 million and net income of $127.6 million. Net income after noncontrolling interests was $110.0 million compared with $79.0 million for the year ended December 31, 2023. Diluted earnings per share were $8.89 for the year ended December 31, 2024, compared with $7.62 diluted earnings per share for the year ended December 31, 2023.

Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the twelve month period was $125.6 million, or $8.75 diluted earnings per share compared with adjusted net income of $86.8 million, or $7.41 diluted earnings per share in the same period of 2023. An explanation of this non-GAAP financial measure and reconciliations to the applicable GAAP numbers accompany this press release.

Consolidated gross premiums earned for the twelve months of 2024 increased by 41.5% to $1,083.2 million from $765.5 million in 2023 driven primarily by growth in Florida due to assumptions of policies from Citizens Property Insurance Corporation.

Premiums ceded for reinsurance for the twelve months of 2024 were $405.7 million compared with $269.6 million for the twelve months of 2023. The twelve months of 2024 included the reversal of $62.9 million of previously accrued benefits related to retrospective reinsurance provisions as a result of losses caused by Hurricanes Helene and Milton.

Net investment income for the twelve months of 2024 was $59.1 million compared with $46.2 million for the twelve months of 2023. The increase was primarily attributable to an increase in interest income from cash, cash equivalents, and available-for-sale fixed maturity securities, offset by a decrease in income from real estate investments.

Losses and loss adjustment expenses for the twelve months of 2024 were $374.7 million compared with $254.6 million for the twelve months of 2023. Loss expense included $78.0 million from Hurricane Milton, $43.0 million from Hurricane Helene and $6.5 million from Hurricane Debby.

Policy acquisition and other underwriting expenses for the twelve months of 2024 were $99.4 million compared with $90.8 million for the twelve months of 2023.

General and administrative personnel expenses for the twelve months of 2024 increased to $63.2 million from $53.9 million for the twelve months of 2023.

Conference Call
HCI Group will hold a conference call later today, February 27, 2025, to discuss these financial results. Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman and Chief Financial Officer Mark Harmsworth will host the call starting at 4:45 p.m. Eastern time.

Interested parties can listen to the live presentation by dialing the listen-only number below or by clicking the webcast link available on the Investor Information section of the company’s website at www.hcigroup.com.

Listen-only toll-free number: (888) 506-0062
Listen-only international number: (973) 528-0011
Entry Code: 835158

Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.

A replay of the call will be available by telephone after 8:00 p.m. Eastern time on the same day as the call and via the Investor Information section of the HCI Group website at www.hcigroup.com through February 27, 2026.

Toll-free replay number: (877) 481-4010
International replay number: (919) 882-2331
Replay ID: 51955

About HCI Group, Inc.
HCI Group, Inc. is a holding company with two distinct operating units. The first unit includes four top-performing insurance companies, a captive reinsurance company, and operations in claims management and real estate. The second unit, called Exzeo Group, is a leading innovator of insurance technology that utilizes advanced underwriting algorithms and data analytics. Exzeo empowers property and casualty insurers to transform underwriting outcomes and achieve industry-leading results.

The company’s common shares trade on the New York Stock Exchange under the ticker symbol “HCI” and are included in the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc. regularly publishes financial and other information in the Investor Information section of the company’s website. For more information about HCI Group and its subsidiaries, visit www.hcigroup.com.

Forward-Looking Statements
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “confident,” “prospects” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. For example, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. Some of these risks and uncertainties are identified in the company’s filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company’s business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements.

Company Contact:
Bill Broomall, CFA
Investor Relations
HCI Group, Inc.
Tel (813) 776-1012
wbroomall@typtap.com

Investor Relations Contact:
Matt Glover
Gateway Group, Inc.
Tel (949) 574-3860
HCI@gatewayir.com

– Tables to follow –


HCI GROUP, INC. AND SUBSIDIARIES
Selected Financial Metrics
(Dollar amounts in thousands, except per share amounts)

	Q4 2024			Q4 2023			FY 2024			FY 2023
	(Unaudited)
Insurance Operations
Gross Written Premiums:
Homeowners Choice	$	145,085		$	182,038		$	593,943		$	535,070
TypTap Insurance Company		174,980			138,482			491,413			363,552
Condo Owners Reciprocal Exchange		14,435			–			81,411			–
Total Gross Written Premiums		334,500			320,520			1,166,767			898,622

Gross Premiums Earned:
Homeowners Choice		156,342			125,796			589,137			417,202
TypTap Insurance Company		123,807			89,394			442,876			348,310
Condo Owners Reciprocal Exchange		17,348			–			51,207			–
Total Gross Premiums Earned		297,497			215,190			1,083,220			765,512

Gross Premiums Earned Loss Ratio		37.2	%		30.4	%		34.6	%		33.3	%

Per Share Metrics
GAAP Diluted EPS	$	0.23		$	3.40		$	8.89		$	7.62
Non-GAAP Adjusted Diluted EPS	$	0.31		$	3.22		$	6.33		$	7.41

Dividends per share	$	0.40		$	0.40		$	1.60		$	1.60

Book value per share at the end of period	$	42.10		$	33.36		$	42.10		$	33.36

Shares outstanding at the end of period		10,767,184			9,738,183			10,767,184			9,738,183

HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollar amounts in thousands)

	December 31, 2024			December 31, 2023

Assets
Fixed-maturity securities, available for sale, at fair value (amortized cost: $719,536 and $387,687, respectively and allowance for credit losses: $0 and $0, respectively)	$	718,537		$	383,238
Equity securities, at fair value (cost: $52,030 and $44,011, respectively)		56,200			45,537
Limited partnership investments		20,802			23,583
Real estate investments		79,120			67,893
Total investments		874,659			520,251

Cash and cash equivalents		532,471			536,478
Restricted cash		3,714			3,287
Receivable from maturities of fixed-maturity securities		—			91,085
Accrued interest and dividends receivable		6,008			3,507
Income taxes receivable		463			—
Deferred income taxes, net		72			512
Premiums receivable, net (allowance: $5,891 and $3,152, respectively)		50,582			38,037
Assumed premium receivable		—			19,954
Prepaid reinsurance premiums		92,060			86,232
Reinsurance recoverable, net of allowance for credit losses:
Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively)		36,062			19,690
Unpaid losses and loss adjustment expenses (allowance: $186 and $118, respectively)		522,379			330,604
Deferred policy acquisition costs		54,303			42,910
Property and equipment, net		29,544			29,251
Right-of-use-assets – operating leases		1,182			1,407
Intangible assets, net		5,206			7,659
Funds withheld for assumed business		11,690			30,087
Other assets		9,818			50,365

Total assets	$	2,230,213		$	1,811,316

Liabilities and Equity
Losses and loss adjustment expenses	$	845,900		$	585,073
Unearned premiums		584,703			501,157
Advance premiums		18,867			15,895
Reinsurance payable on paid losses and loss adjustment expenses		2,496			3,145
Ceded reinsurance premiums payable		18,313			8,921
Assumed premiums payable		2,176			850
Accrued expenses		17,677			19,722
Income tax payable		5,451			7,702
Deferred income taxes, net		2,830			—
Revolving credit facility		44,000			—
Long-term debt		185,254			208,495
Lease liabilities – operating leases		1,185			1,408
Other liabilities		32,320			35,623

Total liabilities		1,761,172			1,387,991

Commitments and contingencies
Redeemable noncontrolling interest		1,691			96,160

Equity:
Common stock, (no par value, 40,000,000 shares authorized, 10,767,184 and 9,738,183 shares issued and outstanding in 2024 and 2023, respectively)		—			—
Additional paid-in capital		122,289			89,568
Retained income		331,793			238,438
Accumulated other comprehensive loss, net of taxes		(749	)		(3,163	)
Total stockholders’ equity		453,333			324,843
Noncontrolling interests		14,017			2,322
Total equity		467,350			327,165

Total liabilities, redeemable noncontrolling interest, and equity	$	2,230,213		$	1,811,316

HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(Dollar amounts in thousands, except per share amounts)

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

Revenue

Gross premiums earned	$	297,497		$	215,190		$	1,083,220		$	765,512
Premiums ceded		(151,146	)		(66,576	)		(405,659	)		(269,627	)

Net premiums earned		146,351			148,614			677,561			495,885

Net investment income		14,486			10,341			59,148			46,234
Net realized investment gains (losses)		326			(410	)		3,384			(1,996	)
Net unrealized investment (losses) gains		(1,181	)		2,830			2,644			3,215
Policy fee income		1,302			1,053			4,639			4,704
Other		591			242			2,675			2,628

Total revenue		161,875			162,670			750,051			550,670

Expenses

Losses and loss adjustment expenses		110,727			65,398			374,708			254,579
Policy acquisition and other underwriting expenses		27,707			22,716			99,402			90,822
General and administrative personnel expenses		10,231			12,230			63,152			53,868
Interest expense		3,322			2,822			13,344			11,117
Other operating expenses		3,997			5,344			26,018			22,634

Total expenses		155,984			108,510			576,624			433,020

Income before income taxes		5,891			54,160			173,427			117,650

Income tax expense		1,757			13,248			45,846			28,393

Net income	$	4,134		$	40,912		$	127,581		$	89,257
Net income attributable to redeemable noncontrolling interests		—			(2,360	)		(10,149	)		(9,370	)
Net income attributable to noncontrolling interests		(1,550	)		(457	)		(7,479	)		(853	)

Net income after noncontrolling interests	$	2,584		$	38,095		$	109,953		$	79,034

Basic earnings per share	$	0.24		$	4.31		$	10.59		$	9.13

Diluted earnings per share	$	0.23		$	3.40		$	8.89		$	7.62

Dividends per share	$	0.40		$	0.40		$	1.60		$	1.60

HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share amounts)

A summary of the numerator and denominator of basic and diluted earnings per common share calculated in accordance with GAAP is presented below.

	Three Months Ended							Year Ended
GAAP	December 31, 2024							December 31, 2024
	Income			Shares (a)		Per Share		Income			Shares (a)		Per Share
	(Numerator)			(Denominator)		Amount		(Numerator)			(Denominator)		Amount
Net income	$	4,134						$	127,581
Less: Net income attributable to redeemable noncontrolling interest		—							(10,149	)
Less: Net income attributable to noncontrolling interests		(1,550	)						(7,479	)
Net income attributable to HCI		2,584							109,953
Less: Income attributable to participating securities		(118	)						(4,110	)
Basic Earnings Per Share:
Income allocated to common stockholders		2,466			10,143	$	0.24		105,843			9,997	$	10.59

Effect of Dilutive Securities: *
Stock options		—			323				—			294
Convertible senior notes		—			—				6,908			2,177
Warrants		—			143				—			218

Diluted Earnings Per Share:
Income available to common stockholders and assumed conversions	$	2,466			10,609	$	0.23	$	112,751			12,686	$	8.89

(a) Shares in thousands.
*For the three months ended December 31, 2024, convertible senior notes were excluded due to anti-dilutive effect.

Non-GAAP Financial Measures

Adjusted net income is a Non-GAAP financial measure that removes from net income of HCI’s portion of the effect of unrealized gains or losses on equity securities required to be included in results of operations in accordance with Accounting Standards Codification 321. HCI Group believes net income without the effect of volatility in equity prices more accurately depicts operating results. This financial measurement is not recognized in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of GAAP Net income to Non-GAAP Adjusted net income and GAAP diluted earnings per share to Non-GAAP Adjusted diluted earnings per share is provided below.

Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income

	Three Months Ended					Year Ended
	December 31, 2024					December 31, 2024
GAAP Net income				$	4,134				$	127,581
Net unrealized investment losses (gains)	$	1,181				$	(2,644	)
Less: Tax effect at 25.041%	$	(296	)			$	662
Net adjustment to Net income				$	885				$	(1,982	)
Non-GAAP Adjusted Net income				$	5,019				$	125,599

HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share amounts)

A summary of the numerator and denominator of the basic and diluted earnings per common share calculated with the Non-GAAP financial measure Adjusted net income is presented below.

	Three Months Ended							Year Ended
Non-GAAP	December 31, 2024							December 31, 2024
	Income			Shares (a)		Per Share		Income			Shares (a)		Per Share
	(Numerator)			(Denominator)		Amount		(Numerator)			(Denominator)		Amount
Adjusted net income (non-GAAP)	$	5,019						$	125,599
Less: Net income attributable to redeemable noncontrolling interest		–						$	(10,149	)
Less: Net loss (income) attributable to noncontrolling interests		(1,550	)						(7,281	)
Net income attributable to HCI		3,469							108,169
Less: Income attributable to participating securities		(158	)						(4,043	)

Basic Earnings Per Share before unrealized gains/losses on equity securities:
Income allocated to common stockholders		3,311			10,143	$	0.33		104,126			9,997	$	10.42

Effect of Dilutive Securities: *
Stock options		—			323				—			294
Convertible senior notes		—			—				6,908			2,177
Warrants		—			143				—			218

Diluted Earnings Per Share before unrealized gains/losses on equity securities:
Income available to common stockholders and assumed conversions	$	3,311			10,609	$	0.31	$	111,034			12,686	$	8.75

(a) Shares in thousands.
*For the three months ended December 31, 2024, convertible senior notes were excluded due to anti-dilutive effect.

Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS

	Three Months Ended					Year Ended
	December 31, 2024					December 31, 2024
GAAP diluted Earnings Per Share				$	0.23				$	8.89
Net unrealized investment gains	$	0.10				$	(0.20	)
Less: Tax effect at 25.041%	$	(0.02	)			$	0.06
Net adjustment to GAAP diluted EPS				$	0.08				$	(0.14	)
Non-GAAP Adjusted diluted EPS				$	0.31				$	8.75

The MIL Network –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

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

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

Fourth Quarter 2024 – Financial Highlights (vs Q4 2023)

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

Recent Business Highlights

Sold Ergobaby for an enterprise value of $104 million on December 27, 2024
In Q4 2024 – raised ~$90 million via issuance of preferred shares
- More than $115 million for full year 2024
- Flexible, low-cost source of capital
In Q4 2024 – re-purchased more than 400,000 common shares
- Average price of $23.19 per share

In January 2025 – raised $300 million in incremental term loan A
- Initial funding of $200 million; additional $100 million available with six month delayed draw
- Matures in July 2027, consistent with existing term loan A

Fourth Quarter and Full Year 2024 Financial Results

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

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

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

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

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

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

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

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

Liquidity and Capital Resources

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

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

Fourth Quarter 2024 Distributions

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

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

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

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

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

2025 Outlook

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

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

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

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

Conference Call

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

Note Regarding Use of Non-GAAP Financial Measures

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

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

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

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

About Compass Diversified

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

Forward Looking Statements

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

Investor Relations

Compass Diversified
irinquiry@compassdiversified.com

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

Media Relations
Compass Diversified
mediainquiry@compassdiversified.com

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

Compass Diversified Holdings Condensed Consolidated Balance Sheets

(in thousands)	December 31, 2024		December 31, 2023

Assets
Current assets
Cash and cash equivalents	$	59,727	$	446,684
Accounts receivable, net		444,386		308,183
Inventories, net		962,408		723,194
Prepaid expenses and other current assets		101,129		88,844
Current assets of discontinued operations		—		36,915
Total current assets		1,567,650		1,603,820
Property, plant and equipment, net		244,746		191,283
Goodwill		982,253		859,907
Intangible assets, net		1,049,186		879,078
Other non-current assets		208,587		195,010
Non-current assets of discontinued operations		—		87,883
Total assets	$	4,052,422	$	3,816,981

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	104,304	$	91,089
Accrued expenses		197,829		151,443
Due to related parties		18,036		16,025
Current portion, long-term debt		15,000		10,000
Other current liabilities		49,617		34,812
Current liabilities of discontinued operations		—		8,986
Total current liabilities		384,786		312,355
Deferred income taxes		119,948		118,882
Long-term debt		1,759,290		1,661,879
Other non-current liabilities		225,334		203,207
Non-current liabilities of discontinued operations		—		1,277
Total liabilities		2,489,358		2,297,600
Stockholders’ equity
Total stockholders’ equity attributable to Holdings		1,296,793		1,326,750
Noncontrolling interest		266,271		175,875
Noncontrolling interest of discontinued operations		—		16,756
Total stockholders’ equity		1,563,064		1,519,381
Total liabilities and stockholders’ equity	$	4,052,422	$	3,816,981

Compass Diversified Holdings Consolidated Statements of Operations

	Three months ended December 31,						Year ended December 31,
(in thousands, except per share data)		2024			2023			2024			2023
Net revenues	$	620,255		$	544,915		$	2,198,233		$	1,965,017
Cost of revenues		349,238			312,972			1,197,873			1,132,014
Gross profit		271,017			231,943			1,000,360			833,003
Operating expenses:
Selling, general and administrative expense		166,256			140,831			587,520			502,013
Management fees		19,453			16,784			74,767			67,945
Amortization expense		24,735			22,088			99,760			88,396
Impairment expense		—			56,832			8,182			89,400
Operating income (loss)		60,573			(4,592	)		230,131			85,249
Other income (expense):
Interest expense, net		(29,189	)		(24,827	)		(106,683	)		(105,179	)
Amortization of debt issuance costs		(1,004	)		(1,004	)		(4,018	)		(4,038	)
Gain (loss) on sale of Crosman		—						(24,218	)		—
Other income (expense), net		412			(350	)		(3,902	)		1,779
Net income (loss) before income taxes		30,792			(30,773	)		91,310			(22,189	)
Provision for income taxes		8,567			6,290			49,012			22,639
Income (loss) from continuing operations		22,225			(37,063	)		42,298			(44,828	)
Income (loss) from discontinued operations, net of income tax		(7,006	)		(3,026	)		(6,905	)		24,208
Gain on sale of discontinued operations		8,612			179,530			11,957			283,025
Net income		23,831			139,441			47,350			262,405
Less: Net income (loss) attributable to noncontrolling interest		13,631			2,828			37,426			16,423
Less: Net income (loss) from discontinued operations attributable to noncontrolling interest		(1,721	)		(824	)		(2,884	)		(304	)
Net income attributable to Holdings	$	11,921		$	137,437		$	12,808		$	246,286

Basic income (loss) per common share attributable to Holdings
Continuing operations	$	(0.10	)	$	(0.75	)	$	(1.25	)	$	(1.81	)
Discontinued operations		0.04			2.45			0.11			4.27
	$	(0.06	)	$	1.70		$	(1.14	)	$	2.46

Basic weighted average number of common shares outstanding		75,505			72,429			75,454			72,105

Cash distributions declared per Trust common share	$	0.25		$	0.25		$	1.00		$	1.00

Compass Diversified Holdings Net Income to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA – 2024 (Unaudited)

	Three months ended												Year ended
(in thousands)	March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Net income (loss)	$	5,781		$	(13,723	)	$	31,461		$	23,831		$	47,350
Income (loss) from discontinued operations, net of tax		317			872			(1,088	)		(7,006	)		(6,905	)
Gain on sale of discontinued operations, net of tax		3,345			—			—			8,612			11,957
Net income (loss) from continuing operations	$	2,119		$	(14,595	)	$	32,549		$	22,225		$	42,298
Less: income from continuing operations attributable to noncontrolling interest		7,765			6,041			9,989			13,631			37,426
Net income (loss) attributable to Holdings – continuing operations	$	(5,646	)	$	(20,636	)	$	22,560		$	8,594		$	4,872
Adjustments:
Distributions paid – preferred shares		(6,045	)		(6,101	)		(6,345	)		(6,967	)		(25,458	)
Amortization expense – intangible assets and inventory step-up		27,116			26,642			24,956			26,341			105,055
Impairment expense		8,182			—			—			—			8,182
Loss (gain) on sale of Crosman		—			24,606			(388	)		—			24,218
Tax effect – loss on sale of Crosman		—			7,254			—			—			7,254
Non-controlling shareholder compensation		4,071			3,680			4,537			4,057			16,345
Acquisition expense		3,479			—			—			1,872			5,351
Integration services fee		—			875			875			875			2,625
Other		274			130			964			11,820			13,188
Adjusted earnings	$	31,431		$	36,450		$	47,159		$	46,592		$	161,632
Plus (less):
Depreciation expense		10,730			10,339			10,180			12,642			43,891
Income tax provision		9,996			19,830			10,619			8,567			49,012
Interest expense		23,575			26,561			27,358			29,189			106,683
Amortization of debt issuance costs		1,005			1,004			1,005			1,004			4,018
Income from continuing operations attributable to noncontrolling interest		7,765			6,041			9,989			13,631			37,426
Tax effect – loss on sale of Crosman		—			(7,254	)		—			—			(7,254	)
Preferred distributions		6,045			6,101			6,345			6,967			25,458
Other		2,879			1,375			60			(412	)		3,902
Adjusted EBITDA	$	93,426		$	100,447		$	112,715		$	118,180		$	424,768

Compass Diversified Holdings Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA – 2023 (Unaudited)

	Three months ended												Year ended
(in thousands)	March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			December 31, 2023
Net income (loss)	$	109,601		$	17,123		$	(3,760	)	$	139,441		$	262,405
Income (loss) from discontinued options, net of tax		10,939			5,437			10,858			(3,026	)		24,208
Gain on sale of discontinued operations, net of tax		97,989			4,232			1,274			179,530			283,025
Net income (loss) from continuing operations	$	673		$	7,454		$	(15,892	)	$	(37,063	)	$	(44,828	)
Less: income (loss) from continuing operations attributable to noncontrolling interest		4,398			3,428			5,769			2,828			16,423
Net income (loss) attributable to Holdings – continuing operations	$	(3,725	)	$	4,026		$	(21,661	)	$	(39,891	)	$	(61,251	)
Adjustments:
Distributions paid – preferred shares		(6,045	)		(6,046	)		(6,045	)		(6,045	)		(24,181	)
Amortization expense – intangible assets and inventory step-up		23,283			22,111			22,090			22,088			89,572
Impairment expense		—			—			32,568			56,832			89,400
Tax effect – impairment expense		—			—			(4,308	)		978			(3,330	)
Non-controlling interest – impairment expense		—			—			—			(5,382	)		(5,382	)
Non-controlling shareholder compensation		1,329			2,895			2,438			2,789			9,451
Integration services fee		1,187			1,188						—			2,375
Other		432			348			349			3,377			4,506
Adjusted earnings	$	16,461		$	24,522		$	25,431		$	34,746		$	101,160
Plus (less):
Depreciation expense		11,006			11,958			11,853			11,142			45,959
Income tax provision		7,471			4,421			4,457			6,290			22,639
Interest expense		26,180			26,613			27,559			24,828			105,180
Amortization of debt issuance costs		1,005			1,024			1,005			1,004			4,038
Income from continuing operations attributable to noncontrolling interest		4,398			3,428			5,769			2,828			16,423
Tax effect – impairment expense		—			—			4,308			(978	)		3,330
Non-controlling interest – impairment expense		—			—			—			5,382			5,382
Distributions paid – preferred shares		6,045			6,046			6,045			6,045			24,181
Other		(1,160	)		75			(1,044	)		349			(1,780	)
Adjusted EBITDA	$	71,406		$	78,087		$	85,383		$	91,636		$	326,512

Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Three Months Ended December 31, 2024 (Unaudited)

(in thousands)	Corporate				5.11		BOA			Lugano		PrimaLoft			THP			Velocity Outdoor			Altor Solutions			Arnold			Sterno			Consolidated
Net income (loss) from continuing operations	$	(8,045	)	$	2,040		$	4,543		$	35,133	$	(5,314	)	$	(1,997	)	$	(1,483	)	$	(441	)	$	(9,138	)	$	6,927		$	22,225
Adjusted for:
Provision (benefit) for income taxes		(2,095	)		(266	)		1,042			11,294		(2,010	)		(305	)		(264	)		(912	)		(196	)		2,280			8,568
Interest expense, net		29,134			(11	)		(5	)		—		(55	)		(24	)		(1	)		—			151			—			29,189
Intercompany interest		(41,740	)		3,252			4,409			15,596		4,390			2,725			1,635			5,159			1,808			2,766			—
Depreciation and amortization		51			5,536			5,343			2,763		5,331			4,163			1,363			9,303			2,511			3,623			39,987
EBITDA		(22,695	)		10,551			15,332			64,786		2,342			4,562			1,250			13,109			(4,864	)		15,596			99,969
Other (income) expense		—			(46	)		489			280		176			8			(1,177	)		24			—			(167	)		(413	)
Non-controlling shareholder compensation		—			499			1,331			775		559			517			(153	)		247			5			277			4,057
Acquisition expenses		—			—			—			—		—			—			—			1,872			—			—			1,872
Integration services fee		—			—			—			—		—			875			—			—			—			—			875
Other		—			—			—			—		—			—			1,500			696			9,546			78			11,820
Adjusted EBITDA	$	(22,695	)	$	11,004		$	17,152		$	65,841	$	3,077		$	5,962		$	1,420		$	15,948		$	4,687		$	15,784		$	118,180

Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Three Months Ended December 31, 2023 (Unaudited)

(in thousands)	Corporate					5.11			BOA			Lugano			PrimaLoft			Velocity Outdoor			Altor Solutions		Arnold			Sterno			Consolidated
Net income (loss) from continuing operations	$	(12,982	)		$	9,840			$	1,345		$	20,847		$	(64,383	)	$	(3,183	)	$	4,260	$	3,523		$	3,670		$	(37,063	)
Adjusted for:
Provision (benefit) for income taxes		301				1,004				639			4,293			(2,549	)		289			1,797		921			(406	)		6,289
Interest expense, net		24,732				(4	)			(9	)		—			(2	)		120			—		(11	)		—			24,826
Intercompany interest		(33,291	)			4,546				2,548			10,177			4,780			3,440			2,303		1,728			3,769			—
Depreciation and amortization		366				6,143				5,496			2,258			5,394			3,259			4,183		2,193			4,943			34,235
EBITDA		(20,874	)			21,529				10,019			37,575			(56,760	)		3,925			12,543		8,354			11,976			28,287
Other (income) expense		(1	)	—		(412	)	—		(19	)		(75	)		(66	)		(31	)		1,239		(4	)		(280	)		351
Non-controlling shareholder compensation		—				203				950			162			761			228			186		1			298			2,789
Impairment expense		—				—				—			—			57,810			(978	)		—		—			—			56,832
Other		—				—				3,072			—			—			—			—		—			305			3,377
Adjusted EBITDA	$	(20,875	)		$	21,320			$	14,022		$	37,662		$	1,745		$	3,144		$	13,968	$	8,351		$	12,299		$	91,636

Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Year ended December 31, 2024 (Unaudited)

(in thousands)	Corporate				5.11		BOA			Lugano		PrimaLoft			THP			Velocity Outdoor			Altor Solutions		Arnold			Sterno			Consolidated
Net income (loss) from continuing operations	$	(35,634	)	$	20,634		$	20,791		$	94,390	$	(10,575	)	$	(9,761	)	$	(54,851	)	$	5,635	$	(2,969	)	$	14,638		$	42,298
Adjusted for:
Provision (benefit) for income taxes		(2,095	)		4,526			4,962			31,304		(3,741	)		(2,894	)		6,810			2,280		2,986			4,874			49,012
Interest expense, net		106,414			(14	)		(21	)		3		(70	)		(52	)		52			—		371			—			106,683
Intercompany interest		(157,585	)		13,366			20,125			56,013		17,916			10,552			9,255			10,771		7,121			12,466			—
Depreciation and amortization		677			22,734			21,594			10,334		21,318			18,974			8,042			21,553		9,265			18,473			152,964
EBITDA		(88,223	)		61,246			67,451			192,044		24,848			16,819			(30,692	)		40,239		16,774			50,451			350,957
Other (income) expense		462			40			511			219		181			3			24,557			2,746		(9	)		(590	)		28,120
Non-controlling shareholder compensation		—			2,129			5,683			2,437		2,382			1,674			403			988		18			631			16,345
Impairment expense		—			—			—			—		—						8,182			—		—			—			8,182
Acquisition expenses		—			—			—			—		—			3,479			—			1,872		—			—			5,351
Integration services fee		—			—			—			—		—			2,625			—			—		—			—			2,625
Other		—			—			—			—		—			90			1,500			696		10,426			476			13,188
Adjusted EBITDA	$	(87,761	)	$	63,415		$	73,645		$	194,700	$	27,411		$	24,690		$	3,950		$	46,541	$	27,209		$	50,968		$	424,768

Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Year ended December 31, 2023 (Unaudited)

(in thousands)	Corporate				5.11		BOA			Lugano			PrimaLoft			Velocity Outdoor			Altor Solutions		Arnold			Sterno			Consolidated
Net income (loss) from continuing operations	$	(60,454	)	$	21,690		$	16,496		$	52,315		$	(69,883	)	$	(40,045	)	$	16,504	$	10,434		$	8,115		$	(44,828	)
Adjusted for:
Provision (benefit) for income taxes		301			4,994			2,863			14,589			(5,673	)		(5,616	)		5,890		4,185			1,106			22,639
Interest expense, net		104,855			(8	)		(18	)		4			(11	)		352			—		5			—			105,179
Intercompany interest		(126,240	)		20,244			7,580			32,837			18,123			13,510			10,486		6,806			16,654			—
Depreciation and amortization		1,498			26,009			22,932			9,229			21,478			13,282			16,741		8,441			19,959			139,569
EBITDA		(80,040	)		72,929			49,853			108,974			(35,966	)		(18,517	)		49,621		29,871			45,834			222,559
Other (income) expense		(128	)		(515	)		98			(80	)		62			(1,210	)		1,440		(5	)		(1,441	)		(1,779	)
Non-controlling shareholder compensation		—			1,191			3,019			1,474			980			914			986		27			860			9,451
Impairment expense		—			—			—			—			57,810			31,590			—		—			—			89,400
Integration services fee		—			—			—			—			2,375			—			—		—			—			2,375
Other		—			—			3,072			—			—			—			—		—			1,434			4,506
Adjusted EBITDA	$	(80,168	)	$	73,605		$	56,042		$	110,368		$	25,261		$	12,777		$	52,047	$	29,893		$	46,687		$	326,512

Compass Diversified Holdings Adjusted EBITDA (Unaudited)

	Three months ended December 31,						Year ended December 31,
(in thousands)		2024			2023			2024			2023

Branded Consumer
5.11	$	11,004		$	21,320		$	63,415		$	73,605
BOA		17,152			14,022			73,645			56,042
Lugano		65,841			37,662			194,700			110,368
PrimaLoft		3,077			1,745			27,411			25,261
The Honey Pot Co. ⁽¹⁾		5,962			—			24,690			—
Velocity Outdoor		1,420			3,144			3,950			12,777
Total Branded Consumer	$	104,456		$	77,893		$	387,811		$	278,053

Industrial
Altor Solutions	$	15,948		$	13,968		$	46,541		$	52,047
Arnold Magnetics		4,687			8,351			27,209			29,893
Sterno		15,784			12,299			50,968			46,687
Total Industrial	$	36,419		$	34,618		$	124,718		$	128,627
Corporate expense		(22,695	)		(20,874	)		(87,761	)		(80,168	)
Total Adjusted EBITDA	$	118,180		$	91,637		$	424,768		$	326,512

(1	)		The above results for The Honey Pot Co. do not include management’s estimate of Adjusted EBITDA, before the Company’s ownership of $3.9 million for the year ended December 31, 2024, and $7.8 million and $28.7 million, respectively, for the three months and year ended December 31, 2023. The Honey Pot Co. was acquired on January 31, 2024.

