NewzIntel.com

Category: Taxation

  • MIL-OSI New Zealand: Universities – Team behind University’s first Pacific Strategy spans the Moana

    Source: University of Auckland (UoA)

    Finance Opposition spokesperson, the Hon Pesetatamalelagi Barbara Edmonds visited her alma mater, the University of Auckland to talk with Business academics and learn more about the Pacific Strategy and Pacific Academy initiatives launching this year.

    Edmonds (Fale’ula, Faleatiu, Safotu, Fasito’o/Sāmoa) is the MP for Mana and visited the University on 24 February. She met with leaders from the School of Business, Schools and Community Engagement, and the Office of the Pro Vice-Chancellor Pacific.
     
    “It’s nice to be back home, it does feel like home, this is my alma mater where I did my Law and Arts degree that set me up for my career.”
     
    Edmonds says it was good to be amongst Pacific students and to have in-depth discussions focused on economic policies.
     
    “We had good discussions with the School of Business, around macro and micro economic policies that we will be testing as part of our policies that we will be forming,” she says.
     
    Pro Vice-Chancellor Pacific Professor Jemaima Sipaea Tiatia-Siau says drafting the University’s first Pacific Strategy in 142 years has been a huge task over the last year; having someone with the expertise and calibre of the Finance Opposition Spokesperson view the work undertaken highlights the strategy’s significance.
     
    “We’re grateful to have had the Hon Barbara Edmonds come onto campus, to be able to share with her the work we have undertaken.
     
    “She’s a great example of why drawing up a road map for Pacific success here at the University is important, so that our young people can flourish at the University and leave ready to take on the world.”
     
    Professor Tiatia-Siau says the Mana MP relished learning about initiatives to prepare school leavers for the university environment such as Auckland Maths Challenge and the Pacific Academy, ensuring Pacific youth were able to thrive.
     
    Edmonds says it was also important to encourage the Pacific community into the Business space.  She pivoted during her career path starting out in Health Sciences before graduating with a Bachelor of Laws and Bachelor of Arts in 2008, going on to become a specialist tax lawyer.
     
    A mother of eight, her path to becoming a Cabinet Minister began eight years ago while working as a private secretary for the National Party’s Ministers of Revenue, Michael Woodhouse and Judith Collins. The following year in 2017 she was appointed as a political adviser for the Labour Government’s Revenue and Police Minister Stuart Nash. She entered Parliament in 2020 as the MP for Mana and became a Cabinet Minister in 2023, holding the Internal Affairs and Pacific Peoples portfolios.
     
    “I came into the business space through the Arts and through Law, it was a very different pathway, says the 44-year-old.
     
    “I got into the area of tax through law, it’s a good indicator of broadening [your scope]. The Humanities and the Arts are important, it means you have a good grounding for a diverse career.
     
    “I’ve been really fortunate that I had a good grounding here, with the Law School and with the Faculty of Arts, and that means decades later you become a Finance Opposition spokesperson for a major political party – don’t knock the Arts!”
     
    Professor Tiatia-Siau says Edmonds’ visit to give guidance and moral support to developing the Pacific Strategy was timely.
     
    “We are this week welcoming our first-year students and we are also on the eve of a great milestone. The presence of Pesetatamalelagi the Hon. Barbara Edmonds is a show of support for the work we are doing, and she is a wonderful role model of what can be accomplished once you have secured a university education.”

    MIL OSI New Zealand News –

  • MIL-OSI United Nations: Bridging Tax Gap Demands Urgent Attention, Deputy Secretary-General Tells Group of 20 Side Event

    Source: United Nations MIL OSI b

    Following are UN Deputy Secretary-General Amina Mohammed’s remarks at the Group of 20 (G20) side event — Domestic Resource Mobilization:  Bridging the Tax Gap, held in Cape Town, South Africa, today:

    It is a pleasure to join you for this important discussion on domestic resource mobilization and bridging the tax gap.  This challenge stands at the heart of financing sustainable development and demands our urgent attention.

    We are not on track to achieve the Sustainable Development Goals (SDGs).  We have an estimated $4 trillion sustainable development financing gap annually.  Domestic public finance is essential for financing the Sustainable Development Goals, increasing equity and strengthening macroeconomic stability.

    Robust fiscal systems, including both tax and expenditure, drive economic growth, industrial transformation and environmental sustainability — contributing to alleviating poverty and reducing inequalities.  Beyond raising revenue, taxation remains fundamental to fairness, trust and sovereignty.

    Yet, after significant increases in taxation in developing countries in the decade before 2009, average tax-to-gross domestic product (GDP) ratios for all developing country groups are below 2010 levels, remaining far below those of developed countries. 

    Successive shocks over the last two decades have severely impacted the mobilization of domestic resources for development.  As global crises intensify, it becomes more critical than ever to increase countries’ taxation capabilities.

    The good news is that there is a large unmet tax potential in many developing countries.  Many Governments have invested in tax reforms, demonstrating how nations can unlock unmet potential.

    Strengthening tax systems requires sustained investment in capacity development based on country needs and priorities.  As economies evolve, so must tax systems.

    The increasingly digitalized economy presents new opportunities but also poses new challenges to an international tax system that has been designed for traditional business models.

    We must develop future-ready tax policies that ensure global fair taxation without imposing excessive burdens — both on taxpayers and tax authorities.  Many organizations — including the UN, International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), World Bank and regional and national tax bodies — are supporting countries in this effort.

    Initiatives like Tax Inspectors Without Borders help countries enhance domestic revenue mobilization.  The Addis Tax Initiative and broader multilateral and regional efforts provide platforms for collaboration, knowledge-sharing and technical assistance.

    However, political will remains insufficient — with countries not investing enough in tax system reform and administration capacity, and donors not delivering promised assistance for supporting revenue mobilization.

    The fourth International Conference on Financing for Development in Sevilla in June offers a pivotal moment to turn commitments for domestic tax reforms into actions and make tax systems more fair, transparent, efficient and effective.

    In our interconnected world, strengthening countries’ fiscal frameworks must go hand in hand with international tax cooperation. Every year, billions of dollars that should fund education, healthcare and infrastructure are lost to tax avoidance and evasion, illicit financial flows and financial crime.

    Africa alone loses approximately $88.6 billion annually to illicit financial flows — around 3.7 per cent of the continent’s GDP — draining resources vital for economic development.

    The G20 has played an important role in advancing tax transparency and tackling tax avoidance.  Expanding the automatic exchange of information and enhancing transparency in beneficial ownership remain paramount.

    But, more must be done to ensure that all countries — particularly those with limited administrative capacity — can fully participate in shaping global tax norms.

    The ongoing negotiations on a UN Framework Convention on International Tax Cooperation present a historic opportunity for progress towards a fair, inclusive, and effective international tax system.

    Through the Pact for the Future, Member States have committed to improving the inclusiveness and effectiveness of tax cooperation under the UN.  Ensuring that international tax rules reflect the diverse needs, priorities and capacities of all countries is central to this effort.

    The two early protocols in the UN Convention — on taxation of income from cross-border services in a digitalized and globalized economy and on preventing and resolving tax disputes — can demonstrate an inclusive and impactful approach.

    The UN process can strengthen global cooperation, enhance legitimacy, certainty, resilience and fairness of international tax rules, while addressing challenges in domestic resource mobilization and ensuring that all countries have a seat at the table.

    Today’s discussion is an opportunity to drive forward these critical issues.  The United Nations remains fully committed to these efforts.  Together, we can build a fairer, more transparent and more effective international tax system — one that provides every country with the means to invest in its future and achieve the Sustainable Development Goals.

    MIL OSI United Nations News –

  • MIL-OSI Australia: Operating outside the system

    Source: Australian Department of Revenue

    Our commitment to you

    We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

    If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

    Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

    If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.

    Copyright notice

    © Australian Taxation Office for the Commonwealth of Australia

    You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

    MIL OSI News –

  • MIL-OSI Australia: SMSF auditor compliance focus for 2025

    Source: Australian Department of Revenue

    Last year we had over 32,000 new funds enter the sector. This was an increase of 21% from 2022–23. The population of SMSFs has grown to over 625,000 and now holds over $1 trillion in assets.

    SMSF auditors have a critical role in maintaining the health and integrity of the sector, so it’s important you understand your obligations and where we consider the biggest risks exist in 2025. Where we find that auditors are not complying with their obligations, we may refer them to the Australian Securities & Investments Commission (ASIC) for further action.

    Market valuations

    Approved SMSF auditors are responsible for verifying and retaining sufficient audit evidence to support the market value of assets. Where there’s insufficient evidence you must consider modifying the independent auditor’s report (IAR). You must also lodge an auditor contravention report (ACR) where the reporting criteria is met.

    In 2024, the ATO contacted auditors where SMSFs they audited reported unchanged values for certain assets across several income years. In 2025, we will continue this program, including reviewing auditors where asset values remain the same and no ACR is lodged.

    High volume auditors

    In 2025, we will continue our focus on auditors who audit a large number of SMSFs. This includes auditors that regularly undertake over 1,000 audits per year or who have had a rapid increase in their audit numbers in recent years. We will be visiting auditors at their offices to review their audit process.

    Disqualified trustees

    Auditors must confirm that the trustees of the SMSF are not acting as a trustee or director of a corporate trustee while a disqualified person. In 2025, we are reviewing auditors where our information indicates trustees have acted while a disqualified person and no ACR has been lodged.

    High risk auditors

    We collect a range of data and intelligence about the SMSF auditor population. We use this information to identify auditors we consider high risk. We will continue to conduct audits of high-risk auditors and refer them to ASIC when they have not complied with their obligations.

    Auditors with low fixed price business models continue to be a concern for the ATO. These models inherently restrict the amount of time an auditor can spend on an audit and can lead to lower quality audits, particularly where the SMSF has more complex investments.

    Independence

    As an approved SMSF auditor, you’re required to comply with independence requirements as part of your professional obligations.

    Following an increase of referrals to ASIC in the last financial year that included independence issues, we’ll be focusing on auditors we consider high risk. This includes auditors:

    • conducting in-house audits
    • with reciprocal auditing arrangements
    • that have a long association with clients and
    • have a large proportion of their client base come from a single referral source.

    You need to ensure you’re meeting the independence requirements set out in APES 110 Code of Ethics for Professional AccountantsExternal Link (including Independence Standards).

    For more information, see ato.gov.au/smsfauditors.

    Looking for the latest news for SMSFs? You can stay up to date by visiting our SMSF newsroom and subscribingExternal Link to our monthly SMSF newsletter.

    MIL OSI News –

  • MIL-OSI Australia: ATO welcomes ANAO audit report on Governance of AI

    Source: Australian Department of Revenue

    The Australian Taxation Office (ATO) welcomes the release of the Australian National Audit Office’s (ANAO’s) report on the Governance of Artificial Intelligence (AI) at the ATO. The ANAO’s report provided 7 recommendations, which the ATO agrees with in full, supporting our commitment to managing taxpayer data with integrity and ensuring ethical decision making in everything we do.

    Noting the rapidly changing nature of data and analytics, the ATO recognises the importance of robust governance, oversight, and accountability to support the development and use of analytical models that are ethical, safe and deliver fit for purpose outcomes.

    We take our responsibility around data ethics and data stewardship extremely seriously. The ATO only uses AI technologies in limited ways that recognise the importance of security, privacy, transparency and the ethical use of data with appropriate human oversight.

    The ATO appreciates the opportunity to assist the ANAO benchmark its approach to conducting similar AI use and governance audits in the future, as well as providing insights to other Australian Public Service (APS) agencies.

    We acknowledge what is considered leading practice for AI use and governance is still evolving and we will continue to not only strive to achieve leading practice, but also assist the broader APS. We are expanding our policies and guidance to reference AI more explicitly, noting our existing data and analytics (including data governance and ethics) and IT policies already broadly apply to our use of AI.

    Our approach will always focus on ensuring we have human oversight over our use of AI, and decision making that adversely impacts taxpayers is always made by a human.

    The ANAO report includes 7 recommendations which will assist the ATO in further strengthening our AI governance. The ATO has agreed to all 7 recommendations in full, and will continue to enhance our AI frameworks, focusing on:

    1. Improving alignment between our automation and AI (A&AI) strategy to meet enterprise-wide program and project management requirements.
    2. Clearly defining and communicating enterprise-wide organisational structures and governance arrangements supporting our adoption of AI, including defining accountabilities and responsibilities at the model and system level.
    3. Reviewing our ‘misuse of data and analytics’ enterprise risk and the associated controls, and explicitly incorporating controls relating to the impact of AI on this risk.
    4. Improving our arrangements in support of the design, development, deployment and use of AI that aligns with ethical principles.
    5. Progressing the development and implementation of AI specific policies and guidance to support the effective design, development, deployment and assurance of AI models.
    6. Establishing performance measurement and evaluation arrangements for our automation and AI strategy.
    7. Ensuring our approach to managing information supports transparency and accountability with respect to its adoption of AI.

    We will continue to implement and build on the recommendations identified to help us evolve and remain current in the face of rapidly advancing AI capability, and ensure we leverage AI in a safe way to create a better tax system for all Australians.

    MIL OSI News –

  • MIL-OSI Australia: Creating a new USI

    Source: Australian Department of Revenue

    Fund trustees, through a digital service provider, should submit the new product details as soon as possible before the new data is to take effect.

    When submitting details for a new USI, or updating bank details, it’s important to first lodge a Financial institution account verification contact details template through Online Services for Business. Once approved you’ll then be able to submit the details through the portal.

    Ensure all information is accurate and complete to avoid any processing delays. After submission, it’s important you verify the new USI has been correctly registered and is active.

    If you’re updating critical data, it’s best practice to provide these details immediately but at least 28 days before they become effective. This lead time allows gateways and clearing houses to adequately reflect the updated information.

    Updates to critical data include changes to:

    • bank details
    • end-point service address
    • end-dating.

    For more detailed information, refer to our Fund Validation Service User Guide

    Looking for the latest news for Super funds? You can stay up to date by visiting our Super funds newsroomOpens in a new window and subscribingOpens in a new window to our monthly Super funds newsletter and CRT alerts.

    MIL OSI News –

  • MIL-OSI Australia: Small business boost measures risks

    Source: Australian Department of Revenue

    Our focus

    If your business meets the standard aggregated annual turnover rules (with an increased $50 million threshold), you may be eligible to claim an additional 20% tax deduction under the:

    Small business skills and training boost

    The small business skills and training boost applies to eligible expenditure incurred from 7:30 pm AEDT on 29 March 2022 until 30 June 2024. The expenditure must be for the provision of external training courses delivered to your employees by registered training providers.