Compass Diversified Holdings Net Sales to Pro Forma Net Sales Reconciliation (unaudited)

	Three months ended December 31,				Year ended December 31,
(in thousands)		2024		2023		2024		2023

Net Sales	$	620,255	$	544,915	$	2,198,233	$	1,965,017
Acquisitions ⁽¹⁾		—		24,905		10,671		107,311
Pro Forma Net Sales	$	620,255	$	569,820	$	2,208,904	$	2,072,328

(1	)		Acquisitions reflects the net sales for The Honey Pot Co. on a proforma basis as if we had acquired this business on January 1, 2023.

Compass Diversified Holdings Subsidiary Pro Forma Net Sales (unaudited)

	Three months ended December 31,				Year ended December 31,
(in thousands)		2024		2023		2024		2023

Branded Consumer
5.11	$	144,768	$	147,394	$	532,161	$	533,089
BOA		48,141		42,435		190,811		155,825
Lugano		149,685		104,750		470,666		308,321
PrimaLoft		12,708		9,434		74,226		67,053
The Honey Pot ⁽¹⁾		28,697		24,905		115,260		107,311
Velocity Outdoor		19,008		45,842		96,427		172,190
Total Branded Consumer	$	403,007	$	374,760	$	1,479,551	$	1,343,789

Industrial
Altor Solutions		81,322		56,417		239,068		238,030
Arnold Magnetics		41,292		44,632		171,837		166,679
Sterno		94,634		94,011		318,448		323,830
Total Industrial	$	217,248	$	195,060	$	729,353	$	728,539

Total Subsidiary Net Sales	$	620,255	$	569,820	$	2,208,904	$	2,072,328

(1	)		Net sales for The Honey Pot are pro forma as if we had acquired this business on January 1, 2023.

Compass Diversified Holdings
Condensed Consolidated Cash Flows

	Three months ended December 31,						Year ended December 31,
(in thousands)		2024			2023			2024			2023

Net cash provided by (used in) operating activities	$	9,974		$	21,128		$	(67,636	)	$	78,080
Net cash provided by (used in) investing activities		(70,199	)		466,213			(422,450	)		570,503
Net cash provided by (used in) financing activities		49,732			(102,236	)		100,614			(260,163	)
Foreign currency impact on cash		(1,727	)		636			(1,278	)		786
Net increase (decrease) in cash and cash equivalents		(12,220	)		385,741			(390,750	)		389,206
Cash and cash equivalents – beginning of the period⁽¹⁾		71,947			64,736			450,477			61,271
Cash and cash equivalents – end of the period	$	59,727		$	450,477		$	59,727		$	450,477

(1	)		Includes cash from discontinued operations of $3.8 million at January 1, 2024 and $8.5 million at January 1, 2023.

Compass Diversified Holding
Selected Financial Data – Cash Flows

	Three months ended December 31,						Year ended December 31,
(in thousands)		2024			2023			2024			2023

Changes in operating assets and liabilities	$	(37,286	)	$	(24,390	)	$	(292,884	)	$	(160,281	)
Purchases of property and equipment	$	(22,858	)	$	(17,239	)	$	(56,701	)	$	(55,016	)
Distributions paid – common shares	$	(18,913	)	$	(17,955	)	$	(75,490	)	$	(71,967	)
Distributions paid – preferred shares	$	(6,967	)	$	(6,045	)	$	(25,458	)	$	(24,181	)

The MIL Network –

February 28, 2025

MIL-OSI: Intchains Group Limited Reports Fourth Quarter and Full Year 2024 Unaudited Financial Results

Source: GlobeNewswire (MIL-OSI)

NEW YORK, Feb. 27, 2025 (GLOBE NEWSWIRE) — Intchains Group Limited (Nasdaq: ICG) (“we,” or the “Company”), a company that engages in the provision of altcoin mining products, the strategic acquisition and holding of Ethereum-based cryptocurrencies, and the active development of innovative Web3 applications, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Operating and Financial Highlights

Sales Volume of Altcoin Mining Products Measured by Number of Embedded ASIC Chips: Since we offer a wide range of altcoin mining products, with each unit incorporating anywhere from tens to thousands of ASIC chips, it is more meaningful to measure the sales of our altcoin mining products by the number of embedded ASIC chips. Our sales volume of ASIC chips for Q4 2024 was 1,705,408 units, compared to 423,040 units for the same period last year, representing an increase of 303.1%.
Revenue: Our revenue for Q4 2024 reached RMB74.2 million (US$10.2 million), reflecting a significant increase of 109.2% from RMB35.5 million for the same period of 2023. For the fourth quarter of 2024, revenue derived from mainland China and overseas countries and regions accounted for 67.0% and 33.0% of our total revenue, respectively.
Net Income: Our net income for Q4 2024 was RMB12.8 million (US$1.8 million), reflecting an increase of 58.2% from RMB8.1 million for the same period in 2023.
Non-GAAP Adjusted Net Income: Non-GAAP adjusted net income in the fourth quarter of 2024 was RMB14.8 million (US$2.0 million), reflecting an increase of 54.2% from RMB9.6 million for the same period in 2023. Non-GAAP adjusted net income excludes share-based compensation expenses. For further information, please refer to “Use of Non-GAAP Financial Measures” in this press release.
Cryptocurrency Assets: As of December 31, 2024, the fair value of our cryptocurrency assets other than stablecoins such as USDT and USDC was RMB148.8 million (US$20.4 million), primarily comprised of approximately 5,702 ETH-based cryptocurrencies, valued at RMB141.2 million (US$19.3 million).

Full Year 2024 Operating and Financial Highlights

Sales Volume of Altcoin Mining Products Measured by Number of Embedded ASIC Chips: Our sales volume of ASIC chips achieved 2,681,500 units for the year ended December 31, 2024, representing a year-over-year increase of 84.0% from 1,457,373 units for 2023.
Revenue: Our revenue was RMB281.8 million (US$38.6 million) for the year ended December 31, 2024, representing a year-over-year increase of 242.7% from RMB82.2 million for 2023. For the year ended December 31, 2024, revenue derived from mainland China and overseas countries and regions accounted for 45.5% and 54.5% of our total revenue, respectively.
Net Income: Our net income was RMB51.5 million (US$7.1 million) for the year ended December 31, 2024, compared to a net loss of RMB26.8 million for 2023.
Non-GAAP Adjusted Net Income: Non-GAAP adjusted net income for the year ended December 31, 2024 was RMB60.5 million (US$8.3 million), compared to a net loss of RMB23.3 million for 2023. Non-GAAP adjusted net income excludes share-based compensation expenses. For further information, please refer to “Use of Non-GAAP Financial Measures” in this press release.

Intchains Group Achieves Milestones in Innovative Solutions and Cryptocurrency Strategy

Mr. Qiang Ding, Chairman of the Board of Directors and Chief Executive Officer, commented, “The cryptocurrency market showed strong performance in Q4 2024, with growing optimism from major financial institutions about its prospects for 2025. Riding this momentum, Dogecoin saw solid price growth during the quarter. As a leading supplier of Dogecoin mining machines, the Company also delivered satisfactory operational results in Q4 2024. The growth rate of net profit in Q4 was slower than that of revenue, primarily due to the Company’s research and development expenses for the launch of new projects in 2025. the Company expects that the increased investment in research and development will better drive the Company’s operational performance in 2025. Throughout this quarter, the Company continued its Ethereum treasury strategy, increasing its ETH holdings by 37% compared to Q3 2024 in terms of units of ETH held at the end of the quarter, The combination of rising Ethereum prices and an expanded ETH portfolio had a positive impact on net profit, further strengthening the company’s financial position.

Looking ahead to 2025, the Company remains committed to expanding its presence in altcoin development. In February 2025, the Company introduced the AE BOX series of mining products, positioning itself as an early mover in Aleo mining. The Company will also continue upgrading its Dogecoin mining machines, reinforcing its industry leadership. Additionally, it will maintain its Ethereum treasury strategy throughout the year. On the application front, the Company took a significant step in Web3 payments with the launch of Goldshell Wallet in February 2025. This expansion reflects the Company’s commitment to broadening its Web3 ecosystem.”

Fourth Quarter 2024 Financial Results

Revenue

Revenue was RMB74.2 million (US$10.2 million) for the fourth quarter of 2024, representing an increase of 109.2% from RMB35.5 million for the same period in 2023. The substantial growth was primarily driven by a significant increase in demand for our altcoin mining products, fueled by improved cryptocurrency market performance.

Cost of Revenue

Cost of revenue was RMB54.8 million (US$7.5 million) for the fourth quarter of 2024, representing an increase of 287.4% from RMB14.1 million for the same period of 2023. The percentage increase in cost of revenue was higher than the percentage increase in our revenue, which was primarily due to the lower gross margins for the series of mining products we primarily sold in the fourth quarter of 2024, compared to the same period last year.

Operating Expenses

Total operating expenses were RMB56.0million (US$7.7 million) for the fourth quarter of 2024, representing an increase of 145.8% from RMB22.8 million for the same period of 2023. The increase was primarily due to an increase in research and development expenses.

Research and development expenses increased by 228.7% to RMB45.9 million (US$6.3 million) for the fourth quarter of 2024 from RMB14.0 million for the same period of 2023. The increase was primarily due to higher expenses related to preliminary research costs conducted for new projects, as well as increased personnel-related expenses.
Sales and marketing expenses increased by 62.1% to RMB2.9 million (US$0.4 million) for the fourth quarter of 2024 from RMB1.8 million for the same period of 2023, mainly driven by increased personnel-related expenses.
General and administrative expenses remained relatively steady at RMB7.0 million and RMB7.2 million (US$1.0 million), respectively, for the fourth quarter of 2023 and 2024.

Interest Income

Interest income decreased by 11.1% to RMB3.8 million (US$0.5 million) for the fourth quarter of 2024 from RMB4.2 million for the same period of 2023, mainly due to a reduced cash balance resulting from our strategy of using part of our operating cash flow to acquire and hold ETH-based cryptocurrencies.

Gain on fair value of cryptocurrency, net

Gain on fair value of cryptocurrency, net, for the fourth quarter of 2024 was RMB29.2 million (US$4.0 million), compared to nil in the same period of 2023. The gain was primarily due to an approximately 31.5% increase in the price of ETH and an approximately 37.4% increase in the number of ETH-based cryptocurrency units held from the end of the third quarter of 2024 to the end of the fourth quarter of 2024.

Other Income, Net

Other income, net, decreased by 29.8% to RMB5.2 million (US$0.7 million) for the fourth quarter of 2024 from RMB7.5 million for the same period of 2023, primarily due to the decrease in grants received from the local government, which have no repayment obligations.

Net Income

As a result of the foregoing, our net income increased by 58.2% to RMB12.8 million (US$1.8 million) for the fourth quarter of 2024 from RMB8.1 million for the same period of 2023.

Non-GAAP Adjusted Net Income

Non-GAAP adjusted net income increased by 54.2% to RMB14.8 million (US$2.0 million) for the fourth quarter of 2024 from RMB9.6 million for the same period of 2023.

Basic and Diluted Net Earnings Per Ordinary Share

Basic and diluted net earnings per ordinary share both increased by 57.1% to RMB0.11 (US$0.01) for the fourth quarter of 2024 from RMB0.07 for the same period of 2023.

Non-GAAP Basic and Diluted Net Earnings Per Ordinary Share

Non-GAAP adjusted basic and diluted net earnings per ordinary share increased by 50.2% to RMB0.12 (US$0.02) for the fourth quarter of 2024 from RMB0.08 for the same period of 2023. Each ADS represents two of the Company’s Class A ordinary shares.

Full Year 2024 Financial Results

Revenue

Revenue was RMB281.8 million (US$38.6 million) in 2024, representing an increase of 242.7% from RMB82.2 million in 2023. The substantial growth was primarily driven by a significant increase in the average selling price of our new products launched in March 2024, compared to older products, as well as improved cryptocurrency market performance, which led to higher demand for our products.

Cost of Revenue

Cost of revenue was RMB130.5 million (US$17.9 million) for the year ended December 31, 2024, representing an increase of 78.3% from RMB73.1 million for 2023. The percentage increase in cost of revenue was substantially lower than the percentage increase in our revenue, which was primarily due to the higher gross margins for our new products launched in March 2024 compared to the older products.

Operating Expenses

Total operating expenses were RMB148.2 million (US$20.3 million) for 2024, representing an increase of 100.1% from RMB74.0 million for 2023. The increase was primarily due to an increase in research and development expenses.

Research and development expenses increased by 158.7% to RMB109.4 million (US$15.0 million) for 2024 from RMB42.3 million for 2023. The increase was primarily due to more products launched in 2024, as well as increased personnel-related expenses.
Sales and marketing expenses increased by 29.6% to RMB8.5 million (US$1.2 million) for 2024 from RMB6.5 million for 2023, mainly driven by increased personnel-related expenses.
General and administrative expenses increased by 20.0% to RMB30.2 million (US$4.1 million) for 2024 from RMB25.2 million for 2023, primarily due to increased personnel-related expenses and increased amortization expenses of trademarks.

Interest Income

Interest income remained relatively steady at RMB16.8 million and RMB16.2 million (US$2.2 million), respectively, for the year ended December 31, 2023 and 2024.

Gain on fair value of cryptocurrency, net

Gain on fair value of cryptocurrency, net, for 2024 was RMB21.3 million (US$2.9 million), compared to nil for 2023. The gain was primarily due to ETH closing price rising approximately 48.6% from the end of 2023 to the end of 2024, as well as units of ETH-based cryptocurrencies held increased from approximately 60 from the end of 2023 to 5,702 from the end of 2024.

Other Income, Net

Other income, net, decreased by 38.7% to RMB8.1 million (US$1.1 million) for 2024 from RMB13.2 million for 2023, primarily due to the decrease in grants received from the local government, which have no repayment obligations.

Net Income/(loss)

As a result of the foregoing, we recorded a net income of RMB51.5 million (US$7.1 million) for the year ended December 31, 2024, compared to a net loss of RMB26.8 million for the year ended December 31, 2023.

Basic and Diluted Net Earnings/(Losses) Per Ordinary Share

Basic and diluted net earnings per ordinary share were both RMB0.43 (US$0.06) for the year ended December 31, 2024, compared to basic and diluted net loss per ordinary share of RMB0.22 for the year ended December 31, 2023.

Non-GAAP Basic and Diluted Net Earnings/(Losses) Per Ordinary Share

Non-GAAP adjusted basic and diluted net income per ordinary share was RMB0.50 (US$0.07) for the year ended December 31, 2024, compared to Non-GAAP adjusted basic and diluted net loss per ordinary share of RMB0.20 for the year ended December 31, 2023. Each ADS represents two of the Company’s Class A ordinary shares.

Recent Development

Aleo Mining: On February 7, 2025, the Company launched AE BOX series of cutting-edge mining products for Aleo, establishing itself as a pioneer in Aleo mining solutions. This marks the Company’s first venture into the zero-knowledge proof sector, further reinforcing its deep expertise and innovation in the altcoin space.

Goldshell Wallet: On February 26, 2025, the Company introduced the Goldshell Wallet, an air-gapped, triple-secured wallet designed for maximum security and seamless user experience. Currently in their trial stage, Goldshell Wallet is not expected to contribute materially to our profits during this phase. However, we believe they represent an important step toward becoming a company with a stable application development pipeline and the ability to navigate across the crypto cycle.

Conference Call Information

The Company’s management team will host an earnings conference call to discuss its financial results at 8:00 PM U.S. Eastern Time on February 27, 2025 (9:00 AM Beijing Time on February 28, 2025). Details for the conference call are as follows:

All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of dial-in numbers and a personal access PIN, which will be used to join the conference call.

Additionally, a live and archived webcast of the conference call will also be available at the Company’s website at https://intchains.com/.

About Intchains Group Limited

Intchains Group Limited is a company that engages in the provision of altcoin mining products, the strategic acquisition and holding of Ethereum-based cryptocurrencies, and the active development of innovative Web3 applications. For more information, please visit the Company’s website at: https://intchains.com/.

Exchange Rate Information

The unaudited United States dollar (“US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers. Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the noon buying rate of US$1.00=RMB7.2993 on the last trading day of the fourth quarter of 2024 (December 31, 2024). No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about: (i) our goals and strategies; (ii) our future business development, formed condition and results of operations; (iii) expected changes in our revenue, costs or expenditures; (iv) growth of and competition trends in our industry; (v) our expectations regarding demand for, and market acceptance of, our products; (vi) general economic and business conditions in the markets in which we operate; (vii) relevant government policies and regulations relating to our business and industry; (viii) fluctuations in the market price of ETH-based cryptocurrencies; gains or losses from the sale of ETH-based cryptocurrencies; changes in accounting treatment for the Company’s ETH-based cryptocurrencies holdings; a decrease in liquidity in the markets in which ETH-based cryptocurrencies are traded; security breaches, cyberattacks, unauthorized access, loss of private keys, fraud, or other events leading to the loss of the Company’s ETH-based cryptocurrencies; impacts to the price and rate of adoption of ETH-based cryptocurrencies associated with financial difficulties and bankruptcies of various participants in the industry; and (viii) assumptions underlying or related to any of the foregoing. Investors can identify these forward-looking statements by words or phrases such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

Use of Non-GAAP Financial Measures

In evaluating Company’s business, the Company uses non-GAAP measures, such as adjusted income (loss) from operations and adjusted net income (loss), as supplemental measures to review and assess its operating performance. The Company defines adjusted income (loss) from operations as income (loss) from operations excluding share-based compensation expenses, and adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. The Company believes that the non-GAAP financial measures provide useful information about the Company’s results of operations, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools and investors should not consider them in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP. One of the key limitations of using adjusted net income is that it does not reflect all of the items of income and expense that affect the Company’s operations. Share-based compensation expenses have been and may continue to be incurred in Company’s business and are not reflected in the presentation of adjusted net income. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For investor and media inquiries, please contact:

Intchains Group Limited

Investor relations
Email: ir@intchains.com

Redhill

Belinda Chan
Tel: +852-9379-3045
Email: belinda.chan@creativegp.com


INTCHAINS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share and per share data, or as otherwise noted)

	As of December 31,
	2023		2024
	RMB		RMB		US$
ASSETS
Current Assets：
Cash and cash equivalents	694,750		322,252		44,148
USDC	—		1,690		232
Cryptocurrency-current	—		30,079		4,121
Inventories, net	41,767		98,614		13,510
Prepayments and other current assets, net	47,403		69,703		9,549
Short-term investments	13,596		198,562		27,203
Total current assets	797,516		720,900		98,763
Non-current Assets:
Cryptocurrency-non-current	645		148,790		20,384
Long-term investments	—		20,569		2,818
Property, equipment, and software, net	49,184		157,065		21,518
Intangible assets, net	3,425		3,552		487
Right-of-use assets	1,735		272		37
Deferred tax assets	12,899		28,942		3,965
Prepayments on long-term assets	113,425		—		—
Other non-current assets	421		9,419		1,290
Total non-current assets	181,734		368,609		50,499
Total assets	979,250		1,089,509		149,262
LIABILITIES, AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	195		14,847		2,034
Contract liabilities	9,828		37,447		5,129
Income tax payable	1,634		2,023		277
Lease liabilities	1,103		272		37
Provision for warranty	40		161		22
Accrued liabilities and other current liabilities	15,364		21,692		2,971
Total current liabilities	28,164		76,442		10,470
Non-current Liabilities:
Deferred tax liabilities	—		—		—
Lease liabilities	761		—		—
Total non-current liabilities	761		—		—
Total liabilities	28,925		76,442		10,470
Shareholders’ Equity:
Ordinary shares (US$0.000001 par value; 50,000,000,000 shares authorized, 119,876,032 and 120,081,456 shares issued, 119,876,032 and 119,962,962 shares outstanding as of December 31, 2023 and December 31, 2024, respectively)	1		1		—
Subscriptions receivable from shareholders	(1	)	(1	)	—
Additional paid-in capital	186,262		195,236		26,747
Statutory reserve	48,265		51,762		7,091
Accumulated other comprehensive income	1,838		3,777		518
Retained earnings	713,960		762,292		104,436
Total equity	950,325		1,013,067		138,792
Total liabilities and shareholders’ equity	979,250		1,089,509		149,262

INTCHAINS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(All amounts in thousands, except share and per share data, or as otherwise noted)

	For the Three Months ended December 31,
	2023		2024
	RMB		RMB		US$
Products revenue	35,454		74,177		10,162
Cost of revenue	(14,132	)	(54,752	)	(7,501	)
Gross profit	21,322		19,425		2,661
Operating expenses:
Research and development expenses	(13,962	)	(45,887	)	(6,286	)
Sales and marketing expenses	(1,787	)	(2,897	)	(397	)
General and administrative expenses	(7,040	)	(7,237	)	(991	)
Total operating expenses	(22,789	)	(56,021	)	(7,674	)
Loss from operations	(1,467	)	(36,596	)	(5,013	)
Interest income	4,248		3,778		518
Foreign exchange gains/(losses), net	(971	)	2,264		310
Gain on fair value of cryptocurrency, net	—		29,228		4,004
Other income, net	7,458		5,237		717
Income before income tax expenses	9,268		3,911		536
Income tax (expense)/benefit	(1,190	)	8,870		1,215
Net Income	8,078		12,781		1,751
Foreign currency translation adjustment, net of nil tax	(826	)	4,127		565
Total comprehensive income	7,252		16,908		2,316

Weighted average number of shares used in per share calculation
— Basic	119,876,032		119,962,962		119,962,962
— Diluted	119,921,358		119,980,895		119,980,895
Net earnings per share
— Basic	0.07		0.11		0.01
— Diluted	0.07		0.11		0.01

INTCHAINS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(All amounts in thousands, except share and per share data, or as otherwise noted)

	For the Year ended December 31,
	2023		2024
	RMB		RMB		US$
Products revenue	82,225		281,767		38,602
Cost of revenue	(73,147	)	(130,452	)	(17,872	)
Gross profit	9,078		151,315		20,730
Operating expenses:
Research and development expenses	(42,304	)	(109,443	)	(14,994	)
Sales and marketing expenses	(6,532	)	(8,468	)	(1,160	)
General and administrative expenses	(25,210	)	(30,248	)	(4,144	)
Total operating expenses	(74,046	)	(148,159	)	(20,298	)
Income/(loss) from operations	(64,968	)	3,156		432
Interest income	16,750		16,235		2,224
Foreign exchange gains/(losses), net	(524	)	1,382		189
Gain on fair value of cryptocurrency, net	—		21,322		2,921
Other income, net	13,191		8,082		1,107
Income/(loss) before income tax expenses	(35,551	)	50,177		6,873
Income tax benefit	8,756		1,320		181
Net Income/(loss)	(26,795	)	51,497		7,054
Foreign currency translation adjustment, net of nil tax	1,838		1,939		266
Total comprehensive income/(loss)	(24,957	)	53,436		7,320

Weighted average number of shares used in per share calculation
— Basic	119,387,937		119,932,051		119,932,051
— Diluted	119,387,937		120,011,806		120,011,806
Net earnings/(losses) per share
— Basic	(0.22	)	0.43		0.06
— Diluted	(0.22	)	0.43		0.06

INTCHAINS GROUP LIMITED
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except per share data)

	For the Three Months ended December 31,
	2023		2024
	RMB		RMB		US$
Loss from operations	(1,467	)	(36,596	)	(5,013	)
Add:
Share-based compensation expense	1,501		1,992		273
Non-GAAP adjusted operating income/(loss)	34		(34,604	)	(4,740	)
Net income	8,078		12,781		1,751
Add:
Share-based compensation expense	1,501		1,992		273
Non-GAAP adjusted net income	9,579		14,773		2,024

Non-GAAP adjusted net earnings per share
— Basic	0.08		0.12		0.02
— Diluted	0.08		0.12		0.02

INTCHAINS GROUP LIMITED
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except per share data)

	For the Year ended December 31,
	2023		2024
	RMB		RMB	US$
Income/(loss) from operations	(64,968	)	3,156	432
Add:
Share-based compensation expense	3,474		8,973	1,229
Non-GAAP adjusted operating income/(loss)	(61,494	)	12,129	1,661
Net income/(loss)	(26,795	)	51,497	7,054
Add:
Share-based compensation expense	3,474		8,973	1,229
Non-GAAP adjusted net income/(loss)	(23,321	)	60,470	8,283

Non-GAAP adjusted net earnings/(losses) per share
— Basic	(0.20	)	0.50	0.07
— Diluted	(0.20	)	0.50	0.07

INTCHAINS GROUP LIMITED
UNAUDITED CRYPTOCURRENCY-ADDITIONAL INFORMATION

As of Quarter Ended	Cryptocurrency	Approximate Number of Cryptocurrency Held at End of Quarter	Original Cost Basis	Approximate Average Cost Price Per Unit of Cryptocurrency	Lowest Market Price Per Unit of Cryptocurrency During Quarter (a)	Market Value of Cryptocurrency Held at End of Quarter Using Lowest Market Price (b)	Highest Market Price Per Unit of Cryptocurrency During Quarter (c)	Market Value of Cryptocurrency Held at End of Quarter Using Highest Market Price (d)	Market Price Per Unit of Cryptocurrency at End of Quarter (e)	Market Value of Cryptocurrency Held at End of Quarter Using Ending Market Price (f)
		Unit	USD	USD	USD	USD	USD	USD	USD	USD
December 31, 2024	ETH	5,075	15,102,524	2,976	2,309	11,718,175	4,109	20,853,175	3,414	17,326,050
	ETH-Coinbase Staked	627	1,800,713	2,872	2,487	1,559,349	4,450	2,790,150	3,701	2,320,527
	Bitcoin	10.29	720,567	70,026	58,864	605,711	108,389	1,115,323	95,285	980,483
	USDT&USDC	4,425,484	4,428,159	1	1	4,384,335	1	4,469,357	1	4,419,574
	Others	Multiple *	78,298	Multiple *	Multiple *	30,694	Multiple *	101,589	Multiple *	69,389
	Total		22,130,261			18,298,264		29,329,594		25,116,023

September 30, 2024	ETH	3,522	10,115,116	2,872	2,116	7,452,552	3,563	12,548,886	2,596	9,143,112
	ETH-Coinbase Staked	627	1,800,713	2,872	2,290	1,435,830	3,926	2,461,602	2,807	1,759,989
	Bitcoin	8.47	549,364	64,860	49,050	415,454	70,000	592,900	63,552	538,285
	USDT&USDC	9,847,687	9,849,266	1	1	9,814,682	1	9,857,395	1	9,845,929
	Others	Multiple *	105,405	Multiple *	Multiple *	36,415	Multiple *	72,441	Multiple *	53,661
	Total		22,419,864			19,154,933		25,533,224		21,340,976

June 30, 2024	ETH	1,937	6,179,744	3,190	2,814	5,450,718	3,974	7,697,638	3,394	6,574,178
	ETH-Coinbase Staked	480	1,301,108	2,711	2,954	1,417,920	4,243	2,036,640	3,645	1,749,600
	Bitcoin	3.95	265,883	67,312	56,500	223,175	72,777	287,469	61,613	243,371
	USDT&USDC	10,422,648	10,423,276	1	1	10,386,315	1	10,458,980	1	10,404,063
	Others	Multiple *	107,484	Multiple *	Multiple *	54,226	Multiple *	122,435	Multiple *	64,202
	Total		18,277,495			17,532,354		20,603,162		19,035,414

March 31, 2024	ETH	346	999,180	2,888	2,100	726,600	4,094	1,416,524	3,618	1,251,828
	ETH-Coinbase Staked	479	1,297,687	2,709	2,236	1,071,044	4,341	2,079,339	3,842	1,840,318
	Bitcoin	0.67	44,995	67,157	38,501	25,796	73,836	49,470	70,407	47,173
	USDT&USDC	99,583	99,583	1	1	99,583	1	99,583	1	99,583
	Others	Multiple *	81,571	Multiple *	Multiple *	67,814	Multiple *	124,481	Multiple *	91,346
	Total		2,523,016			1,990,837		3,769,397		3,330,248

^{* The ‘Others’ category encompasses various cryptocurrencies that are not reported individually due to their lower significance. This category is labeled as ‘Multiple’ to indicate the presence of diverse prices associated with different type of cryptocurrency. Due to their immaterial nature, detailed price listings are not provided.}
^{(a) The “Lowest Market Price Per Unit of Cryptocurrency During Quarter” represents the lowest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter, without regard to when we obtained any of the cryptocurrency.}
^{(b) The “Market Value of Cryptocurrency Held at End of Quarter Using Lowest Market Price” represents a mathematical calculation consisting of the lowest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter multiplied by the number of cryptocurrency we held at the end of the applicable period.}
^{(c) The “Highest Market Price Per Unit of Cryptocurrency During Quarter” represents the highest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter, without regard to when we obtained any of the cryptocurrency.}
^{(d) The “Market Value of Cryptocurrency Held at End of Quarter Using Highest Market Price” represents a mathematical calculation consisting of the highest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter multiplied by the number of cryptocurrency we held at the end of the applicable period.}
^{(e) The “Market Price Per Unit of Cryptocurrency at End of Quarter” represents the market price of a single unit of cryptocurrency on the Coinbase exchange at midnight UTC+8 time on the last day of the respective quarter, which aligns with the our revenue recognition cut-off.}
^{(f) The “Market Value of Cryptocurrency Held at End of Quarter Using Ending Market Price” represents a mathematical calculation consisting of the market price of a single unit of cryptocurrency on the Coinbase exchange at midnight UTC+8 time on the last day of the respective quarter multiplied by the number of cryptocurrency we held at the end of the applicable period.}

The MIL Network –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

Cash Generation of $34 million in Q4 after safe harbor equipment purchases, third consecutive quarter of positive Cash Generation

Paid down $132 million of recourse debt in Q4 with excess cash

Cash Generation guidance of $200 million to $500 million in 2025

Cash Generation guidance of $40 to $50 million in Q1

Net Earning Assets increased to $6.8 billion, including $947 million of Total Cash

Storage Capacity Installed of 392 Megawatt hours in Q4, exceeding high-end of guidance range and representing 78% year-over-year growth, as storage attachment rates reach 62%

Solar Energy Capacity Installed of 242 Megawatts in Q4, within the guidance range, reaching 7.5 Gigawatts of Networked Solar Energy Capacity

SAN FRANCISCO, Feb. 27, 2025 (GLOBE NEWSWIRE) — Sunrun (Nasdaq: RUN), the nation’s leading provider of clean energy as a subscription service, today announced financial results for the fourth quarter and full year ended December 31, 2024.

“We are growing, generating meaningful cash, increasing our book value of deployed systems, and paying down debt. We are poised to further improve our operating and financial results, and deliver a very strong 2025 with meaningful Cash Generation. Our actions to optimize our product mix, prioritize the highest value geographies and routes to market and an intense focus on cost as we grow have resulted in the highest Net Subscriber Values Sunrun has ever reported,” said Mary Powell, Sunrun’s Chief Executive Officer. “We are improving in every dimension we control – focusing on fast, effective execution, delivering strong financial and operating results, gaining share in a disciplined way, while building a long-term foundation of valuable grid resources.”