    Small business technology investment boost

    The small business technology investment boost applies to eligible expenditure incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023. The boost is for business expenses and depreciating assets to help digitise your small business. It is capped at $100,000 of expenditure per income year. You can receive a maximum bonus deduction of $20,000 per income year.

    How to get it right

    We are seeing some small businesses incorrectly claim the boost measures due to errors or misunderstanding of the law.

    If you claimed either boost measure and believe you don’t meet the eligibility criteria or have made an error, we encourage you to amend your tax return.

    If you incorrectly claim, we may get in contact with you or your tax professional. If no action is taken, we may conduct a review and audit of your business.

    See how to avoid errors and claim correctly for the:

    Skills and training boost

    The errors we are seeing some small businesses make when claiming the skills and training boost include:

    If you are planning on claiming, ensure you meet the skills and training boost eligibility criteria, and check:

    • it’s for an expense that was incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2024
    • it’s for expenditure with a registered external training provider that is not you or an associate of yours
    • it’s for the provision of training to employees of your business, either in-person in Australia, or online
    • where you are a sole trader, the training is for your employees not yourself
    • the training is already deductible for your business.

    Example: claiming skills and training boost

    Maya and Jackson are directors and shareholders of Sports Academy Pty Ltd. The company has no employees.

    Sports Academy Pty Ltd spend $6,240 on a bookkeeping training course with a registered training provider for Maya. Sports Academy Pty Ltd claim a 20% ($1,248) skills and training boost deduction on its 2022–23 company tax return.

    However, because Maya is not an employee of the company, Sports Academy Pty Ltd is not eligible to claim the skills & training boost deduction. The deduction they claimed is disallowed.

    Sports Academy Pty Ltd must amend their company tax return to exclude the skills and training boost deduction. This adjustment increases the company’s taxable income, leading to a higher tax liability for the 2023 income year.

    Sports Academy Pty Ltd lodge an amended company tax return. It reflects the corrected taxable income. They later receive a notice of assessment, which shows an adjusted tax liability for the 2023 income year.

    End of example

    Technology investment boost

    The errors we are seeing some small businesses make when claiming the technology investment boost include:

    • expenses not meeting definition of eligible digital expenditure
    • exceeding annual turnover threshold requirement
    • claims exceeding the cap on expenditure
    • claims by businesses with no reported depreciating assets
    • incorrectly claiming over multiple years.

    If you are planning on claiming, ensure you meet the technology investment boost eligibility criteria, and check:

    • it’s for an expense that was incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023.
    • it’s for expenditure of business expenses or depreciating assets (or both) to help digitise your small business
    • the expense is already deductible for your business.

    Example: claiming technology investment boost

    Sami, Omar and Leila are directors of a private company. It supplies pharmaceutical products to retailers and other businesses.

    In May 2022 the directors of Pharmacy Supplies Pty Ltd decide to:

    • purchase an electronic point-of-sale system and accounting software, at a cost of $30,000. This is to improve record keeping and better understand their business. It will be used from 1 July 2022
    • invest in a cyber security system and plan from 1 July 2022 to move to a digital record keeping system. It will cost $40,000 to start and $5,000 a year for updates and maintenance
    • modernise their website and implement a mobile app, which will go live in September 2022, at a cost of $40,000.

    Pharmacy Supplies Pty Ltd has spent $110,000 on eligible costs in the 2023 income year. Pharmacy Supplies Pty Ltd claims a $22,000 tech investment boost deduction for 2022–23.

    However, due to the $100,000 cap on eligible business expenses and depreciating assets, or $20,000 per income year, Pharmacy Supplies Pty Ltd has incorrectly claimed $2,000 more than allowed.

    Pharmacy Supplies Pty Ltd must amend its 2022–23 company tax return. It must reduce the technology investment boost deduction. This adjustment increases the company’s taxable income, leading to a higher tax liability for the 2023 income year.

    Pharmacy Supplies Pty Ltd lodges an amended company tax return, reflecting the corrected taxable income. They later receive a notice of assessment, which shows an adjusted tax liability for the 2023 income year.

    End of example

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    MIL OSI News –

  • MIL-OSI USA: February 26th, 2025 Heinrich Responds to Latest Developments on Health Care Center in Southern New Mexico Denying Medical Care to New Mexicans

    US Senate News:

    Source: United States Senator for New Mexico Martin Heinrich
    In a post published to his social media this morning, Heinrich condemned Ben Archer Health Center for turning away patients without birth certificates on-hand at their clinics
    Heinrich: “What Ben Archer was pulling at its health clinics wasn’t just wrong, it was illegal.”
    WASHINGTON – U.S. Senator Martin Heinrich (D-N.M.) released the following statement today after constituents notified his office that Ben Archer Health Center was denying medical care to individuals unable to provide “proof of citizenship”:
    “What Ben Archer was pulling at its health clinics wasn’t just wrong, it was illegal. I am glad they reversed course, and that they did it quickly. Let this be a lesson to all health care providers that we will hold you accountable for following the law,” said Heinrich.
    “The idea that kids should have to take their birth certificate to school to get care at the school health clinic? It’s just ludicrous. We have skyrocketing grocery prices, a housing crisis, and now, a measles outbreak in New Mexico and Texas. We need our elected officials focused on fixing real issues and our health care providers focused on providing health care,” Heinrich concluded.
    Background
    Heinrich’s office was alerted by constituents to Ben Archer Health Center’s new practice of requiring “proof of citizenship” today. His office then verified that Ben Archer was employing this practice at school-based health clinics, for scheduled appointments at standalone clinics, and for same-day appointment requests. In defense of their actions, Ben Archer leadership pointed to President Donald Trump’s Executive Order, “Ending Taxpayer Subsidization of Open Borders,”which was issued on February 19, 2025, but has no bearing on the provision of health care to non-citizens. In fact, New Mexico and federal law both require Ben Archer and other similarly funded health centers in the United States to provide health care to all residents of the area the center serves, regardless of immigration status. Relevant statutes include NMSA 24A-1-20 and 42 U.S.C.§ 254b.

    MIL OSI USA News –

  • MIL-OSI USA: Florida Financial Advisor Pleads Guilty to Promoting Illegal Tax Shelter and Stealing Client Funds

    Source: US State Government of Utah

    Defendant Helped Clients in Mississippi and Elsewhere File False Tax Returns That Caused Nearly $40M in Tax Loss to the IRS

    A Florida man pleaded guilty today to orchestrating a nearly decade-long scheme to promote an illegal tax shelter and commit wire fraud. He also pleaded guilty to assisting in the preparation of false tax returns for tax shelter clients.

    According to court documents and statements made in court, Stephen T. Mellinger III, of Delray Beach, was a financial advisor, insurance salesman, and securities broker operating in Florida, Michigan, Mississippi, and elsewhere. Beginning in late 2013, Mellinger conspired with others to promote an illegal tax shelter whereby clients would claim false tax deductions for so-called “royalty payments” to fraudulently reduce their taxes.

    In reality, as Mellinger knew, the “royalty payments” were merely a circular flow of money designed to give the appearance of genuine business expenses. Typically, a client would send money to bank accounts controlled by Mellinger and other co-conspirators, who then sent the money — less a fee — right back to a different bank account that the client controlled. In this way, tax shelter participants retained control of the money they transferred, while falsely deducting the transfers as business expenses on their tax returns.

    In total, Mellinger and his co-conspirators helped clients prepare tax returns that claimed over $106 million in false tax deductions, which caused a tax loss to the IRS of approximately $37 million.

    Mellinger and a co-conspirator who was a relative, collectively earned approximately $3 million in fees from promoting the scheme.

    In January 2016, Mellinger learned that several of his clients were being investigated and that the United States had started seizing their funds. Mellinger and a relative subsequently stole more than $2.1 million of funds from some of those clients, some of which he used to buy a home in Delray Beach.

    Mellinger is scheduled to be sentenced on Sept. 16, and faces a maximum penalty of five years in prison for conspiring to defraud the IRS and commit wire fraud, and three years in prison for aiding in the preparation of false tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division, Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, and Acting U.S. Attorney Patrick A. Lemon for the Southern District of Mississippi made the announcement.

    IRS Criminal Investigation and the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service are investigating the case.

    Trial Attorneys Richard J. Hagerman, William Montague, and Matthew Hicks of the Tax Division, Assistant U.S. Attorney Charles W. Kirkham for the Southern District of Mississippi, and Trial Attorneys Emily Cohen and Jasmin Salehi Fashami of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.

    MIL OSI USA News –

  • MIL-OSI Security: Florida Financial Advisor Pleads Guilty to Promoting Illegal Tax Shelter and Stealing Client Funds

    Source: United States Attorneys General 1

    Defendant Helped Clients in Mississippi and Elsewhere File False Tax Returns That Caused Nearly $40M in Tax Loss to the IRS

    A Florida man pleaded guilty today to orchestrating a nearly decade-long scheme to promote an illegal tax shelter and commit wire fraud. He also pleaded guilty to assisting in the preparation of false tax returns for tax shelter clients.

    According to court documents and statements made in court, Stephen T. Mellinger III, of Delray Beach, was a financial advisor, insurance salesman, and securities broker operating in Florida, Michigan, Mississippi, and elsewhere. Beginning in late 2013, Mellinger conspired with others to promote an illegal tax shelter whereby clients would claim false tax deductions for so-called “royalty payments” to fraudulently reduce their taxes.

    In reality, as Mellinger knew, the “royalty payments” were merely a circular flow of money designed to give the appearance of genuine business expenses. Typically, a client would send money to bank accounts controlled by Mellinger and other co-conspirators, who then sent the money — less a fee — right back to a different bank account that the client controlled. In this way, tax shelter participants retained control of the money they transferred, while falsely deducting the transfers as business expenses on their tax returns.

    In total, Mellinger and his co-conspirators helped clients prepare tax returns that claimed over $106 million in false tax deductions, which caused a tax loss to the IRS of approximately $37 million.

    Mellinger and a co-conspirator who was a relative, collectively earned approximately $3 million in fees from promoting the scheme.

    In January 2016, Mellinger learned that several of his clients were being investigated and that the United States had started seizing their funds. Mellinger and a relative subsequently stole more than $2.1 million of funds from some of those clients, some of which he used to buy a home in Delray Beach.

    Mellinger is scheduled to be sentenced on Sept. 16, and faces a maximum penalty of five years in prison for conspiring to defraud the IRS and commit wire fraud, and three years in prison for aiding in the preparation of false tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division, Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, and Acting U.S. Attorney Patrick A. Lemon for the Southern District of Mississippi made the announcement.

    IRS Criminal Investigation and the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service are investigating the case.

    Trial Attorneys Richard J. Hagerman, William Montague, and Matthew Hicks of the Tax Division, Assistant U.S. Attorney Charles W. Kirkham for the Southern District of Mississippi, and Trial Attorneys Emily Cohen and Jasmin Salehi Fashami of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.

    MIL Security OSI –

  • MIL-OSI: SEACOR Marine Announces Fourth Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    HOUSTON, Feb. 26, 2025 (GLOBE NEWSWIRE) — SEACOR Marine Holdings Inc. (NYSE: SMHI) (the “Company” or “SEACOR Marine”), a leading provider of marine and support transportation services to offshore energy facilities worldwide, today announced results for its fourth quarter ended December 31, 2024.

    SEACOR Marine’s consolidated operating revenues for the fourth quarter of 2024 were $69.8 million, operating income was $10.6 million, and direct vessel profit (“DVP”)(1) was $23.1 million. This compares to consolidated operating revenues of $73.1 million, operating income of $22.6 million, and DVP of $29.8 million in the fourth quarter of 2023, and consolidated operating revenues of $68.9 million, operating loss of $6.5 million, and DVP of $16.0 million in the third quarter of 2024.

    Notable fourth quarter items include:

    • 4.5% decrease in revenues from the fourth quarter of 2023 and a 1.3% increase from the third quarter of 2024.
    • Average day rates of $18,901, a 4.8% increase from the fourth quarter of 2023, and flat from the third quarter of 2024.
    • 72% utilization, an increase from 71% in the fourth quarter of 2023 and from 67% in the third quarter of 2024.
    • DVP margin of 33.1%, a decrease from 40.8% in the fourth quarter of 2023 and an increase from 23.2% in the third quarter of 2024, due in part to $3.5 million of drydocking and major repairs during the fourth quarter of 2024 compared to $1.7 million in the fourth quarter of 2023 and $8.3 million in the third quarter of 2024, all of which are expensed as incurred.
    • Refinancing of $328.7 million of principal indebtedness under multiple debt facilities, including $125.0 million previously due in 2026, into a single new credit facility due in the fourth quarter of 2029.
    • In connection with the refinancing, recognized a one-time loss of $31.9 million on debt extinguishment, of which $28.3 million was non-cash and primarily comprised of extinguishment of unamortized debt discounts.
    • Completed the sale of two anchor handling towing supply vessels (“AHTS”) for total proceeds of $22.5 million and a gain of $15.6 million, the proceeds of which will be used to partially fund the construction payments for two new PSVs.

    For the fourth quarter of 2024, net loss was $26.2 million ($0.94 loss per basic and diluted share). This compares to a net income for the fourth quarter of 2023 of $5.7 million ($0.21 earnings per basic share and $0.20 earnings per diluted share). Sequentially, the fourth quarter 2024 results compare to a net loss of $16.3 million ($0.59 loss per basic and diluted share) in the third quarter of 2024.

    Chief Executive Officer John Gellert commented:

    “The fourth quarter results reflect a substantial improvement in operating performance compared with the prior quarters of 2024. This performance improvement was due mostly to fewer out-of-service days for repairs and drydockings which translated into improved utilization across most segments. We also benefited from having all our premium liftboats available and employed most of the quarter and currently plan to commence the permanent repairs of one of our U.S. flag premium liftboats at the end of the third quarter of 2025, which should provide us the opportunity to maximize utilization on these liftboats as seasonal activity improves in the Gulf of America. During the quarter, we did see soft market conditions in the North Sea as well as customer delays in programmed activities in Mexico and the U.S.

    Looking at the rest of 2025, we continue to see a healthy level of inquiries across most of our international markets with the notable exception of the North Sea and Mexico, where regulatory or financial hurdles are subduing demand for oil and gas services. In the U.S., we see significant challenges for offshore wind in the near term, but the backlog of mandatory maintenance and decommissioning activity in the Gulf of America should ultimately lead to increased levels of activity on the shelf. Although we are not immune to the mid-cycle lull in offshore drilling activity worldwide, I remain optimistic that our fleet mix is well positioned to meet current demand expectations.