“In the fourth quarter, we again set new margin records and delivered the third consecutive quarter of Cash Generation. We continue to execute well in the capital markets, raising more than $4 billion in asset-level debt and tax equity financing during 2024, and more than $800 million in non-recourse debt financing year-to-date. We have extended our runway of tax equity commitments and term sheets, including $1.3 billion added year-to-date,” said Danny Abajian, Sunrun’s Chief Financial Officer. “We have a strong balance sheet with no near-term corporate debt maturities and have paid down recourse parent debt by $186 million since March, including a $132 million paydown using excess cash in Q4. As we increase our Cash Generation, we will continue to further pay down parent recourse debt and are committed to a capital allocation strategy beyond this initial de-leveraging period that drives significant shareholder value.”

Fourth Quarter Updates

Storage Attachment Rates Reach 62%: Customer Additions with storage grew more than 50% during the quarter compared to the prior-year period. Storage attachment rates on installations reached 62% in Q4, up from 45% in the prior-year period, with 392 Megawatt hours installed during the quarter. Sunrun has installed more than 156,000 solar and storage systems, representing over 2.5 Gigawatt hours of stored energy capacity.
Continued Strong Capital Markets Execution: In January 2025, Sunrun priced a $629 million securitization of residential solar and battery systems. The securitization is Sunrun’s thirteenth securitization since 2015 and first issuance in 2025. The oversubscribed transaction was structured with three separate classes of A rated notes, only two of which were publicly offered. The weighted average spread of the notes was 197 basis points, which was an improvement of approximately 38 basis points from our prior securitization in September. Similar to prior transactions, Sunrun raised additional capital in a subordinated non-recourse financing, which increased the cumulative advance rate to above 80% as measured against the initial Contracted Subscriber Value of the portfolio.
Paying Down Recourse Debt: We continue to pay down parent recourse debt. During the fourth quarter, we repurchased $125.5 million in principal of our 2026 Convertible Notes. As of December 31, 2024 we had only $7.7 million outstanding of these notes, which we may repurchase in 2025. Since March 31, 2024 we have paid down recourse debt by $186 million, by repurchasing our 2026 Convertible Notes and reducing borrowings under our recourse Working Capital Facility. We have also increased our Total Cash balance by $164 million and grown Net Earning Assets by $1.5 billion. We expect to further pay down our recourse debt in 2025 by $100 million or more. Aside from the $7.7 million outstanding of our 2026 Convertible Notes, we have no recourse debt maturities until March 2027. Over time we will explore further capital allocation options to maximize shareholder value, based on market conditions and our long-term outlook.
Improving Grid Stability with Virtual Power Plants: During 2024, Sunrun’s virtual power plants (VPPs) successfully supported power grids across the country with a combined instantaneous peak of nearly 80 megawatts—a capacity greater than many traditional fossil-fuel power plants. These innovative programs leveraged Sunrun’s fleet of residential solar and battery systems—the largest in America—empowering customers to generate, store, and share their own solar energy. In 2024, more than 20,000 Sunrun customers participated in 16 virtual power plant programs across nine states and territories. From California and Texas to Puerto Rico and New England, the customers’ batteries supplied on-demand, stored solar energy to augment power resources during hundreds of critical energy events.

Key Operating Metrics

In the fourth quarter of 2024, Customer Additions were 32,932 including 30,709 Subscriber Additions. As of December 31, 2024, Sunrun had 1,048,842 Customers, including 889,186 Subscribers. Customers grew 12% in the fourth quarter of 2024 compared to the fourth quarter of 2023.

Annual Recurring Revenue from Subscribers was approximately $1.6 billion as of December 31, 2024. The Average Contract Life Remaining of Subscribers was 17.6 years as of December 31, 2024.

Subscriber Value was $55,811 in the fourth quarter of 2024, a 11% increase compared to the fourth quarter of 2023. Creation Cost was $36,634 in the fourth quarter of 2024, a 1% decrease compared to the fourth quarter of 2023.

Net Subscriber Value was $19,177 in the fourth quarter of 2024. Total Value Generated was $589 million in the fourth quarter of 2024. On a pro-forma basis assuming a 7.3% discount rate, consistent with capital costs observed in the quarter, Subscriber Value was $50,998 and Net Subscriber Value was $14,364 in the fourth quarter of 2024.

Gross Earning Assets as of December 31, 2024, were $17.8 billion. Net Earning Assets were $6.8 billion, which included $947 million in Total Cash, as of December 31, 2024.

Cash Generation was $34.2 million in the fourth quarter of 2024, the third consecutive quarter of positive Cash Generation.

Storage Capacity Installed was 392.0 Megawatt hours in the fourth quarter of 2024, a 78% increase compared to the fourth quarter of 2023.

Solar Energy Capacity Installed was 242.4 Megawatts in the fourth quarter of 2024, a 7% increase compared to the fourth quarter of 2023. Included in this figure is 232.0 Megawatts of Solar Energy Capacity Installed for Subscribers in the fourth quarter of 2024, an 11% increase compared to the fourth quarter of 2023.

Networked Solar Energy Capacity was 7,531 Megawatts as of December 31, 2024. Included in this figure is 6,436 Megawatts of Networked Solar Energy Capacity for Subscribers as of December 31, 2024.

Networked Storage Capacity was 2.5 Gigawatt hours as of December 31, 2024.

The solar energy systems we deployed in Q4 are expected to offset the emission of 4.8 million metric tons of CO2 over the next thirty years. Over the last twelve months ended December 31, 2024, Sunrun’s systems are estimated to have offset 4.0 million metric tons of CO2.

Outlook

Cash Generation is expected to be in a range of $40 million to $50 million in the first quarter of 2025.

For the full-year 2025, Cash Generation is expected to be in a range of $200 million to $500 million.

Storage Capacity Installed is expected to be in a range of 265 to 275 Megawatt hours in the first quarter of 2025, representing approximately 30% growth year over year at the midpoint.

Solar Energy Capacity Installed is expected to be in a range of 170 to 180 Megawatts in the first quarter of 2025, representing approximately flat year over year growth at the midpoint.

For the full-year 2025, the Company expects robust growth in Storage Capacity Installed year over year, and Solar Energy Capacity Installed is expected to be approximately flat year over year.

Fourth Quarter 2024 GAAP Results

Total revenue was $518.5 million in the fourth quarter of 2024, up $1.9 million, or 0%, from the fourth quarter of 2023. Customer agreements and incentives revenue was $388.6 million, an increase of $67.0 million, or 21%, compared to the fourth quarter of 2023. Solar energy systems and product sales revenue was $129.9 million, a decrease of $65.1 million, or 33%, compared to the fourth quarter of 2023. The increasing mix of Subscribers results in less upfront revenue recognition, as revenue is recognized over the life of the Customer Agreement, which is typically 20 or 25 years.

Total cost of revenue was $421.0 million, a decrease of 13% year-over-year. Total operating expenses were $652.6 million, a decrease of 9% year-over-year, on a pro-forma basis to exclude a non-cash goodwill impairment, which was incurred in the fourth quarter of 2024.

Net loss attributable to common stockholders was $2,813.7 million, or $12.51 per basic and diluted share for the fourth quarter of 2024. Pro forma to exclude non-cash impairment charges, results in non-GAAP net income of $360.9 million or $1.41 per diluted share for the fourth quarter of 2024.

Full Year 2024 GAAP Results

Total revenue was $2,037.7 million in the full year 2024, down $222.1 million, or 10%, from the full year 2023. Customer agreements and incentives revenue was $1,505.2 million, an increase of $318.5 million, or 27%, compared to the full year 2023. Solar energy systems and product sales revenue was $532.5 million, a decrease of $540.6 million, or 50%, compared to the full year 2023.

Total cost of revenue was $1,709.2 million, a decrease of 18% year-over-year. Total operating expenses were $2,610.8 million, a decrease of 15% year-over year, on a pro-forma basis to exclude non-cash goodwill impairment, which was incurred in both the full year 2023 and full year 2024.

During the year, Sunrun recorded a non-cash goodwill impairment charge of approximately $3.1 billion. Due to the decline in our stock price, we wrote down our goodwill balance of $3.1 billion in its entirety during the fourth quarter of 2024. The goodwill primarily arose following the stock-for-stock acquisition of Vivint Solar in October 2020, with the majority arising from and determined based on the market capitalizations at the time of the acquisition. The Company recorded a non-cash goodwill impairment charge of $3.1 billion, or $14.05 per basic share, in our Consolidated Statement of Operations for the full year 2024, which was reflected in the Company’s fourth quarter results.

Net loss attributable to common stockholders was $2,846.2 million, or $12.81 per basic and diluted share for the full year 2024. Pro-forma to exclude non-cash impairment charges, results in non-GAAP net income of $333.7 million or $1.33 per diluted share for the full-year 2024.

Financing Activities

As of February 27, 2025, closed transactions and executed term sheets provide us with expected tax equity to fund over 500 Megawatts of Solar Energy Capacity Installed for Subscribers beyond what was deployed through December 31, 2024. Sunrun also has $680 million in unused commitments available in its non-recourse senior revolving warehouse loan after the January securitization, to fund approximately 230 megawatts of projects for Subscribers.

Conference Call Information

Sunrun is hosting a conference call for analysts and investors to discuss its fourth quarter and full year 2024 results and business outlook at 1:30 p.m. Pacific Time today, February 27, 2025. A live audio webcast of the conference call along with supplemental financial information will be accessible via the “Investor Relations” section of Sunrun’s website at https://investors.sunrun.com. The conference call can also be accessed live over the phone by dialing (877) 407-5989 (toll free) or (201) 689-8434 (toll). An audio replay will be available following the call on the Sunrun Investor Relations website for approximately one month.

About Sunrun

Sunrun Inc. (Nasdaq: RUN) revolutionized the solar industry in 2007 by removing financial barriers and democratizing access to locally-generated, renewable energy. Today, Sunrun is the nation’s leading provider of clean energy as a subscription service, offering residential solar and storage with no upfront costs. Sunrun’s innovative products and solutions can connect homes to the cleanest energy on earth, providing them with energy security, predictability, and peace of mind. Sunrun also manages energy services that benefit communities, utilities, and the electric grid while enhancing customer value. Discover more at www.sunrun.com

Non-GAAP Information

This press release includes references to certain non-GAAP financial measures, such as non-GAAP net (loss) income and non-GAAP net (loss) income per share. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of current period performance on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to the GAAP financial measures presented in this press release and our financial statements and other publicly filed reports. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies.

Non-GAAP net (loss) income is defined as GAAP net (loss) income adjusted by the non-cash goodwill impairment charge, non-cash adjustment to equity investments, and the debt discount amortization. Management believes the exclusion of this non-cash and non-recurring item provides useful supplemental information to investors and facilitates the analysis of its operating results and comparison of operating results across reporting periods.

Forward Looking Statements

This communication contains forward-looking statements related to Sunrun (the “Company”) within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements related to: the Company’s financial and operating guidance and expectations; the Company’s business plan, trajectory, expectations, market leadership, competitive advantages, operational and financial results and metrics (and the assumptions related to the calculation of such metrics); the Company’s momentum in its business strategies including expectations regarding market share, total addressable market, growth in certain geographies, customer value proposition, market penetration, growth of certain divisions, financing activities, financing capacity, product mix, and ability to manage cash flow and liquidity; the growth of the solar industry; the Company’s financing activities and expectations to refinance, amend, and/or extend any financing facilities; trends or potential trends within the solar industry, our business, customer base, and market; the Company’s ability to derive value from the anticipated benefits of partnerships, new technologies, and pilot programs, including contract renewal and repowering programs; anticipated demand, market acceptance, and market adoption of the Company’s offerings, including new products, services, and technologies; the Company’s strategy to be a margin-focused, multi-product, customer-oriented company; the ability to increase margins based on a shift in product focus; expectations regarding the growth of home electrification, electric vehicles, virtual power plants, and distributed energy resources; the Company’s ability to manage suppliers, inventory, and workforce; supply chains and regulatory impacts affecting supply chains; the Company’s leadership team and talent development; the legislative and regulatory environment of the solar industry and the potential impacts of proposed, amended, and newly adopted legislation and regulation on the solar industry and our business; the ongoing expectations regarding the Company’s storage and energy services businesses and anticipated emissions reductions due to utilization of the Company’s solar energy systems; and factors outside of the Company’s control such as macroeconomic trends, bank failures, public health emergencies, natural disasters, acts of war, terrorism, geopolitical conflict, or armed conflict / invasion, and the impacts of climate change. These statements are not guarantees of future performance; they reflect the Company’s current views with respect to future events and are based on assumptions and estimates and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. The risks and uncertainties that could cause the Company’s results to differ materially from those expressed or implied by such forward-looking statements include: the Company’s continued ability to manage costs and compete effectively; the availability of additional financing on acceptable terms; worldwide economic conditions, including slow or negative growth rates and inflation; volatile or rising interest rates; changes in policies and regulations, including net metering, interconnection limits, and fixed fees, or caps and licensing restrictions and the impact of these changes on the solar industry and our business; the Company’s ability to attract and retain the Company’s business partners; supply chain risks and associated costs; realizing the anticipated benefits of past or future investments, partnerships, strategic transactions, or acquisitions, and integrating those acquisitions; the Company’s leadership team and ability to attract and retain key employees; changes in the retail prices of traditional utility generated electricity; the availability of rebates, tax credits and other incentives; the availability of solar panels, batteries, and other components and raw materials; the Company’s business plan and the Company’s ability to effectively manage the Company’s growth and labor constraints; the Company’s ability to meet the covenants in the Company’s investment funds and debt facilities; factors impacting the home electrification and solar industry generally, and such other risks and uncertainties identified in the reports that we file with the U.S. Securities and Exchange Commission from time to time. All forward-looking statements used herein are based on information available to us as of the date hereof, and we assume no obligation to update publicly these forward-looking statements for any reason, except as required by law.

Citations to industry and market statistics used herein may be found in our Investor Presentation, available via the “Investor Relations” section of Sunrun’s website at https://investors.sunrun.com.

Consolidated Balance Sheets (In Thousands)
	As of December 31,
		2024		2023
Assets
Current assets:
Cash	$	574,956	$	678,821
Restricted cash		372,312		308,869
Accounts receivable, net		170,706		172,001
Inventories		402,083		459,746
Prepaid expenses and other current assets		202,579		262,822
Total current assets		1,722,636		1,882,259
Restricted cash		148		148
Solar energy systems, net		15,032,115		13,028,871
Property and equipment, net		121,239		149,139
Goodwill		—		3,122,168
Other assets		3,021,746		2,267,652
Total assets	$	19,897,884	$	20,450,237
Liabilities and total equity
Current liabilities:
Accounts payable	$	354,214	$	230,723
Distributions payable to noncontrolling interests and redeemable noncontrolling interests		41,464		35,180
Accrued expenses and other liabilities		543,752		499,225
Deferred revenue, current portion		129,442		128,600
Deferred grants, current portion		7,900		8,199
Finance lease obligations, current portion		26,045		22,053
Non-recourse debt, current portion		231,665		547,870
Pass-through financing obligation, current portion		—		16,309
Total current liabilities		1,334,482		1,488,159
Deferred revenue, net of current portion		1,208,905		1,067,461
Deferred grants, net of current portion		196,535		195,724
Finance lease obligations, net of current portion		66,139		68,753
Line of credit		384,226		539,502
Non-recourse debt, net of current portion		11,806,181		9,191,689
Convertible senior notes		479,420		392,867
Pass-through financing obligation, net of current portion		—		278,333
Other liabilities		119,846		190,866
Deferred tax liabilities		137,940		122,870
Total liabilities		15,733,674		13,536,224
Redeemable noncontrolling interests		624,159		676,177
Total stockholders’ equity		2,554,207		5,230,228
Noncontrolling interests		985,844		1,007,608
Total equity		3,540,051		6,237,836
Total liabilities, redeemable noncontrolling interests and total equity	$	19,897,884	$	20,450,237

Consolidated Statements of Operations (In Thousands, Except Per Share Amounts)
	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Revenue:
Customer agreements and incentives	$	388,574		$	321,555		$	1,505,227		$	1,186,706
Solar energy systems and product sales		129,918			195,035			532,492			1,073,107
Total revenue		518,492			516,590			2,037,719			2,259,813
Operating expenses:
Cost of customer agreements and incentives		292,632			287,780			1,169,213			1,077,114
Cost of solar energy systems and product sales		128,361			194,808			539,952			1,019,638
Sales and marketing		150,751			166,760			617,162			740,821
Research and development		8,794			7,663			39,304			21,816
General and administrative		72,045			57,110			245,127			221,067
Goodwill Impairment		3,122,168			—			3,122,168			1,158,000
Total operating expenses		3,774,751			714,121			5,732,926			4,238,456
Loss from operations		(3,256,259	)		(197,531	)		(3,695,207	)		(1,978,643	)
Interest expense, net		(233,385	)		(181,826	)		(848,366	)		(652,989	)
Other income (expense), net		89,829			(157,644	)		161,539			(63,900	)
Loss before income taxes		(3,399,815	)		(537,001	)		(4,382,034	)		(2,695,532	)
Income tax benefit		136			(1,595	)		(26,817	)		(12,691	)
Net loss		(3,399,951	)		(535,406	)		(4,355,217	)		(2,682,841	)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests		(586,294	)		(185,282	)		(1,509,050	)		(1,078,344	)
Net loss attributable to common stockholders	$	(2,813,657	)	$	(350,124	)	$	(2,846,167	)	$	(1,604,497	)
Net loss per share attributable to common stockholders
Basic	$	(12.51	)	$	(1.60	)	$	(12.81	)	$	(7.41	)
Diluted	$	(12.51	)	$	(1.60	)	$	(12.81	)	$	(7.41	)
Weighted average shares used to compute net loss per share attributable to common stockholders
Basic		224,896			218,461			222,215			216,642
Diluted		224,896			218,461			222,215			216,642

Consolidated Statements of Cash Flows (In Thousands)
	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Operating activities:
Net loss	$	(3,399,951	)	$	(535,406	)	$	(4,355,217	)	$	(2,682,841	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization, net of amortization of deferred grants		162,343			143,024			620,876			531,669
Goodwill impairment		3,122,168			—			3,122,168			1,158,000
Deferred income taxes		136			(1,623	)		(26,817	)		(12,716	)
Stock-based compensation expense		28,869			27,555			112,825			111,781
Interest on pass-through financing obligations		—			4,862			8,837			19,504
Reduction in pass-through financing obligations		—			(9,820	)		(20,787	)		(40,352	)
Unrealized (gain) loss on derivatives		(122,319	)		108,226			(120,008	)		28,105
Other noncash items		105,220			118,956			210,479			261,390
Changes in operating assets and liabilities:
Accounts receivable		5,741			5,762			(14,974	)		15,748
Inventories		(59,735	)		202,055			57,663			324,158
Prepaid expenses and other current assets		(301,380	)		(142,438	)		(771,997	)		(476,628	)
Accounts payable		141,070			(52,514	)		177,449			(108,785	)
Accrued expenses and other liabilities		4,182			(31,986	)		80,588			(56,473	)
Deferred revenue		55,297			47,340			152,762			106,700
Net cash used in operating activities		(258,359	)		(116,007	)		(766,153	)		(820,740	)
Investing activities:
Payments for the costs of solar energy systems		(791,785	)		(651,462	)		(2,699,452	)		(2,587,183	)
Purchase of equity investment		—			(5,000	)		—			(5,000	)
Purchases of property and equipment, net		(627	)		(4,662	)		(1,572	)		(20,960	)
Net cash provided by (used in) investing activities		(792,412	)		(661,124	)		(2,701,024	)		(2,613,143	)
Financing activities:
Proceeds from state tax credits, net of recapture		—			—			5,203			4,033
Proceeds from trade receivable financing		124,261			41,225			124,261			41,225
Repayment of trade receivable financing		—			(41,225	)		—			(41,225	)
Proceeds from line of credit		48,700			473,277			354,256			1,124,675
Repayment of line of credit		(56,998	)		(451,023	)		(509,532	)		(1,090,331	)
Proceeds from issuance of convertible senior notes, net of capped call transaction		—			—			444,822			—
Repurchase of convertible senior notes		(117,235	)		(1,545	)		(346,581	)		(1,545	)
Proceeds from issuance of non-recourse debt		644,950			556,100			4,009,906			3,745,580
Repayment of non-recourse debt		(102,748	)		(175,728	)		(1,794,962	)		(1,575,527	)
Payment of debt fees		(128	)		(412	)		(93,875	)		(47,342	)
Proceeds from pass-through financing and other obligations, net		—			2,100			4,795			8,812
Repayment of pass-through financing obligation		—			—			(240,288	)		—
Payment of finance lease obligations		(6,605	)		(6,484	)		(27,240	)		(23,279	)
Contributions received from noncontrolling interests and redeemable noncontrolling interests		521,480			459,858			1,811,966			1,572,399
Distributions paid to noncontrolling interests and redeemable noncontrolling interests		(70,269	)		(51,578	)		(308,657	)		(225,114	)
Acquisition of noncontrolling interest		(4,761	)		—			(26,195	)		(46,274	)
Proceeds from transfer of investment tax credits		148,586			6,980			705,697			6,980
Payments to redeemable noncontrolling interests and noncontrolling interests of investment tax credits		(148,586	)		(6,980	)		(705,697	)		(6,980	)
Net proceeds related to stock-based award activities		6,923			8,459			18,876			22,611
Net cash provided by financing activities		987,570			813,024			3,426,755			3,468,698
Net change in cash and restricted cash		(63,201	)		35,893			(40,422	)		34,815
Cash and restricted cash, beginning of period		1,010,617			951,945			987,838			953,023
Cash and restricted cash, end of period	$	947,416		$	987,838		$	947,416		$	987,838

Reconciliation between GAAP and Non-GAAP diluted (loss) income per share:
	Three Months Ended December 31, 2024						Year Ended December 31, 2024
	Net (Loss) Income			Diluted EPS			Net (Loss) Income			Diluted EPS
GAAP diluted loss per share	$	(2,813,657	)	$	(12.51	)	$	(2,846,167	)	$	(12.81	)
Debt Discount Amortization		1,131			0.01			6,438			0.03
Non-cash impairment charges ⁽²⁾		3,173,450			14.11			3,173,450			14.28
Non-GAAP diluted income per share ⁽¹⁾	$	360,924		$	1.41		$	333,721		$	1.33

GAAP weighted average shares for diluted EPS		224,896						222,215
Non-GAAP weighted average shares for diluted EPS		256,614						250,622

(1) Non-GAAP diluted income per share excludes the effects of the pro forma adjustment detailed above. Non- GAAP diluted income per share is adjusted to exclude this item, as it is not used by management to evaluate the performance of the business.
(2) Excluding this item of non-recurring, infrequent or unusual nature and its impact on the comparability of our results for the period to prior periods and future expected trends.

Key Operating and Financial Metrics

The following operating metrics are used by management to evaluate the performance of the business. Management believes these metrics, when taken together with other information contained in our filings with the SEC and within this press release, provide investors with helpful information to determine the economic performance of the business activities in a period that would otherwise not be observable from historic GAAP measures. Management believes that it is helpful to investors to evaluate the present value of cash flows expected from subscribers over the full expected relationship with such subscribers (“Subscriber Value”, more fully defined in the definitions appendix below) in comparison to the costs associated with adding these customers, regardless of whether or not the costs are expensed or capitalized in the period (“Creation Cost”, more fully defined in the definitions appendix below). The Company also believes that Subscriber Value, Creation Costs, and Total Value Generated are useful metrics for investors because they present an unlevered view of all of the costs associated with new customers in a period compared to the expected future cash flows from these customers over a 30-year period, based on contracted pricing terms with its customers, which is not observable in any current or historic GAAP-derived metric. Management believes it is useful for investors to also evaluate the future expected cash flows from all customers that have been deployed through the respective measurement date, less estimated costs to maintain such systems and estimated distributions to tax equity partners in consolidated joint venture partnership flip structures, and distributions to project equity investors (“Gross Earning Assets”, more fully defined in the definitions appendix below). The Company also believes Gross Earning Assets is useful for management and investors because it represents the remaining future expected cash flows from existing customers, which is not a current or historic GAAP-derived measure.

Various assumptions are made when calculating these metrics. Both Subscriber Value and Gross Earning Assets utilize a 6% rate to discount future cash flows to the present period. Furthermore, these metrics assume that customers renew after the initial contract period at a rate equal to 90% of the rate in effect at the end of the initial contract term. For Customer Agreements with 25-year initial contract terms, a 5-year renewal period is assumed. For a 20-year initial contract term, a 10-year renewal period is assumed. In all instances, we assume a 30-year customer relationship, although the customer may renew for additional years, or purchase the system. Estimated cost of servicing assets has been deducted and is estimated based on the service agreements underlying each fund.

*In-period volume metrics:*	Three Months Ended December 31, 2024
Customer Additions		32,932
Subscriber Additions (included within Customer Additions)		30,709
Solar Energy Capacity Installed (in Megawatts)		242.4
Solar Energy Capacity Installed for Subscribers (in Megawatts)		232.0
Storage Capacity Installed (in Megawatt hours)		392.0

*In-period value creation metrics:*	Three Months Ended December 31, 2024
Subscriber Value Contracted Period	$52,035
Subscriber Value Renewal Period	$3,776
Subscriber Value	$55,811
Creation Cost	$36,634
Net Subscriber Value	$19,177
Total Value Generated (in millions)	$588.9

*In-period environmental impact metrics:*	Three Months Ended December 31, 2024
Positive Environmental Impact from Customers (over trailing twelve months, in millions of metric tons of CO2 avoidance)		4.0
Positive Expected Lifetime Environmental Impact from Customer Additions (in millions of metric tons of CO2 avoidance)		4.8

*Period-end metrics:*	December 31, 2024
Customers		1,048,842
Subscribers (subset of Customers)		889,186
Households Served in Low-Income Multifamily Properties		21,129
Networked Solar Energy Capacity (in Megawatts)		7,531
Networked Solar Energy Capacity for Subscribers (in Megawatts)		6,436
Networked Storage Capacity (in Megawatt hours)		2,525
Annual Recurring Revenue (in millions)	$1,644
Average Contract Life Remaining (in years)		17.6
Gross Earning Assets Contracted Period (in millions)	$13,791
Gross Earning Assets Renewal Period (in millions)	$4,043
Gross Earning Assets (in millions)	$17,834
Net Earning Assets (in millions)	$6,766

Figures presented above may not sum due to rounding. For adjustments related to Subscriber Value and Creation Cost, please see the supplemental Creation Cost and Net Subscriber Value calculation memo for each applicable period, which is available on investors.sunrun.com.

Definitions

Deployments represent solar or storage systems, whether sold directly to customers or subject to executed Customer Agreements (i) for which we have confirmation that the systems are installed, subject to final inspection, or (ii) in the case of certain system installations by our partners, for which we have accrued at least 80% of the expected project cost (inclusive of acquisitions of installed systems).

Customer Agreements refer to, collectively, solar or storage power purchase agreements and leases.

Subscriber Additions represent the number of Deployments in the period that are subject to executed Customer Agreements.

Customer Additions represent the number of Deployments in the period.

Solar Energy Capacity Installed represents the aggregate megawatt production capacity of our solar energy systems that were recognized as Deployments in the period.

Solar Energy Capacity Installed for Subscribers represents the aggregate megawatt production capacity of our solar energy systems that were recognized as Deployments in the period that are subject to executed Customer Agreements.

Storage Capacity Installed represents the aggregate megawatt hour capacity of storage systems that were recognized as Deployments in the period.

Creation Cost represents the sum of certain operating expenses and capital expenditures incurred divided by applicable Customer Additions and Subscriber Additions in the period. Creation Cost is comprised of (i) installation costs, which includes the increase in gross solar energy system assets and the cost of customer agreement revenue, excluding depreciation expense of fixed solar assets, and operating and maintenance expenses associated with existing Subscribers, plus (ii) sales and marketing costs, including increases to the gross capitalized costs to obtain contracts, net of the amortization expense of the costs to obtain contracts, plus (iii) general and administrative costs, and less (iv) the gross profit derived from selling systems to customers under sale agreements and Sunrun’s product distribution and lead generation businesses. Creation Cost excludes stock based compensation, amortization of intangibles, and research and development expenses, along with other items the company deems to be non-recurring or extraordinary in nature. The gross margin derived from solar energy systems and product sales is included as an offset to Creation Cost since these sales are ancillary to the overall business model and lowers our overall cost of business. The sales, marketing, general and administrative costs in Creation Costs is inclusive of sales, marketing, general and administrative activities related to the entire business, including solar energy system and product sales. As such, by including the gross margin on solar energy system and product sales as a contra cost, the value of all activities of the Company’s segment are represented in the Net Subscriber Value.

Subscriber Value represents the per subscriber value of upfront and future cash flows (discounted at 6%) from Subscriber Additions in the period, including expected payments from customers as set forth in Customer Agreements, net proceeds from tax equity finance partners, payments from utility incentive and state rebate programs, contracted net grid service program cash flows, projected future cash flows from solar energy renewable energy credit sales, less estimated operating and maintenance costs to service the systems and replace equipment, consistent with estimates by independent engineers, over the initial term of the Customer Agreements and estimated renewal period. For Customer Agreements with 25 year initial contract terms, a 5 year renewal period is assumed. For a 20 year initial contract term, a 10 year renewal period is assumed. In all instances, we assume a 30-year customer relationship, although the customer may renew for additional years, or purchase the system.

Net Subscriber Value represents Subscriber Value less Creation Cost.

Total Value Generated represents Net Subscriber Value multiplied by Subscriber Additions.

Customers represent the cumulative number of Deployments, from the company’s inception through the measurement date.

Subscribers represent the cumulative number of Customer Agreements for systems that have been recognized as Deployments through the measurement date.

Networked Solar Energy Capacity represents the aggregate megawatt production capacity of our solar energy systems that have been recognized as Deployments, from the company’s inception through the measurement date.

Networked Solar Energy Capacity for Subscribers represents the aggregate megawatt production capacity of our solar energy systems that have been recognized as Deployments, from the company’s inception through the measurement date, that have been subject to executed Customer Agreements.

Networked Storage Capacity represents the aggregate megawatt hour capacity of our storage systems that have been recognized as Deployments, from the company’s inception through the measurement date.

Gross Earning Assets is calculated as Gross Earning Assets Contracted Period plus Gross Earning Assets Renewal Period.

Gross Earning Assets Contracted Period represents the present value of the remaining net cash flows (discounted at 6%) during the initial term of our Customer Agreements as of the measurement date. It is calculated as the present value of cash flows (discounted at 6%) that we would receive from Subscribers in future periods as set forth in Customer Agreements, after deducting expected operating and maintenance costs, equipment replacements costs, distributions to tax equity partners in consolidated joint venture partnership flip structures, and distributions to project equity investors. We include cash flows we expect to receive in future periods from tax equity partners, government incentive and rebate programs, contracted sales of solar renewable energy credits, and awarded net cash flows from grid service programs with utilities or grid operators.

Gross Earning Assets Renewal Period is the forecasted net present value we would receive upon or following the expiration of the initial Customer Agreement term but before the 30th anniversary of the system’s activation (either in the form of cash payments during any applicable renewal period or a system purchase at the end of the initial term), for Subscribers as of the measurement date. We calculate the Gross Earning Assets Renewal Period amount at the expiration of the initial contract term assuming either a system purchase or a renewal, forecasting only a 30-year customer relationship (although the customer may renew for additional years, or purchase the system), at a contract rate equal to 90% of the customer’s contractual rate in effect at the end of the initial contract term. After the initial contract term, our Customer Agreements typically automatically renew on an annual basis and the rate is initially set at up to a 10% discount to then-prevailing utility power prices.

Net Earning Assets represents Gross Earning Assets, plus total cash, less adjusted debt and less pass-through financing obligations, as of the same measurement date. Debt is adjusted to exclude a pro-rata share of non-recourse debt associated with funds with project equity structures along with debt associated with the company’s ITC safe harboring facility. Because estimated cash distributions to our project equity partners are deducted from Gross Earning Assets, a proportional share of the corresponding project level non-recourse debt is deducted from Net Earning Assets, as such debt would be serviced from cash flows already excluded from Gross Earning Assets.

Cash Generation is calculated using the change in our unrestricted cash balance from our consolidated balance sheet, less net proceeds (or plus net repayments) from all recourse debt (inclusive of convertible debt), and less any primary equity issuances or net proceeds derived from employee stock award activity (or plus any stock buybacks or dividends paid to common stockholders) as presented on the Company’s consolidated statement of cash flows. The Company expects to continue to raise tax equity and asset-level non-recourse debt to fund growth, and as such, these sources of cash are included in the definition of Cash Generation. Cash Generation also excludes long-term asset or business divestitures and equity investments in external non-consolidated businesses (or less dividends or distributions received in connection with such equity investments). Restricted cash in a reserve account with a balance equal to the amount outstanding of 2026 convertible notes is considered unrestricted cash for the purposes of calculating Cash Generation.

Annual Recurring Revenue represents revenue arising from Customer Agreements over the following twelve months for Subscribers that have met initial revenue recognition criteria as of the measurement date.

Average Contract Life Remaining represents the average number of years remaining in the initial term of Customer Agreements for Subscribers that have met revenue recognition criteria as of the measurement date.

Households Served in Low-Income Multifamily Properties represent the number of individual rental units served in low-income multi-family properties from shared solar energy systems deployed by Sunrun. Households are counted when the solar energy system has interconnected with the grid, which may differ from Deployment recognition criteria.

Positive Environmental Impact from Customers represents the estimated reduction in carbon emissions as a result of energy produced from our Networked Solar Energy Capacity over the trailing twelve months. The figure is presented in millions of metric tons of avoided carbon emissions and is calculated using the Environmental Protection Agency’s AVERT tool. The figure is calculated using the most recent published tool from the EPA, using the current-year avoided emission factor for distributed resources on a state by state basis. The environmental impact is estimated based on the system, regardless of whether or not Sunrun continues to own the system or any associated renewable energy credits.

Positive Expected Lifetime Environmental Impact from Customer Additions represents the estimated reduction in carbon emissions over thirty years as a result of energy produced from solar energy systems that were recognized as Deployments in the period. The figure is presented in millions of metric tons of avoided carbon emissions and is calculated using the Environmental Protection Agency’s AVERT tool. The figure is calculated using the most recent published tool from the EPA, using the current-year avoided emission factor for distributed resources on a state by state basis, leveraging our estimated production figures for such systems, which degrade over time, and is extrapolated for 30 years. The environmental impact is estimated based on the system, regardless of whether or not Sunrun continues to own the system or any associated renewable energy credits.

Total Cash represents the total of the restricted cash balance and unrestricted cash balance from our consolidated balance sheet.

Investor & Analyst Contact:

Patrick Jobin
SVP, Deputy CFO & Investor Relations Officer
investors@sunrun.com

Media Contact:

Wyatt Semanek
Director, Corporate Communications
press@sunrun.com

The MIL Network –

February 28, 2025

MIL-OSI: dLocal Reports 2024 Fourth Quarter Financial Results

Source: GlobeNewswire (MIL-OSI)

Full Year 2024 results
US$25.6 billion Total Payment Volume, up 45% year-over-year
Revenue of US$746 million, up 15% year-over-year
113% Net Revenue Retention Rate
Gross Profit of US$295 million, up 6% year-over-year
Adjusted EBITDA of US$189 million, down 7% year-over-year

Fourth Quarter 2024
US$7.7 billion Total Payment Volume, up 51% year-over-year and 18% quarter-over-quarter
Revenue of US$204 million, up 9% year-over-year and 10% quarter-over-quarter
106% Net Revenue Retention Rate
Gross Profit of US$84 million, up 20% year-over-year and 7% quarter-over-quarter
Adjusted EBITDA of US$57 million, up 16% year-over-year and 9% quarter-over-quarter

Record TPV of $26 billion, a strong growth to 45% YoY with mix continuing to move to newer more attractive markets, while core markets rebounded from Q3 softness;

Revenue and gross profits hitting record highs of $746 million and $295 million, respectively;

Adjusted EBITDA to GP margins closing out the year at 64%, but improving consistently as the year progressed.

dLocal reports in US dollars and in accordance with IFRS as issued by the IASB

MONTEVIDEO, Uruguay, Feb. 27, 2025 (GLOBE NEWSWIRE) — DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), a technology – first payments platform today announced its financial results for the fourth quarter ended December 31, 2024..

As we walk through a review of our performance over the past quarter and year, and as we have repeatedly mentioned, we think of five pillars underpinning dLocal’s investment thesis:

A massive addressable market, given the untapped potential of emerging and frontier markets as they digitize payments and merchants go to market throughout the Global South. 85% of the world’s population resides in emerging markets¹, and two thirds of global growth by 2035 will come from there².
Consistent high top line growth, driven by a proven track record of delivering value to the world’s most sophisticated global digital merchants that has allowed us to capture a market leading share of this expanding TAM.
Attractive margin business with potential to deliver operational leverage once we have laid the foundational blocks and further scale benefits kick in.
Strong cash generating financial model as Net Income converts well into FCF.
Investment in product development capabilities to drive growth through new categories, products, feature innovations, and potential M&A activity.

Our FY 2024 results affirm the investment thesis, highlighted by a record TPV of $26 billion, a strong TPV growth of 45% year-over-year, driven by a shift towards newer, more attractive markets, while core markets rebounded from Q3 softness. Additionally, revenue and gross profits reached record highs of $746 million and $295 million, respectively, with an adjusted EBITDA to GP margins closing the year at 64%, showing consistent improvement throughout the year. Furthermore, Net Income to FCF of Own funds³ conversion exited the year at a rate above 100%.

These strong 2024 results should be seen in the context of a weak first quarter followed by progressively stronger quarter-over-quarter performance, and the continuation of an investment cycle aimed at achieving greater scalability for our business.

Building on last quarter’s positive trend, our TPV grew over 50% year-over-year, despite a strong Q4 2023 comparison. Quarter-over-quarter, TPV growth accelerated to nearly 20%, driven by commerce seasonality, and strength in remittances and ride-hailing. In constant currency³, given general weakness in Emerging Markets currencies, those growth rates are even more impressive, about 30 points higher year-over-year.

Revenues surpassed the milestone of over $200 million in Q4, representing a 9% year-over-year growth. In constant currencies⁴, revenue growth for the period would have been around 40% year-over-year.

Our growth continues to reinforce our position as a trusted partner for global companies seeking to do business across emerging markets, with performance coming from a well diversified list of countries, with notable contributions from Argentina, Egypt, Other LatAm and Other Africa and Asia markets. As a result of our expansion into more frontier markets, we also continue to see solid growth in our cross-border volumes.

In terms of profitability, we reached a record gross profit of $84 million, with a net take rate at 1.1%, reflecting the market dynamic where higher volumes drive lower take rates, increase in the payouts share, and the depreciation of emerging market currencies. To offset this, we are driving cost efficiencies through processor and broker renegotiations and improvements in our hedging strategy. We also continue our push into higher take rate markets and verticals, which over the long term, should partially offset the take rate compression.

Despite the ongoing step up in investments in our engineering team, operational capabilities, and license portfolio to support our long-term growth ambitions, our Adjusted EBITDA hit a record $57 million in the quarter, with an adjusted EBITDA over gross profit margin improving quarter-over-quarter to 68%.

Cash generation was also solid, as we continue to increase free cash available to deploy behind our capital allocation strategy. This sustained cash generation increases our flexibility when thinking through M&A, buybacks or re-investing in a disciplined manner back into the business.

In 2024, we added 9 licenses and registrations, including the UK FCA’s Authorised Payment Institution license, which enhances our competitive edge and demonstrates our commitment to compliant practices and regulatory oversight.

To sum up, Q4 marked the successful end to 2024 in terms of consistent TPV growth, controlled take rate decline, and balance of investment for future growth with a healthy margin and free cash profile.

Looking ahead to our 2025 guidance⁵, we expect a strong TPV growth of 35% – 45% year-over-year, with a revenue growth of 25% – 35% year-over-year that shows this sustained momentum of our top line. We see gross profit growth of 20% – 25% year-over-year, and Adjusted EBITDA growth between 20% and 30% year-over-year.

Considering those assumptions, we should expect a net take rate compression while delivering high TPV growth even at our scale. Over the midterm, we will work to maintain strong TPV while recognizing that given the extremely strong levels of TPV retention we deliver, our larger merchants will continue to attain lower pricing tiers. We will strive to offset this effect through growth in higher take rate new verticals, natural mix shift towards higher take rate frontier markets, and new revenue streams through product launches.

This guidance highlights that our combination of revenue growth, margin structure and free cash generation is not that common. There are not that many companies today who are as profitable as we are, growing revenues at the pace we are growing, and consistently generating free cash.

As known, our business thrives in fast-growing, dynamic markets with massive opportunities in digital payments across emerging markets, driven by strong demand and long-term growth trends. However, these markets also bring volatility from macroeconomic shifts, regulatory changes, and currency fluctuations. While we are confident in our long-term high-growth potential, providing mid-term guidance may not accurately reflect the predictability over a multi-year timeframe. For this reason, we have made the decision to discontinue mid-term guidance. We will continue to focus on delivering strong operational execution so as to hit the annual targets we disclose.

Looking ahead to 2025, we are confident in our ability to sustain momentum. Our investments in technology, product innovation, and market expansion position us well for growth. Despite the volatility of emerging markets, our disciplined scaling, local expertise, and commitment to delivering value to merchants will differentiate us. Our strategy focuses on capturing the potential of digital payments in high-growth regions, driving operational efficiencies, and reinforcing market leadership. We are excited about the opportunities ahead and committed to executing with the same rigor and discipline that have defined our success.

¹ Source: Euromonitor International: Reaching the emerging middle class beyond BRIC; ² Source: S&P Global Market Intelligence. ³ Please see Reconciliation of TPV and Revenue constant currency measures to reported results of Q4 2024 Earnings Presentation; ⁴ Please see Reconciliation of TPV and Revenue constant currency measures to reported results of Q4 2024 Earnings Presentation; ⁵ please see Full year 2025 outlook on slide 23 of Q4 2024 Earnings Presentation.

Fourth quarter 2024 financial highlights

Total Payment Volume (“TPV”) reached a record US$7.7 billion in the fourth quarter, up 51% year-over-year compared to US$5.1 billion in the fourth quarter of 2023 and up 18% compared to US$6.5 billion in the third quarter of 2024. In constant currencies¹, TPV growth for the period would have been 81% year-over-year.

Revenues amounted to US$204.5 million, up 9% year-over-year compared to US$188.0 million in the fourth quarter of 2023 and up 10% compared to US$185.8 million in the third quarter of 2024. This quarter-over-quarter increase was mostly driven by volume increase in Egypt, as well as positive results in Other LatAm and Other Africa and Asia, with notable performance in South Africa, Turkey, Colombia and Ecuador. In constant currencies1, revenue growth for the period would have been 42% year-over-year.

Gross profit was US$83.7 million in the fourth quarter of 2024, up 20% compared to US$69.7 million in the fourth quarter of 2023 and up 7% compared to US$78.2 million in the third quarter of 2024. The improvement in gross profit quarter-over-quarter was primarily due to volume growth in Argentina, Egypt, Nigeria and Turkey. These positive factors were partially offset by (i) Mexico, given the higher growth of Tier 0 merchants coupled with a shift in the payment mix; (ii) Brazil, given the lower take rates from the new Payment Orchestration option launched in the third quarter of 2024 (which positively allowed for volume recovery versus the prior quarter) and shift in the payment mix; and (iii) Other LatAm markets, that despite delivering positive volume performance, on a quarter-over-quarter comparison was impacted by the strong growth in Q3 from wider FX spreads in certain smaller markets, as disclosed in the previous quarterly results.

As a result, gross profit margin was 41% in this quarter, compared to 37% in the fourth quarter of 2023 and 42% in the third quarter of 2024.

Gross profit over TPV was at 1.1% decreasing from 1.4% in the fourth quarter of 2023 and from 1.2% compared to the third quarter of 2024.

Operating income was US$42.3 million, up 3% compared to US$41.0 million in the fourth quarter of 2023 and up 3% compared to US$41.1 million in the third quarter of 2024, as we resumed the pace of certain investments in building out our capabilities. In this context, operating expenses grew by 44% year-over-year, with most of the growth allocated to Product Development & IT capabilities, with these expenses increasing by 70% year-over-year while combined Sales and Marketing (S&M) and G&A expenses grew by 29%. On the sequential comparison, operating expenses increased 12% quarter-over-quarter, a reflection of (i) growth in combined S&M and G&A expenses, driven by continued investment in operating capabilities and marketing investments; and (ii) slightly down tech and development expenses as increases in headcount were offset by reductions in other IT expenditures.

As a result, Adjusted EBITDA was US$56.9 million, up 16% compared to US$49.2 million in the fourth quarter of 2023 and up 9% compared to US$52.4 million in the third quarter of 2024.

Adjusted EBITDA margin was 28%, compared to the 26% recorded in the fourth quarter of 2023 and 28% in the third quarter of 2024. On the annual comparison, the increase is explained by investments in core areas to drive efficiency and ensure future growth while maintaining our lean and disciplined structure. Adjusted EBITDA over gross profit of 68% decreased compared to 71% in the fourth quarter of 2023 and increased compared to 67% in the third quarter of 2024.

Net financial cost was US$1.1 million, compared to a finance income of US$1.0 million in the fourth quarter of 2023 and a cost of US$10.1 million in the third quarter of 2024, as explained in the Net Income section.

Our effective income tax rate increased to 27% from 8% last quarter, and stands at 20% on a year-to-date basis. In the fourth quarter of 2024, effective income tax rate was impacted by an income tax settlement related to previous periods. Excluding this tax settlement, our effective income tax rate stood at 16% for the fourth quarter and 17% for the year compared to 16% in 2023, as a result of slightly higher local-to-local share of pre-tax income.

Net income for the fourth quarter of 2024 was US$29.7 million, or US$0.10 per diluted share, up 4% compared to a profit of US$28.5 million, or US$0.10 per diluted share, for the fourth quarter of 2023 and up 11% compared to a profit of US$26.8 million, or US$0.09 per diluted share for the third quarter of 2024. During the current period, net income was mostly affected by the positive non-cash mark to market effect related to our Argentine bond investments, lower finance costs partially offset by higher taxes. Adjusted net income for the fourth quarter of 2024 was US$45.8 million, up 13% compared to US$40.6 million for the fourth quarter of 2023 and up 6% compared to US$43.4 million for the third quarter of 2024.

As of December 31, 2024, dLocal had US$425.2 million in cash and cash equivalents, including US$189.0 million of own funds and US$236.1 million of merchants’ funds. The consolidated cash position decreased by US$111.0 million from US$536.2 million as of December 31, 2023. When compared to the US$560.5 million cash position as of September 30, 2024, it decreased by US$135.4 million. The variation quarter-over-quarter is primarily explained by changes in merchant working capital, driven by: (i) increase in trade receivables due to temporary settlement delays before year-end; coupled with (ii) decrease in trade payables due to a shift in settlement periods with certain merchants and higher settlement of accumulated merchant balances.

¹Please see Reconciliation of TPV and Revenue constant currency measures to reported results of Q4 2024 Earnings Presentation.

The following table summarizes our key performance metrics:

	Three months ended December 31			Twelve months ended December 31
	2024	2023	% change	2024	2023	% change
Key Performance metrics	(In millions of US$ except for %)
TPV	7,714	5,111	51%	25,575	17,677	45%
Revenue	204.5	188.0	9%	746.0	650.4	15%
Gross Profit	83.7	69.7	20%	294.7	276.9	6%
Gross Profit margin	41%	37%	4p.p	40%	43%	-3p.p
Adjusted EBITDA	56.9	49.2	16%	188.7	202.3	-7%
Adjusted EBITDA margin	28%	26%	2p.p	25%	31%	-6p.p
Adjusted EBITDA/Gross Profit	68%	71%	-3p.p	64%	73%	-9p.p
Profit	29.7	28.5	4%	120.5	149.1	-19%
Profit margin	15%	15%	-1p.p	16%	23%	-7p.p

Fourth quarter 2024 business highlights

During the fourth quarter of 2024, pay-ins TPV increased 44% year-over-year and 15% quarter-over-quarter to US$5.3 billion, accounting for 69% of the TPV.

Pay-outs TPV increased by 68% year-over-year and 26% quarter-over-quarter to US$2.4 billion, accounting for the remaining 31% of the TPV.

Cross-border TPV increased by 67% year-over-year and 23% quarter-over-quarter to US$3.7 billion. Cross-border volume accounted for 48% of the TPV in the fourth quarter of 2024.

Local-to-local TPV increased by 38% year-over-year and 14% quarter-over-quarter to US$4.0 billion. Local-to-local volume accounted for 52% of the TPV in the fourth quarter of 2024.

LatAm revenue increased 16% year-over-year to US$152.9 million, accounting for 75% of total revenue. On the annual comparison, the growth was primarily driven by (i) volume growth in Argentina; and (ii) strong performance of Other LatAm, particularly in Colombia. This result was partially offset by Brazil due to (i) lower take rates from the new Payment Orchestration option launched in the third quarter of 2024; and (ii) shift in the payment mix. Sequentially, LatAm revenue grew by 5%, mainly driven by the performance of Other LatAm, especially in Colombia and Ecuador. The positive result was offset by (i) Argentina, impacted by the lower FX spreads; (ii) Brazil, as previously explained; and (iii) Mexico, due to higher growth of Tier 0 merchants coupled with a shift in the payment mix.

In the Africa and Asia region, revenue decreased by 9% year-over-year, primarily driven by Nigeria due to the Naira devaluation in February of 2024; partially offset by (i) the strong growth performance in Egypt; and (ii) in Other Africa and Asia, particularly the performance in South Africa in the commerce vertical. Those regions are also the main drivers of the sequential increase.

LatAm gross profit increased by 3% year-over-year and 1% quarter-over-quarter to US$56.4 million, accounting for 67% of total gross profit. Most of the year-over-year increase is explained by the volume growth in Argentina, Mexico, and other LatAm markets, which were mostly offset by Brazil as just explained, and currency devaluations. Sequentially, the growth was mainly driven by Argentina’s positive performance; offset by drivers in Mexico and Brazil, as explained previously. Other Latam markets, which continue to grow TPV, were negatively impacted quarter-over-quarter due to the strong Q3 growth from wider FX spreads in smaller markets, as previously disclosed.

Africa and Asia gross profit increased by 82% year-over-year to US$27.3 million, accounting for the remaining 33% of total gross profit. This annual comparison is explained by TPV growth in Egypt, ramp-up of commerce merchants in South Africa, and positive performance in Other Africa and Asia markets, including Turkey and Vietnam. Sequentially, gross profit increased by 21%, attributable to the positive performance in Egypt, Nigeria and Turkey in categories such as remittances, financial services, ads and streaming.

During the quarter, Revenue from Existing Merchants reached US$198.3 million compared to US$ 179.9 million in the third quarter of 2024. On the annual comparison, Revenue from Existing Merchants increased by 13% and the net revenue retention rate, or NRR, reached 106%.

Revenue from New Merchants accounted for US$6.1 million in the fourth quarter of 2024 compared to US$11.8 million in the same quarter of the prior year.

The tables below present the breakdown of dLocal’s TPV by product and type of flow:

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Pay-ins	5,340	69%	3,701	72%	17,902	70%	12,823	73%
Pay-outs	2,373	31%	1,410	28%	7,673	30%	4,855	27%
Total TPV	7,714	*100*%	5,111	*100*%	25,575	*100*%	17,677	*100*%

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Cross-border	3,740	48%	2,235	44%	11,902	47%	8,670	49%
Local-to-local	3,974	52%	2,876	56%	13,673	53%	9,007	51%
Total TPV	7,714	*100*%	5,111	*100*%	25,575	*100*%	17,677	*100*%

The tables below present the breakdown of dLocal’s revenue by geography:

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Latin America	152.9	75%	131.5	70%	562.2	75%	492.7	76%
Brazil	33.7	16%	50.2	27%	152.0	20%	159.0	24%
Argentina	25.1	12%	10.5	6%	85.5	11%	75.1	12%
Mexico	40.5	20%	35.6	19%	149.2	20%	116.8	18%
Chile	13.5	7%	14.9	8%	51.2	7%	55.7	9%
Other LatAm	40.1	20%	20.3	11%	124.4	17%	86.1	13%

Africa & Asia	51.6	25%	56.5	30%	183.8	25%	157.7	24%
Nigeria	2.9	1%	28.4	15%	13.3	2%	84.0	13%
Egypt	21.4	10%	18.4	10%	94.0	13%	36.7	6%
Other Africa & Asia	27.4	13%	9.7	5%	76.5	10%	37.0	6%

Total Revenue	204.5	*100*%	188.0	*100*%	746.0	*100*%	650.4	*100*%

The tables below present the breakdown of dLocal’s gross profit by geography:

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Latin America	56.4	67%	54.7	79%	214.2	73%	228.7	83%
Brazil	14.8	18%	25.5	37%	67.3	23%	78.8	28%
Argentina	9.2	11%	4.0	6%	28.7	10%	48.7	18%
Mexico	10.9	13%	9.3	13%	42.5	14%	34.7	13%
Chile	9.2	11%	9.1	13%	33.1	11%	34.0	12%
Other LatAm	12.4	15%	7.0	10%	42.6	14%	32.6	12%

Africa & Asia	27.3	33%	15.0	21%	80.5	27%	48.1	17%
Nigeria	2.4	3%	1.5	2%	6.6	2%	5.8	2%
Egypt	16.0	19%	9.6	14%	48.4	16%	26.1	9%
Other Africa & Asia	8.9	11%	3.9	6%	25.5	9%	16.2	6%

Total Gross Profit	83.7	*100*%	69.7	*100*%	294.7	*100*%	276.9	*100*%

Special note regarding Adjusted EBITDA and Adjusted EBITDA Margin

dLocal has only one operating segment. dLocal measures its operating segment’s performance by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin, and uses these metrics to make decisions about allocating resources.

Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the finance income and costs, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges,other operating gain/loss,other non-recurring costs, and inflation adjustment. dLocal defines Adjusted EBITDA Margin as the Adjusted EBITDA divided by consolidated revenues.

Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, (“Operating Segments”), Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Nevertheless, dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin metrics should not be viewed in isolation or as a substitute for net income for the periods presented under IFRS. dLocal also believes that its Adjusted EBITDA and Adjusted EBITDA Margin metrics are useful metrics used by analysts and investors, although these measures are not explicitly defined under IFRS. Additionally, the way dLocal calculates operating segment’s performance measures may be different from the calculations used by other entities, including competitors, and therefore, dLocal’s performance measures may not be comparable to those of other entities. Finally, dLocal is unable to present a quantitative reconciliation of forward-looking guidance for Adjusted EBITDA because dLocal cannot reliably predict certain of their necessary components, such as impairment gains/(losses) on financial assets, transaction costs, and inflation adjustment.

The table below presents a reconciliation of dLocal’s Adjusted EBITDA to net income:

$ in thousands	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Profit for the period	29,701	28,481	120,469	149,086
Income tax expense	11,090	7,476	30,550	29,428
Depreciation and amortization	4,888	3,604	17,177	12,225
Finance income and costs, net	1,085	(996)	(17,174)	(11,394)
Share-based payment non-cash charges	6,339	4,850	23,780	11,922
Other operating loss¹	1,307	–	5,257	–
Impairment loss / (gain) on financial assets	533	(657)	440	(3,136)
Inflation adjustment	392	6,040	6,655	12,537
Other non-recurring costs²	1,571	434	1,571	1,663
Adjusted EBITDA	56,906	49,232	188,725	202,332

Note: ¹ The company wrote-off certain amounts related to merchants/processors off-boarded by dLocal. 2 Other non-recurring costs consist of costs not directly associated with our core business activities, including costs associated with addressing the allegations made by a short-seller report and certain class action and other legal and regulatory expenses (which include fees from counsel, global expert services and a forensic accounting advisory firm) in 2023 and 2024.

Special note regarding Adjusted Net Income

Adjusted Net Income is a non-IFRS financial measure. As used by dLocal, Adjusted Net Income is defined as the profit for the period (net income) excluding impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, and other operating (gain)/loss, in line with our Adjusted EBITDA calculation (see detailed methodology for Adjusted EBITDA on page 13). It further excludes the accounting non-cash charges related to the fair value gain from the Argentine dollar-linked bonds, the exchange difference loss from the intercompany loan denominated in USD that we granted to our Argentine subsidiary to purchase the bonds, and the hedging cost associated with the Argentina treasury notes. In addition, it excludes the inflation adjustment based on IFRS rules for hyperinflationary economies. We believe Adjusted Net Income is a useful measure for understanding our results of operations while excluding certain non-cash effects such as currency devaluation, inflation, and hedging costs. Our calculation for Adjusted Net Income may differ from similarly-titled measures presented by other companies and should not be considered in isolation or as a replacement for our measure of profit for the period as presented in accordance with IFRS.

The table below presents a reconciliation of dLocal’s Adjusted net income:

$ in thousands	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Net income as reported	29,701	28,481	120,469	149,086
Inflation adjustment	392	6,040	6,655	12,537
Loan – exchange difference	2,332	51,858	22,602	81,024
Argentina Treasury Notes Hedging Costs	5,536	–	9,808	–
Fair value loss / (gain) of financial assets at FVTPL	(5,115)	(50,754)	(38,609)	(78,640)
Impairment loss / (gain) on financial assets	533	(657)	440	(3,135)
Share-based payment non-cash charges	6,339	4,850	23,780	11,922
Other operating loss¹	1,307	–	5,257	–
Other non-recurring costs³	1,571	434	1,571	1,663
Tax effect on adjustments	(1,310)	386	(899)	834
Adjusted net income	45,828	40,638	155,616	175,291

Unaudited quarterly results.

Note: ¹ The company wrote-off certain amounts related to merchants/processors off-boarded by dLocal. ² In Q4 2024, income tax was impacted by an income tax settlement related to previous periods, as disclosed in the Note 12 – Income Tax. ³ Other non-recurring costs consist of costs not directly associated with our core business activities, including costs associated with addressing the allegations made by a short-seller report and certain class action and other legal and regulatory expenses (which include fees from counsel, global expert services and a forensic accounting advisory firm) in 2023 and 2024.

Earnings per share

We calculate basic earnings per share by dividing the profit attributable to owners of the group by the weighted average number of common shares outstanding during the three-month and twelve-month periods ended December 31, 2024 and 2023.

Our diluted earnings per share is calculated by dividing the profit attributable to owners of the group of dLocal by the weighted average number of common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all dilutive potential common shares into common shares.

The following table presents the information used as a basis for the calculation of our earnings per share:

	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Profit attributable to common shareholders (USD)	29,682,000	28,515,000	120,416,000	148,964,000
Weighted average number of common shares	280,443,489	290,657,015	290,014,019	291,982,305
Adjustments for calculation of diluted earnings per share	14,417,466	5,008,261	15,122,271	10,976,123
Weighted average number of common shares for calculating diluted earnings per share	294,860,956	295,665,276	305,136,290	302,958,428
Basic earnings per share	0.11	0.10	0.42	0.51
Diluted earnings per share	0.10	0.10	0.39	0.49

This press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting” nor a financial statement as defined by International Accounting Standards 1 “Presentation of Financial Statements”. The quarterly financial information in this press release has not been audited, whereas the annual results for the year ended December 31, 2024 and 2023 are audited.

Conference call and webcast
dLocal’s management team will host a conference call and audio webcast on February 27, 2025 at 5:00 p.m. Eastern Time. Please click here to pre-register for the conference call and obtain your dial in number and passcode.

The live conference call can be accessed via audio webcast at the investor relations section of dLocal’s website, at https://investor.dlocal.com/. An archive of the webcast will be available for a year following the conclusion of the conference call. The investor presentation will also be filed on EDGAR at www.sec.gov.

About dLocal
dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers in more than 40 countries across Africa, Asia, and Latin America. Through the “One dLocal” platform (one direct API, one platform, and one contract), global companies can accept payments, send pay-outs and settle funds globally without the need to manage separate pay-in and pay-out processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market.

Definition of selected operational metrics
“API” means application programming interface, which is a general term for programming techniques that are available for software developers when they integrate with a particular service or application. In the payments industry, APIs are usually provided by any party participating in the money flow (such as payment gateways, processors, and service providers) to facilitate the money transfer process.

“Cross-border” means a payment transaction whereby dLocal is collecting in one currency and settling into a different currency and/or in a different geography.

“Local payment methods” refers to any payment method that is processed in the country where the end user of the merchant sending or receiving payments is located, which include credit and debit cards, cash payments, bank transfers, mobile money, and digital wallets.

“Local-to-local” means a payment transaction whereby dLocal is collecting and settling in the same currency.

“Net Revenue Retention Rate” or “NRR” is a U.S. dollar-based measure of retention and growth of dLocal’s merchants. NRR is calculated for a period or year by dividing the Current Period/Year Revenue by the Prior Period/Year Revenue. The Prior Period/Year Revenue is the revenue billed by us to all our customers in the prior period. The Current Period/Year Revenue is the revenue billed by us in the current period to the same customers included in the Prior Period/Year Revenue. Current Period/Year Revenue includes revenues from any upselling and cross-selling across products, geographies, and payment methods to such merchant customers, and is net of any contractions or attrition, in respect of such merchant customers, and excludes revenue from new customers on-boarded in the preceding twelve months. As most of dLocal revenues come from existing merchants, the NRR rate is a key metric used by management, and we believe it is useful for investors in order to assess our retention of existing customers and growth in revenues from our existing customer base.

“Pay-in” means a payment transaction whereby dLocal’s merchant customers receive payment from their customers.

“Pay-out” means a payment transaction whereby dLocal disburses money in local currency to the business partners or customers of dLocal’s merchant customers.

“Revenue from New Merchants” means the revenue billed by us to merchant customers that we did not bill revenues in the same quarter (or period) of the prior year.

“Revenue from Existing Merchants” means the revenue billed by us in the last twelve months to the merchant customers that we billed revenue in the same quarter (or period) of the prior year.

“TPV” dLocal presents total payment volume, or TPV, which is an operating metric of the aggregate value of all payments successfully processed through dLocal’s payments platform. Because revenue depends significantly on the total value of transactions processed through the dLocal platform, management believes that TPV is an indicator of the success of dLocal’s global merchants, the satisfaction of their end users, and the scale and growth of dLocal’s business.