    As previously announced, during the fourth quarter we entered into a new senior secured term loan of up to $391.0 million with an affiliate of EnTrust Global, which significantly simplified our debt capital structure into a single credit facility maturing in 2029. Importantly, this new credit facility addressed $125.0 million of near-term maturities previously due in 2026 to The Carlyle Group, inclusive of $35.0 million of convertible debt, eliminating approximately 10% of dilution overhang on the Company’s common stock. It also provided us with up to $41.0 million of borrowing capacity to finance the construction of two new PSVs, which we ordered during the fourth quarter of 2024. We had to fully amortize all debt discounts and issuance costs on the refinanced debt, including the shipyard financing with affiliates of COSCO, generating a $31.9 million one-time loss, of which $28.3 million was non-cash, but, in my view, the benefits of the refinancing and its support for the Company’s order for two new PSVs far outweigh the one-time loss.

    I am particularly excited about this PSV order as we expand and complement our fleet of modern and fuel efficient PSVs. This is a continuation of our asset rotation strategy aimed at renewing our fleet with high-specification, environmentally efficient assets. The vessels are scheduled to deliver in the fourth quarter of 2026 and first quarter of 2027, respectively. We will partly fund this new construction program with the $22.5 million of proceeds from the sale of our last remaining AHTS vessels, marking our exit from the AHTS asset class effective January 2025.”
    _______________

    (1) Direct vessel profit (defined as operating revenues less operating costs and expenses, “DVP”) is the Company’s measure of segment profitability. DVP is a critical financial measure used by the Company to analyze and compare the operating performance of its regions, without regard to financing decisions (depreciation and interest expense for owned vessels vs. lease expense for lease vessels). DVP is also useful when comparing the Company’s global fleet performance against those of our competitors who may have differing fleet financing structures. DVP has material limitations as an analytical tool in that it does not reflect all of the costs associated with the ownership and operation of our fleet, and it should not be considered in isolation or used as a substitute for our results as reported under GAAP. See page 4 for reconciliation of DVP to GAAP Operating Income (Loss), its most comparable GAAP measure.
       

    SEACOR Marine provides global marine and support transportation services to offshore energy facilities worldwide. SEACOR Marine operates and manages a diverse fleet of offshore support vessels that deliver cargo and personnel to offshore installations, including offshore wind farms; assist offshore operations for production and storage facilities; provide construction, well work-over, offshore wind farm installation and decommissioning support; and carry and launch equipment used underwater in drilling and well installation, maintenance, inspection and repair. Additionally, SEACOR Marine’s vessels provide emergency response services and accommodations for technicians and specialists.

    Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements concern management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by the management of the Company. These statements are not guarantees of future performance and actual events or results may differ significantly from these statements. Actual events or results are subject to significant known and unknown risks, uncertainties and other important factors, many of which are beyond the Company’s control and are described in the Company’s filings with the SEC. It should be understood that it is not possible to predict or identify all such factors. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its filings with the Securities and Exchange Commission, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (if any). These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

    Please visit SEACOR Marine’s website at www.seacormarine.com for additional information.
    For all other requests, contact InvestorRelations@seacormarine.com

     
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
    (in thousands, except share data)
     
        Three Months Ended December 31,     Year ended December 31,  
        2024     2023     2024     2023  
    Operating Revenues   $ 69,808     $ 73,083     $ 271,361     $ 279,511  
    Costs and Expenses:                        
    Operating     46,726       43,269       197,252       159,650  
    Administrative and general     10,888       11,547       44,713       49,183  
    Lease expense     347       679       1,678       2,748  
    Depreciation and amortization     12,879       13,022       51,628       53,821  
          70,840       68,517       295,271       265,402  
    Gains on Asset Dispositions and Impairments, Net     11,624       18,057       13,481       21,409  
    Operating Income (Loss)     10,592       22,623       (10,429 )     35,518  
    Other Income (Expense):                        
    Interest income     372       222       1,768       1,444  
    Interest expense     (10,001 )     (10,444 )     (40,627 )     (37,504 )
    Loss on debt extinguishment     (31,923 )     —       (31,923 )     (2,004 )
    Derivative (losses) gains, net     (536 )     608       (908 )     608  
    Foreign currency gains (losses), net     1,308       (1,276 )     (1,049 )     (2,133 )
    Other, net     187       —       121       —  
          (40,593 )     (10,890 )     (72,618 )     (39,589 )
    (Loss) Income Before Income Tax (Benefit) Expense and Equity in Earnings of 50% or Less Owned Companies     (30,001 )     11,733       (83,047 )     (4,071 )
    Income Tax (Benefit) Expense     (2,345 )     6,378       (2,615 )     8,799  
    (Loss) Income Before Equity in Earnings of 50% or Less Owned Companies     (27,656 )     5,355       (80,432 )     (12,870 )
    Equity in Earnings of 50% or Less Owned Companies     1,430       374       2,308       3,556  
    Net (Loss) Income   $ (26,226 )   $ 5,729     $ (78,124 )   $ (9,314 )
                             
    Net (Loss) Earnings Per Share:                        
    Basic   $ (0.94 )   $ 0.21     $ (2.82 )   $ (0.34 )
    Diluted   $ (0.94 )   $ 0.20     $ (2.82 )   $ (0.34 )
    Weighted Average Common Stock and Warrants Outstanding:                        
    Basic     27,773,200       27,182,496       27,655,289       27,082,391  
    Diluted     27,773,200       28,400,684       27,655,289       27,082,391  
                                     
               
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
     (in thousands, except statistics and per share data)
               
              Three Months Ended
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    Time Charter Statistics:                                
    Average Rates Per Day   $ 18,901     $ 18,879     $ 19,141     $ 19,042     $ 18,031    
    Fleet Utilization     72 %     67 %     69 %     62 %     71 %  
    Fleet Available Days (2)     4,870       5,026       4,994       5,005       5,170    
    Operating Revenues:                                
    Time charter   $ 66,095     $ 63,313     $ 65,649     $ 59,263     $ 66,498    
    Bareboat charter     364       372       364       364       368    
    Other marine services     3,349       5,231       3,854       3,143       6,217    
          69,808       68,916       69,867       62,770       73,083    
    Costs and Expenses:                                
    Operating:                                
    Personnel     20,365       21,940       21,566       21,670       22,080    
    Repairs and maintenance     10,433       9,945       10,244       9,763       7,604    
    Drydocking     2,467       6,068       6,210       6,706       2,561    
    Insurance and loss reserves     2,473       2,584       3,099       1,738       2,944    
    Fuel, lubes and supplies     4,884       6,574       3,966       4,523       3,683    
    Other     6,104       5,796       4,435       3,699       4,397    
          46,726       52,907       49,520       48,099       43,269    
    Direct Vessel Profit (1)     23,082       16,009       20,347       14,671       29,814    
    Other Costs and Expenses:                                
    Lease expense     347       364       486       481       679    
    Administrative and general     10,888       11,019       10,889       11,917       11,547    
    Depreciation and amortization     12,879       12,928       12,939       12,882       13,022    
          24,114       24,311       24,314       25,280       25,248    
    Gains (Losses) on Asset Dispositions and Impairments, Net     11,624       1,821       37       (1 )     18,057    
    Operating Income (Loss)     10,592       (6,481 )     (3,930 )     (10,610 )     22,623    
    Other Income (Expense):                                
    Interest income     372       358       445       593       222    
    Interest expense     (10,001 )     (10,127 )     (10,190 )     (10,309 )     (10,444 )  
    Derivative (losses) gains, net     (536 )     67       104       (543 )     608    
    Loss on debt extinguishment     (31,923 )     —       —       —       —    
    Foreign currency gains (losses), net     1,308       (1,717 )     (560 )     (80 )     (1,276 )  
    Other, net     187       29       —       (95 )     —    
          (40,593 )     (11,390 )     (10,201 )     (10,434 )     (10,890 )  
    (Loss) Income Before Income Tax (Benefit) Expense and Equity in Earnings (Losses) of 50% or Less Owned Companies     (30,001 )     (17,871 )     (14,131 )     (21,044 )     11,733    
    Income Tax (Benefit) Expense     (2,345 )     (513 )     (682 )     925       6,378    
    (Loss) Income Before Equity in Earnings (Losses) of 50% or Less Owned Companies     (27,656 )     (17,358 )     (13,449 )     (21,969 )     5,355    
    Equity in Earnings (Losses) of 50% or Less Owned Companies     1,430       1,012       966       (1,100 )     374    
    Net (Loss) Income   $ (26,226 )   $ (16,346 )   $ (12,483 )   $ (23,069 )   $ 5,729    
                                     
    Net (Loss) Earnings Per Share:                                
    Basic   $ (0.94 )   $ (0.59 )   $ (0.45 )   $ (0.84 )   $ 0.21    
    Diluted   $ (0.94 )   $ (0.59 )   $ (0.45 )   $ (0.84 )   $ 0.20    
    Weighted Average Common Stock and Warrants Outstanding:                                
    Basic     27,773       27,773       27,729       27,344       27,182    
    Diluted     27,773       27,773       27,729       27,344       28,401    
    Common Shares and Warrants Outstanding at Period End     28,950       28,950       28,941       28,906       28,489    

     _______________

    (1) See full description of footnote above.
    (2) Includes available days for a bareboat charter for one PSV, which has been excluded from days worked and average day rates.
       
         
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED DIRECT VESSEL PROFIT (“DVP”) BY SEGMENT
    (in thousands, except statistics)
         
        Three Months Ended
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    United States, primarily Gulf of America                                
    Time Charter Statistics:                                
    Average rates per day worked   $ 26,116     $ 17,188     $ 22,356     $ 28,156     $ 22,584    
    Fleet utilization     45 %     42 %     37 %     27 %     50 %  
    Fleet available days     920       920       921       927       1,152    
    Out-of-service days for repairs, maintenance and drydockings     75       116       179       137       61    
    Out-of-service days for cold-stacked status (2)     184       175       127       182       254    
    Operating Revenues:                                
    Time charter   $ 10,744     $ 6,593     $ 7,697     $ 6,957     $ 12,929    
    Other marine services     1,114       1,188       480       1,026       5,346    
          11,858       7,781       8,177       7,983       18,275    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel     6,097       6,297       6,284       5,781       6,906    
    Repairs and maintenance     1,680       1,655       1,879       1,404       819    
    Drydocking     1,451       2,615       2,570       1,968       303    
    Insurance and loss reserves     854       799       943       396       1,297    
    Fuel, lubes and supplies     854       964       866       667       1,032    
    Other     229       225       226       (171 )     475    
          11,165       12,555       12,768       10,045       10,832    
    Direct Vessel Profit (Loss) (1)   $ 693     $ (4,774 )   $ (4,591 )   $ (2,062 )   $ 7,443    
    Other Costs and Expenses:                                
    Lease expense   $ 136     $ 140     $ 141     $ 138     $ 141    
    Depreciation and amortization     3,196       3,194       3,194       2,750       3,479    
                                     
    Africa and Europe                                
    Time Charter Statistics:                                
    Average rates per day worked   $ 16,895     $ 18,875     $ 18,580     $ 15,197     $ 15,233    
    Fleet utilization     73 %     77 %     74 %     76 %     82 %  
    Fleet available days     1,856       1,990       1,969       1,775       1,748    
    Out-of-service days for repairs, maintenance and drydockings     180       203       203       238       124    
    Out-of-service days for cold-stacked status     —       58       91       91       92    
    Operating Revenues:                                
    Time charter   $ 22,999     $ 28,809     $ 27,047     $ 20,555     $ 21,791    
    Other marine services     1,027       3,048       1,028       169       189    
          24,026       31,857       28,075       20,724       21,980    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel     5,654       6,083       4,969       5,181       6,007    
    Repairs and maintenance     3,712       3,455       3,161       3,209       2,807    
    Drydocking     835       681       1,226       2,032       1,298    
    Insurance and loss reserves     577       599       819       334       416    
    Fuel, lubes and supplies     2,226       2,514       1,170       1,287       623    
    Other     3,748       3,975       2,801       2,199       2,267    
          16,752       17,307       14,146       14,242       13,418    
    Direct Vessel Profit (1)   $ 7,274     $ 14,550     $ 13,929     $ 6,482     $ 8,562    
    Other Costs and Expenses:                                
    Lease expense   $ 82     $ 75     $ 172     $ 178     $ 289    
    Depreciation and amortization     4,477       4,540       4,565       3,915       3,747    

     _______________

    (1) See full description of footnote above.
    (2) Includes one liftboat and one FSV cold-stacked in this region as of December 31, 2024.
       
           
    SEACOR MARINE HOLDINGS INC.
     UNAUDITED DIRECT VESSEL PROFIT (“DVP”) BY SEGMENT (continued)
    (in thousands, except statistics)
           
        Three Months Ended  
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    Middle East and Asia                              
    Time Charter Statistics:                              
    Average rates per day worked   $ 17,337     $ 17,825     $ 17,083     $ 16,934     $ 17,590  
    Fleet utilization     88 %     71 %     82 %     71 %     69 %
    Fleet available days     1,266       1,288       1,296       1,365       1,461  
    Out-of-service days for repairs, maintenance and drydockings     30       229       168       224       360  
    Operating Revenues:                              
    Time charter   $ 19,385     $ 16,411     $ 18,073     $ 16,477     $ 17,729  
    Other marine services     635       375       619       350       539  
          20,020       16,786       18,692       16,827       18,268  
    Direct Costs and Expenses:                              
    Operating:                              
    Personnel     5,470       5,769       6,930       5,963       5,522  
    Repairs and maintenance     3,574       3,318       3,443       2,712       2,590  
    Drydocking     (226 )     832       707       1,483       624  
    Insurance and loss reserves     804       927       798       618       1,022  
    Fuel, lubes and supplies     840       1,043       1,103       1,198       1,242  
    Other     1,305       1,131       989       1,000       1,133  
          11,767       13,020       13,970       12,974       12,133  
    Direct Vessel Profit (1)   $ 8,253     $ 3,766     $ 4,722     $ 3,853     $ 6,135  
    Other Costs and Expenses:                              
    Lease expense   $ 72     $ 73     $ 71     $ 85     $ 158  
    Depreciation and amortization     3,272       3,261       3,247       3,496       3,643  
                                   
    Latin America                              
    Time Charter Statistics:                              
    Average rates per day worked   $ 21,390     $ 21,984     $ 22,437     $ 28,308     $ 20,745  
    Fleet utilization     73 %     63 %     71 %     58 %     84 %
    Fleet available days (2)     828       828       808       938       809  
    Out-of-service days for repairs, maintenance and drydockings     20       94       41       1       —  
    Operating Revenues:                              
    Time charter   $ 12,967     $ 11,500     $ 12,832     $ 15,274     $ 14,049  
    Bareboat charter     364       372       364       364       368  
    Other marine services     573       620       1,727       1,598       143  
          13,904       12,492       14,923       17,236       14,560  
    Direct Costs and Expenses:                              
    Operating:                              
    Personnel     3,144       3,791       3,383       4,745       3,645  
    Repairs and maintenance     1,467       1,517       1,761       2,438       1,388  
    Drydocking     407       1,940       1,707       1,223       336  
    Insurance and loss reserves     238       259       539       390       209  
    Fuel, lubes and supplies     964       2,053       827       1,371       786  
    Other     822       465       419       671       522  
          7,042       10,025       8,636       10,838       6,886  
    Direct Vessel Profit (1)   $ 6,862     $ 2,467     $ 6,287     $ 6,398     $ 7,674  
    Other Costs and Expenses:                              
    Lease expense   $ 57     $ 76     $ 102     $ 80     $ 91  
    Depreciation and amortization     1,934       1,933       1,933       2,721       2,153  

     _______________

    (1) See full description of footnote above.
    (2) Includes available days for a bareboat charter for one PSV, which has been excluded from days worked and average day rates.
       
         
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED PERFORMANCE BY VESSEL CLASS
    (in thousands, except statistics)
         
        Three Months Ended
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    AHTS                                
    Time Charter Statistics:                                
    Average rates per day worked   $ 10,410     $ 10,316     $ 8,125     $ 8,538     $ 8,937    
    Fleet utilization     79 %     46 %     49 %     75 %     64 %  
    Fleet available days     178       334       364       364       368    
    Out-of-service days for repairs, maintenance and drydockings     28       87       29       —       41    
    Out-of-service days for cold-stacked status     —       58       91       91       92    
    Operating Revenues:                                
    Time charter   $ 1,465     $ 1,576     $ 1,459     $ 2,331     $ 2,102    
    Other marine services     —       13       219       —       6    
          1,465       1,589       1,678       2,331       2,108    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel   $ 595     $ 981     $ 1,045     $ 1,064     $ 944    
    Repairs and maintenance     128       239       465       220       612    
    Drydocking     5       436       280       68       58    
    Insurance and loss reserves     49       66       97       43       73    
    Fuel, lubes and supplies     25       90       69       616       375    
    Other     210       263       230       287       295    
          1,012       2,075       2,186       2,298       2,357    
    Other Costs and Expenses:                                
    Lease expense   $ 7     $ 4     $ 164     $ 171     $ 253    
    Depreciation and amortization     122       175       175       175       175    
                                     
    FSV                                
    Time Charter Statistics:                                
    Average rates per day worked   $ 13,643     $ 13,102     $ 12,978     $ 11,834     $ 11,841    
    Fleet utilization     72 %     81 %     80 %     72 %     74 %  
    Fleet available days     2,024       2,024       2,002       2,002       2,105    
    Out-of-service days for repairs, maintenance and drydockings     118       96       128       216       337    
    Out-of-service days for cold-stacked status     92       83       36       91       92    
    Operating Revenues:                                
    Time charter   $ 19,992     $ 21,606     $ 20,698     $ 17,081     $ 18,502    
    Other marine services     416       1,012       516       126       163    
          20,408       22,618       21,214       17,207       18,665    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel   $ 5,078     $ 5,637     $ 5,829     $ 5,649     $ 5,320    
    Repairs and maintenance     4,480       4,378       4,572       3,093       2,691    
    Drydocking     426       448       457       1,869       1,710    
    Insurance and loss reserves     422       532       546       277       507    
    Fuel, lubes and supplies     1,586       1,962       993       1,051       1,441    
    Other     2,456       2,238       1,850       1,649       1,632    
          14,448       15,195       14,247       13,588       13,301    
    Other Costs and Expenses:                                
    Depreciation and amortization   $ 4,746     $ 4,744     $ 4,746     $ 4,744     $ 4,879    
                                               
         
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED PERFORMANCE BY VESSEL CLASS (continued)
    (in thousands, except statistics)
         
        Three Months Ended
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    PSV                                
    Time Charter Statistics:                                
    Average rates per day worked   $ 17,912     $ 21,819     $ 20,952     $ 19,133     $ 19,778    
    Fleet utilization     72 %     58 %     66 %     53 %     77 %  
    Fleet available days (1)     1,932       1,932       1,900       1,911       1,902    
    Out-of-service days for repairs, maintenance and drydockings     117       349       291       307       109    
    Operating Revenues:                                
    Time charter   $ 24,865     $ 24,488     $ 26,390     $ 19,390     $ 29,140    
    Bareboat charter     364       372       364       364       368    
    Other marine services     1,561       2,855       2,266       416       595    
          26,790       27,715       29,020       20,170       30,103    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel   $ 8,999     $ 9,360     $ 8,979     $ 8,850     $ 9,017    
    Repairs and maintenance     4,101       3,798       3,151       4,393       3,520    
    Drydocking     1,046       2,629       2,616       3,386       472    
    Insurance and loss reserves     618       636       1,037       395       690    
    Fuel, lubes and supplies     2,379       3,594       1,575       1,889       1,027    
    Other     2,566       2,821       1,850       1,395       1,922    
          19,709       22,838       19,208       20,308       16,648    
    Other Costs and Expenses:                                
    Lease expense   $ —     $ (3 )   $ 3     $ —     $ —    
    Depreciation and amortization     4,122       4,117       4,128       4,073       4,073    

     _______________

    (1) Includes available days for a bareboat charter for one PSV, which has been excluded from days worked and average day rates.
       
         
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED PERFORMANCE BY VESSEL CLASS (continued)
    (in thousands, except statistics)
         
        Three Months Ended
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    Liftboats                                
    Time Charter Statistics:                                
    Average rates per day worked   $ 39,326     $ 36,423     $ 43,204     $ 53,506     $ 40,181    
    Fleet utilization     68 %     58 %     54 %     53 %     52 %  
    Fleet available days     736       736       728       728       795    
    Out-of-service days for repairs, maintenance and drydockings     41       109       143       78       60    
    Out-of-service days for cold-stacked status     92       92       91       91       162    
    Operating Revenues:                                
    Time charter   $ 19,773     $ 15,643     $ 17,102     $ 20,461     $ 16,754    
    Other marine services     1,177       1,142       666       1,772       4,666    
          20,950       16,785       17,768       22,233       21,420    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel   $ 5,678     $ 5,926     $ 6,842     $ 6,140     $ 5,316    
    Repairs and maintenance     1,722       1,531       2,054       2,035       769    
    Drydocking     990       2,555       2,857       1,383       321    
    Insurance and loss reserves     1,384       1,334       1,482       1,282       1,554    
    Fuel, lubes and supplies     894       928       1,329       967       838    
    Other     860       473       519       343       531    
          11,528       12,747       15,083       12,150       9,329    
    Other Costs and Expenses:                                
    Depreciation and amortization     3,866       3,866       3,865       3,866       3,867    
                                     
    Other Activity                                
    Operating Revenues:                                
    Other marine services   $ 195     $ 209     $ 187     $ 829     $ 787    
          195       209       187       829       787    
    Direct Costs and Expenses:                                
    Operating:                                
    Personnel   $ 15     $ 36     $ (1,129 )   $ (33 )   $ 1,483    
    Repairs and maintenance     2       (1 )     2       22       12    
    Insurance and loss reserves     —       16       (63 )     (259 )     120    
    Fuel, lubes and supplies     —       —       —       —       2    
    Other     12       1       (14 )     25       17    
          29       52       (1,204 )     (245 )     1,634    
    Other Costs and Expenses:                                
    Lease expense   $ 340     $ 363     $ 319     $ 310     $ 426    
    Depreciation and amortization     23       26       25       24       28    
                                               
     
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands)
     
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    ASSETS                                
    Current Assets:                                
    Cash and cash equivalents   $ 59,491     $ 35,601     $ 40,605     $ 59,593     $ 67,455    
    Restricted cash     16,649       2,263       2,255       2,566       16,676    
    Receivables:                                
    Trade, net of allowance for credit loss     69,888       76,497       70,770       58,272       63,728    
    Other     7,913       7,841       6,210       12,210       11,049    
    Tax receivable     1,601       983       983       983       983    
    Inventories     2,760       3,139       3,117       2,516       1,609    
    Prepaid expenses and other     4,406       4,840       5,659       3,425       2,686    
    Assets held for sale     10,943       —       500       500       500    
    Total current assets     173,651       131,164       130,099       140,065       164,686    
    Property and Equipment:                                
    Historical cost     900,414       921,445       921,443       919,139       918,823    
    Accumulated depreciation     (367,448 )     (362,604 )     (349,799 )     (337,001 )     (324,141 )  
          532,966       558,841       571,644       582,138       594,682    
    Construction in progress     11,904       11,935       11,518       13,410       10,362    
    Net property and equipment     544,870       570,776       583,162       595,548       605,044    
    Right-of-use asset – operating leases     3,436       3,575       3,683       3,988       4,291    
    Right-of-use asset – finance leases     36       19       28       29       37    
    Investments, at equity, and advances to 50% or less owned companies     3,541       2,046       2,641       3,122       4,125    
    Other assets     1,577       1,864       1,953       2,094       2,153    
    Total assets   $ 727,111     $ 709,444     $ 721,566     $ 744,846     $ 780,336    
    LIABILITIES AND EQUITY                                
    Current Liabilities:                                
    Current portion of operating lease liabilities   $ 606     $ 494     $ 861     $ 1,285     $ 1,591    
    Current portion of finance lease liabilities     17       17       26       33       35    
    Current portion of long-term debt     27,500       28,605       28,605       28,605       28,365    
    Accounts payable     29,236       22,744       17,790       23,453       27,562    
    Other current liabilities     27,683       28,808       23,795       21,067       19,533    
    Total current liabilities     85,042       80,668       71,077       74,443       77,086    
    Long-term operating lease liabilities     2,982       3,221       3,276       3,390       3,529    
    Long-term finance lease liabilities     20       4       5       —       6    
    Long-term debt     317,339       272,325       277,740       281,989       287,544    
    Deferred income taxes     22,037       26,802       30,083       33,873       35,718    
    Deferred gains and other liabilities     1,369       1,416       1,447       2,285       2,229    
    Total liabilities     428,789       384,436       383,628       395,980       406,112    
    Equity:                                
    SEACOR Marine Holdings Inc. stockholders’ equity:                                
    Common stock     287       287       286       286       280    
    Additional paid-in capital     479,283       477,661       476,020       474,433       472,692    
    Accumulated deficit     (180,600 )     (154,374 )     (138,028 )     (125,609 )     (102,425 )  
    Shares held in treasury     (8,110 )     (8,110 )     (8,110 )     (8,071 )     (4,221 )  
    Accumulated other comprehensive income, net of tax     7,141       9,223       7,449       7,506       7,577    
          298,001       324,687       337,617       348,545       373,903    
    Noncontrolling interests in subsidiaries     321       321       321       321       321    
    Total equity     298,322       325,008       337,938       348,866       374,224    
    Total liabilities and equity   $ 727,111     $ 709,444     $ 721,566     $ 744,846     $ 780,336    
     
               
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
               
              Three Months Ended
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023    
    Cash Flows from Operating Activities:                                
    Net (Loss) Income   $ (26,226 )   $ (16,346 )   $ (12,483 )   $ (23,069 )   $ 5,729    
    Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:                                
    Depreciation and amortization     12,879       12,928       12,939       12,882       13,022    
    Deferred financing costs amortization     254       298       297       295       279    
    Stock-based compensation expense     1,622       1,604       1,587       1,645       1,510    
    Debt discount amortization     1,799       2,061       1,993       1,926       1,862    
    Allowance for credit losses     59       101       39       3       266    
    (Gains) losses from equipment sales, retirements or impairments     (11,624 )     (1,821 )     (37 )     1       (18,057 )  
    Losses on debt extinguishment     28,252       —       —       —       —    
    Derivative losses (gains)     536       (67 )     (104 )     543       (608 )  
    Interest on finance lease     2       —       1       —       1    
    Settlements on derivative transactions, net     —       —       —       164       —    
    Currency (gains) losses     (1,308 )     1,717       560       80       1,276    
    Deferred income taxes     (4,766 )     (3,281 )     (3,790 )     (1,845 )     2,640    
    Equity (earnings) losses     (1,430 )     (1,012 )     (966 )     1,100       (374 )  
    Dividends received from equity investees     —       1,498       1,418       —       166    
    Changes in Operating Assets and Liabilities:                                
    Accounts receivables     5,448       (7,411 )     (6,928 )     4,291       (3,472 )  
    Other assets     1,338       1,032       (2,395 )     (1,290 )     733    
    Accounts payable and accrued liabilities     1,693       9,325       (4,378 )     (3,895 )     (6,456 )  
    Net cash provided by (used in) operating activities     8,528       626       (12,247 )     (7,169 )     (1,483 )  
    Cash Flows from Investing Activities:                                
    Purchases of property and equipment     (3,010 )     (210 )     (658 )     (3,416 )     (3,644 )  
    Proceeds from disposition of property and equipment     22,441       2,331       86       —       36,692    
    Net cash provided by (used in) investing activities     19,431       2,121       (572 )     (3,416 )     33,048    
    Cash Flows from Financing Activities:                                
    Payments on long-term debt     (2,479 )     (7,770 )     (6,533 )     (7,530 )     (6,173 )  
    Payments on debt extinguishment     (328,712 )     —       —       —       —    
    Payments on debt extinguishment cost     (3,671 )     —       —       —       —    
    Proceeds from issuance of long-term debt, net of debt discount and issue costs     345,192       —       —       —       87    
    Payments on finance leases     (13 )     (10 )     (9 )     (9 )     (9 )  
    Proceeds from issuance of common stock, net of issue costs     —       —       —       —       24    
    Proceeds from exercise of stock options and warrants     —       38       102       —       —    
    Tax withholdings on restricted stock vesting     —       —       (39 )     (3,850 )     —    
    Net cash provided by (used in) financing activities     10,317       (7,742 )     (6,479 )     (11,389 )     (6,071 )  
    Effects of Exchange Rate Changes on Cash, Restricted Cash and Cash Equivalents     —       (1 )     (1 )     2       1    
    Net Change in Cash, Restricted Cash and Cash Equivalents     38,276       (4,996 )     (19,299 )     (21,972 )     25,495    
    Cash, Restricted Cash and Cash Equivalents, Beginning of Period     37,864       42,860       62,159       84,131       58,636    
    Cash, Restricted Cash and Cash Equivalents, End of Period   $ 76,140     $ 37,864     $ 42,860     $ 62,159     $ 84,131    
     
     
    SEACOR MARINE HOLDINGS INC.
    UNAUDITED FLEET COUNTS
     
        Owned     Leased-in     Managed     Total  
    December 31, 2024                        
    AHTS     —       —       2       2  
    FSV     22       —       1       23  
    PSV     21       —       —       21  
    Liftboats     8       —       —       8  
          51       —       3       54  
    December 31, 2023                        
    AHTS     3       1       —       4  
    FSV     22       —       3       25  
    PSV     21       —       —       21  
    Liftboats     8       —       —       8  
          54       1       3       58  

    The MIL Network –

  • MIL-OSI Security: Federal Grand Jury Indicts Four Men for Wire Fraud, Wire Fraud Conspiracy, and Aggravated Identity Theft

    Source: Office of United States Attorneys

    Louisville, KY – A federal grand jury in Louisville returned an indictment on February 19, 2025, charging four Jefferson County, Kentucky men with wire fraud, wire fraud conspiracy, and aggravated identity theft.