Rounding: We have made rounding adjustments to some of the figures included in this interim report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Forward-looking statements
This press release contains certain forward-looking statements. These forward-looking statements convey dLocal’s current expectations or forecasts of future events, including guidance in respect of total payment volume, revenue, gross profit and Adjusted EBITDA. Forward-looking statements regarding dLocal and amounts stated as guidance are based on current management expectations and involve known and unknown risks, uncertainties and other factors that may cause dLocal’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Statement Regarding Forward-Looking Statements” sections of dLocal’s filings with the U.S. Securities and Exchange Commission. Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof. In addition, dLocal is unable to present a quantitative reconciliation of forward-looking guidance for Adjusted EBITDA, because dLocal cannot reliably predict certain of their necessary components, such as impairment gains/(losses) on financial assets, transaction costs, and inflation adjustment.

dLocal Limited
Certain financial information
Consolidated Condensed Interim Statements of Comprehensive Income for the three-month and twelve-month periods ended December 31, 2024 and 2023
(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Continuing operations
Revenues	204,491	188,005	745,974	650,351
Cost of services	(120,780)	(118,286)	(451,301)	(373,492)
Gross profit	83,711	69,719	294,673	276,859

Technology and development expenses	(6,822)	(4,024)	(25,625)	(12,650)
Sales and marketing expenses	(5,598)	(4,710)	(21,626)	(17,120)
General and administrative expenses	(27,183)	(20,641)	(101,225)	(70,568)
Impairment (loss)/gain on financial assets	(533)	657	(440)	3,136
Other operating (loss)/gain	(1,307)	–	(5,257)	–
Operating profit	42,268	41,001	140,500	179,657
Finance income	12,036	57,913	66,875	128,228
Finance costs	(13,121)	(56,917)	(49,701)	(116,834)
Inflation adjustment	(392)	(6,040)	(6,655)	(12,537)
Other results	(1,477)	(5,044)	10,519	(1,143)
Profit before income tax	40,791	35,957	151,019	178,514
Income tax expense	(11,090)	(7,476)	(30,550)	(29,428)
Profit for the period	29,701	28,481	120,469	149,086

Profit attributable to:
Owners of the Group	29,682	28,515	120,416	148,964
Non-controlling interest	19	(34)	53	122
Profit for the period	29,701	28,481	120,469	149,086

Earnings per share (in USD)
Basic Earnings per share	0.11	0.10	0.42	0.51
Diluted Earnings per share	0.10	0.10	0.39	0.49

Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange difference on translation on foreign operations	(4,417)	(9,054)	(11,188)	(7,713)
Other comprehensive income for the period, net of tax	(4,417)	(9,054)	(11,188)	(7,713)
Total comprehensive income for the period, net of tax	25,284	19,427	109,281	141,373

Total comprehensive income for the period
Owners of the Group	25,311	19,463	109,290	141,255
Non-controlling interest	(27)	(36)	(9)	118
Total comprehensive income for the period	25,284	19,427	109,281	141,373

dLocal Limited
Certain financial information
Consolidated Condensed Interim Statements of Financial Position as of December 31, 2024 and December 31, 2023
(All amounts in thousands of U.S. dollars)

	December 31, 2024	December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	425,172	536,160
Financial assets at fair value through profit or loss	129,319	102,677
Trade and other receivables	496,713	363,374
Derivative financial instruments	2,874	2,040
Other assets	18,805	11,782
Total Current Assets	1,072,883	1,016,033

Non-Current Assets
Financial assets at fair value through profit or loss	–	1,710
Trade and other receivables	18,044	–
Deferred tax assets	5,367	2,217
Property, plant and equipment	3,377	2,917
Right-of-use assets	3,645	3,689
Intangible assets	63,318	57,887
Other assets	4,695	–
Total Non-Current Assets	98,446	68,420
TOTAL ASSETS	1,171,329	1,084,453

LIABILITIES
Current Liabilities
Trade and other payables	597,787	602,493
Lease liabilities	1,137	626
Tax liabilities	21,515	20,800
Derivative financial instruments	6,227	948
Financial liabilities	50,455	–
Provisions	500	362
Total Current Liabilities	677,621	625,229

Non-Current Liabilities
Deferred tax liabilities	1,858	753
Lease liabilities	2,863	3,331
Total Non-Current Liabilities	4,721	4,084
TOTAL LIABILITIES	682,342	629,313

EQUITY
Share Capital	570	591
Share Premium	186,769	173,001
Treasury Shares	(200,980)	(99,936)
Capital Reserve	33,438	21,575
Other Reserves	(20,934)	(9,808)
Retained earnings	490,024	369,608
Total Equity Attributable to owners of the Group	488,887	455,031
Non-controlling interest	100	109
TOTAL EQUITY	488,987	455,140
TOTAL EQUITY AND LIABILITIES	1,171,329	1,084,453

dLocal Limited
Certain interim financial information
Consolidated Statements of Cash flows for the three-month and twelve-month periods ended December 31, 2024 and 2023
(All amounts in thousands of U.S. dollars)

	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Cash flows from operating activities
Profit before income tax	40,791	35,957	151,019	178,514
Adjustments:
Interest Income from financial instruments	(6,921)	(7,159)	(28,266)	(49,588)
Interest charges for lease liabilities	370	110	501	578
Other interests charges	739	2,503	3,758	5,623
Finance expense related to derivative financial instruments	(627)	5,497	19,462	28,013
Net exchange differences	5,914	50,100	24,787	82,620
Fair value loss/(gain) on financial assets at FVPL	(3,922)	(50,754)	(37,416)	(78,640)
Amortization of Intangible assets	4,364	3,251	15,511	10,816
Depreciation and disposals of PP&E and right-of-use	652	353	1,884	1,409
Share-based payment expense, net of forfeitures	6,339	4,850	23,780	11,922
Other operating gain	786	–	4,736	–
Net Impairment loss/(gain) on financial assets	533	2,796	440	318
Inflation adjustment and other financial results	(5,704)	9,041	(17,063)	9,041
	43,313	56,546	163,133	200,626
Changes in working capital
Increase in Trade and other receivables	(109,487)	(51,154)	(162,645)	(123,246)
Decrease / (Increase) in Other assets	4,128	13,258	5,427	45,007
Increase / (Decrease) in Trade and Other payables	(70,700)	52,654	(6,957)	194,619
Increase / (Decrease) in Tax Liabilities	(3,835)	(6,591)	(3,184)	(10,967)
Increase / (Decrease) in Provisions	222	(275)	138	(1,111)
Cash (used) / generated from operating activities	(136,359)	64,438	(4,088)	304,928
Income tax paid	(4,773)	(2,996)	(28,696)	(11,475)
Net cash (used) / generated from operating activities	(141,132)	61,442	(32,784)	293,453

Cash flows from investing activities
Acquisitions of Property, plant and equipment	(427)	21	(1,705)	(965)
Additions of Intangible assets	(5,699)	(4,758)	(20,942)	(17,260)
Acquisition of financial assets at FVPL	(14,852)	(15,847)	(121,468)	(117,517)
Collections of financial assets at FVPL	–	3,721	108,097	1,487
Interest collected from financial instruments	6,921	7,159	28,266	49,588
Payments for investments in other assets at FVPL	(10,000)	–	(10,000)	–
Net cash (used in) / generated investing activities	(24,057)	(9,704)	(17,752)	(84,667)

Cash flows from financing activities
Repurchase of shares	–	–	(101,067)	(97,929)
Share-options exercise paid	358	–	1,853	153
Interest payments on lease liability	(370)	(110)	(501)	(578)
Principal payments on lease liability	(112)	(315)	(552)	(1,103)
Finance expense paid related to derivative financial instruments	(8)	(7,640)	(15,017)	(28,443)
Net proceeds from financial liabilities	33,653	–	50,428	–
Interest payments on financial liabilities	(1,633)	–	(2,281)	–
Other finance expense paid	(327)	(2,851)	(1,450)	(5,971)
Net cash used in by financing activities	31,561	(10,916)	(68,587)	(133,871)
Net increase in cash flow	(133,628)	40,822	(119,123)	74,915

Cash and cash equivalents at the beginning of the period	560,533	498,165	536,160	468,092
Net (decrease)/increase in cash flow	(133,628)	40,822	(119,123)	74,915
Effects of exchange rate changes on inflation and cash and cash equivalents	(1,732)	(2,827)	8,135	(6,847)
Cash and cash equivalents at the end of the period	425,172	536,160	425,172	536,160

Investor Relations Contact:
investor@dlocal.com

Media Contact:
media@dlocal.com

The MIL Network –

February 28, 2025

MIL-OSI: Talen Energy Reports Full Year 2024 Results, Exceeds 2024 Guidance and Reaffirms 2025 Guidance

Source: GlobeNewswire (MIL-OSI)

Earnings Release Highlights

Full year GAAP Net Income (Loss) Attributable to Stockholders of $998 million.
Full year Adjusted EBITDA of $770 million and Adjusted Free Cash Flow of $283 million, exceeding the 2024 guidance midpoints.
Reaffirming 2025 guidance; 2026 outlook unchanged.
Reached reliability-must-run (“RMR”) settlement agreement with PJM and key stakeholders to run Brandon Shores and H.A. Wagner generation facilities through May 31, 2029.
Repurchased approximately 13 million shares in 2024 (22% of total outstanding shares).

HOUSTON, Feb. 27, 2025 (GLOBE NEWSWIRE) — Talen Energy Corporation (“Talen,” the “Company,” “we,” or “our”) (NASDAQ: TLN), an independent power producer dedicated to powering the future, today reported its full year 2024 financial and operating results.

“Talen had an exciting year focused on unlocking value from existing assets. Our fleet ran well this year, earning $770 million of Adjusted EBITDA and $283 million of Adjusted Free Cash Flow. We sold our data center campus to AWS and announced a major agreement providing power directly to them, making Talen the first power company to do so. We are actively executing under this arrangement and pursuing commercial and regulatory solutions for the Susquehanna ISA amendment,” said Talen President and Chief Executive Officer Mac McFarland.

“We sold our ERCOT assets earlier in the year, realizing significant value that was largely returned to our shareholders, and in Q4, we reached a settlement with PJM and other stakeholders to continue running our Brandon Shores and H.A. Wagner generation facilities through May 2029, supporting grid reliability in Maryland.” McFarland continued. “We have simplified our capital structure and prioritized shareholder returns, repurchasing 22% of our outstanding shares this year. We remain focused on maximizing value and cash flow per share.”

Summary of Financial and Operating Results (Unaudited)

_{(Millions of Dollars)}	Year Ended December 31, 2024
GAAP Net Income (Loss) Attributable to Stockholders		$998
Adjusted EBITDA		770
Adjusted Free Cash Flow		283

	Year Ended December 31, 2024		Year Ended December 31, 2023
Total Generation (TWh) ^(a)	36.3		32.5
Carbon-Free Generation	50	%	55	%
OSHA TRIR ^(b)	0.34		0.58
Fleet EFOF ^(c)	2.2	%	5.5	%

__________________
^{(a) Total generation is net of station use consumption, where applicable, includes volumes produced by Susquehanna in support of Nautilus operations and includes generation from ERCOT assets through April 2024.}
^{(b) OSHA Total Recordable Incident Rate (“OSHA TRIR”) is the number of recordable incidents x 200,000 / total number of manhours worked. Only includes Talen-operated generation facilities (i.e., excludes Conemaugh and Keystone).}
^{(c) Fleet Equivalent Forced Outage Factor (“Fleet EFOF”) is the percentage of a given period in which a generating unit is not available due to forced outages and forced de-rates. Represents all generation facilities, including our portion of partially-owned facilities.}

For the year ended December 31, 2024, we reported GAAP Net Income (Loss) Attributable to Stockholders of $998 million, Adjusted EBITDA of $770 million and Adjusted Free Cash Flow of $283 million. 2024 Adjusted EBITDA and Adjusted Free Cash Flow exceeded the 2024 guidance midpoints of $765 million and $275 million, respectively.

Given the impacts of fresh start accounting and the implementation of the plan of reorganization in the second quarter 2023, our full year 2024 results are not comparable to 2023.

Full year 2024 results were supported by strong operational performance across the generation fleet, the benefits from hedging activities, the impact of the Nuclear PTC, and disciplined cost management, despite the absence of earnings from the ERCOT generation portfolio that was sold in May 2024.

Our generation fleet continued to run reliably and safely, with a Fleet EFOF of 2.2% and an OSHA TRIR of 0.34. Total generation was 36.3 TWh, with 50% contributed from carbon-free nuclear generation at our Susquehanna nuclear facility. Also, our PJM gas-fired assets were dispatched more frequently during times of peak load than they were in 2023.

Reaffirming 2025 Guidance; 2026 Outlook Unchanged

_{(Millions of Dollars)}	Range
2025E Adjusted EBITDA	$925 – $1,175
2025E Adjusted Free Cash Flow	$395 – $595

_{(Millions of Dollars)}	Range
2026E Adjusted EBITDA	$1,130 – $1,530
2026E Adjusted Free Cash Flow	$535 – $895

RMR Arrangements

In December 2024, we reached an agreement with PJM, FERC staff, Maryland PSC and public utilities on the terms of RMR arrangements for our Brandon Shores and H.A. Wagner generation facilities. On January 27, 2025, we filed with FERC the resulting Joint Offers of Settlement regarding both facilities’ RMR Continuing Operations Rates Schedules, and they remain subject to FERC approval. If approved, the proposed RMR arrangements will extend the operating life of these facilities through May 31, 2029, or until such time as the necessary transmission upgrades are placed into service. Beginning June 1, 2025, we expect to receive $145 million annually for Brandon Shores and $35 million for H.A. Wagner with some performance incentives. Additionally, we expect to receive reimbursement for variable costs and approved project investments.

Update on Share Repurchase Program

Since the start of 2024, we have repurchased approximately 22% of our outstanding shares for a total of $1.95 billion, with $1.1 billion of remaining share repurchase program capacity through year-end 2026. During the fourth quarter 2024, we repurchased approximately 5 million shares of stock from our largest shareholder. All share repurchase amounts are excluding transaction costs.

Balance Sheet and Liquidity

We are focused on maintaining net leverage below our target of 3.5x net debt-to-Adjusted EBITDA, along with ample liquidity. As of February 21, 2025, we had total available liquidity of approximately $1.2 billion, comprised of $474 million of unrestricted cash and $700 million of available capacity under the revolving credit facility. Our current net leverage ratio, utilizing the 2024 Adjusted EBITDA and net debt balance as of February 21, 2025, is approximately 3.3x.

Update on Hedging Activities

As of December 31, 2024, including the impact of the Nuclear PTC, we had hedged approximately 89% of our expected generation volumes for 2025 and 33% for 2026. The Company’s hedging program is a key component of our comprehensive risk policy and supports the objective of increasing cash flow stability while maintaining upside optionality.

As an update on nuclear fuel supply activities, the nuclear fuel cycle is fully contracted through the 2027 fuel load, almost entirely contracted through 2028, and over 70% contracted through 2029. These percentages are based on total nuclear fuel costs across all phases and assume current market pricing for the portion not yet under contract.

Earnings Call

The Company will hold an earnings call on Thursday, February 27, 2025, at 4:30 p.m. EST (3:30 p.m. CST). To listen to the earnings call, please register in advance for the webcast here. For participants joining the call via phone, please register here prior to the start time to receive dial-in information. For those unable to participate in the live event, a digital replay of the earnings call will be archived for approximately one year and available on Talen’s Investor Relations website at https://ir.talenenergy.com/news-events/events.

About Talen

Talen Energy (NASDAQ: TLN) is a leading independent power producer and energy infrastructure company dedicated to powering the future. We own and operate approximately 10.7 gigawatts of power infrastructure in the United States, including 2.2 gigawatts of nuclear power and a significant dispatchable fossil fleet. We produce and sell electricity, capacity, and ancillary services into wholesale U.S. power markets, with our generation fleet principally located in the Mid-Atlantic and Montana. Our team is committed to generating power safely and reliably and delivering the most value per megawatt produced. Talen is also powering the digital infrastructure revolution. We are well-positioned to capture this significant growth opportunity, as data centers serving artificial intelligence increasingly demand more reliable, clean power. Talen is headquartered in Houston, Texas. For more information, visit https://www.talenenergy.com/.

Investor Relations:

Ellen Liu
Senior Director, Investor Relations
InvestorRelations@talenenergy.com

Media:

Taryne Williams
Director, Corporate Communications
Taryne.Williams@talenenergy.com

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this communication, or incorporated by reference into this communication, are forward-looking statements. Throughout this communication, we have attempted to identify forward-looking statements by using words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecasts,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or other forms of these words or similar words or expressions or the negative thereof, although not all forward-looking statements contain these terms. Forward-looking statements address future events and conditions concerning, among other things, capital expenditures, earnings, litigation, regulatory matters, hedging, liquidity and capital resources and accounting matters. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this communication. All of our forward-looking statements include assumptions underlying or relating to such statements that may cause actual results to differ materially from expectations, and are subject to numerous factors that present considerable risks and uncertainties.

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

	Successor						Predecessor
_{(Millions of Dollars, except share data)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Capacity revenues	$	192		$	133		$	108
Energy and other revenues		1,881			1,156			1,042
Unrealized gain (loss) on derivative instruments		42			55			60
Operating Revenues		2,115			1,344			1,210

Fuel and energy purchases		(694	)		(424	)		(176	)
Nuclear fuel amortization		(123	)		(108	)		(33	)
Unrealized gain (loss) on derivative instruments		20			(3	)		(123	)
Energy Expenses		(797	)		(535	)		(332	)

Operating Expenses
Operation, maintenance and development		(592	)		(358	)		(285	)
General and administrative		(163	)		(93	)		(51	)
Depreciation, amortization and accretion		(298	)		(165	)		(200	)
Impairments		(1	)		(3	)		(381	)
Other operating income (expense), net		(38	)		(30	)		(37	)
Operating Income (Loss)		226			160			(76	)
Nuclear decommissioning trust funds gain (loss), net		178			108			57
Interest expense and other finance charges		(238	)		(176	)		(163	)
Reorganization income (expense), net		—			—			799
Gain (loss) on sale of assets, net		884			7			50
Other non-operating income (expense), net		61			95			10
Income (Loss) Before Income Taxes		1,111			194			677
Income tax benefit (expense)		(98	)		(51	)		(212	)
Net Income (Loss)		1,013			143			465
Less: Net income (loss) attributable to noncontrolling interest		15			9			(14	)
Net Income (Loss) Attributable to Stockholders (Successor) / Member (Predecessor)	$	998		$	134		$	479
Per Common Share (Successor)
Net Income (Loss) Attributable to Stockholders – Basic	$	18.40		$	2.27		N/A
Net Income (Loss) Attributable to Stockholders – Diluted	$	17.67		$	2.26		N/A
Weighted-Average Number of Common Shares Outstanding – Basic (in thousands)		54,254			59,029		N/A
Weighted-Average Number of Common Shares Outstanding – Diluted (in thousands)		56,486			59,399		N/A

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

	Successor
_{(Millions of Dollars, except share data)}	December 31, 2024			December 31, 2023
Assets
Cash and cash equivalents	$	328		$	400
Restricted cash and cash equivalents		37			501
Accounts receivable		123			137
Inventory, net		302			375
Derivative instruments		66			89
Other current assets		184			52
Total current assets		1,040			1,554
Property, plant and equipment, net		3,154			3,839
Nuclear decommissioning trust funds		1,724			1,575
Derivative instruments		5			6
Other noncurrent assets		183			147
Total Assets	$	6,106		$	7,121

Liabilities and Equity
Long-term debt, due within one year	$	17		$	9
Accrued interest		18			32
Accounts payable and other accrued liabilities		266			344
Derivative instruments		—			32
Other current liabilities		154			69
Total current liabilities		455			486
Long-term debt		2,987			2,811
Derivative instruments		7			11
Postretirement benefit obligations		305			368
Asset retirement obligations and accrued environmental costs		468			469
Deferred income taxes		362			407
Other noncurrent liabilities		135			35
Total Liabilities	$	4,719		$	4,587
Commitments and Contingencies

Stockholders’ Equity
Common stock ($0.001 par value 350,000,000 shares authorized) ^(a)	$	—		$	—
Additional paid-in capital		1,725			2,346
Accumulated retained earnings (deficit)		(326	)		134
Accumulated other comprehensive income (loss)		(12	)		(23	)
Total Stockholders’ Equity		1,387			2,457
Noncontrolling interests		—			77
Total Equity		1,387			2,534
Total Liabilities and Equity	$	6,106		$	7,121

__________________

^{(a) 45,961,910 and 59,028,843 shares issued and outstanding as of December 31, 2024 (Successor) and December 31, 2023 (Successor), respectively.}

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

	Successor						Predecessor
_{(Millions of Dollars)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Operating Activities
Net income (loss)	$	1,013		$	143		$	465
Non-cash reconciliation adjustments:
(Gain) loss on AWS Data Campus Sale and ERCOT Sale		(886	)		—			—
Depreciation, amortization and accretion		285			157			208
NDT funds (gain) loss, net (excluding interest and fees)		(130	)		(78	)		(43	)
Nuclear fuel amortization		123			108			33
Unrealized (gains) losses on derivative instruments		(69	)		(40	)		65
Deferred income taxes		(46	)		55			195
Impairments		1			3			381
(Gain) loss on sales of assets, net		—			(7	)		(50	)
Reorganization (income) expense, net		—			—			(933	)
Other		(26	)		7			7
Changes in assets and liabilities:
Inventory, net		67			(68	)		10
Accounts receivable		14			8			261
Other assets		(61	)		147			98
Accounts payable and accrued liabilities		(69	)		(49	)		(69	)
Accrued interest		(15	)		28			(124	)
Other liabilities		55			(12	)		(42	)
Net cash provided by (used in) operating activities		256			402			462
Investing Activities
NDT funds investment purchases		(2,295	)		(1,290	)		(959	)
NDT funds investment sale proceeds		2,263			1,265			949
Proceeds from AWS Data Campus Sale and ERCOT Sale		1,398			—			—
Nuclear fuel expenditures		(104	)		(45	)		(49	)
Property, plant and equipment expenditures		(85	)		(116	)		(138	)
Equity investments in affiliates		(10	)		(5	)		(8	)
Proceeds from the sale of assets		2			8			46
Other investing activities		2			12			2
Net cash provided by (used in) investing activities		1,171			(171	)		(157	)

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

	Successor						Predecessor
_{(Millions of Dollars)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Financing Activities
Share repurchases		(1,958	)		—			—
TES debt issuance		849			—			—
TES debt repayments		(479	)		—			—
Cumulus Digital TLF repayment		(182	)		(15	)		—
Repurchase of noncontrolling interest		(125	)		(19	)		—
Cash settlement of restricted stock units		(32	)		—			—
Exercise or repurchase of warrants		(16	)		(40	)		—
Deferred financing costs		(13	)		(7	)		(74	)
LMBE-MC TLB payments		—			(294	)		(7	)
TLB-1 proceeds, net		—			288			—
Repayment of prepetition secured indebtedness		—			—			(3,898	)
Financing proceeds at Emergence, net of discount		—			—			2,219
Contributions from member		—			—			1,393
Payment of make-whole premiums on prepetition secured indebtedness		—			—			(152	)
Derivatives with financing elements		—			—			(20	)
Other		(7	)		3			—
Net cash provided by (used in) financing activities		(1,963	)		(84	)		(539	)
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash and Cash Equivalents		(536	)		147			(234	)
Beginning of period cash and cash equivalents and restricted cash and cash equivalents		901			754			988
End of period cash and cash equivalents and restricted cash and cash equivalents	$	365		$	901		$	754

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted Free Cash flow, which we use as measures of our performance and liquidity, are not financial measures prepared under GAAP. Non-GAAP financial measures do not have definitions under GAAP and may be defined and calculated differently by, and not be comparable to, similarly titled measures used by other companies. Non-GAAP measures are not intended to replace the most comparable GAAP measures as indicators of performance. Generally, a non-GAAP financial measures is a numerical measure of financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Management cautions readers not to place undue reliance on the following non-GAAP financial measures, but to also consider them along with their most directly comparable GAAP financial measures. Non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analyzing our results as reported under GAAP.

Adjusted EBITDA

We use Adjusted EBITDA to: (i) assist in comparing operating performance and readily view operating trends on a consistent basis from period to period without certain items that may distort financial results; (ii) plan and forecast overall expectations and evaluate actual results against such expectations; (iii) communicate with our Board of Directors, shareholders, creditors, analysts, and the broader financial community concerning our financial performance; (iv) set performance metrics for our annual short-term incentive compensation; and (v) assess compliance with our indebtedness.

Adjusted EBITDA is computed as net income (loss) adjusted, among other things, for certain: (i) nonrecurring charges; (ii) non-recurring gains; (iii) non-cash and other items; (iv) unusual market events; (v) any depreciation, amortization, or accretion; (vi) mark-to-market gains or losses; (vii) gains and losses on the nuclear facility decommissioning trust (“NDT”); (viii) gains and losses on asset sales, dispositions, and asset retirement; (ix) impairments, obsolescence, and net realizable value charges; (x) interest expense; (xi) income taxes; (xii) legal settlements, liquidated damages, and contractual terminations; (xiii) development expenses; (xiv) noncontrolling interests, except where otherwise noted; and (xv) other adjustments. Such adjustments are computed consistently with the provisions of our indebtedness to the extent that they can be derived from the financial records of the business. Pursuant to TES’s debt agreements, Cumulus Digital contributes to Adjusted EBITDA beginning in the first quarter 2024, following termination of the Cumulus Digital credit facility and associated cash flow sweep.

Additionally, we believe investors commonly adjust net income (loss) information to eliminate the effect of nonrecurring restructuring expenses and other non-cash charges, which can vary widely from company to company and from period to period and impair comparability. We believe Adjusted EBITDA is useful to investors and other users of our financial statements to evaluate our operating performance because it provides an additional tool to compare business performance across companies and between periods. Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to such items described above. These adjustments can vary substantially from company to company and period to period depending upon accounting policies, book value of assets, capital structure, and the method by which assets were acquired.

Adjusted Free Cash Flow

Adjusted Free Cash Flow is utilized by our chief operating decision makers to evaluate cash flow activities. Adjusted Free Cash Flow is computed as Adjusted EBITDA reduced by capital expenditures (including nuclear fuel but excluding development, growth, and (or) conversion capital expenditures), cash payments for interest and finance charges, cash payments for taxes (excluding income taxes paid from the NDT, taxes paid or deductions taken as a result of strategic asset sales, and benefits of the Nuclear PTC utilized to reduce taxes paid), and pension contributions.

We believe Adjusted Free Cash Flow is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to determine a company’s ability to meet future obligations and to compare business performance across companies and across periods. Adjusted Free Cash Flow is widely used by investors to measure a company’s levered cash flow without regard to items such as ARO settlements; nonrecurring development, growth and conversion expenditures; and cash proceeds or payments for the sale or purchase of assets, which can vary substantially from company to company and from period to period depending upon accounting methods, book value of assets, capital structure, and the method by which assets were acquired.

Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation

The following table presents a reconciliation of the GAAP financial measures of “Net Income (Loss)” presented on the Consolidated Statements of Operations to the non-GAAP financial measures of Adjusted EBITDA and Adjusted Free Cash Flow:

	Successor						Predecessor
_{(Millions of Dollars)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Net Income (Loss)	$	1,013		$	143		$	465
Adjustments
Interest expense and other finance charges		238			176			163
Income tax (benefit) expense		98			51			212
Depreciation, amortization and accretion		298			165			200
Nuclear fuel amortization		123			108			33
Reorganization (gain) loss, net ^(a)		—			—			(799	)
Unrealized (gain) loss on commodity derivative contracts		(62	)		(52	)		63
Nuclear decommissioning trust funds (gain) loss, net		(178	)		(108	)		(57	)
Stock-based compensation expense		33			19			—
Long-term incentive compensation expense		21			2			—
(Gain) loss on asset sales, net ^(b)		(884	)		(7	)		(50	)
Non-cash impairments ^(c)		1			3			381
Legal settlements and litigation costs ^(d)		(10	)		(84	)		1
Unusual market events ^(d)		(1	)		(19	)		14
Net periodic defined benefit cost		14			2			(3	)
Operational and other restructuring activities ^{(e) (f)}		76			48			17
Development expenses		1			7			10
Non-cash inventory net realizable value, obsolescence, and other charges ^(g)		20			4			56
Noncontrolling interest		(21	)		(42	)		(14	)
Other		(10	)		10			3
Total Adjusted EBITDA	$	770		$	426		$	695

Capital expenditures, net		(177	)		(112	)		(96	)
Interest and finance charge payments		(252	)		(132	)		(173	)
Tax payments		(4	)		(5	)		(5	)
Pension contributions		(54	)		(8	)		(3	)
Total Adjusted Free Cash Flow	$	283		$	169		$	418

_______________

^{(a) See Note 4 to the FY 2024 Financial Statements for additional information.}
^{(b) See Note 20 to the FY 2024 Financial Statements for additional information.}
^{(c) See Note 10 to the FY 2024 Financial Statements for additional information.}
^{(d) See Note 12 to the FY 2024 Financial Statements for additional information.}
^{(e) The year ended December 31, 2024 (Successor) primarily includes the effects of nonrecurring ERCOT hedge settlements that occurred after the ERCOT Sale and severance payments associated with cost reduction initiatives.}
^{(f) The periods from May 18 through December 31, 2023 (Successor) and from January 1 through May 17, 2023 (Predecessor) include the effects of nonrecurring costs associated with exit from the Restructuring, severance costs associated with cost reduction initiatives, and nonrecurring post-Restructuring strategic initiative costs.}
^{(g) See Note 8 to the FY 2024 Financial Statements for additional information.}

Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2025 Guidance

	2025E
_{(Millions of dollars)}	Low			High
Net Income (Loss)	$	155		$	375

Adjustments
Interest expense and other finance charges		235			245
Income tax (benefit) expense		60			80
Depreciation, amortization and accretion		295			295
Nuclear fuel amortization		105			105
Unrealized (gain) loss on commodity derivative contracts		75			75
Adjusted EBITDA	$	925		$	1,175

Capital expenditures, net	$	(195	)	$	(205	)
Interest and finance charge payments		(215	)		(225	)
Tax payments		(50	)		(70	)
Pension contributions		(70	)		(80	)
Adjusted Free Cash Flow	$	395		$	595

_______________

^{Note: Figures are rounded to the nearest $5 million.}

The MIL Network –

February 28, 2025

MIL-OSI: Inuvo Reports Record Fourth Quarter 2024 Revenue of $26.2 Million, 26% Year-Over-Year Growth and Net Income

Source: GlobeNewswire (MIL-OSI)

Q4 2024 Net Income of $141 thousand and Adjusted EBITDA of $1.2 million

Inuvo management to host conference call today at 4:15 PM ET

LITTLE ROCK, Ark., Feb. 27, 2025 (GLOBE NEWSWIRE) — Inuvo, Inc. (NYSE American: INUV), a leading provider of artificial intelligence AdTech solutions, today provided a business update and announced its financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights:

Revenue was a record $26.2 million, a 26% increase compared to $20.8 million in Q4 2023
Gross profit increased 20% to $21.8 million, compared to $18.2 million in Q4 2023
Net income was $141 thousand, compared to net loss of $2.4 million for Q4 2023
Adjusted EBITDA was $1.2 million, compared to a loss of $1.2 million for Q4 2023

Full Year 2024 Financial Highlights:

Revenue increased 13% to $83.8 million, compared to $73.9 million in 2023
Gross profit increased 13% to $71.8 million, compared to $63.4 million in 2023
Net loss decreased by 45% to a loss of $5.8 million, compared to a net loss of $10.4 million in 2023
Adjusted EBITDA loss improved sixfold to $816,000 compared to $5.3 million in 2023
$230,000 in Net Cash from Operating activities was generated in 2024

2024 Operational Highlights:

Secured a Master Services Agreement with one of the largest retailers in the world
Signed 33 new agencies/brands and one new platform during the year
Secured a $10.0 million credit line in July
Launched enhancements to the IntentKey Self-Serve Platform, an advanced AI agent specifically designed for audience modeling

Richard Howe, CEO of Inuvo, stated, “Q4 2024 was a record-breaking quarter, delivering 26% year-over-year growth and generating $26.2 million in revenue—our largest quarter ever. This strong performance contributed to a 13% revenue increase for the full fiscal year. Over the past 18 quarters, we have sustained an approximately 7% compounded quarterly growth rate. This year, all our key financial metrics had strong year-over-year improvements. Notably, in Q4, we achieved positive net income and adjusted EBITDA.”