    U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge Karen Wingerd of the Internal Revenue Service, Criminal Investigation, Cincinnati Field Office, and Chief Richard Sanders of the Jeffersontown Police Department made the announcement.

    According to the indictment, between at least May 1, 2023, and November 14, 2023, Anthony Phillips, 61, Aubrey Walker, Sr., 50, William Walker, 49, and Robert Lewis, 44, conspired to defraud a victim company by falsely representing they were representatives of the company’s small business clients to make purchases from the victim company and charge them to the client accounts. The defendants are also charged with several counts of execution of this wire fraud scheme. In executing this scheme, the defendants caused wires to be transmitted in interstate commerce from the Western District of Kentucky to outside of Kentucky. Anthony Phillips is also charged with transferring, possessing, or using a means of identification of another person, without lawful authority, during and in relation to the wire fraud.

    The defendants made their initial court appearances this week before a U.S. Magistrate Judge of the U.S. District Court for the Western District of Kentucky. If convicted, Anthony Phillips faces a mandatory minimum sentence of 2 years and a maximum sentence of 26 years in prison. If convicted Aubrey Walker, Sr., William Walker, and Robert Lewis each face a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors.

    There is no parole in the federal system.     

    This case is being investigated by the IRS CI and the Jeffersontown Police Department.

    Assistant U.S. Attorney Erin McKenzie is prosecuting the case.

    An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    ###

    MIL Security OSI –

  • MIL-OSI Security: Pair Of Charlotte Businessmen Convicted Failing To Account For And Pay Over Trust Fund Taxes Are Sentenced

    Source: Office of United States Attorneys

    CHARLOTTE, N.C. – A pair of Charlotte businessmen were sentenced today in federal court for failing to account for and pay over to the Internal Revenue Service (IRS) more than $150,000 in trust fund taxes over five quarters in 2016 and 2017, announced Lawrence J. Cameron, Acting U.S. Attorney for the Western District of North Carolina.

    Donald “Trey” Eakins, Special Agent in Charge of the IRS, Criminal Investigation (IRS-CI), Charlotte Field Office, joins Acting U.S. Attorney Cameron in making todays’ announcement.

    Richard Brasser, 58, and Gregory Gentner, 54, were sentenced to 12 months and 1 day in prison, respectively, followed by a one-year term of supervised release. In March 2024, a federal jury found Brasser and Gentner guilty of multiple counts of failing to account for and pay over trust funds taxes.

    According to today’s sentencing hearing, evidence presented at trial, and other court documents, rFactr was a company with offices in Charlotte, that sold software that leveraged social media for sales platforms. Brasser was rFactr’s Chief Executive Officer and Gentner the Chief Operating Officer. Trial evidence established that from 2015 through 2017, Brasser and Gentner caused rFactr to collect more than $600,000 in trust fund taxes from the wages of its employees but did not account for the taxes by filing Forms 941 with the IRS. Moreover, the defendants did not pay over the withheld taxes to the IRS in a timely manner.

    According to trial evidence, Brasser and Gentner had a history of noncompliance with rFactr’s employment tax obligations. Specifically, between 2013 and 2017, Brasser and Gentner failed to comply with rFactr’s employment tax obligations by failing to timely file rFactr’s employment tax returns and failing to timely pay over to the IRS rFactr’s employment taxes. In total, between 2015 and 2017, Brasser and Gentner caused rFactr to owe more than $1.1 million in employment taxes.

    In making today’s announcement, Acting U.S. Attorney Cameron commended IRS-Criminal Investigation for their investigation of the case.

    Assistant U.S. Attorney Caryn Finley and Special Assistant U.S. Attorney Eric Frick of the U.S. Attorney’s Office in Charlotte prosecuted the case.

    MIL Security OSI –

  • MIL-OSI: Constellation Software Inc. and Topicus.Com Inc. Announce Results for Topicus.com Inc. for the Fourth Quarter and Year Ended December 31, 2024

    Source: GlobeNewswire (MIL-OSI)

    TORONTO, Feb. 26, 2025 (GLOBE NEWSWIRE) — Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for Topicus.com Inc. (“Topicus” or the “Company”) for the fourth quarter and year ended December 31, 2024. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.

    The following press release should be read in conjunction with the Annual Consolidated Financial Statements of Topicus.com Inc. (or the “Company”) for the year ended December 31, 2024, which we prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s annual Management’s Discussion and Analysis for the year ended December 31, 2024, which can be found on SEDAR+ at www.sedarplus.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR+ at www.sedarplus.com.

    Q4 2024 Headlines:

    • Revenue increased 18% (5% organic growth) to €364.9 million compared to €309.7 million in Q4 2023.
    • Net income increased 32% to €56.2 million (€0.40 on a diluted per share basis) from €42.5 million (€0.31 on a diluted per share basis) in Q4 2023.
    • Acquisitions were completed for aggregate cash consideration of €47.9 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €6.7 million resulting in total consideration of €54.6 million.
    • Cash flows from operations (“CFO”) increased 28% to €79.6 million compared to €62.4 million in Q4 2023.
    • Free cash flow available to shareholders1 (“FCFA2S”) increased 27% to €36.6 million compared to €28.9 million in Q4 2023.

    2024 Headlines:

    • Revenue increased 15% (5% organic growth) to €1,294.9 million compared to €1,125.0 million in 2023.
    • Net income increased 30% to €149.5 million (€1.11 on a diluted per share basis) from €115.4 million (€0.88 on a diluted per share basis) in 2023.
    • A number of acquisitions were completed for total consideration of €153.4 million including holdbacks and contingent consideration.
    • Cash flows from operations (“CFO”) increased 41% to €347.6 million compared to €246.6 million in 2023.
    • Free cash flow available to shareholders1 (“FCFA2S”) increased 44% to €177.4 million compared to €123.4 million in 2023.

    Total revenue for the quarter ended December 31, 2024 was €364.9 million, an increase of 18%, or €55.2 million, compared to €309.7 million for the comparable period in 2023. For the year ended December 31, 2024 total revenues were €1,294.9 million, an increase of 15%, or €169.9 million, compared to €1,125.0 million for the comparable period in 2023. The increase for both the three months and 12 months ended December 31, 2024 compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 5% for each of the periods. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

    Net income for the quarter ended December 31, 2024 increased €13.7 million to €56.2 million compared to €42.5 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.40 in the quarter ended December 31, 2024 compared to €0.31 for the same period in 2023. For the twelve months ended December 31, 2024 net income increased €34.1 million to €149.5 million compared to €115.4 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €1.11 in the twelve months ended December 31, 2024 compared to €0.88 for the same period in 2023.

    For the quarter ended December 31, 2024, CFO increased €17.2 million to €79.6 million compared to €62.4 million for the same period in 2023 representing an increase of 28%. Many of the businesses invoice customers for annual software maintenance fees in Q1 each year resulting in a disproportionate amount of cash being received in the first quarter as compared to the remaining three quarters. For the twelve months ended December 31, 2024, CFO increased €101.1 million to €347.6 million compared to €246.6 million for the same period in 2023 representing an increase of 41%.

    For the quarter ended December 31, 2024, FCFA2S increased €7.7 million to €36.6 million compared to €28.9 million for the same period in 2023 representing an increase of 27%. For the twelve months ended December 31, 2024, FCFA2S increased €54.0 million to €177.4 million compared to €123.4 million for the same period in 2023 representing an increase of 44%.

    1. See Non-IFRS measures.

    Forward Looking Statements

    Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Topicus or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Topicus assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

    Non-IFRS Measures

    Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, dividends paid to redeemable preferred securities holders, and property and equipment purchased, and includes interest and dividends received, and the proceeds from sale of interest rate caps. The portion of this amount applicable to non-controlling interests is then deducted. Topicus believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Topicus does not make any acquisitions, or investments, and does not repay any debts. While Topicus could use the FCFA2S to pay dividends or repurchase shares, Topicus’ objective is to invest all of our FCFA2S in acquisitions which meet Topicus’ hurdle rate.

    FCFA2S is not a recognized measure under IFRS and, accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

    The following table reconciles FCFA2S to net cash flows from operating activities:

          Three months ended
    December 31,    		       Year ended
    December 31,    		  
          2024 2023       2024 2023  
        (€ in millions)   (€ in millions)
                         
    Net cash flows from operating activities     79.6   62.4         347.6   246.6    
    Adjusted for:                    
    Interest paid on lease obligations     (0.6 ) (0.4 )       (2.1 ) (1.4 )  
    Interest paid on other facilities     (5.7 ) (4.4 )       (21.1 ) (15.8 )  
    Proceeds from sale of interest rate cap     –   –         –   4.8    
    Credit facility transaction costs     (0.3 ) (0.0 )       (1.3 ) (0.3 )  
    Payments of lease obligations     (6.5 ) (5.5 )       (24.6 ) (21.8 )  
    Property and equipment purchased     (1.9 ) (2.5 )       (8.3 ) (7.8 )  
                         
          64.5   49.5         290.3   204.3    
    Less amount attributable to                    
      non-controlling interests     (27.9 ) (20.6 )       (112.9 ) (81.0 )  
                         
    Free cash flow available to shareholders     36.6   28.9         177.4   123.4    
                         
    Due to rounding, certain totals may not foot.                    
     

    About Topicus.com Inc.

    Topicus’ subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol “TOI”. Topicus acquires, manages and builds vertical market software businesses.

    About Constellation Software Inc.

    Constellation’s common shares are listed on the Toronto Stock Exchange under the symbol “CSU”. Constellation acquires, manages and builds vertical market software businesses.

    For further information:
    Jamal Baksh
    Chief Financial Officer
    jbaksh@csisoftware.com
    info@topicus.com
    www.topicus.com

    SOURCE: TOPICUS.COM INC.

     
    Topicus.com Inc.
    Consolidated Statements of Financial Position        
    (In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
               
               
            December 31, 2024 December 31, 2023
               
    Assets        
               
    Current assets:        
      Cash     206,157 179,059
      Accounts receivable     142,791 134,079
      Unbilled revenue     45,415 44,838
      Inventories     4,930 4,517
      Other assets     55,107 55,250
            454,400 417,742
               
    Non-current assets:        
      Property and equipment     23,245 20,030
      Right of use assets     75,666 61,066
      Deferred income taxes     19,905 16,412
      Other assets     11,983 13,824
      Intangible assets 950,670 903,709
            1,081,470 1,015,042
               
    Total assets     1,535,870 1,432,784
               
    Liabilities and Shareholders’ Equity        
               
    Current liabilities:        
      Topicus Revolving Credit Facility and current portion of term and other loans 225,718 161,077
      Accounts payable and accrued liabilities     250,361 211,423
      Deferred revenue     166,593 138,854
      Provisions     2,582 1,708
      Acquisition holdback payables     13,073 12,292
      Lease obligations     23,629 20,614
      Income taxes payable     18,233 20,068
            700,189 566,035
               
    Non-current liabilities:        
      Term and other loans     49,300 64,615
      Deferred income taxes     145,911 137,155
      Acquisition holdback payables     10,061 1,339
      Lease obligations     53,188 41,524
      Other liabilities     45,825 29,632
            304,285 274,266
               
    Total liabilities     1,004,474 840,301
               
               
    Shareholders’ Equity:        
      Capital stock     39,412 39,412
      Accumulated other comprehensive income (loss)     5,584 2,390
      Retained earnings     266,281 297,382
      Non-controlling interests     220,119 253,299
            531,396 592,483
               
               
               
    Total liabilities and shareholders’ equity     1,535,870 1,432,784
               
    Topicus.com Inc.          
    Consolidated Statements of Income (Loss)        
    (In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
               
             
               
          Year ended December 31,
          2024     2023  
               
    Revenue          
    License     43,507     35,458  
    Professional services     326,877     297,669  
    Hardware and other     24,819     18,045  
    Maintenance and other recurring     899,659     773,801  
          1,294,862     1,124,973  
    Expenses          
    Staff     706,579     625,200  
    Hardware     16,851     12,068  
    Third party license, maintenance and professional services   100,085     88,074  
    Occupancy     10,951     8,351  
    Travel, telecommunications, supplies, software and equipment   50,382     43,639  
    Professional fees     20,722     15,318  
    Other, net     13,427     15,422  
    Depreciation     34,088     30,586  
    Amortization of intangible assets     135,499     121,124  
          1,088,584     959,782  
               
    Impairment of intangible and other non-financial assets   617     –  
    Bargain purchase (gain)     (517 )   –  
    Finance and other expenses (income)     22,705     20,426  
          22,804     20,426  
               
    Income (loss) before income taxes     183,474     144,766  
               
    Current income tax expense (recovery)     62,413     53,098  
    Deferred income tax expense (recovery)     (28,410 )   (23,759 )
    Income tax expense (recovery)     34,004     29,338  
               
    Net income (loss)     149,470     115,427  
               
    Net income (loss) attributable to:          
    Equity holders of Topicus     91,994     71,753  
    Non-controlling interests     57,476     43,674  
    Net income (loss)     149,470     115,427  
               
    Weighted average shares          
    Basic shares outstanding     82,766,336     81,889,764  
    Diluted shares outstanding     129,841,819     129,841,819  
               
    Earnings (loss) per common share of Topicus          
    Basic     1.11     0.88  
    Diluted     1.11     0.88  
               
               
    Topicus.com Inc.          
    Consolidated Statements of Comprehensive Income (Loss)        
    (In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
               
             
             
          Year ended December 31,
          2024   2023
               
    Net income (loss)     149,470   115,427
               
    Items that are or may be reclassified subsequently to net income (loss):        
               
    Foreign currency translation differences from foreign operations and other   7,241   2,344
               
    Other comprehensive (loss) income for the period, net of income tax   7,241   2,344
               