Mr. Howe continued, “We made a number of significant technological advancements in 2024, most notably the enhancements to the IntentKey Self-Serve Platform. This groundbreaking innovation democratizes advertising by allowing anyone of any caliber to describe and then immediately execute targeting, giving the AI nothing other than some simple audience descriptions.”

Financial Results for the Fourth Quarter and Full Year Ended December 31, 2024

Net revenue for the fourth quarter of 2024 totaled $26.2 million, compared to $20.8 million for the same period last year, a 26% year-over-year increase. The higher revenue was due to increasing demand within both Platforms and Agencies & Brands. Net revenue for the year ended December 31, 2024 totaled $83.8 million, compared to $73.9 million during the same period in 2023, a 13% year-over-year increase.

Cost of revenue for the fourth quarter of 2024, totaled $4.4 million compared to $2.6 million for the same period last year. Cost of revenue for the full year ended December 31, 2024, totaled $12.0 million, as compared to $10.5 million for the same period last year. The increase in the cost of revenue for the three months and full year ended December 31, 2024, as compared to the same period last year, was due to higher revenue within a Platform client this year.

Gross profit for the fourth quarter of 2024 and full year ended December 31, 2024 totaled $21.8 million and $71.8 million, respectively, as compared $18.2 million and $63.4 million, respectively, for the same periods last year. Gross profit margin for the fourth quarter of 2024 and the full year ended December 31, 2024 was approximately 83.1% and 85.6%, respectively, as compared to 87.3% and 85.8%, respectively, for the same periods last year.

Operating expenses for the fourth quarter of 2024 totaled $21.5 million, compared to $20.6 million for the same period last year. Operating expenses for the full year ended December 31, 2024 totaled $77.3 million, compared to $73.8 million for the same period last year. The higher operating expenses for the year ended December 31, 2024 was primarily driven by a 14.8% increase in Marketing costs compared to the same period in 2023. This increase was largely attributable to higher revenue from Platform advertisers.

Net interest expense/income for the fourth quarter of 2024 and the full year ended December 31, 2024 was approximately an expense of $103 thousand and an income of $267 thousand, respectively, compared to an income of approximately $8 thousand and an expense of $30 thousand for the same periods last year, respectively. The higher interest expense this year was due to increased borrowing from our line of credit.

Other expense/income for both the fourth quarter of 2024 and the full year ended December 31, 2024 was income of approximately $27 thousand, respectively, compared to income of approximately $0 and $15 thousand for the same periods last year, respectively. The income for this year was due to setup charges for new Platform partners. Last year’s income was due to unrealized and realized gains on trading securities.

Net income for the fourth quarter of 2024 was $141 thousand, or $0.00 per basic and diluted share, as compared to net loss of $2.4 million, or $0.02 per basic and diluted share, for the same period last year. Net loss for the full year ended December 31, 2024 totaled $5.8 million, or $0.04 per basic and diluted share, as compared to net loss of $10.4 million, or $0.08 per basic and diluted share, for the same period last year.

Adjusted EBITDA [see reconciliation table below] was approximately $1.2 million in the fourth quarter of 2024, compared to an Adjusted EBITDA loss of approximately $1.2 million for the same period last year. Adjusted EBITDA was a loss of approximately $816 thousand for the full year ended December 31, 2024, compared to a loss of approximately $5.3 million for the same period last year.

Liquidity and Capital Resources:

On December 31, 2024, Inuvo had $2.5 million in cash and cash equivalents, an unused working capital facility of $10.0 million and no debt.

As of February 21, 2025, Inuvo had 142,795,483 common shares issued and outstanding.

Conference Call Details:
Date: Thursday, February 27, 2025
Time: 4:15 p.m. Eastern Standard Time
Toll-free Dial-in Number: 1-800-717-1738
International Dial-in Number: 1-646-307-1865
Conference ID: 11158080
Webcast Link: HERE

A telephone replay will be available through Thursday, March 13, 2025. To access the replay, please dial 1- 844-512-2921 (domestic) or 1-412-317-6671 (international). At the system prompt, please enter the code 11158080 followed by the # sign. You will then be prompted for your name, company, and phone number. Playback will then automatically begin.

About Inuvo

Inuvo^®, Inc. (NYSE American: INUV) is a market leader in Artificial Intelligence built for advertising. Its IntentKey AI solution is a first-of-its-kind proprietary and patented technology capable of identifying and actioning to the reasons why consumers are interested in products, services, or brands, not who those consumers are. To learn more, visit www.inuvo.com.

Safe Harbor / Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, without limitation risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in Inuvo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed on February 27, 2025, and our other filings with the SEC. Inuvo cannot provide assurances that the assumptions upon which these forward-looking statements are based will prove to have been correct. Should one of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements, and investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Inuvo does not intend to update or revise any forward-looking statements made herein or any other forward-looking statements as a result of new information, future events or otherwise. Inuvo further expressly disclaims any written or oral statements made by a third-party regarding the subject matter of this press release. The information which appears on our websites and our social media platforms is not part of this press release.

Inuvo Company Contact:
Wally Ruiz
Chief Financial Officer
Tel (501) 205-8397
wallace.ruiz@inuvo.com

Investor Relations:
David Waldman / Natalya Rudman
Crescendo Communications, LLC
Tel: (212) 671-1020
inuv@crescendo-ir.com

(tables follow)

INUVO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Twelve Months Ended
	December 31			December 31			December 31			December 31
		2024			2023			2024			2023
Net revenue	$	26,189,924		$	20,842,095		$	83,793,859		$	73,911,528
Cost of revenue		4,433,905			2,643,543			12,033,777			10,477,272
Gross profit		21,756,019			18,198,552			71,760,082			63,434,256
Operating expenses:		83.1	%		87.3	%		85.6	%		85.8	%
Marketing costs		17,122,706			15,212,600			59,663,061			51,982,572
Compensation		2,703,309			3,591,109			12,065,783			13,793,309
General and administrative		1,709,887			1,821,821			5,545,049			8,050,590
Total operating expenses		21,535,902			20,625,530			77,273,893			73,826,771
Operating income (loss)		220,117			(2,426,978	)		(5,513,811	)		(10,392,515	)
Interest expense (income), net		102,910			(7,884	)		266,772			29,570
Other income		26,812			–			26,812			14,668
Income tax expense (benefit)		2,678			(17,764	)		8,030			(17,764	)
Net income (loss)		141,341			(2,401,330	)		(5,761,801	)		(10,389,653	)
Other comprehensive income:
Unrealized loss on marketable securities		–			–			–			84,868
Comprehensive income (loss)	$	141,341		$	(2,401,330	)	$	(5,761,801	)	$	(10,304,785	)

Net loss per share, basic and diluted	$0.00			($0.02		)	($0.04		)	($0.08		)
Weighted average shares outstanding:
Basic		140,494,192			127,381,051			139,968,374			131,116,370
Diluted		140,494,192			127,381,051			139,968,374			131,116,370

INUVO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


	December 31		December 31
	2024		2023
Assets

Cash and cash equivalent	$	2,459,245	$	4,440,454
Accounts receivable, net		12,545,771		9,226,956
Prepaid expenses and other current assets		639,805		1,076,121
Total current assets		15,644,821		14,743,531

Property and equipment, net		1,792,903		1,680,788

Goodwill		9,853,342		9,853,342
Intangible assets, net of accumulated amortization		3,897,875		4,664,791
Other assets		1,006,990		1,431,692

Total assets	$	32,195,931	$	32,374,144

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable	$	8,422,351	$	6,432,120
Accrued expenses and other current liabilities		9,463,537		8,100,354
Total current liabilities		17,885,888		14,532,474

Long-term liabilities		835,271		859,484

Total stockholders’ equity		13,474,772		16,982,186
Total liabilities and stockholders’ equity	$	32,195,931	$	32,374,144

RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE TAXES TO ADJUSTED EBITDA
(unaudited)

	Three Months Ended					Twelve Months Ended
		December 31	December 31			December 31			December 31
		2024		2023			2024			2023
Net income (loss)		141,341		(2,401,330	)	$	(5,761,801	)	$	(10,389,653	)
Interest expense (income), net		102,910		(7,884	)		266,772			29,570
Income tax expense (benefit)		2,678		(17,764	)		8,030			(17,764	)
Depreciation and amortization on PP&E		446,608		425,106			1,745,261			1,670,868
Amortization		123,412		264,523			824,272			1,080,690
EBITDA		816,949		(1,737,349	)		(2,917,466	)		(7,626,289	)
Stock-based compensation		413,911		514,613			1,501,444			1,986,296
Non recurring items:
Unrealized loss on marketable securities										14,668
Doubtful account reserve										361,097
Impairment & amortization of services agreement							600,000
Adjusted EBITDA		1,230,860		(1,222,736	)		(816,022	)		(5,264,228	)

Reconciliation of Operating Loss to EBITDA and Adjusted EBITDA

We present EBITDA and Adjusted EBITDA as a supplemental measure of our performance. We defined EBITDA as Net loss plus (i) interest expense, (ii) income tax expense, (iii) depreciation, and (iv) amortization. We further define Adjusted EBITDA as EBITDA plus (v) stock-based compensation and (vi) certain identified expenses that are not expected to recur or be representative of future ongoing operation of the business. These adjustments are itemized above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same or similar to some of the adjustments in the presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

The MIL Network –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

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

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

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

Fourth Quarter 2024 Financial Highlights

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

Full Year 2024 Financial Highlights

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

Fourth Quarter 2024 Key Performance Indicators and Recent Business Highlights

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

Financial Outlook

For the first quarter of 2025, the Company expects:

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

For the full year 2025, the Company expects:

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

Quarterly Conference Call

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

About AvePoint

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

Non-GAAP Financial Measures and Other Key Metrics

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

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

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

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

Disclosure Information

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

Forward-Looking Statements

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

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

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

AvePoint, Inc. Condensed Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited)

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

AvePoint, Inc. Condensed Consolidated Balance Sheets (In thousands, except par value)

	December 31,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	290,735		$	223,162
Short-term investments		167			3,721
Accounts receivable, net		87,365			85,877
Prepaid expenses and other current assets		16,528			12,824
Total current assets		394,795			325,584
Property and equipment, net		5,289			5,118
Goodwill		17,715			19,156
Intangible assets, net		8,889			10,546
Operating lease right-of-use assets		15,954			13,908
Deferred contract costs		59,838			54,675
Other assets		16,575			13,595
Total assets	$	519,055		$	442,582
Liabilities, mezzanine equity, and stockholders’ equity
Current liabilities:
Accounts payable	$	2,352		$	1,384
Accrued expenses and other current liabilities		76,135			53,766
Current portion of deferred revenue		144,468			121,515
Total current liabilities		222,955			176,665
Long-term operating lease liabilities		9,909			9,383
Long-term portion of deferred revenue		8,840			7,741
Earn-out shares liabilities		—			18,346
Other liabilities		6,403			5,603
Total liabilities		248,107			217,738
Commitments and contingencies
Mezzanine equity
Redeemable noncontrolling interest		—			6,038
Total mezzanine equity		—			6,038
Stockholders’ equity
Common stock, $0.0001 par value; 1,000,000 shares authorized, 194,071 and 184,652 shares issued and outstanding as of December 31, 2024 and 2023, respectively		19			18
Additional paid-in capital		779,007			667,881
Accumulated other comprehensive income		576			3,196
Accumulated deficit		(510,448	)		(460,496	)
Noncontrolling interest		1,794			8,207
Total stockholders’ equity		270,948			218,806
Total liabilities, mezzanine equity, and stockholders’ equity	$	519,055		$	442,582

AvePoint, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)

	Year Ended
	December 31,
	2024			2023
Operating activities
Net loss	$	(29,142	)	$	(21,501	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		5,382			4,687
Operating lease right-of-use assets expense		6,270			6,234
Foreign currency remeasurement loss		866			—
Stock-based compensation		39,059			36,048
Deferred income taxes		498			(864	)
Other		(67	)		1,068
Change in value of earn-out and warrant liabilities		37,276			11,454
Changes in operating assets and liabilities:
Accounts receivable		(4,898	)		(19,448	)
Prepaid expenses and other current assets		(3,350	)		(2,773	)
Deferred contract costs and other assets		(8,482	)		(7,687	)
Accounts payable, accrued expenses, operating lease liabilities and other current liabilities		16,046			609
Deferred revenue		29,436			26,867
Net cash provided by operating activities		88,894			34,694
Investing activities
Maturities of investments		5,353			2,620
Purchases of investments		(1,819	)		(3,497	)
Capitalization of internal-use software		(1,211	)		(1,434	)
Purchase of property and equipment		(3,044	)		(2,087	)
Issuance of notes receivables		(1,750	)		(1,250	)
Other investing activities		(130	)		—
Net cash used in investing activities		(2,601	)		(5,648	)
Financing activities
Repurchase of common stock		(33,053	)		(39,036	)
Proceeds from warrant exercises		17,182			—
Proceeds from stock option exercises		11,033			5,569
Redemption of redeemable noncontrolling interest		(6,130	)		—
Purchase of public warrants		(3,991	)		—
Company earn-out shares settled in cash		(572	)		—
Repayments of finance leases		(6	)		(64	)
Payments of debt issuance costs		—			(136	)
Net cash used in financing activities		(15,537	)		(33,667	)
Effect of exchange rates on cash		(3,183	)		595
Net decrease in cash and cash equivalents		67,573			(4,026	)
Cash and cash equivalents at beginning of period		223,162			227,188
Cash and cash equivalents at end of period	$	290,735		$	223,162
Supplemental disclosures of cash flow information
Income taxes paid	$	6,882		$	6,112
Company earn-out shares issuance	$	53,871		$	—

AvePoint, Inc. Non-GAAP Reconciliations (In thousands) (Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
Non-GAAP operating income
GAAP operating income (loss)	$	4,853		$	878		$	7,166		$	(15,351	)
Stock-based compensation expense		9,252			9,073			39,059			36,048
Amortization of acquired intangible assets		356			350			1,420			1,456
Non-GAAP operating income	$	14,461		$	10,301		$	47,645		$	22,153
Non-GAAP operating margin		16.2	%		13.8	%		14.4	%		8.1	%



Non-GAAP gross profit
GAAP gross profit	$	67,262		$	55,006		$	247,956		$	194,365
Stock-based compensation expense		(201	)		869			1,315			3,161
Amortization of acquired intangible assets		239			239			961			964
Non-GAAP gross profit	$	67,300		$	56,114		$	250,232		$	198,490
Non-GAAP gross margin		75.5	%		75.2	%		75.7	%		73.0	%

Non-GAAP sales and marketing
GAAP sales and marketing	$	32,410		$	29,127		$	122,869		$	112,105
Stock-based compensation expense		(2,281	)		(2,251	)		(8,965	)		(9,518	)
Amortization of acquired intangible assets		(117	)		(111	)		(459	)		(492	)
Non-GAAP sales and marketing	$	30,012		$	26,765		$	113,445		$	102,095
Non-GAAP sales and marketing as a % of revenue		33.7	%		35.9	%		34.3	%		37.6	%

Non-GAAP general and administrative
GAAP general and administrative	$	17,127		$	15,592		$	69,222		$	61,271
Stock-based compensation expense		(5,032	)		(4,787	)		(20,483	)		(19,338	)
Non-GAAP general and administrative	$	12,095		$	10,805		$	48,739		$	41,933
Non-GAAP general and administrative as a % of revenue		13.6	%		14.5	%		14.7	%		15.4	%

Non-GAAP research and development
GAAP research and development	$	12,872		$	9,409		$	48,699		$	36,340
Stock-based compensation expense		(2,140	)		(1,166	)		(8,296	)		(4,031	)
Non-GAAP research and development	$	10,732		$	8,243		$	40,403		$	32,309
Non-GAAP research and development as a % of revenue		12.0	%		11.0	%		12.2	%		11.9	%

The MIL Network –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

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

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

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

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

Fourth Quarter Financial Results

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

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

Full Year Financial Results

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

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

Fourth Quarter and Recent Business Highlights

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

Conference Call

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

About red violet^®

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

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

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

Use of Non-GAAP Financial Measures

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

FORWARD-LOOKING STATEMENTS

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


RED VIOLET, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data)

	December 31, 2024			December 31, 2023
ASSETS:
Current assets:
Cash and cash equivalents	$	36,504		$	32,032
Accounts receivable, net of allowance for doubtful accounts of $188 and $159 as of December 31, 2024 and 2023, respectively		8,061			7,135
Prepaid expenses and other current assets		1,627			1,113
Total current assets		46,192			40,280
Property and equipment, net		545			592
Intangible assets, net		35,997			34,403
Goodwill		5,227			5,227
Right-of-use assets		1,901			2,457
Deferred tax assets		7,496			9,514
Other noncurrent assets		1,173			517
Total assets	$	98,531		$	92,990
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	2,127		$	1,631
Accrued expenses and other current liabilities		2,881			1,989
Current portion of operating lease liabilities		406			569
Deferred revenue		712			690
Dividend payable		4,181			–
Total current liabilities		10,307			4,879
Noncurrent operating lease liabilities		1,592			1,999
Total liabilities		11,899			6,878
Shareholders’ equity:
Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of December 31, 2024 and 2023		–			–
Common stock—$0.001 par value, 200,000,000 shares authorized, 13,936,329 and 13,980,274 shares issued, and 13,936,329 and 13,970,846 shares outstanding, as of December 31, 2024 and 2023		14			14
Treasury stock, at cost, 0 and 9,428 shares as of December 31, 2024 and 2023		–			(188	)
Additional paid-in capital		87,488			94,159
Accumulated deficit		(870	)		(7,873	)
Total shareholders’ equity		86,632			86,112
Total liabilities and shareholders’ equity	$	98,531		$	92,990

RED VIOLET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data)

	Year Ended December 31,
	2024		2023
Revenue	$	75,189	$	60,204
Costs and expenses⁽¹⁾:
Cost of revenue (exclusive of depreciation and amortization)		13,997		13,069
Sales and marketing expenses		17,835		13,833
General and administrative expenses		25,875		22,446
Depreciation and amortization		9,562		8,352
Total costs and expenses		67,269		57,700
Income from operations		7,920		2,504
Interest income		1,400		1,334
Income before income taxes		9,320		3,838
Income tax expense (benefit)		2,317		(9,691	)
Net income	$	7,003	$	13,529
Earnings per share:
Basic	$	0.51	$	0.97
Diluted	$	0.50	$	0.96
Weighted average shares outstanding:
Basic		13,864,797		13,974,125
Diluted		14,125,825		14,134,021


(1) Share-based compensation expense in each category:
Sales and marketing expenses	$	606	$	462
General and administrative expenses		5,342		4,924
Total	$	5,948	$	5,386

RED VIOLET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)

	Year Ended December 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	7,003		$	13,529
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,562			8,352
Share-based compensation expense		5,948			5,386
Write-off of long-lived assets		85			6
Provision for bad debts		342			1,088
Noncash lease expenses		556			576
Deferred income tax expense (benefit)		2,018			(9,801	)
Changes in assets and liabilities:
Accounts receivable		(1,268	)		(2,688	)
Prepaid expenses and other current assets		(514	)		(342	)
Other noncurrent assets		(656	)		84
Accounts payable		496			(598	)
Accrued expenses and other current liabilities		936			100
Deferred revenue		22			20
Operating lease liabilities		(570	)		(641	)
Net cash provided by operating activities		23,960			15,071
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(169	)		(122	)
Capitalized costs included in intangible assets		(9,398	)		(9,024	)
Net cash used in investing activities		(9,567	)		(9,146	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Taxes paid related to net share settlement of vesting of restricted stock units		(4,068	)		(1,992	)
Repurchases of common stock		(5,853	)		(3,711	)
Net cash used in financing activities		(9,921	)		(5,703	)
Net increase in cash and cash equivalents	$	4,472		$	222
Cash and cash equivalents at beginning of period		32,032			31,810
Cash and cash equivalents at end of period	$	36,504		$	32,032
SUPPLEMENTAL DISCLOSURE INFORMATION:
Cash paid for interest	$	–		$	–
Cash paid for income taxes	$	607		$	82
Share-based compensation capitalized in intangible assets	$	1,627		$	1,851
Retirement of treasury stock	$	10,065		$	5,559
Right-of -use assets obtained in exchange of operating lease liabilities	$	–		$	1,919
Operating lease liabilities arising from obtaining right-of-use assets	$	–		$	1,919
Dividend declared not yet paid	$	4,181		$	–

Use and Reconciliation of Non-GAAP Financial Measures

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

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

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

Net income (loss) margin		4	%		(7	%)		9	%		22	%
Adjusted EBITDA margin		23	%		18	%		31	%		27	%

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

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands, except share data)	2024			2023			2024			2023
Net income (loss)	$	863		$	(1,070	)	$	7,003		$	13,529
Share-based compensation expense		1,496			1,328			5,948			5,386
Amortization of share-based compensation capitalized in intangible assets		299			263			1,152			969
Discrete tax items⁽¹⁾		–			–			–			(10,272	)
Tax effect of adjustments⁽²⁾		(1,336	)		(251	)		(2,587	)		(1,526	)
Adjusted net income	$	1,322		$	270		$	11,516		$	8,086
Earnings per share:
Basic	$	0.06		$	(0.08	)	$	0.51		$	0.97
Diluted	$	0.06		$	(0.08	)	$	0.50		$	0.96
Adjusted earnings per share:
Basic	$	0.10		$	0.02		$	0.83		$	0.58
Diluted	$	0.09		$	0.02		$	0.82		$	0.57
Weighted average shares outstanding:
Basic		13,900,091			13,985,426			13,864,797			13,974,125
Diluted⁽³⁾		14,366,545			14,307,797			14,125,825			14,134,021

(1)	During the three months ended September 30, 2023, a one-time income tax benefit of $10.3 million was recognized as a result of the release of the valuation allowance previously recorded on our deferred tax asset and cumulative research and development tax credit, which were excluded to calculate the adjusted net income.

(2)	The tax effect of adjustments is calculated using the expected federal and state statutory tax rate. The expected federal and state income tax rate was approximately 26.00% for the three and twelve months ended December 31, 2024, and 25.75% for the three and twelve months ended December 31, 2023.

(3)	For the three months ended December 31, 2023, diluted weighted average shares outstanding for adjusted diluted earnings per share are calculated by the inclusion of unvested RSUs, which were not included in US GAAP diluted weighted average shares outstanding due to the Company’s net loss position for such period.

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

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

Gross margin		70	%		64	%		69	%		65	%
Adjusted gross margin		82	%		78	%		81	%		78	%

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

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

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

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

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

SUPPLEMENTAL METRICS

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

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


	(Unaudited)
(Dollars in thousands)	Q1’23			Q2’23			Q3’23			Q4’23			Q1’24			Q2’24			Q3’24			Q4’24
Customer metrics
IDI – billable customers⁽¹⁾		7,256			7,497			7,769			7,875			8,241			8,477			8,743			8,926
FOREWARN – users⁽²⁾		131,348			146,537			168,356			185,380			236,639			263,876			284,967			303,418
Revenue metrics
Contractual revenue %⁽³⁾		75	%		79	%		79	%		82	%		78	%		74	%		77	%		77	%
Gross revenue retention %⁽⁴⁾		94	%		94	%		94	%		92	%		93	%		94	%		94	%		96	%
Other metrics
Employees – sales and marketing	61			63			65			71			76			86			93			95
Employees – support	10			9			9			9			10			10			11			11
Employees – infrastructure	27			26			27			27			29			27			29			28
Employees – engineering	47			47			47			51			51			56			58			57
Employees – administration	25			25			25			25			25			25			26			25

(1)	We define a billable customer of IDI as a single entity that generated revenue in the last three months of the period. Billable customers are typically corporate organizations. In most cases, corporate organizations will have multiple users and/or departments purchasing our solutions, however, we count the entire organization as a discrete customer.

(2)	We define a user of FOREWARN as a unique person that has a subscription to use the FOREWARN service as of the last day of the period. A unique person can only have one user account.

(3)	Contractual revenue % represents revenue generated from customers pursuant to pricing contracts containing a monthly fee and any additional overage divided by total revenue. Pricing contracts are generally annual contracts or longer, with auto renewal.

(4)	Gross revenue retention is defined as the revenue retained from existing customers, net of reinstated revenue, and excluding expansion revenue. Revenue is measured once a customer has generated revenue for six consecutive months. Revenue is considered lost when all revenue from a customer ceases for three consecutive months; revenue generated by a customer after the three-month loss period is defined as reinstated revenue. Gross revenue retention percentage is calculated on a trailing twelve-month basis. The numerator of which is revenue lost during the period due to attrition, net of reinstated revenue, and the denominator of which is total revenue based on an average of total revenue at the beginning of each month during the period, with the quotient subtracted from one. Our gross revenue retention calculation excludes revenue from idiVERIFIED, which is purely transactional and currently represents less than 3% of total revenue.

The MIL Network –

February 28, 2025

MIL-OSI: Epsilon Energy Ltd. Announces the Following Headlines

Source: GlobeNewswire (MIL-OSI)

Board declares dividend of $0.0625 per common share
Company announces the timing of its 2024 year end earnings release and conference call

HOUSTON, Feb. 27, 2025 (GLOBE NEWSWIRE) — Epsilon Energy Ltd. (“Epsilon” or the “Company”) (NASDAQ: EPSN) today announced that its Board of Directors has declared a dividend of $0.0625 per share of common stock (annualized $0.25/sh) to the stock holders of record at the close of business on March 13, 2025, payable on March 31, 2025. All dividends paid by the Company are “eligible dividends” as defined in subsection 89(1) of the Income Tax Act (Canada), unless indicated otherwise.

The Company also announced that it will issue its year end 2024 earnings release on Wednesday, March 19, 2025 after the market close and host a conference call to discuss its financial and operating results on Thursday, March 20, 2025 at 10:30 a.m. Central Time (11:30 a.m. Eastern Time).

Interested parties in the United States and Canada may participate toll-free by dialing (833) 816-1385. International parties may participate by dialing (412) 317-0478. Participants should ask to be joined to the “Epsilon Energy 2024 Year End Earnings Conference Call.”

A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=lEJXH1I5. A webcast replay will be available on the Company’s website (www.epsilonenergyltd.com) following the call.

About Epsilon

Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets in Pennsylvania, Texas, New Mexico, Oklahoma, and Alberta, Canada.