    Total comprehensive income (loss) for the period   156,711   117,771
               
    Total other comprehensive income (loss) attributable to:        
    Equity holders of Topicus     3,193   1,201
    Non-controlling interests     4,048   1,143
    Total other comprehensive income (loss)     7,241   2,344
               
    Total comprehensive income (loss) attributable to:        
    Equity holders of Topicus     95,187   72,954
    Non-controlling interests     61,524   44,817
    Total comprehensive income (loss)     156,711   117,771
                 
    Topicus.com Inc.            
    Consolidated Statement of Changes in Shareholders’ Equity        
    (In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
                   
                   
    Year ended December 31, 2024            
             
        Capital Stock Accumulated other
    comprehensive
    (loss) income    		 Retained
    earnings    		   Total   Non-controlling
    interests    		   Total equity  
                   
    Balance at January 1, 2024 39,412 2,390 297,382   339,185   253,299   592,483  
                   
    Total comprehensive income (loss) for the period:            
                   
    Net income (loss) – – 91,994   91,994   57,476   149,470  
                   
    Other comprehensive income (loss)            
                   
    Foreign currency translation differences from            
      foreign operations and other, net of income tax – 3,193 –   3,193   4,048   7,241  
                   
    Total other comprehensive income (loss)            
      for the period – 3,193 –   3,193   4,048   7,241  
                   
    Total comprehensive income (loss) for the period – 3,193 91,994   95,187   61,524   156,711  
                   
    Transactions with owners, recorded directly in equity            
                   
      Other movements in non-controlling interests and equity – – (251 ) (251 ) (369 ) (620 )
                   
      Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus – – 4,797   4,797   (4,797 ) –  
                   
      Dividends paid to shareholders of the Company – – (127,641 ) (127,641 ) –   (127,641 )
                   
      Return of capital to non-controlling interests         (9,048 ) (9,048 )
                   
      Dividends paid to non-controlling interests – – –   –   (80,489 ) (80,489 )
                   
    Balance at December 31, 2024 39,412 5,584 266,281   311,277   220,119   531,396  
                   
    Topicus.com Inc.            
    Consolidated Statement of Changes in Shareholders’ Equity        
    (In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
                   
                   
    Year ended December 31, 2023            
                   
             
        Capital Stock Accumulated other
    comprehensive
    (loss) income    		   Retained
    earnings    		   Total Non-controlling
    interests    		   Total equity  
                   
    Balance at January 1, 2023 39,412 (232 ) 226,919   266,099 201,685   467,784  
                   
    Total comprehensive income (loss) for the period:            
                   
    Net income (loss) – –   71,753   71,753 43,674   115,427  
                   
    Other comprehensive income (loss)            
                   
    Foreign currency translation differences from            
      foreign operations and other, net of income tax – 1,201   –   1,201 1,143   2,344  
                   
    Total other comprehensive income (loss) for the period – 1,201   –   1,201 1,143   2,344  
                   
    Total comprehensive income (loss) for the period – 1,201   71,753   72,954 44,817   117,771  
                   
                   
    Transactions with owners, recorded directly in equity            
                   
      Other movements in non-controlling interests and equity – 1,422   (1,290 ) 131 (203 ) (72 )
                   
      Contribution by non-controlling interests – –   –   – 9,617   9,617  
                   
      Acquisition of non-controlling interests – –   –   – (803 ) (803 )
                   
      Dividends paid to non-controlling interests – –   –   – (1,814 ) (1,814 )
                   
    Balance at December 31, 2023 39,412 2,390   297,382   339,185 253,299   592,483  
                   
    Topicus.com Inc.        
    Consolidated Statements of Cash Flows        
    (In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
                 
             
                 
            Year ended December 31,
            2024     2023  
                 
    Cash flows from (used in) operating activities:        
      Net income (loss)   149,470     115,427  
      Adjustments for:        
        Depreciation   34,088     30,586  
        Amortization of intangible assets   135,499     121,124  
        Impairment of intangible and other non-financial assets   617     –  
        Bargain purchase (gain)   (517 )   –  
        Finance and other expenses (income)   22,705     20,426  
        Income tax expense (recovery)   34,004     29,338  
      Change in non-cash operating assets and liabilities        
        exclusive of effects of business combinations   27,106     (20,062 )
      Income taxes (paid) received   (55,344 )   (50,281 )
      Net cash flows from (used in) operating activities   347,627     246,558  
                 
    Cash flows from (used in) financing activities:        
      Interest paid on lease obligations   (2,054 )   (1,422 )
      Interest paid on other facilities   (21,124 )   (15,779 )
      Proceeds from sale of interest rate cap   –     4,809  
      Net increase (decrease) in Topicus Revolving Credit Facility   65,000     25,000  
      Proceeds from issuance of term and other loans   30,238     37,010  
      Increase (decrease) in bank indebtedness   7,873     –  
      Repayment of loan from CSI   –     (29,878 )
      Increase (decrease) in loan from Vela Software Group   (300 )   1,342  
      Contribution from Vela Software Group into GeoSoftware and Geoactive   –     9,617  
      Return of capital to non-controlling interests   (9,048 )   –  
      Repayments of term and other loans   (47,786 )   (84,226 )
      Credit facility transaction costs   (1,321 )   (278 )
      Payments of lease obligations   (24,594 )   (21,784 )
      Other financing activities   (356 )   (573 )
      Dividends paid to non-controlling interests   (80,489 )   (1,814 )
      Dividends paid to shareholders of the Company   (127,641 )   –  
      Net cash flows from (used in) in financing activities   (211,602 )   (77,977 )
                 
    Cash flows from (used in) investing activities:        
      Acquisition of businesses   (112,952 )   (113,846 )
      Cash obtained with acquired businesses   35,532     12,291  
      Post-acquisition settlement payments, net of receipts   (22,385 )   (17,622 )
      Purchases of other investments   –     (248 )
      (Increase) decrease in restricted cash   (2,128 )   –  
      Property and equipment purchased   (8,283 )   (7,778 )
      Net cash flows from (used in) investing activities   (110,217 )   (127,203 )
                 
    Effect of foreign currency on        
      cash and cash equivalents   1,291     909  
                 
    Increase (decrease) in cash   27,099     42,287  
                 
    Cash, beginning of period   179,059     136,772  
                 
    Cash, end of period   206,157     179,059  

    The MIL Network –

  • MIL-OSI: Element Reports Fourth Quarter and Record 2024 Financial Results; Reaffirms Full-Year 2025 Guidance

    Source: GlobeNewswire (MIL-OSI)

    Amounts in US$ unless otherwise noted
     
    • Record 2024 net revenue of $1.1 billion driving record adjusted operating income, adjusted earnings per share and adjusted free cash flow per share
    • Record performance in 2024 underpinned by an 18% year-over-year increase in services revenue, and a 9% year-over-year increase in net financing revenue associated with higher net earning assets
       
    • Strong performance allowed for acceleration of strategic investments to position us for future success while delivering full-year adjusted operating margins within guidance range
       
    • Robust client demand, strong and growing pipeline, and a high-recurring-revenue business model, combined with the benefits of investments made in 2024, to drive continued growth across key financial metrics
       
    • Reaffirming 2025 guidance for net revenue growth of 6.5 to 8.5%, positive adjusted operating leverage, and high single- to low double-digit growth in each of adjusted operating income, adjusted EPS, and adjusted free cash flow per share

    TORONTO, Feb. 26, 2025 (GLOBE NEWSWIRE) — Element Fleet Management Corp. (TSX:EFN) (“Element” or the “Company”), the largest publicly traded, pure-play automotive fleet manager in the world, today announced financial and operating results for the three months ended December 31, 2024 and record results for full-year 2024.  The following table presents Element’s selected financial results.

      Q4 20241 Q3 20241 Q4 20231 QoQ YoY 2024   2023   YoY
    In US$ millions, except percentages and per share amount       % %     %
    Selected results – as reported                
    Net revenue 270.9   279.6   245.1   (3)% 11% 1,087.6   959.1   13%
    Pre-tax income 121.4   134.0   103.4   (9)% 17% 513.6   448.9   14%
    Pre-tax income margin 44.8 % 47.9 % 42.2 % (310) bps 260  bps 47.2 % 46.8 % 40  bps
    Earnings per share (EPS) [basic] 0.23   0.24   0.20   (1)% 3% 0.96   0.84   12%
    EPS [basic] [$CAD] 0.32   0.33   0.27   (3)% 19% 1.31   1.13   16%
    Adjusted results (excludes one-time strategic project costs in  2024)1                
    Adjusted net revenue2 270.9   279.6   245.1   (3)% 11% 1,087.6   959.1   13%
    Adjusted operating income (AOI)2 143.3   161.4   134.9   (11)% 6% 601.2   530.5   13%
    Adjusted operating margin2 52.9 % 57.7 % 55.0 % (480) bps (210) bps 55.3 % 55.3 % — bps
    Adjusted EPS2 [basic] 0.27   0.29   0.25   (7)% 8% 1.12   0.98   14%
    Adjusted EPS2[basic] [$CAD] 0.37   0.40   0.33   (8)% 12% 1.53   1.32   16%
    Other highlights:                
    Adjusted free cash flow per share2(FCF/sh) 0.30   0.36   0.29   (17)% 3% 1.38   1.24   11%
    Adjusted2 (FCF/sh) [$CAD] 0.41   0.49   0.40   (16)% 2% 1.89   1.67   13%
    Originations 1,498   1,716   1,490   (13)% 1% 6,732   6,340   6%
                               
    1. Strategic project costs totaled $20 million, of which $14 million was incurred in 2023 and $6 million in 2024, These costs were, attributable to leasing initiatives in Ireland, and were $2 million below planned investment as previously communicated. These costs for the quarterly periods in the above table were as follows: Q4 2023 ($11 million), Q3 2024 ($2 million), and Nil in Q4 2024. Additionally, Q3 2024 also included $7 million in acquisition-related costs, including severance, in connection with the Autofleet transaction.
    2. Adjusted results are non-GAAP or supplemental financial measures, which do not have any standard meaning prescribed by GAAP  under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the “IFRS to Non-GAAP Reconciliations” section in this earnings release. The Company uses “Adjusted Results” because it believes that they provide useful information to investors regarding its performance and results of operations.

    “In 2024, we continued to execute our global growth strategy that builds on our considerable business momentum, delivering record results and value to clients, team members, and our shareholders. At the core of our efforts is a digital-first mindset and an unwavering commitment to operational excellence and prioritizing client success,” said Laura Dottori-Attanasio, Chief Executive Officer of Element. “Our robust performance relative to our plan allowed us to accelerate strategic investments aimed at enhancing our client experience, modernizing operations through digitization and automation, and strengthening our teams and culture. We achieved this while delivering within our full-year adjusted operating margin guidance and exceeding other key financial metrics. With these investments, we are building a stronger, more agile, and more innovative foundation to lead in defining the future of mobility. 

    Dottori-Attanasio continued, “We expect expense growth to moderate considerably in 2025 as the acceleration and benefits of this year’s investments begin to materialize. By optimizing costs and driving operational efficiencies through digital innovation, our disciplined approach to strategic investing in the areas that are critical to client success positions us well to both deliver on our financial targets and sustain success well into the future.”

    Net revenue growth

    Element grew 2024 net revenue 13% over 2023 (“year-over-year”) to $1.1 billion led largely by double-digit services revenue growth and higher net financing revenue.

    Q4 2024 net revenue increased $26 million or 11% on a year-over-year basis led largely by robust services revenue growth.  Q4 2024 net revenue decreased $9 million or 3% from a record Q3 2024 led largely by lower net financing revenue, lower syndication revenue and seasonal factors impacting Gains on Sale (“GOS”). This was partly offset by higher services revenue quarter-over-quarter.

    Service revenue

    Element’s largely unlevered services revenue is the key pillar of its capital-light business model, which also improves the Company’s return on equity profile.

    2024 services revenue increased a strong 18% year-over-year to $596 million driven primarily by higher penetration and utilization rates of our service offerings from new and existing clients and higher origination volumes.

    Q4 2024 services revenue grew a robust 25% year-over-year and  10% quarter-over-quarter driven primarily by higher penetration and utilization rates.

    Net financing revenue

    2024 net financing revenue grew $38 million or 9% year-over-year led largely by higher net earning assets resulting from higher originations across all geographies. This increase was partly offset by higher funding costs, including higher interest expense largely associated with financing the redemptions of our preferred shares (previously recorded below the AOI line). GOS was largely unchanged year-over-year, as increased volumes of vehicles for sale continue to mitigate used vehicle price normalization.

    Q4 2024 net financing revenue increased $1 million or 1% year-over-year led largely by the same reasons cited in the full-year 2024 explanation above. This increase was partly offset by a year-over-year decrease in GOS, and higher funding costs. A higher volume of vehicles for sale was more than offset by a decrease in used vehicle pricing in Mexico and ANZ.

    Q4 2024 net financing revenue decreased $13 million or 11% from Q3 2024. This quarter-over-quarter decrease was materially led by seasonal factors affecting GOS and for the same reasons cited directly above. Lower net earning assets and higher interest expense associated with financing the redemption of our preferred shares on September 30, 2024, and the impact of incremental debt due to the acquisition of Autofleet also contributed to the decrease.

    Syndication volume

    The Company syndicated a record $3.5 billion of assets in 2024, an increase of $984 million or 40% from 2023, and $1.0 billion in Q4 2024 – $330 million or 47% higher than Q4 2023. This growth was largely associated with higher origination volume, the Company’s ongoing focus on its capital lighter model, and management of its tangible leverage.  Overall, investor demand remains robust.

    2024 syndication revenue decreased $3 million or 6% year-over-year led largely by the bulk syndication of a Canadian lease portfolio in December 2024 (the “Bulk Sale”) in the amount of $346 million (CAD$474 million). This Bulk Sale further diversified our funding sources. Initial sale and setup costs impacted yields. Yields were further impacted by the Company’s syndication mix and scheduled reduction in bonus depreciation driving lower net yields. Gross yield, which is a measure of the value and demand for our core syndication product, was relatively unchanged from 2023. For further information on the Bulk Sale, please refer to the Element announces new strategic funding relationship section in this press release.

    Q4 2024 syndication revenue decreased $7 million or 55% year-over-year for the same reasons cited above for the full year 2024, and $11 million or 64% quarter-over-quarter largely due to lower net yields and setup costs associated with the sale of the Canadian portfolio. 

    Adjusted operating income and adjusted operating margins

    AOI was a record $601 million in 2024, an increase of $71 million or 13% year-over-year. This resulted in adjusted EPS of $1.12 in 2024, which is a 14% increase year-over-year. 2024 adjusted operating margin was 55.3%, unchanged from last year and at the mid-point of the Company’s revised 2024 guidance range between 55.0 to 55.5%. Excluding Autofleet, adjusted operating margins would have expanded 30 basis points year-over-year to 55.6%.

    Q4 2024 AOI was $143 million, an increase of $8 million or 6% year-over-year. Q4 2024 adjusted operating margin was 52.9% influenced by accelerated strategic investments, seasonal factors impacting GOS, $3 million in Autofleet operating costs, and the impact of the bulk sale of a portfolio of Canadian leases, which the Company believes will benefit 2025 and beyond. Excluding Autofleet, Q4 2024 adjusted operating margin was 54.1%.  

    Q4 2024 AOI decreased $18 million or 11% quarter-over-quarter led largely by the same reasons cited in the preceding paragraph. 

    Originations

    Element originated $6.7 billion of assets in 2024, which is a $392 million or 6% increase year-over-year led by growth across all regions. 

    Q4 2024 originations of $1.5 billion increased $8 million or 1% year-over-year; however, originations decreased $218 million or 13% quarter-over-quarter led largely by seasonal factors including historically slower client order volume during the summer months.

    Order volumes increased significantly in the last four months of 2024, reaching a record monthly high in December. This momentum, bolstered by improvements made through our U.S. & Canada Leasing strategic initiative based in Ireland, is expected to drive solid origination volumes in the first half of 2025.

    The table below sets out the geographic distribution of Element’s originations for 2024 and 2023:

    (in US$000’s for stated values) December 31, 2024 December 31, 2023
      $ % $ %
    United States and Canada 5,206,339 77.34 % 4,850,411 76.50  %
    Mexico 1,035,249 15.38 % 1,028,165 16.22 %
    Australia and New Zealand 489,960 7.28 % 461,451 7.28 %
    Total 6,731,548 100.00 % 6,340,027 100.00 %
                 

    Adjusted free cash flow per share and returns to shareholders

    On an adjusted basis, Element generated $1.38 of adjusted free cash flow (“FCF”) per share in 2024; up 11% year-over-year driven by growth in net revenues and higher originations, while investing approximately $77 million in total capital investments during the year. In Q4 2024, Element accelerated approximately $47 million of tax payments to the Australian Tax Office relating to the 2025 to 2027 taxation years. The tax payments relate to cash tax timing benefits received due to temporary accelerated depreciation available during the pandemic, effectively providing the Company with a tax deferral. The accelerated payment allows for future adjusted free cash flow to better represent the cash taxes that would be paid in the normal course of operations during those future years. This acceleration of Australian cash taxes is excluded from adjusted free cash flow per share.

    Element returned $336 million of cash to shareholders through common share dividends, common share buybacks and preferred share redemptions in 2024.

    Common dividend and share repurchases

    On February 26, 2025, the Board of Directors (the “Board”) authorized and declared a quarterly cash dividend of CAD$0.13 per common share of Element for the first quarter of 2025. The dividend will be payable on April 15, 2025 to shareholders of record as at the close of business on March 31, 2025.

    The Company’s common dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).

    In furtherance of the Company’s return of capital plan, Element renewed its normal course issuer bid (the “NCIB”) for its common shares. Under the NCIB, the Company has approval from the TSX to purchase up to 40,386,699 common shares during the period from November 20, 2024, to November 19, 2025. The Company intends to be more active under its NCIB in 2025. The actual number of the Company’s common shares, if any, that may be purchased under the NCIB, and the timing of any such purchases, will be determined by the Company, subject to applicable terms and limitations of the NCIB (including any automatic share purchase plan adopted in connection therewith). There cannot be any assurance as to how many common shares, if any, will ultimately be purchased pursuant to the NCIB. Any subsequent renewals of the NCIB will be in the discretion of the Company and subject to further TSX approval.

    During 2024, the Company purchased 630,657 Common Shares for cancellation under its normal course issuer bids, for an aggregate amount of approximately $11 million at a volume weighted average price of CAD$23.77 per Common Share. During Q4 2024, the Company purchased 175,357 Common Shares under its NCIB, for cancellation, for an aggregate amount of approximately $4 million at a volume weighted average price of CAD$28.51 per Common Share.  During January and February 2025, the Company purchased 1.1 million Common Shares under its latest NCIB, for cancellation, for an aggregate amount of approximately $22 million at a volume weighted average price of CAD $28.75 per Common Share.

    Element applies trade date accounting in determining the date on which the share repurchase is reflected in the consolidated financial statements. Trade date accounting is the date on which the Company commits itself to purchase the shares.

    Preparing Element for the future

    In 2024, Element was purposeful in accelerating strategic investments in support of future growth.  The Company prioritized initiatives that elevate the client experience, modernize operations through digitization and automation, strengthen its teams and culture, and emphasized these efforts through the acquisition of Autofleet. While pursuing these strategic advancements, the Company exercised operational discipline to ensure that financial targets were achieved, maintaining operating margins within its 2024 guidance range of 55.0 to 55.5%. The Company expects expense growth to moderate considerably in 2025 as the benefits of these investments begin to materialize.

    Notable achievements include:

    • Centralizing accountability for its U.S. and Canadian leasing operations in Ireland and establishing a strategic sourcing presence in Singapore, with these initiatives expected to generate between $30 – $45 million of run-rate net revenue, and between $22 – $37 million of run-rate adjusted operating income (“AOI”), by full-year 2028. Both units are fully operational with an expected payback period from the Company’s investments at less than 2.5 years. 
       
    • Acquiring Autofleet’s robust and highly scalable fleet optimization technology platform to substantially accelerate its digitization and automation initiatives, enhance the client experience and accelerate operational scalability, unlocking new growth and value creation potential.  The integration of Autofleet will enhance the Company’s position in the evolving mobility and vehicle connectivity landscape. Priorities include developing a Digital Driver Experience app, building a digital client reporting portal, and gradually migrating Element’s applications to Autofleet’s cloud and AI-based platform.
       
    • Launching an Acceleration Office, to fast-track and prioritize strategic initiatives like our holistic digital and data analytics transformation, and our expansion into both Insurance and the Small-to Medium-Sized Fleets space.
       
    • In January 2025, the Company expanded beyond its core by announcing a new Insurance Risk solution – a fully integrated insurance and risk management offering. This new service, launched in a strategic partnership with Hub International Limited (“HUB”), a leading global insurance brokerage and financial services firm servicing commercial fleets, is designed to transform how clients insure and manage commercial fleets. The new service bundles insurance coverage solutions, including accident management, subrogation, driver safety programs, and telematics, to deliver a seamless, vehicle life-cycle experience for clients.

    Guidance

    Full-year 2024 Guidance

    Element delivered full-year 2024 results within or above the high end of its previously provided guidance ranges on key metrics, with the exception of originations. The following table highlights our full-year 2024 guidance (as was updated alongside its Q2 2024 results release) compared to the full-year 2024 results.

    In US$, except per share amounts Full-year 2024 Guidance Full-year 2024 Actuals
    Net revenue $1.060 – $1.080 billion $1.088 billion
    YoY Growth 11-13 % 13%
    Adjusted operating margin1 55.0% – 55.5% 55.3%
    Adjusted operating income $575 – 595 million $601 million
    YoY Growth 8-12 % 13%
    Adjusted EPS [basic] $1.07 – $1.11 $1.12
    YoY Growth 9-13 % 14%
    Adjusted free cash flow per share $1.32 – 1.36 1.38
    YoY Growth 6-10 % 11%
    Originations $7.0 – 7.4 billion $6.7 billion
    YoY Growth 11-17 % 6%

     1. Excluding Autofleet, adjusted operating margin was 55.6% in 2024; representing adjusting operating margin expansion of 30 basis points year-over-year.     

    Certain year-over-year growth amounts shown in this table may not calculate exactly due to rounding.

    Full-year 2025 Guidance

    The Company expects to see continued growth in its client base and net revenue, driven by the ongoing transition to self-managed fleets and robust demand for its services and solutions. Strong order volumes over the last four months of 2024, bolstered by enhancements made through our U.S. and Canada leasing initiative in Ireland, is expected to drive solid originations volume in the first half of 2025. Originations are preceded by vehicle orders, which are binding commitments by clients to lease or purchase vehicles from Element.

    Element is committed to generating positive operating leverage in 2025, and expects to begin realizing the benefits of the investments undertaken in 2024.

    In US$, except per share amounts Full-year 2025 Initial  Guidance Full-year 2025 Guidance
    Net revenue 6.5 – 8.5% $1.160 – $1.185 billion
    Adjusted operating income High-single to low-double digit $645 – $670 million
    Adjusted operating margins   55.5 – 56.5%
    Adjusted EPS [basic] High-single to low-double digit $1.20 – $1.25
    Adjusted free cash flow per share High-single to low-double digit $1.48- $1.53
    Originations Low- to mid-single digit $6.9 – $7.1 billion

    The Company’s guidance for 2025 incorporates the effects of several anticipated revenue headwinds, including the depreciation of the Mexican Peso (the Company has assumed an MXN-to-USD exchange rate of 20.5:1), higher interest expenses due to increased local Peso funding in 2025, and financing the redemption of the preferred shares. In addition, the scheduled reduction in bonus depreciation in the U.S. is likely to impact syndication yields. We also anticipate that our 2025 effective tax rate will average between 24.5% to 26.5%.

    The above ranges are prior to any further material foreign exchange fluctuations, and any adverse impact related to changes in the trade agreements between the U.S., Mexico, and Canada.

    Simplified capital structure

    To further optimize the Company’s balance sheet and simplify its capital structure, the Company redeemed the following during 2024: (1) all of its 5,126,400 issued and outstanding 6.21% Cumulative 5-Year Rate Reset Preferred Shares Series C (the “Series C Shares”) on June 20, 2024, at a price of CAD$25.00 per Series C Share for an aggregate total amount of approximately US$91.2 million; (2) all of its 5,321,900 issued and outstanding 5.903% Cumulative 5-Year Rate Reset Preferred Shares Series E (the “Series E Shares”) on September 30, 2024, at a price of CAD$25.00 per Series E Share for an aggregate amount of US$95 million approximately; and (3) all of its remaining outstanding 4.25% Convertible Unsecured Subordinated Debentures due June 30, 2024 for consideration of approximately 14.6 million Common Shares, issued from Treasury and delivered to beneficial holders.

    Following the redemption of its Series E preferred shares, the Company no longer has any preferred shares outstanding.

    As at December 31, 2024, total Common Shares issued and outstanding were 404.5 million.

    Element announces new strategic funding relationship

    In December 2024, Element established a new strategic funding relationship with affiliates of Blackstone’s Infrastructure & Asset-Based Credit Group (“Blackstone”) involving a portfolio of Canadian fleet lease receivables valued at approximately $346 million (CAD$474 million). This initial transaction, which took place on December 20, 2024, has characteristics similar to that of a bulk syndication. Through this arrangement Element benefits from substantial derecognition of these finance lease receivables, diversifying and optimizing its funding profile, validating the high-quality of its asset origination platform, and supporting the Company’s continued growth. 

    This transaction further assists in diversifying the Company’s funding sources, reducing leverage and driving our capital lighter model. However, due to the initial sale, overall yield was negatively impacted by setup costs. These costs are not expected to recur in future transactions. Consequently, the Company expects higher syndication yields in 2025, while also benefiting from the derecognition of finance lease receivables that similar transactions would offer.

    Transitioning to debt-to-capital vs. tangible leverage ratio (“TLR”)

    In Q4 2024, in collaboration with its partners, the Company changed its banking covenants from TLR to debt-to-capital, which the Company believes is a more meaningful measure of its leverage. Commencing in Q4 2024, the Company will prioritize the reporting and management of debt-to-capital metrics, though TLR will be still disclosed this quarter for consistency. The bank covenants are set at 80% of debt-to-capital, and the Company targets a range between 73% to 77%. The Company remains committed to maintaining a strong investment grade balance sheet and will continue to monitor TLR as a key internal metric, but it will be of reduced importance as an operating constraint.

    At December 31, 2024, the Company’s debt-to-capital ratio was 74.1% (December 31, 2023 72%) and its TLR was 7.56:1 (December 31, 2023 5.99:1).

    Conference call and webcast

    A conference call to discuss these results will be held on Thursday, February 27, 2025 at 8:00 a.m. Eastern Time.

    The conference call and webcast can be accessed as follows:

    A taped recording of the conference call may be accessed through March 27, 2025 by dialing 1-855-669-9658 (Canada/U.S. Toll Free) or 1-412-317-0088 (International Toll) and entering the access code 3917835.

    IFRS to Non-GAAP Reconciliations, Non-GAAP Measures and Supplemental Information

    The Company’s audited consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB and the accounting policies we adopted in accordance with IFRS. These audited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present fairly our financial position as at December 31, 2024 and December 31, 2023, the results of operations, comprehensive income and cash flows for the three- and 12-month periods-ended December 31, 2024 and December 31, 2023.

    Non-GAAP and IFRS key annualized operating ratios and per share information of the operations of the Company:

        As at and for the three-month
     period ended    		 For the year ended
    (in US$000’s except ratios and per share amounts or unless otherwise noted)   December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
                 
    Key annualized operating ratios            
                 
    Leverage ratios            
    Financial leverage ratio P/(P+R)   74.1 %   74.3 %   72.4 %   74.1 %   72.4 %
    Tangible leverage ratio P/
    (R-K)    		   7.56     7.00     5.98     7.56     5.99  
    Average financial leverage ratio Q/(Q+V)   75.0 %   75.1 %   72.6 %   74.7 %   71.6 %
    Average tangible leverage ratio Q/(V-L)   7.60     6.80     5.75     6.72     5.53  
                 
    Other key operating ratios            
    Allowance for credit losses as a % of total finance receivables before allowance F/E   0.08 %   0.08 %   0.08 %   0.08 %   0.08 %
    Adjusted operating income on average net earning assets B/J   7.31 %   8.01 %   7.20 %   7.53 %   7.57 %
    Adjusted operating income on average tangible total equity of Element D/(V-L)   39.34 %   37.91 %   29.34 %   35.76 %   30.08 %
                 
    Per share information            
    Number of shares outstanding W   404,502     403,609     389,169     404,502     389,169  
    Weighted average number of shares outstanding [basic] X   404,578     403,609     389,115     396,880     390,297  
    Pro forma diluted average number of shares outstanding Y   404,726     403,768     404,068     404,164     405,242  
    Cumulative preferred share dividends during the period Z   —     1,434     4,418     7,222     17,625  
    Other effects of dilution on an adjusted operating income basis AA $ —   $ 0   $ 1,184   $ 2,412   $ 4,859  
    Net income per share [basic] (A-Z)/X $ 0.23   $ 0.24   $ 0.20   $ 0.96   $ 0.84  
    Net income per share [diluted]   $ 0.23   $ 0.24   $ 0.19   $ 0.95   $ 0.82  
                 
    Adjusted EPS [basic] (D1)/X $ 0.27   $ 0.29   $ 0.25   $ 1.12   $ 0.99  
    Adjusted EPS [diluted] (D1+AA)/Y $ 0.27   $ 0.29   $ 0.24   $ 1.10   $ 0.96  
                                     

    Management also uses a variety of both IFRS and non-GAAP and Supplemental Measures, and non-GAAP ratios to monitor and assess their operating performance. The Company uses these non-GAAP and Supplemental Financial Measures because they believe that they may provide useful information to investors regarding their performance and results of operations.