Contact Information:

281-670-0002

Jason Stabell
Chief Executive Officer
Jason.Stabell@EpsilonEnergyLTD.com

Andrew Williamson
Chief Financial Officer
Andrew.Williamson@EpsilonEnergyLTD.com

The MIL Network –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

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

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

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

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

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

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

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

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

Fiscal Year 2024 Financial Highlights

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

Fourth Quarter 2024 Financial Highlights

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

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

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

Business Highlights

Omnichannel platform drives revenue in key secular growth areas

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

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

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

Focused investments drive long-term growth opportunities

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

Recent product launches

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

2024 operating priorities drove profitable growth

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

Financial Outlook

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

Accordingly, we estimate the following:

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

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

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

Conference Call and Webcast details

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

Non-GAAP Financial Measures

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

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

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

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

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

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

Forward Looking Statements

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

About PubMatic

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



CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited)

	December 31, 2024			December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	100,452		$	78,509
Marketable securities		40,135			96,835
Accounts receivable, net		424,814			375,468
Prepaid expenses and other current assets		10,145			11,143
Total current assets		575,546			561,955
Property, equipment and software, net		58,522			60,729
Operating lease right-of-use assets		44,402			21,102
Acquisition-related intangible assets, net		4,284			5,864
Goodwill		29,577			29,577
Deferred tax assets		24,864			13,880
Other assets, non-current		2,324			2,136
TOTAL ASSETS	$	739,519		$	695,243
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	386,602		$	347,673
Accrued liabilities		26,365			25,684
Operating lease liabilities, current		5,843			6,236
Total current liabilities		418,810			379,593
Operating lease liabilities, non-current		39,538			15,607
Other liabilities, non-current		3,908			3,844
TOTAL LIABILITIES		462,256			399,044
Stockholders’ Equity
Common stock		6			6
Treasury stock		(146,796	)		(71,103	)
Additional paid-in capital		275,304			230,419
Accumulated other comprehensive loss		(636	)		(4	)
Retained earnings		149,385			136,881
TOTAL STOCKHOLDERS’ EQUITY		277,263			296,199
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	739,519		$	695,243


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited)

	Three Months Ended December 31,				Year Ended December 31,
		2024		2023		2024		2023
Revenue	$	85,502	$	84,600	$	291,256	$	267,014
Cost of revenue⁽¹⁾		24,935		24,208		101,027		99,229
Gross profit		60,567		60,392		190,229		167,785
Operating expenses:⁽¹⁾
Technology and development		7,831		6,846		33,263		26,727
Sales and marketing		23,763		20,353		95,369		82,803
General and administrative⁽²⁾		14,171		12,780		57,670		56,219
Total operating expenses		45,765		39,979		186,302		165,749
Operating income		14,802		20,413		3,927		2,036
Total other income, net		3,618		2,632		13,847		8,469
Income before income taxes		18,420		23,045		17,774		10,505
Provision for income taxes		4,521		4,343		5,270		1,624
Net income	$	13,899	$	18,702	$	12,504	$	8,881
Net income per share attributable to common stockholders:
Basic	$	0.29	$	0.37	$	0.25	$	0.17
Diluted	$	0.26	$	0.34	$	0.23	$	0.16
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic		47,993		50,659		49,213		51,760
Diluted		52,623		54,940		54,294		56,027

⁽¹⁾Stock-based compensation expense includes the following:
STOCK BASED COMPENSATION EXPENSE (In thousands) (unaudited)

	Three Months Ended December 31,				Year Ended December 31,
		2024		2023		2024		2023
Cost of revenue	$	438	$	383	$	1,855	$	1,472
Technology and development		1,625		1,137		6,313		4,346
Sales and marketing		3,247		2,589		13,407		10,462
General and administrative		4,099		3,228		16,101		12,582
Total stock-based compensation	$	9,409	$	7,337	$	37,676	$	28,862

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


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) (unaudited)

	December 31,
		2024			2023
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income	$	12,504		$	8,881
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		45,352			44,770
Stock-based compensation		37,676			28,862
Provision for doubtful accounts		—			5,675
Deferred income taxes		(10,984	)		(13,406	)
Accretion of discount on marketable securities		(4,117	)		(4,093	)
Non-cash lease expense		6,801			6,145
Other		(25	)		45
Changes in operating assets and liabilities:
Accounts receivable		(49,345	)		(75,716	)
Prepaid expenses and other current assets		(5,826	)		3,918
Accounts payable		38,096			79,687
Accrued liabilities		9,627			3,035
Operating lease liabilities		(6,531	)		(5,789	)
Other liabilities, non-current		197			(893	)
Net cash provided by operating activities		73,425			81,121
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of and deposits on property and equipment		(17,592	)		(10,601	)
Capitalized software development costs		(20,936	)		(17,687	)
Purchases of marketable securities		(142,016	)		(140,603	)
Proceeds from sales of marketable securities		—			18,873
Proceeds from maturities of marketable securities		202,858			111,000
Net cash provided by (used in) investing activities		22,314			(39,018	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of business combination indemnification claims holdback		(2,148	)		—
Proceeds from issuance of common stock for employee stock purchase plan		2,368			1,869
Proceeds from exercise of stock options		1,765			1,549
Principal payments on finance lease obligations		(131	)		(126	)
Payments to acquire treasury stock		(75,332	)		(59,268	)
Net cash used in financing activities		(73,478	)		(55,976	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		22,261			(13,873	)
Effect of foreign currency on cash		(318	)		—
CASH AND CASH EQUIVALENTS – Beginning of year		78,509			92,382
CASH AND CASH EQUIVALENTS – End of year	$	100,452		$	78,509


RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA AND NON-GAAP NET INCOME (In thousands, except per share amounts) (unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Reconciliation of net income:
Net income	$	13,899		$	18,702		$	12,504		$	8,881
Add back (deduct):
Stock-based compensation		9,409			7,337			37,676			28,862
Depreciation and amortization		11,421			11,039			45,352			44,770
Interest income		(1,604	)		(2,515	)		(8,477	)		(8,828	)
Provision for income taxes		4,521			4,343			5,270			1,624
Adjusted EBITDA¹	$	37,646		$	38,906		$	92,325		$	75,309

Revenue	$	85,502		$	84,600		$	291,256		$	267,014
Adjusted EBITDA margin		44	%		46	%		32	%		28	%

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Reconciliation of net income per share:
Net income	$	13,899		$	18,702		$	12,504		$	8,881
Add back (deduct):
Stock-based compensation		9,409			7,337			37,676			28,862
Adjustment for income taxes		(1,865	)		(1,590	)		(7,728	)		(5,695	)
Non-GAAP net income¹	$	21,443		$	24,449		$	42,452		$	32,048
GAAP diluted EPS	$	0.26		$	0.34		$	0.23		$	0.16
Non-GAAP diluted EPS	$	0.41		$	0.45		$	0.78		$	0.57
GAAP weighted average shares outstanding—diluted		52,623			54,940			54,294			56,027
Non-GAAP weighted average shares outstanding—diluted		52,623			54,940			54,294			56,027


SUPPLEMENTAL CASH FLOW INFORMATION COMPUTATION OF FREE CASH FLOW, A NON-GAAP MEASURE (In thousands) (unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Reconciliation of cash provided by operating activities:
Net cash provided by operating activities	$	18,048		$	28,674		$	73,425		$	81,121
Less: Purchases of property and equipment		(4,324	)		(5,177	)		(17,592	)		(10,601	)
Less: Capitalized software development costs		(4,868	)		(3,962	)		(20,936	)		(17,687	)
Free cash flow	$	8,856		$	19,535		$	34,897		$	52,833

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

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

The MIL Network –

February 28, 2025

MIL-OSI: ARRAY Technologies, Inc. Reports Financial Results for the Fourth Quarter and Full Year 2024

Source: GlobeNewswire (MIL-OSI)

Fourth Quarter 2024 Financial Highlights

Revenue of $275.2 million
Gross Margin of 28.5%
Adjusted gross margin⁽¹⁾ of 29.8%
Net loss to common shareholders of $(141.2) million
- Net loss to common shareholders inclusive of $74.0 million non-cash goodwill impairment charge and $91.9 million non-cash long-lived intangible asset write-down associated with the 2022 STI acquisition
Adjusted EBITDA⁽¹⁾ of $45.2 million
Net loss per basic and diluted share of $(0.93)
Adjusted net income per diluted share⁽¹⁾ of $0.16

Full Year 2024 Financial Highlights

Revenue of $915.8 million
Gross Margin of 32.5%
Adjusted gross margin ⁽¹⁾ of 34.1%
Net loss to common shareholders of $(296.1) million
- Net loss to common shareholders inclusive of $236.0 million non-cash goodwill impairment charge and $91.9 million non-cash long-lived intangible asset write-down associated with the 2022 STI acquisition
Adjusted EBITDA⁽¹⁾ of $173.6 million
Net loss per basic and diluted share of $(1.95)
Adjusted net income per diluted share⁽¹⁾ of $0.60
Free cash flow⁽¹⁾ of $135.4 million
Total executed contracts and awarded orders at December 31, 2024 were $2.0 billion

ALBUQUERQUE, N.M., Feb. 27, 2025 (GLOBE NEWSWIRE) — ARRAY Technologies (NASDAQ: ARRY) (“ARRAY” or the “Company”), a global leader in utility-scale solar tracking, today announced financial results for its fourth quarter and full year ended December 31, 2024.

“ARRAY delivered strong fourth quarter and full year 2024 results, we exceeded the mid-point of our fourth quarter revenue guidance and achieved record gross margin on the full year. Our ongoing focus on operational execution continues to translate into robust profitability and healthy cash flow. We finished 2024 with an orderbook of $2 billion, representing 10% year-on-year growth. We are pleased with our results, which delivered significant progress in both market share and commercial growth. Thank you to our employees for their continued focus and hard work. Additionally, we are on track to deliver 100% domestic content solar trackers by the first half of 2025. Our OmniTrack™ product continues to gain traction in the market, and now accounts for over 20% of our orderbook. We are excited about our investment in Swap Robotics, a disruptive technology driving automation in PV installations. We believe the integration of Swap Robotics technology into our product portfolio will drive project efficiencies and cost savings for our customers,” said Chief Executive Officer, Kevin G. Hostetler.

Mr. Hostetler continued, “While persistent headwinds, including permitting and interconnection delays, shortages of high-voltage circuit breakers and transformers, and labor constraints—continue to impact project timelines in the United States, we experienced the market stabilizing by year-end, in contrast to the delays experienced in the middle of the year. In Europe, we anticipate modest growth in 2025 as we are well positioned to capture additional market share. However, in Brazil, macro factors such as currency devaluation, volatile interest rates, and newly introduced tariffs on solar components have impacted growth. For 2025, at the midpoint of our guidance, ARRAY expects to deliver over 20% year-over-year revenue growth. We are optimistic about future demand growth for utility-scale solar energy both domestically and internationally and confident that our value proposition in the industry will continue to propel growth for years to come.”

First Quarter and Full Year 2025 Guidance

Given the uncertainty in the utility-scale solar energy market and headwinds we experienced during 2024 which pushed out project timelines, we are providing guidance for the first quarter of 2025. It is not our intention to provide quarterly guidance in the future. For the quarter ending March 31, 2025, the Company expects:

Revenue to be in the range of $260 million to $270 million
Adjusted EBITDA margin⁽²⁾ to be in the range of 11% to 13%

For the year ending December 31, 2025, the Company expects:

Revenue to be in the range of $1.05 billion to $1.15 billion
Adjusted EBITDA⁽²⁾ to be in the range of $180 million to $200 million
Adjusted net income per share⁽²⁾ to be in the range of $0.60 to $0.70

Supplemental Presentation and Conference Call Information

ARRAY has posted a supplemental presentation to its website, which will be discussed during the conference call hosted by management today (February 27, 2025) at 5:00 p.m. (ET). The conference call can be accessed live over the phone by dialing (877)-869-3847 (domestic) or (201)-689-8261 (international) and entering the passcode 13750627 or via webcast of the live conference call by logging onto the Investor Relations sections of the Company’s website at http://ir.arraytechinc.com. A telephonic replay will be available approximately three hours after the call by dialing (877)-660-6853 (domestic), or (201)-612-7415 (international) with the passcode 13750627. The replay will be available until 11:59 p.m. (ET) on March 13, 2025. The online replay will be available for 30 days on the same website immediately following the call.

About ARRAY Technologies, Inc.

ARRAY Technologies (NASDAQ: ARRY) is a leading global provider of solar tracking technology to utility-scale and distributed generation customers, who construct, develop, and operate solar PV sites. With solutions engineered to withstand the harshest weather conditions, ARRAY’s high-quality solar trackers, software platforms and field services combine to maximize energy production and deliver value to our customers for the entire lifecycle of a project. Founded and headquartered in the United States, ARRAY is rooted in manufacturing and driven by technology – relying on its domestic manufacturing, diversified global supply chain, and customer-centric approach to design, deliver, commission, train, and support solar energy deployment around the world. For more news and information on ARRAY, please visit arraytechinc.com.

Investor Relations Contact:
Keith Jennings
505-437-0010
investors@arraytechinc.com

Media Contact:
Nicole Stewart
505-589-8257

Forward-Looking Statements

This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, technology or product developments, financing and investment plans, dividend policy, competitive position, industry and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “anticipates,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” “designed to” or similar expressions and the negatives of those terms.

ARRAY’s actual results and the timing of events could materially differ from those anticipated in such forward-looking statements as a result of certain risks, uncertainties and other factors, including without limitation: changes in growth or rate of growth in demand for solar energy projects; competitive pressures within our industry; factors affecting viability and demand for solar energy, including but not limited to, the retail price of electricity, availability of in-demand components like high voltage breakers, various policies related to the permitting and interconnection costs of solar plants, and the availability of incentives for solar energy and solar energy production systems, which makes it difficult to predict our future prospects; competition from conventional and renewable energy sources; a loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment; a drop in the price of electricity derived from the utility grid or from alternative energy sources; fluctuations in our results of operations across fiscal periods, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations; any increase in interest rates, or a reduction in the availability of tax equity or project debt capital in the global financial markets, which could make it difficult for customers to finance the cost of a solar energy system; existing electric utility industry policies and regulations, and any subsequent changes or new related policies and regulations, may present technical, regulatory and economic barriers to the purchase and use of solar energy systems, which may significantly reduce demand for our products or harm our ability to compete; the interruption of the flow of materials from international vendors, which could disrupt our supply chain, including as a result of the imposition of new and/or additional duties, tariffs and other charges or restrictions on imports and exports; changes in the global trade environment, including the imposition of import tariffs or other import restrictions; geopolitical, macroeconomic and other market conditions unrelated to our operating performance including but not limited to a pandemic, the Ukraine-Russia war, attacks on shipping in the Red Sea, conflict in the Middle East, and inflation and interest rates; our ability to convert our orders in backlog into revenue; the reduction, elimination or expiration, or our failure to optimize the benefits of government incentives for, or regulations mandating the use of, renewable energy and solar energy, particularly in relation to our competitors; failure to, or incurrence of significant costs in order to, obtain, maintain, protect, defend or enforce, our intellectual property and other proprietary right; delays in construction projects and any failure to manage our inventory; significant changes in the cost of raw materials; disruptions to transportation and logistics, including increases in shipping costs; defects or performance problems in our products, which could result in loss of customers, reputational damage and decreased revenue; delays, disruptions or quality control problems in our product development operations; our ability to retain our key personnel or failure to attract additional qualified personnel; additional business, financial, regulatory and competitive risks due to our continued planned expansion into new markets; cybersecurity or other data incidents, including unauthorized disclosure of personal or sensitive data or theft of confidential information; a failure to maintain an effective system of integrated internal controls over financial reporting; our substantial indebtedness, risks related to actual or threatened public health epidemics, pandemics, outbreaks or crises; changes to laws and regulations, including changes to tax laws and regulations, that are applied adversely to us or our customers, including our ability to optimize those changes brought about by the passage of the Inflation Reduction Act or any repeal thereof; and the other risks and uncertainties described in more detail in the Company’s most recent Annual Report on Form 10-K and other documents on file with the SEC, each of which can be found on our website, www.arraytechinc.com.

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Non-GAAP Financial Information

This press release includes certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA, Adjusted net income, Adjusted net income per share, Adjusted general and administrative expense and Free cash flow.

We define Adjusted gross profit as gross profit plus (i) amortization of developed technology and (ii) other costs if applicable. We define Adjusted gross margin as Adjusted gross profit as a percentage of revenue. We define Adjusted EBITDA as net income (loss) plus (i) other expense, net, (ii) foreign currency (gain) loss, net, (iii) preferred dividends and accretion, (iv) interest expense, (v) income tax (benefit) expense, (vi) depreciation expense, (vii) amortization of intangibles, (viii) amortization of developed technology, (ix) equity-based compensation, (x) change in fair value of contingent consideration, (xi) impairment of long-lived assets, (xii) goodwill impairment, (xiii) certain legal expenses, and (xiv) other costs. We define Adjusted net income as net income (loss) to common shareholders plus (i) amortization of intangibles, (ii) amortization of developed technology, (iii) amortization of debt discount and issuance costs (iv) preferred accretion, (v) equity-based compensation, (vi) change in fair value of contingent consideration, (vii) impairment of long-lived assets, (viii) goodwill impairment, (ix) certain legal expenses, (x) other costs, and (xi) income tax (benefit) expense adjustments. We define Adjusted general and administrative expense as general and administrative expense less (i) equity based compensation, (ii) certain legal expenses, (iii) other costs and (iv) income tax expense adjustments. We define Free cash flow as Cash provided by (used in) operating activities less purchase of property, plant and equipment and cash payments for the acquisition of right-of-use assets.

A detailed reconciliation between GAAP results and results excluding special items (“non-GAAP”) is included within this presentation. We calculate net income (loss) per share as net income (loss) to common shareholders divided by the basic and diluted weighted average number of shares outstanding for the applicable period and we define Adjusted net income per share as Adjusted net income (as detailed above) divided by the basic and diluted weighted average number of shares outstanding for the applicable period.

We believe that these non-GAAP financial measures are provided to enhance the reader’s understanding of our past financial performance and our prospects for the future. Our management team uses these non-GAAP financial measures in assessing the Company’s performance, as well as in planning and forecasting future periods. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies.

Among other limitations, Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; do not reflect income tax expense or benefit; and other companies in our industry may calculate Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income differently than we do, which limits their usefulness as comparative measures. Because of these limitations, Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP.

We compensate for these limitations by relying primarily on our GAAP results and using Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income on a supplemental basis.

You should review the reconciliation of gross profit to Adjusted gross profit and net income (loss) to Adjusted EBITDA and Adjusted net income below and not rely on any single financial measure to evaluate our business.

⁽¹⁾ A reconciliation of the most comparable GAAP measure to its Non-GAAP measure is included below.
⁽²⁾ A reconciliation of projected Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income per share, which are forward-looking measures that are not prepared in accordance with GAAP, to the most directly comparable GAAP financial measures, is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a quantitative reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the components of the applicable GAAP measures and non-GAAP adjustments may be recognized. The GAAP measures may include the impact of such items as non-cash share-based compensation, revaluation of the fair-value of our contingent consideration, and the tax effect of such items, in addition to other items we have historically excluded from Adjusted EBITDA and Adjusted net income per share. We expect to continue to exclude these items in future disclosures of these non-GAAP measures and may also exclude other similar items that may arise in the future (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments are inherently unpredictable as to if or when they may occur. As such, for our 2025 outlook, we have not included estimates for these items and are unable to address the probable significance of the unavailable information, which could be material to future results.

Array Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited) (in thousands, except per share and share amounts)

	December 31,
		2024			2023
ASSETS
Current assets
Cash and cash equivalents	$	362,992		$	249,080
Restricted cash		1,149			—
Accounts receivable, net		275,838			332,152
Inventories		200,818			161,964
Prepaid expenses and other		157,927			89,085
Total current assets		998,724			832,281

Property, plant and equipment, net		26,222			27,893
Goodwill		160,189			435,591
Other intangible assets, net		181,409			354,389
Deferred income tax assets		17,754			15,870
Other assets		41,701			40,717
Total assets	$	1,425,999		$	1,706,741

LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	172,368		$	119,498
Accrued expenses and other		91,183			70,211
Accrued warranty reserve		2,063			2,790
Income tax payable		5,227			5,754
Deferred revenue		119,775			66,488
Current portion of contingent consideration		1,193			1,427
Current portion of debt		30,714			21,472
Other current liabilities		15,291			48,051
Total current liabilities		437,814			335,691

Deferred income tax liabilities		21,398			66,858
Contingent consideration, net of current portion		7,868			8,936
Other long-term liabilities		18,684			20,428
Long-term warranty		4,830			3,372
Long-term debt, net of current portion		646,570			660,948
Total liabilities		1,137,164			1,096,233

Commitments and contingencies (Note 16)

Series A Redeemable Perpetual Preferred Stock: $0.001 par value; 500,000 shares authorized; 460,920 and 432,759 issued, respectively; liquidation preference of $493.1 million at both dates		406,931			351,260

Stockholders’ equity
Preferred stock $0.001 par value – 4,500,000 shares authorized; none issued at respective dates		—			—
Common stock $0.001 par value – 1,000,000,000 shares authorized; 151,951,652 and 151,242,120 shares issued at respective dates		151			151
Additional paid-in capital		297,780			344,517
Accumulated deficit		(370,624	)		(130,230	)
Accumulated other comprehensive income (loss)		(45,403	)		44,810
Total stockholders’ equity		(118,096	)		259,248
Total liabilities, redeemable perpetual preferred stock and stockholders’ equity	$	1,425,999		$	1,706,741

Array Technologies, Inc. and Subsidiaries 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	$	275,232		$	341,615		$	915,807			$	1,576,551
Cost of revenue:
Cost of product and service revenue		193,273			253,746			603,572				1,146,442
Amortization of developed technology		3,640			3,640			14,558				14,558
Total cost of revenue		196,913			257,386			618,130				1,161,000
Gross profit		78,319			84,229			297,677				415,551

Operating expenses:
General and administrative		45,663			43,710			160,567				159,535
Change in fair value of contingent consideration		396			732			125				2,964
Depreciation and amortization		8,702			9,567			36,086				38,928
Long-lived assets impairment		91,904			—			91,904		—		—
Goodwill impairment		74,000			—			236,000				—
Total operating expenses		220,665			54,009			524,682				201,427

(Loss) income from operations		(142,346	)		30,220			(227,005	)			214,124

Other income (expense), net		654			(888	)		(1,008	)			(1,015	)
Interest income		4,092			2,206			16,777				8,330
Foreign currency (loss) gain, net		(3,442	)		(326	)		(4,515	)			(53	)
Interest expense		(9,007	)		(8,857	)		(34,825	)			(44,229	)
Total other (expense) income		(7,703	)		(7,865	)		(23,571	)			(36,967	)

(Loss) income before income tax expense (benefit)		(150,049	)		22,355			(250,576	)			177,157
Income tax (benefit) expense		(23,146	)		3,013			(10,182	)			39,917
Net (loss) income		(126,903	)		19,342			(240,394	)			137,240
Preferred dividends and accretion		14,338			13,332			55,670				51,691
Net (loss) income to common shareholders	$	(141,241	)	$	6,010		$	(296,064	)		$	85,549

(Loss) income per common share
Basic	$	(0.93	)	$	0.04		$	(1.95	)		$	0.57
Diluted	$	(0.93	)	$	0.04		$	(1.95	)		$	0.56

Weighted average common shares outstanding
Basic		151,944			151,175			151,754				150,942
Diluted		151,944			152,110			151,754				152,022

Array Technologies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) (in thousands)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Operating activities:
Net income (loss)	$	(126,903	)	$	19,342		$	(240,394	)	$	137,240
Adjustments to net income (loss):
Goodwill impairment		74,000			—			236,000			—
Impairment of long-lived assets		91,904			—			91,904			—
Provision for bad debts		(1,357	)		2,644			2,058			2,527
Deferred tax benefit		(30,371	)		(6,534	)		(37,650	)		(8,862	)
Depreciation and amortization		9,206			9,950			38,221			40,268
Amortization of developed technology		3,640			3,640			14,558			14,558
Amortization of debt discount and issuance costs		1,435			1,447			6,087			10,570
Gain on debt refinancing		—			(457	)		—			(457	)
Equity-based compensation		3,498			2,845			10,349			14,540
Change in fair value of contingent consideration		396			732			125			2,964
Warranty provision		3,127			1,075			3,163			4,666
Write-down of inventories		442			1,844			2,923			6,431
Changes in operating assets and liabilities, net of business acquisition:
Accounts receivable		(442	)		99,164			41,423			92,800
Inventories		(14,823	)		54,189			(44,787	)		66,743
Income tax receivables		33			(3,156	)		(4,112	)		9
Prepaid expenses and other		(24,505	)		(8,700	)		(69,708	)		(10,840	)
Accounts payable		24,475			(52,097	)		58,180			(37,654	)
Accrued expenses and other		34,492			(10,019	)		(436	)		5,325
Income tax payable		3,790			2,666			(863	)		1,936
Lease liabilities		(2,894	)		9,227			(8,624	)		1,177
Deferred revenue		8,443			(33,821	)		55,563			(111,986	)
Net cash provided by operating activities		57,586			93,981			153,980			231,955
Investing activities
Purchase of property, plant and equipment		(1,701	)		(5,374	)		(7,305	)		(16,989	)
Retirement/disposal of property, plant and equipment		(4	)		168			34			168
Cash payments for the acquisition of right-of-use assets		(11,276	)		—			(11,276	)		—
SAFE Investment		(3,000	)		—			(3,000	)		—
Sale of equity investment		—			—			11,975			—
Net cash used in investing activities		(15,981	)		(5,206	)		(9,572	)		(16,821	)
Financing activities
Series A equity issuance costs		—			—			—			(1,509	)
Tax withholding related to vesting of equity-based compensation		(18	)		—			(1,752	)		—
Proceeds from issuance of other debt		74,035			2,795			93,059			63,311
Principal payments on term loan facility		(1,075	)		(1,075	)		(4,300	)		(74,300	)
Principal payments on other debt		(72,545	)		(19,039	)		(97,424	)		(88,063	)
Contingent consideration payments		—			—			(1,427	)		(1,200	)
Net cash used in financing activities		397			(17,319	)		(11,844	)		(101,761	)
Effect of exchange rate changes on cash and cash equivalent balances		(10,233	)		3,614			(17,503	)		1,806
Net change in cash and cash equivalents		31,769			75,070			115,061			115,179
Cash and cash equivalents and restricted cash, beginning of period		332,372			174,010			249,080			133,901
Cash and cash equivalents and restricted cash, end of period	$	364,141		$	249,080		$	364,141		$	249,080

Supplemental cash flow information
Cash paid for interest	$	8,989		$	8,995		$	38,655		$	43,949
Cash paid for income taxes (net of refunds)	$	2,746		$	9,145		$	27,966		$	45,942

Non-cash investing and financing
Dividends accrued on Series A	$	(13,668	)	$	6,803		$	7,246		$	26,370

Array Technologies, Inc.
Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, General and Administrative Expense, and Free Cash Flow Reconciliation (unaudited)
(in thousands, except per share amounts)

The following table reconciles Gross profit to Adjusted gross profit:

	Three Months Ended December 31,					Year Ended December 31,
		2024		2023			2024		2023
Revenue		275,232		341,615			915,807		1,576,551
Cost of revenue		196,913		257,386			618,130		1,161,000
Gross profit		78,319		84,229			297,677		415,551
Gross margin		28.5	%	24.7	%		32.5	%	26.4	%

Amortization of developed technology		3,640		3,640			14,558		14,558
Adjusted gross profit		81,959		87,869			312,235		430,109
Adjusted gross margin		29.8	%	25.7	%		34.1	%	27.3	%

The following table reconciles Net income to Adjusted EBITDA:

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Net (loss) income	$	(126,903	)	$	19,342		$	(240,394	)	$	137,240
Preferred dividends and accretion		14,338			13,332			55,670			51,691
Net (loss) income to common shareholders	$	(141,241	)	$	6,010		$	(296,064	)	$	85,549
Other expense, net		(4,746	)		(1,318	)		(15,769	)		(7,315	)
Foreign currency loss (gain), net		3,442			326			4,515			53
Preferred dividends and accretion		14,338			13,332			55,670			51,691
Interest expense		9,007			8,857			34,825			44,229
Income tax (benefit) expense		(23,146	)		3,013			(10,182	)		39,917
Depreciation expense		1,140			772			4,410			2,669
Amortization of intangibles		8,142			9,186			33,811			37,607
Amortization of developed technology		3,640			3,640			14,558			14,558
Equity-based compensation		3,498			2,648			10,349			14,578
Change in fair value of contingent consideration		396			732			125			2,964
Long-lived assets impairment		91,904			—			91,904			—
Goodwill impairment		74,000			—			236,000			—
Certain legal expenses^(a)		2,240			244			6,773			898
Other costs^(b)		2,586			736			2,628			736
Adjusted EBITDA	$	45,200		$	48,178		$	173,553		$	288,134

^(a) Represents certain legal fees and other related costs associated with (i) Actions filed against the company and certain officers and directors alleging violations of the Securities Exchange Acts of 1934 and 1933, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed. The appeal has been fully briefed, argued, and the Company is awaiting a decision, and (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI, and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business.

^(b) For the three months ended December 31, 2024, other costs represent costs related to the settlement of a regional tax dispute for a period prior to the acquisition of STI. For the twelve months ended December 31, 2024, other costs also include costs related to Capped-Call accounting treatment evaluation and the settlement of a regional tax dispute. For the three months ended December 31, 2023, other costs represent costs related to Capped-Call accounting treatment evaluation.

The following table reconciles Net income to Adjusted net income:

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Net (loss) income	$	(126,903	)	$	19,342		$	(240,394	)	$	137,240
Preferred dividends and accretion		14,338			13,332			55,670			51,691
Net (loss) income to common shareholders	$	(141,241	)	$	6,010		$	(296,064	)	$	85,549
Amortization of intangibles		8,142			9,187			33,811			37,607
Amortization of developed technology		3,640			3,640			14,558			14,558
Amortization of debt discount and issuance costs		1,547			1,447			6,199			10,570
Preferred accretion		7,093			6,528			27,510			25,320
Equity based compensation		3,498			2,648			10,349			14,578
Change in fair value of contingent consideration		396			732			125			2,964
Impairment of long-lived assets		91,904			—			91,904			—
Goodwill impairment		74,000			—			236,000			—
Certain legal expenses^(a)		2,240			244			6,773			898
Other costs^(b)		2,586			736			2,628			736
Income tax expense adjustments^(c)		(28,688	)		(4,757	)		(42,596	)		(20,863	)
Adjusted net income	$	25,117		$	26,415		$	91,197		$	171,917

(Loss) income per common share
Basic	$	(0.93	)	$	0.04		$	(1.95	)	$	0.57
Diluted	$	(0.93	)	$	0.04		$	(1.95	)	$	0.56
Weighted average number of common shares outstanding
Basic		151,944			151,175			151,754			150,942
Diluted		151,944			152,110			151,754			152,022

Adjusted net income per common share
Basic	$	0.17		$	0.17		$	0.60		$	1.14
Diluted	$	0.16		$	0.17		$	0.60		$	1.13
Weighted average number of common shares outstanding
Basic		151,944			151,175			151,754			150,942
Diluted		152,255			152,110			152,285			152,022

^(a) Represents certain legal fees and other related costs associated with (i) Actions filed against the company and certain officers and directors alleging violations of the Securities Exchange Acts of 1934 and 1933, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed. The appeal has been fully briefed, argued, and the Company is awaiting a decision, and (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business.

^(b) For the three months ended December 31, 2024, other costs represent costs related to the settlement of a regional tax dispute for a period prior to the acquisition of STI. For the twelve months ended December 31, 2024, other costs also include costs related to Capped-Call accounting treatment evaluation and the settlement of a tax dispute. For the three months ended December 31, 2023, other costs represent costs related to Capped-Call accounting treatment evaluation.

^(c) Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax.

The following table reconciles General and administrative expense to Adjusted general and administrative expense:


	Three Months Ended December 31,					Year Ended December 31,
		2024		2023			2024		2023
General and administrative expense		45,663		43,710			160,567		159,535
Equity based compensation		3,498		2,648			10,349		14,578
Certain legal expenses^(a)		2,240		244			6,773		898
Other costs^(b)		2,586		736			2,628		736
Income tax expense adjustments^(c)		(28,688	)	(4,757	)		(42,596	)	(20,863	)
Adjusted general and administrative expense		25,299		42,581			137,721		154,884

^(a) Represents certain legal fees and other related costs associated with (i) Actions filed against the company and certain officers and directors alleging violations of the Securities Exchange Acts of 1934 and 1933, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed. The appeal has been fully briefed, argued, and the Company is awaiting a decision, and (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business.

^(b) For the three months ended December 31, 2024, other costs represent costs related to the settlement of a regional tax dispute for a period prior to the acquisition of STI. For the twelve months ended December 31, 2024, other costs also include costs related to Capped-Call accounting treatment evaluation and the settlement of a tax dispute. For the Three months ended December 31, 2023, other costs represent costs related to Capped-Call accounting treatment evaluation.

^(c) Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax.

The following table reconciles new cash provided by operating activities to Free cash flow:

	Three Months Ended December 31,					Year Ended December 31,
		2024		2023			2024		2023
Net cash provided by operating activities		57,586		93,981			153,980		231,955
Purchase of property, plant and equipment		(1,701	)	(5,374	)		(7,305	)	(16,989	)
Cash payments for the acquisition of right-of-use assets		(11,276	)	—			(11,276	)	—
Free cash flow		44,609		88,607			135,399		214,966

The MIL Network –

February 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

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

Fourth Quarter 2024 Financial Highlights:

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

Full Year 2024 Financial Highlights:

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

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

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

Recent Business and Operating Highlights:

Customer Wins

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

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

Business Outlook

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

First Quarter 2025:

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

Full Year 2025:

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

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

Conference Call Information

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

About Definitive Healthcare

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

Forward-Looking Statements

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

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

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

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

Website

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

Non-GAAP Financial Measures

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

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

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

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

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

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

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

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

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

Media Contact:
Bethany Swackhamer
bswackhamer@definitivehc.com


Definitive Healthcare Corp.
Consolidated Balance Sheets
(amounts in thousands, except number of shares and par value; unaudited)

	December 31, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	105,378		$	130,976
Short-term investments		184,786			177,092
Accounts receivable, net		53,232			59,249
Prepaid expenses and other assets		13,040			13,120
Deferred contract costs		13,736			13,490
Total current assets		370,172			393,927
Property and equipment, net		3,791			4,471
Operating lease right-of-use assets, net		7,521			9,594
Other assets		2,300			2,388
Deferred contract costs		14,389			17,320
Intangible assets, net		297,933			323,121
Goodwill		393,283			1,075,080
Total assets	$	1,089,389		$	1,825,901
Liabilities and Equity
Current liabilities:
Accounts payable	$	10,763		$	5,787
Accrued expenses and other liabilities		40,896			51,529
Deferred revenue		93,344			97,377
Term loan		13,750			13,750
Operating lease liabilities		2,408			2,239
Total current liabilities		161,161			170,682
Long-term liabilities:
Deferred revenue		32			9
Term loan		229,368			242,567
Operating lease liabilities		7,586			9,372
Tax receivable agreements liability		49,511			127,000
Deferred tax liabilities		25,088			67,163
Other liabilities		9,449			9,934
Total liabilities		482,195			626,727

Equity:
Class A Common Stock, par value $0.001, 600,000,000 shares authorized, 113,953,554 and 116,562,252 shares issued and outstanding at December 31, 2024 and 2023, respectively		114			117
Class B Common Stock, par value $0.00001, 65,000,000 shares authorized, 39,439,198 and 39,375,806 shares issued and outstanding, respectively, at December 31, 2024, and 39,762,700 and 39,168,047 shares issued and outstanding, respectively, at December 31, 2023		—			—
Additional paid-in capital		1,085,445			1,086,581
Accumulated other comprehensive (deficit) income		(610	)		2,109
Accumulated deficit		(640,574	)		(227,450	)
Noncontrolling interests		162,819			337,817
Total equity		607,194			1,199,174
Total liabilities and equity	$	1,089,389		$	1,825,901

Definitive Healthcare Corp.
Consolidated Statements of Operations
(amounts in thousands, except share amounts and per share data; unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Revenue	$	62,288		$	65,932		$	252,202		$	251,415
Cost of revenue:
Cost of revenue exclusive of amortization ⁽¹⁾		10,967			9,447			40,684			34,740
Amortization		3,719			3,066			14,049			12,742
Gross profit		47,602			53,419			197,469			203,933
Operating expenses:
Sales and marketing ⁽¹⁾		20,372			23,605			83,807			94,534
Product development ⁽¹⁾		8,982			11,569			36,518			42,441
General and administrative ⁽¹⁾		8,503			16,567			49,267			58,861
Depreciation and amortization		9,413			9,935			37,618			39,008
Transaction, integration, and restructuring expenses		2,835			1,823			12,225			11,489
Goodwill impairment		97,060			—			688,854			287,400
Total operating expenses		147,165			63,499			908,289			533,733
Loss from operations		(99,563	)		(10,080	)		(710,820	)		(329,800	)
Other (expense) income, net:
Interest expense, net		(303	)		(125	)		(245	)		(1,559	)
Other income (expense), net		9,254			(1,982	)		77,320			23,179
Total other income (expense), net		8,951			(2,107	)		77,075			21,620
Loss before income taxes		(90,612	)		(12,187	)		(633,745	)		(308,180	)
Benefit from (provision for) income taxes		5,895			(1,175	)		42,299			18,553
Net loss		(84,717	)		(13,362	)		(591,446	)		(289,627	)
Less: Net loss attributable to noncontrolling interests		(25,642	)		(3,129	)		(178,322	)		(87,239	)
Net loss attributable to Definitive Healthcare Corp.	$	(59,075	)	$	(10,233	)	$	(413,124	)	$	(202,388	)
Net loss per share of Class A Common Stock:
Basic	$	(0.51	)	$	(0.09	)	$	(3.54	)	$	(1.79	)
Diluted	$	(0.51	)	$	(0.09	)	$	(3.54	)	$	(1.79	)
Weighted average Common Stock outstanding:
Basic		115,015,489			116,418,495			116,640,183			112,764,537
Diluted		115,015,489			116,418,495			116,640,183			112,764,537

⁽¹⁾ Amounts include equity-based compensation expense as follows:

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Cost of revenue	$	171		$	267		$	839		$	1,097
Sales and marketing		1,449			3,110			6,235			11,407
Product development		1,651			3,572			8,579			13,138
General and administrative		4,094			6,305			22,432			23,097
Total equity-based compensation expense	$	7,365		$	13,254		$	38,085		$	48,739

Definitive Healthcare Corp.
Consolidated Statements of Cash Flows
(amounts in thousands; unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Cash flows provided by (used in) operating activities:
Net loss	$	(84,717	)	$	(13,362	)	$	(591,446	)	$	(289,627	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		526			562			2,245			1,953
Amortization of intangible assets		12,606			12,439			49,422			49,797
Amortization of deferred contract costs		3,978			3,488			15,441			12,963
Equity-based compensation		7,365			13,254			38,085			48,739
Amortization of debt issuance costs		175			175			702			702
Provision for bad debt expense		—			554			947			1,374
Non-cash restructuring charges		192			—			1,239			155
Goodwill impairment charges		97,060			—			688,854			287,400
Tax receivable agreement remeasurement		(8,758	)		1,507			(76,909	)		(23,470	)
Changes in fair value of contingent consideration		1,460			302			(1,780	)		302
Deferred income taxes		(6,061	)		1,015			(42,670	)		(18,713	)
Changes in operating assets and liabilities:
Accounts receivable		(17,455	)		(18,559	)		5,693			811
Prepaid expenses and other assets		(627	)		(1,348	)		(7,832	)		(7,156	)
Deferred contract costs		(4,481	)		(5,770	)		(12,756	)		(18,790	)
Contingent consideration		—			—			(602	)		—
Accounts payable, accrued expenses, and other liabilities		(285	)		2,919			(5,458	)		1,330
Deferred revenue		7,157			7,533			(4,979	)		(6,580	)
Net cash provided by operating activities		8,135			4,709			58,196			41,190
Cash flows (used in) provided by investing activities:
Purchases of property, equipment, and other assets		(10,901	)		(594	)		(12,344	)		(2,977	)
Purchases of short-term investments		(111,634	)		(45,595	)		(304,304	)		(259,208	)
Maturities of short-term investments		96,265			100,596			303,769			275,426
Cash paid for acquisitions and investments, net of cash acquired		—			—			(13,530	)		(45,023	)
Net cash (used in) provided by investing activities		(26,270	)		54,407			(26,409	)		(31,782	)
Cash flows used in financing activities:
Repayments of term loans		(3,437	)		(3,438	)		(13,750	)		(8,594	)
Taxes paid related to net share settlement of equity awards		(278	)		(1,035	)		(7,548	)		(4,432	)
Repurchases of Class A Common Stock		(7,329	)		—			(22,366	)		—
Payments of contingent consideration		—			—			(1,000	)		—
Payments under tax receivable agreement		—			—			(6,950	)		(246	)
Payments of equity offering issuance costs		—			—			—			(30	)
Member distributions		(2,324	)		(1,589	)		(5,135	)		(12,282	)
Net cash used in financing activities		(13,368	)		(6,062	)		(56,749	)		(25,584	)
Net (decrease) increase in cash and cash equivalents		(31,503	)		53,054			(24,962	)		(16,176	)
Effect of exchange rate changes on cash and cash equivalents		(728	)		462			(636	)		218
Cash and cash equivalents, beginning of year		137,609			77,460			130,976			146,934
Cash and cash equivalents, end of year	$	105,378		$	130,976		$	105,378		$	130,976
Supplemental cash flow disclosures:
Cash paid during the period for:
Interest	$	3,310		$	3,684		$	14,196		$	14,456
Income taxes		—			—			—			136
Acquisitions:
Net assets acquired, net of cash acquired	$	—		$	—		$	13,675		$	52,678
Working capital adjustment receivable		—			—			(145	)		145
Contingent consideration		—			—			—			(7,800	)
Net cash paid for acquisitions	$	—		$	—		$	13,530		$	45,023

Supplemental disclosure of non-cash investing activities:
Capital expenditures included in accounts payable and accrued expenses and other liabilities	$	6,870		$	47		$	6,870		$	47

Definitive Healthcare Corp.
Reconciliations of Non-GAAP Financial Measures to Closest GAAP Equivalent

Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash Flow
(in thousands; unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Net cash provided by operating activities	$	8,135		$	4,709		$	58,196		$	41,190
Purchases of property, equipment, and other assets		(10,901	)		(594	)		(12,344	)		(2,977	)
Interest paid in cash		3,310			3,684			14,196			14,456
Transaction, integration, and restructuring expenses paid in cash ^(a)		1,183			1,521			12,766			11,032
Earnout payment ^(b)		—			—			602			—
Other non-core items ^(c)		(3,311	)		1,803			(936	)		4,875
Unlevered Free Cash Flow	$	(1,584	)	$	11,123		$	72,480		$	68,576

(a) Transaction and integration expenses paid in cash primarily represent legal, accounting, and consulting expenses related to our acquisitions. Restructuring expenses paid in cash relate to our restructuring plans announced in the first quarter of 2024 and the first and third quarters of 2023, along with exit costs related to office relocations. (b) Earnout payment represents final settlement of contingent consideration included in cash flow from operations. (c) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations.

Reconciliation of GAAP Net Loss to Adjusted Net Income and
GAAP Operating Loss to Adjusted Operating Income
(in thousands, except per share amounts; unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2024			2023			2024			2023
Net loss	$	(84,717	)	$	(13,362	)	$	(591,446	)	$	(289,627	)
Add: Income tax (benefit) provision		(5,895	)		1,175			(42,299	)		(18,553	)
Add: Interest expense, net		303			125			245			1,559
Add: Other (income) expense, net		(9,254	)		1,982			(77,320	)		(23,179	)
Loss from operations		(99,563	)		(10,080	)		(710,820	)		(329,800	)
Add: Amortization of intangible assets acquired through business combinations		11,370			11,510			45,239			46,099
Add: Equity-based compensation		7,365			13,254			38,085			48,739
Add: Transaction, integration, and restructuring expenses		2,835			1,823			12,225			11,489
Add: Goodwill impairment		97,060			—			688,854			287,400
Add: Other non-core items		(3,311	)		1,803			(936	)		4,875
Adjusted Operating Income		15,756			18,310			72,647			68,802
Less: Interest expense, net		(303	)		(125	)		(245	)		(1,559	)
Less: Recurring income tax benefit (provision) ^(a)		60			(1,175	)		669			1,374
Less: Foreign currency gain (loss)		496			(475	)		411			(291	)
Less: Tax impacts of adjustments to net loss		(3,458	)		(5,886	)		(18,341	)		(21,633	)
Adjusted Net Income	$	12,551		$	10,649		$	55,141		$	46,693
Shares for Adjusted Net Income Per Diluted Share ^(b)		154,404,162			155,560,756			155,853,282			154,836,706
Adjusted Net Income Per Diluted Share	$	0.08		$	0.07		$	0.35		$	0.30

(a) Recurring income tax benefit (provision) excludes the income tax impact of goodwill impairment charges. (b) Diluted Adjusted Net Income Per Share is computed by giving effect to all potential weighted average Class A common stock and any securities that are convertible into Class A common stock, including Definitive OpCo units and restricted stock units. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method assuming proceeds from unrecognized compensation as required by GAAP. Fully diluted shares are 162,498,543 and 163,153,442 as of December 31, 2024 and 2023, respectively.

Reconciliation of GAAP Gross Profit and Margin to Adjusted Gross Profit and Margin
(in thousands; unaudited)

	Three Months Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
(in thousands)	Amount		% of Revenue		Amount		% of Revenue		Amount		% of Revenue		Amount		% of Revenue
Reported gross profit and margin	$	47,602	76	%	$	53,419	81	%	$	197,469	78	%	$	203,933	81	%
Amortization of intangible assets resulting from acquisition-related purchase accounting adjustments		2,483	4	%		2,137	3	%		9,866	4	%		9,044	4	%
Equity-based compensation costs		171	0	%		267	0	%		839	0	%		1,097	0	%
Adjusted gross profit and margin	$	50,256	81	%	$	55,823	85	%	$	208,174	83	%	$	214,074	85	%

Reconciliation of GAAP Net Loss to Adjusted EBITDA
(in thousands; unaudited)

	Three Months Ended December 31,												Year Ended December 31,
		2024						2023						2024					2023
	Amount			% of Revenue			Amount			% of Revenue			Amount			% of Revenue		Amount			% of Revenue
Net loss and margin	$	(84,717	)		(136	)%	$	(13,362	)		(20	)%	$	(591,446	)	(235	)%	$	(289,627	)	(115	)%
Interest expense, net		303			0	%		125			0	%		245		0	%		1,559		1	%
Income tax (benefit) provision		(5,895	)		(9	)%		1,175			2	%		(42,299	)	(17	)%		(18,553	)	(7	)%
Depreciation & amortization		13,132			21	%		13,001			20	%		51,667		20	%		51,750		21	%
EBITDA and margin		(77,177	)		(124	)%		939			1	%		(581,833	)	(231	)%		(254,871	)	(101	)%
Other (income) expense, net ^(a)		(9,254	)		(15	)%		1,982			3	%		(77,320	)	(31	)%		(23,179	)	(9	)%
Equity-based compensation ^(b)		7,365			12	%		13,254			20	%		38,085		15	%		48,739		19	%
Transaction, integration, and restructuring expenses ^(c)		2,835			5	%		1,823			3	%		12,225		5	%		11,489		5	%
Goodwill impairment ^(d)		97,060			156	%		—			0	%		688,854		273	%		287,400		114	%
Other non-core items ^(e)		(3,311	)		(5	)%		1,803			3	%		(936	)	(0	)%		4,875		2	%
Adjusted EBITDA and margin	$	17,518			28	%	$	19,801			30	%	$	79,075		31	%	$	74,453		30	%

(a) Primarily represents TRA liability remeasurement and foreign exchange gains and losses. (b) Equity-based compensation represents non-cash compensation expense recognized in association with equity awards made to employees and directors. (c) Transaction and integration expenses primarily represent legal, accounting, and consulting expenses and fair value adjustments for contingent consideration related to our acquisitions and strategic partnerships. Restructuring expenses relate to the 2024 Restructuring Plan and those we committed to during the first and third quarters of 2023, as well as impairment and restructuring charges related to office closures, relocations, and consolidations.

	Three Months Ended December 31,						Year Ended December 31,
(in thousands)		2024			2023			2024			2023
Merger and acquisition due diligence and transaction costs	$	919		$	1,309		$	3,329		$	5,419
Integration costs		176			129			1,115			934
Fair value adjustment for contingent consideration		1,460			302			(1,780	)		302
Restructuring charges for severance and other separation costs		88			83			8,097			4,679
Office closure and relocation restructuring charges and impairments		192			—			1,464			155
Total transaction, integration and restructuring expense	$	2,835		$	1,823		$	12,225		$	11,489

(d) Goodwill impairment charges represent non-cash, pre-tax, goodwill impairment charges. We experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented triggering events requiring our management to perform quantitative goodwill impairment tests multiple times in 2024 and during the third quarter of 2023. As a result of the impairment tests conducted in each respective period, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded these impairment charges. (e) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations. These expenses are comprised of non-core legal and regulatory costs isolated to unique and extraordinary litigation, legal and regulatory matters that are not considered normal and recurring business activity, including sales tax accrual adjustments inclusive of penalties and interest for sales taxes that we may have been required to collect from customers in 2024 and in certain previous years, and other non-recurring legal and regulatory matters. Other non-core items also include consulting fees and severance costs associated with strategic transition initiatives, as well as professional fees related to financing, capital structure changes, and other non-core items.

	Three Months Ended December 31,						Year Ended December 31,
(in thousands)		2024			2023			2024			2023
Non-core legal and regulatory	$	(3,438	)	$	(60	)	$	(3,439	)	$	2,370
Consulting and severance costs for strategic transition initiatives		1		$	1,977			2,219		$	1,977
Other non-core expenses		126			(114	)		284			528
Total other non-core items	$	(3,311	)	$	1,803		$	(936	)	$	4,875

The MIL Network –

February 28, 2025

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

US Senate News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MIL OSI USA News –

February 28, 2025

MIL-OSI Economics: IPAA, U.S. Chamber and 500+ Groups Urge Urge Congress to Permanently Extend Pro-Growth Tax Reforms

Source: Independent Petroleum Association of America

Headline: IPAA, U.S. Chamber and 500+ Groups Urge Urge Congress to Permanently Extend Pro-Growth Tax Reforms

Feb 27, 2025 IPAA, U.S. Chamber and 500+ Groups Urge Urge Congress to Permanently Extend Pro-Growth Tax Reforms

To Members of the United States Congress:

The undersigned organizations support extending pro-growth tax policies that have raised workers’ wages, helped families weather inflation, and led to more well-paying jobs. The individual, business, and estate tax provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”) have been instrumental in helping achieve these goals and should be made permanent.

As lawmakers contemplate advancing tax reform legislation through budget reconciliation this year, the importance of adopting the appropriate budget baseline cannot be overstated. We believe it is imperative that Congress adopt a current-policy baseline.

Adopting a current-policy baseline would avoid a $4 trillion dollar tax increase on American families and employers by creating a pathway for Congress to make the TCJA permanent. Doing so would provide businesses the certainty and stability they need to make the long-term investments that drive growth, accelerate productivity, and increase prosperity across all segments of the economy. …

MIL OSI Economics –

February 28, 2025

MIL-OSI Asia-Pac: Chief Minister of Maharashtra and Union Minister of State for Power and New & Renewable Energy addressed the 2nd meeting of Group of Ministers on viability of distribution utilities.

Source: Government of India (2)

Chief Minister of Maharashtra and Union Minister of State for Power and New & Renewable Energy addressed the 2nd meeting of Group of Ministers on viability of distribution utilities.

Renewable Energy as panacea for increasing supply and reducing cost of power

Inflation-indexed and cost-reflective power tariffs need of the hour.

Need for Regulatory Reforms for Power Distribution.

Posted On: 27 FEB 2025 7:57PM by PIB Delhi

The 2^nd meeting of Group of Ministers (GoM), constituted for addressing issues related to viability of electricity distribution utilities, was held in Mumbai today in the presence of Shri Devendra Fadnavis, Hon’ble Chief Minister of Maharashtra, also holding the portfolio of Energy Ministry in the State, and Shri Shripad Yesso Naik, Hon’ble Union Minister of State for Power and New & Renewable Energy as Chairman of the GoM.

Thiru V Senthil Balaji, Hon’ble Minister of Electricity, Tamil Nadu, Dr. Somendra Tomar, Hon’ble Minister of State for Energy, Uttar Pradesh, and Smt. Meghana Sakore Bordikar, Hon’ble Minister of State for Energy, Maharashtra attended the meeting. Shri Gottipati Ravikumar, Hon’ble Minister of Energy, Andhra Pradesh and Shri Heeralal Nagar, Hon’ble Minister of State for Energy, Rajasthan attended the meeting through video-conference. The meeting was also attended by officials from Central Government, State Governments and Power Utilities of member States, Power Finance Corporation (PFC) Ltd and REC Ltd.

In his opening remarks, Union Minister of State welcomed Energy Ministers from the member States and thanked Chief Minister, Maharashtra, for hosting the meeting. He highlighted the discussions held in the first meeting of the GoM and the collective efforts required from the members for improvement in power Distribution sector. He highlighted about 4 key parameters and their relevance to improving viability of distribution utilities viz. Aggregate Technical and Commercial (AT&C) Loss, Gap between Average Cost of Supply and Average Revenue Realised (ACS-ARR Gap), Accumulated Losses and Outstanding debts.

Union Minister expressed that every 1% increase of AT&C loss results in monetary losses for utilities in upwards of Rs. 10,000 Cr. He stressed upon the need for leveraging renewable energy (RE) for reducing cost of power in line with the initiatives taken by Maharashtra and Rajasthan. He highlighted about various short, medium and long term strategies to supplement the efforts towards viability of power distribution sector. He mentioned about the use of advanced technologies such as Artificial Intelligence for demand forecasting and power purchase optimisation, establishing mechanism for timely payment of Government dues, sharing best practices amongst DISCOMs, development of renewable energy, energy storage and expediting works under Revamped Distribution Sector Scheme (RDSS), as the key interventions.

In his address Chief Minister of Maharashtra thanked Union Minister of State for having the 2^nd meeting of the Group of Ministers in Mumbai. He commended that the measures taken by the Government of India will have far reaching impact on making country’s distribution sector stronger and healthier. He highlighted about the energy distribution across different consumer categories in the State. He emphasised on the need for expeditious growth of renewable sources of energy couple with energy storage solutions so as to meet the future challenges of energy transition and growing power demand.

He further highlighted the efforts made by the State towards RE deployment under Mukhyamantri Saur Krishi Vahini Yojana facilitating day time power supply to farmers thereby reducing cost of power and reducing subsidy burden of the State. He mentioned that the State is expeditiously working towards solarization of all the Agricultural load feeders.

He assured for improvement in AT&C loss figures of the State in the coming years. He mentioned about progress made by the State under the RDSS. He highlighted the importance of Resource Adequacy plan, use of AI tools etc. He requested support of Government of India (GoI) for early release of Gross Budgetary Support (GBS) under RDSS, reintroduction of schemes like UDAY (Ujjwal DISCOM Assurance Yojana), lowering interest rates on loans charged by REC Ltd. and Power Finance Corporation (PFC) Ltd., and waiver or reduction in their prepayment charges. He urged for having regulatory relaxations for allowing surplus of DISCOMs towards infrastructure development and reducing debt burden before passing it on further.

Joint Secretary (Distribution), Ministry of Power made a presentation highlighting status of key financial and operational parameters of member States.

The contours of the Action plan identifying the ways to reduce the outstanding debts and losses of the Distribution Utilities and the means to bring them into profits, were discussed in detail.

State of Gujarat, as a special invitee, shared the best practices adopted and their journey toward making their DISCOMs profitable.

The member States actively participated in the meeting and presented the overview of State DISCOMs. They gave valuable suggestions for improving the financial condition of DISCOMs. State of Maharashtra, Tamilnadu, Uttar Pradesh, Andhra Pradesh, and Rajasthan, made presentations covering status, reforms undertaken, best practices and way forward for the GoM.

PRAYAS group made a presentation highlighting reforms that may be undertaken for having a financially viable distribution sector.

The Group of Ministers reiterated its commitment and expressed resolve to take necessary measures for improving the financial viability of DISCOMs.

In his closing remarks, Hon’ble Union Minister of State mentioned that the inputs/ suggestions provided by the States would be helpful in shaping the policies and further course of action and urged the member States to work upon the action points that have emerged during the meeting.

It was also unanimously decided to have 3rd meeting of GoM in Uttar Pradesh in the month of March.

*****

JN / SK

(Release ID: 2106731) Visitor Counter : 55

MIL OSI Asia Pacific News –

February 28, 2025

MIL-OSI Security: Drug Kingpin Sentenced To 27 Years As Part Of Ongoing Drug Trafficking Conspiracy

Source: Office of United States Attorneys

GRAND RAPIDS – Acting U.S. Attorney for the Western District of Michigan Andrew Birge today announced that United States District Judge Jane M. Beckering sentenced Jason Demyers, 44, a current resident of Arizona with significant ties to Lansing, Michigan, to serve 324 months in prison for his leadership of a multi-state drug trafficking conspiracy. During sentencing, Judge Beckering described Demyers as a “kingpin” in what she described as a “nationally orchestrated drug trafficking organization” that dealt massive amounts of both cocaine and methamphetamine. Demyers is the seventh defendant to be sentenced in the case.

Demyers was one of the leaders of the drug trafficking conspiracy. His organization distributed kilograms of cocaine and methamphetamine in and around Detroit, Lansing, and Kalamazoo between August 2022 and July 2024. Demyers personally coordinated the shipment to Michigan of packages containing approximately ten kilograms of methamphetamine. He also worked with couriers who flew from Michigan to California carrying thousands of dollars earned from drug sales and then flew back to Michigan carrying kilograms of illegal drugs.

During the pendency of the case, investigators seized approximately ten kilograms of methamphetamine, eight kilograms of cocaine, multiple pieces of real property used to facilitate the drug trafficking conspiracy, and jewelry valued at approximately $325,000.

In total, the United States charged fourteen defendants as part of the organization. Twelve of the defendants have pled guilty, while two have entered into a pretrial diversion program. Of the defendants sentenced to date, the Court has imposed the following prison sentences:

Franchot Barnes – 324 months
Jomo Grady – 210 months
Evette Wallace – 110 months
Jamar Goins – 78 months
Lanise Moody – 40 months
Jonathan Conner – 37 months

The remaining defendants are scheduled to be sentenced in May and June 2025.

The Drug Enforcement Administration (DEA) and the Lansing Police Department (LPD) began the investigation into Demyers’ drug trafficking organization in October 2022, in partnership with Internal Revenue Service Criminal Investigation (IRS-CI) and the Kalamazoo County Sheriff’s Office.

“Today’s sentencing of Jason Demyers for his lead role in a national drug trafficking organization is a victory for the American public and a defeat to drug traffickers everywhere. The special agents of IRS Criminal Investigation continue in their mission to disrupt the flow of ill-gotten gains that is the life-blood for these criminals,” said Special Agent in Charge Charles Miller, Detroit Field Office, IRS Criminal Investigation. “We will continue to be relentless in our mission to dismantle these drug trafficking organizations and bring the criminals who run them to justice.”

“This case is a prime example of how a seemingly small investigation can evolve into a large-scale operation, thanks to the dedicated collaboration between our local, state, and federal partners,” said Lansing Police Chief Rob Backus. “By working together, we’re able to target and dismantle operations led by some of the most prolific offenders.”

“DEA is committed to protecting communities throughout Michigan from drug traffickers who prey on the vulnerable,” said Acting Special Agent in Charge of the DEA Detroit Field Division Andrew Lawton. “Mr. Demyers ran a drug trafficking organization that funneled kilogram-quantities of drugs into Michigan along with an untold amount of misery and destruction. Together with our law enforcement partners, DEA will continue to identify, disrupt, and dismantle criminal organizations that threaten safety and disrupt communities.”

This prosecution, dubbed Operation Cold as Ice, was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

Assistant United States Attorneys Stephanie M. Carowan and Austin J. Hakes prosecuted the case on behalf of the United States.

###

MIL Security OSI –

February 28, 2025

MIL-OSI Economics: IPAA Applauds Senate Passage of Congressional Review Act Resolution to Nullify Biden Methane Tax Regulations

Source: Independent Petroleum Association of America

Headline: IPAA Applauds Senate Passage of Congressional Review Act Resolution to Nullify Biden Methane Tax Regulations

Feb 27, 2025 IPAA Applauds Senate Passage of Congressional Review Act Resolution to Nullify Biden Methane Tax Regulations

WASHINGTON – The Independent Petroleum Association of America (IPAA) issued the following statement following the Senate passage of H.J.Res.35 which through the Congressional Review Act process disapproves of the Biden Environmental Protection Agency’s (EPA) methane emissions fee on oil and natural gas facilities which will lead to higher prices for consumers, reduced domestic energy production, and increased American reliance on foreign energy sources.

IPAA President & CEO Jeff Eshelman: “The Independent Petroleum Association of America (IPAA) applauds Sen. John Hoeven for his leadership in overturning the EPA’s Waste Emissions Charge (Methane Tax) regulations. This Congressional Review Act (CRA) resolution approved by the Senate today allows Congress to nullify the regulations the Biden Administration established to implement the misguided methane tax. The Biden Administration and Democrats in Congress passed the methane tax to single out and punish the oil and natural gas industry despite its already burdensome EPA regulatory framework. The tax was passed without appropriate understanding of its impact or industry safeguards. IPAA has always opposed the methane tax and believe it is simply a tax designed to hamper American oil and gas production. With the passage of H.J.Res.35 in both the House and Senate, IPAA urges quick action by President Trump to sign this resolution and will work with his Administration to eliminate this unnecessary tax on American oil and natural gas producers as soon as possible.”

IPAA also supports legislation led by Senator Ted Cruz (R-TX) and Congressman August Pfluger (R-TX-11) to repeal the Methane Tax.

MIL OSI Economics –

February 28, 2025

MIL-OSI Security: New York Man Who Ran Multi-Million-Dollar Cryptocurrency Investment Scheme Found Guilty Of Wire Fraud And Money Laundering

Source: Office of United States Attorneys

SAN FRANCISCO – A federal jury convicted Douglas Jae Woo Kim, 32, of New York, New York, on 14 counts of wire fraud, international money laundering, and money laundering. The jury reached its verdict yesterday afternoon, following a three-week trial before Senior U.S. District Judge Charles R. Breyer.

According to court documents and evidence presented at trial, between October 2017 and June 2020, after moving to San Francisco, Kim engaged in a scheme to defraud investors, many of whom were friends and acquaintances, of over $7 million in money and cryptocurrency by holding himself out as a legitimate trader of cryptocurrency, a form of virtual currency. Kim falsely represented that he was seeking short-term liquidity in the form of loans or investments for cryptocurrency trading or other legitimate business purposes and promised to trade or invest the cryptocurrency provided by investors and lenders to make a profit. He also told victims that the loans carried no or very low risk, promised high rates of return on their loans, and claimed that he had sufficient funds to personally guarantee the loans.

“This case may involve the new world of virtual currency, but there’s nothing new about the defendant’s scheme to defraud,” said Acting United States Attorney Patrick D. Robbins. “Douglas Kim made bogus promise after promise to investors and lenders, only to cheat them and send their money to offshore gambling sites. Today’s verdict sends a clear message to anyone who engages in fraud in the Northern District of California: you will be prosecuted, and you will face serious consequences.”

“Mr. Kim deceived those who trusted him, exploiting their confidence to fund his personal gambling activities rather than the legitimate investments he offered his victims. The FBI remains committed to identifying and bringing to justice individuals who manipulate and defraud others for financial gain,” said FBI Acting Special Agent in Charge Dan Costin.

In October 2017, Kim contacted a victim by text message and said he was looking for investors interested in making what he called a short-term loan for a “fairly modest operation.” Kim represented that he was investing in a cryptocurrency operation in which he would make a profit from fees charged to a peer-to-peer network and from exchange transactions, and informed the victim that the operation “isn’t very risky to me.” Within days of receiving cryptocurrency from the victim to finance the investment, Kim transferred almost all of it to bitcoin sports betting sites located outside the United States. Kim went on to obtain over a million dollars’ worth of funds from this victim over the course of the scheme, the majority of which went to offshore sports betting sites.

In November 2017, Kim contacted another victim by email and said he was looking for cryptocurrency for a trading strategy. Kim assured that the victim that “my activities are fairly low risk.” On Dec. 1, 2017, Kim obtained a cryptocurrency loan from this victim worth approximately $186,000 at the time. Once the cryptocurrency was obtained, Kim immediately sent all of it to offshore sports betting sites. In total, Kim obtained over $500,000 in funds from this victim.

In an agreement dated Jan. 1, 2018, Kim set out the terms of a similar investment with a third victim. The agreement called for the victim to provide cryptocurrency valued at approximately $200,000 at the time. The same day, Kim converted more than half of the funds to bitcoin and, in the following days, transferred substantially all the converted cryptocurrency to his account with an offshore casino. Kim went on to obtain over $4 million in funds from this victim.

Kim defrauded numerous other victims, including nine who testified at trial, until at least July 2020, when he was charged by federal complaint. In 2023, while he was out on pretrial release, Kim allegedly renewed his scheme to defraud. One count related to this renewed period of fraud remains pending.

The jury acquitted Kim of one count of international money laundering.

Kim is scheduled to appear on June 25, 2025, to set a date for sentencing. He faces a maximum penalty of 20 years in prison for each count of wire fraud and international money laundering, and 10 years in prison for each count of money laundering. Any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorneys Noah Stern and Maya Karwande are prosecuting the case with the assistance of Veronica Hernandez, Maryam Beros, Andy Ding, Lynette Dixon, and Christine Tian. The prosecution is the result of an investigation by the FBI and IRS Criminal Investigation.

MIL Security OSI –

February 28, 2025

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Feb 27, 2025 IPAA, U.S. Chamber and 500+ Groups Urge Urge Congress to Permanently Extend Pro-Growth Tax Reforms

Chief Minister of Maharashtra and Union Minister of State for Power and New & Renewable Energy addressed the 2nd meeting of Group of Ministers on viability of distribution utilities.Renewable Energy as panacea for increasing supply and reducing cost of power

Feb 27, 2025 IPAA Applauds Senate Passage of Congressional Review Act Resolution to Nullify Biden Methane Tax Regulations

Chief Minister of Maharashtra and Union Minister of State for Power and New & Renewable Energy addressed the 2nd meeting of Group of Ministers on viability of distribution utilities.

Renewable Energy as panacea for increasing supply and reducing cost of power