    The following table provides a reconciliation of certain IFRS to non-GAAP measures related to the operations of the Company and other supplemental information.

                                For the three-month period ended For the year ended
    (in US$000’s  except per share amounts or unless otherwise noted)   December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
    Reported results   US$ US$ US$ US$ US$
    Services income, net     161,461     146,903     129,657     595,540     502,659  
    Net financing revenue     103,453     116,090     102,211     449,130     410,853  
    Syndication revenue, net     5,976     16,643     13,261     42,890     45,587  
    Net revenue     270,890     279,636     245,129     1,087,560     959,099  
    Operating expenses     141,234     139,367     134,085     544,681     481,749  
    Operating income     129,656     140,269     111,044     542,879     477,350  
    Operating margin     47.9 %   50.2 %   45.3 %   49.9 %   49.8 %
    Total expenses     149,463     145,669     141,716     574,003     510,153  
    Income before income taxes     121,427     133,967     103,413     513,557     448,946  
    Net income     92,057     98,565     81,567     387,137     345,599  
    EPS [basic]   $ 0.23   $ 0.24   $ 0.20   $ 0.96   $ 0.84  
    EPS [diluted]   $ 0.23   $ 0.24   $ 0.19   $ 0.95   $ 0.82  
    Adjusting items            
    Impact of adjusting items on operating expenses:            
    Strategic initiatives costs – Salaries, wages, and benefits     —     4,633     5,329     5,593     5,329  
    Strategic initiatives costs – General and administrative expenses     —     4,283     5,437     7,806     8,342  
       Share-based compensation     13,687     12,242     12,346     43,435     36,429  
       Amortization of convertible debenture discount     —     —     772     1,517     3,038  
    Total impact of adjusting items on operating expenses     13,687     21,158     23,884     58,351     53,138  
    Total pre-tax impact of adjusting items     13,687     21,158     23,884     58,351     53,138  
    Total after-tax impact of adjusting items     10,265     15,667     17,667     43,763     27,478  
    Total impact of adjusting items on EPS [basic]     0.03     0.04     0.05     0.11     0.07  
    Total impact of adjusting items on EPS [diluted]     0.03     0.04     0.04     0.11     0.06  
                                     
                                For the three-month period ended For the year ended
    (in US$000’s  except per share amounts or unless otherwise noted)   December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
    Adjusted results   US$ US$ US$ US$ US$
    Adjusted net revenue     270,890     279,636     245,129     1,087,560     959,099  
    Adjusted operating expenses     127,547     118,209     110,201     486,330     428,611  
    Adjusted operating income     143,343     161,427     134,928     601,230     530,488  
    Adjusted operating margin     52.9 %   57.7 %   55.0 %   55.3 %   55.3 %
    Provision for income taxes     29,370     35,402     21,846     126,420     103,347  
    Adjustments:            
    Pre-tax income     5,481     6,213     8,184     22,465     21,153  
    Foreign tax rate differential and other     985     275     5,092     1,474     5,607  
    Provision for taxes applicable to adjusted results     35,836     41,890     35,122     150,359     130,107  
    Adjusted net income     107,507     119,537     99,806     450,871     400,381  
    Adjusted EPS [basic]   $ 0.27   $ 0.29   $ 0.25   $ 1.12   $ 0.98  
    Adjusted EPS [diluted]   $ 0.27   $ 0.29   $ 0.24   $ 1.10   $ 0.96  
                                     

    The following table summarizes key statement of financial position amounts for the periods presented.

    Selected statement of financial position amounts                           For the three-month period ended For the year ended
    (in US$000’s unless otherwise noted)   December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
        US$ US$ US$ US$ US$
    Total Finance receivables, before allowance for credit losses E 7,576,386   7,612,881   7,225,093   7,576,386   7,225,093  
    Allowance for credit losses F 6,168   6,069   5,539   6,168   5,539  
    Net investment in finance receivable G 4,968,294   5,251,679   4,964,175   4,968,294   4,964,175  
    Equipment under operating leases H 2,435,430   2,537,369   2,646,158   2,435,430   2,646,158  
    Net earning assets I=G+H 7,403,724   7,789,048   7,610,333   7,403,724   7,610,333  
    Average net earning assets J 7,848,023   8,059,992   7,494,361   7,980,144   7,008,655  
    Goodwill and intangible assets K 1,672,701   1,581,560   1,596,323   1,672,701   1,596,323  
    Average goodwill and intangible assets L 1,675,336   1,581,776   1,589,182   1,607,766   1,590,290  
    Borrowings M 8,463,789   8,472,130   8,018,132   8,463,789   8,018,132  
    Unsecured convertible debentures N —   —   127,816   —   127,816  
    Less: continuing involvement liability O (132,683 ) (125,225 ) (81,851 ) (132,683 ) (81,851 )
    Total debt P=M+N-O 8,331,106   8,346,905   8,064,097   8,331,106   8,064,097  
    Cash and restricted funds P1 408,621   337,247   350,637   408,621   350,637  
    Total net debt P2 = P-P1 7,922,485   8,009,658   7,713,460   7,922,485   7,713,460  
    Average debt Q 8,313,527   8,582,383   7,829,218   8,473,105   7,361,960  
    Total shareholders’ equity R 2,774,315   2,774,502   2,943,828   2,774,315   2,943,828  
    Preferred shares S —   —   181,077   —   181,077  
    Common shareholders’ equity T=R-S 2,774,315   2,774,502   2,762,751   2,774,315   2,762,751  
    Average common shareholders’ equity U 2,768,504   2,781,421   2,713,843   2,770,044   2,664,760  
    Average total shareholders’ equity V 2,768,504   2,843,024   2,949,789   2,868,593   2,921,281  
                           

    Throughout this press release, management uses the following 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. Non-GAAP measures are reported in addition to, and should not be considered alternatives to, measures of performance according to IFRS.

    Adjusted operating expenses

    Adjusted operating expenses are equal to salaries, wages and benefits, general and administrative expenses, and depreciation and amortization less adjusting items impacting operating expenses. The following table reconciles the Company’s reported expenses to adjusted operating expenses.

                              For the three-month period ended For the year ended
    (in US$000’s except per share amounts or unless otherwise noted) December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
      US$ US$ US$ US$ US$
    Reported Expenses 149,463 145,669   141,716 574,003 510,153
    Less:          
    Amortization of intangible assets from acquisitions 7,819 6,970   6,971 28,734 27,912
    Loss (gain) on investments 410 (668 ) 660 588 492
    Operating expenses 141,234 139,367   134,085 544,681 481,749
    Less:          
      Amortization of convertible debenture discount — —   772 1,517 3,038
      Share-based compensation 13,687 12,242   12,346 43,435 36,429
      Strategic initiatives costs – Salaries, wages and benefits — 4,633   5,329 5,593 5,329
      Strategic initiatives costs – General and administrative expenses — 4,283   5,437 7,806 8,342
    Total adjustments 13,687 21,158   23,884 58,351 53,138
    Adjusted operating expenses 127,547 118,209   110,201 486,330 428,611
                 

    Adjusted operating income or Pre-tax adjusted operating income

    Adjusted operating income reflects net income or loss for the period adjusted for the amortization of debenture discount, share-based compensation, amortization of intangible assets from acquisitions, provision for or recovery of income taxes, loss or income on investments, and adjusting items from the table below.

    The following tables reconciles income before taxes to adjusted operating income.

                              For the three-month period ended For the year ended
    (in US$000’s except per share amounts or unless otherwise noted) December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
      US$ US$ US$ US$ US$
    Income before income taxes 121,427 133,967   103,413 513,557 448,946
    Adjustments:          
    Amortization of convertible debenture discount — —   772 1,517 3,038
    Share-based compensation 13,687 12,242   12,346 43,435 36,429
    Amortization of intangible assets from acquisition 7,819 6,970   6,971 28,734 27,912
    Loss (gain) on investments 410 (668 ) 660 588 492
    Adjusting Items:          
    Strategic initiatives costs – Salaries, wages and benefits — 4,633   5,329 5,593 5,329
    Strategic initiatives costs – General and administrative expenses — 4,283   5,437 7,806 8,342
    Total pre-tax impact of adjusting items — 8,916   10,766 13,399 13,671
    Adjusted operating income 143,343 161,427   134,928 601,230 530,488
                 

    Adjusted operating margin

    Adjusted operating margin is the adjusted operating income before taxes for the period divided by the net revenue for the period.

    After-tax adjusted operating income

    After-tax adjusted operating income reflects the adjusted operating income after the application of the Company’s effective tax rates.

    Adjusted net income

    Adjusted net income reflects reported net income less the after-tax impacts of adjusting items. The following table reconciles reported net income to adjusted net income.

                              For the three-month period ended For the year ended
    (in US$000’s except per share amounts or unless otherwise noted) December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
      US$ US$ US$ US$ US$
    Net income 92,057   98,565   81,567   387,137   345,599  
    Amortization of convertible debenture discount —   —   772   1,517   3,038  
    Share-based compensation 13,687   12,242   12,346   43,435   36,429  
    Amortization of intangible assets from acquisition 7,819   6,970   6,971   28,734   27,912  
    Loss (gain) on investments 410   (668 ) 660   588   492  
    Strategic initiatives costs – Salaries, wages and benefits —   4,633   5,329   5,593   5,329  
    Strategic initiatives costs – General and administrative expenses —   4,283   5,437   7,806   8,342  
    Provision for income taxes 29,370   35,402   21,846   126,420   103,347  
    Provision for taxes applicable to adjusted results (35,836 ) (41,890 ) (35,122 ) (150,359 ) (130,107 )
    Adjusted net income 107,507   119,537   99,806   450,871   400,381  
                         

    After-tax adjusted operating income attributable to common shareholders

    After-tax adjusted operating income attributable to common shareholders is computed as after-tax adjusted operating income less the cumulative preferred share dividends for the period.

    About Element Fleet Management

    Element Fleet Management (TSX: EFN) is the largest publicly traded pure-play automotive fleet manager in the world. As a Purpose-driven company, we provide a full range of sustainable and intelligent mobility solutions to optimize and enhance fleet performance for our clients across North America, Australia, and New Zealand. Our services address every aspect of our clients’ fleet requirements, from vehicle acquisition, maintenance, route optimization, risk management, and remarketing, to advising on decarbonization efforts, integration of electric vehicles and managing the complexity of gradual fleet electrification. Clients benefit from Element’s expertise as one of the largest fleet solutions providers in its markets, offering economies of scale and insight used to reduce operating costs and enhance efficiency and performance. At Element, we maximize our clients’ fleet so they can focus on growing their business. For more information, please visit: https://www.elementfleet.com

    This press release includes forward-looking statements regarding Element and its business. Such statements are based on management’s current expectations and views of future events. 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, including, among others, statements regarding Element’s financial performance, enhancements to clients’ service experience and service levels; expectations regarding client and revenue retention trends; management of operating expenses; increases in efficiency; Element’s ability to achieve its sustainability objectives; Element achieving its digital platform ambitions; the Autofleet acquisition enabling the Company to scale its business more quickly, achieve operational efficiencies, increase client and shareholder value and unlock new revenues streams; EV strategy and capabilities; global EV adoption rates; dividend policy and the payment of future dividends; the costs and benefits of strategic initiatives; creation of value for all stakeholders; expectations regarding syndication; growth prospects and expected revenue growth; level of workforce engagement; improvements to magnitude and quality of earnings; executive hiring and retention; focus and discipline in investing; balance sheet management and plans and expectations with respect to leverage ratios;  and Element’s proposed share purchases, including the number of common shares to be repurchased, the timing thereof and TSX acceptance of the NCIB and any renewal thereof. 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 Element’s 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. Such risks and uncertainties include those regarding the fleet management and finance industries, economic factors, regulatory landscape and many other factors beyond the control of Element. A discussion of the material risks and assumptions associated with this outlook can be found in Element’s annual MD&A, and Annual Information Form for the year ended December 31, 2023, each of which has been filed on SEDAR+ and can be accessed at www.sedarplus.ca. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

    The MIL Network –

  • MIL-OSI: Kneat Achieves Record Revenue for Fourth Quarter and Full Year 2024

    Source: GlobeNewswire (MIL-OSI)

    LIMERICK, Ireland, Feb. 26, 2025 (GLOBE NEWSWIRE) — kneat.com, inc. (TSX: KSI) (OTC: KSIOF) (“Kneat” or the “Company”) a leader in digitizing and automating validation and quality processes, today announced financial results for the three- and twelve-month periods ended December 31, 2024. All dollar amounts are presented in Canadian dollars unless otherwise stated.

    • Total revenue reaches $13.7 million in the fourth quarter, an increase of 40% year over year
    • Fourth-quarter gross profit grew 48% year over year to $10.4 million
    • Annual Recurring Revenue (ARR)1 at December 31, 2024, reaches $59.7 million, an increase of 60% year over year

    “Our sustained revenue growth, expanding margins and solid traction across all areas of Validation demonstrate the durability of our business model. With companies throughout the Life Sciences adopting new technologies to drive business value, Validation’s transition to digital is set to continue, with Kneat leading the way.”

    – said Eddie Ryan, Chief Executive Officer of Kneat. 

    Q4 2024 Highlights

    • Total revenues increased 40% to $13.7 million in the fourth quarter of 2024, compared to $9.8 million for the fourth quarter of 2023.
    • SaaS revenue for the fourth quarter of 2024 grew 41% to $12.5 million, versus $8.9 million for the fourth quarter of 2023.
    • Fourth-quarter 2024 gross profit was $10.4 million, up 48% from $7.0 million (adjusted)2 in gross profit for the fourth quarter of 2023.
    • Gross margin in the fourth quarter of 2024 was 75%, compared to 71% (adjusted)2 for the fourth quarter of 2023.
    • EBITDA3 in the fourth quarter of 2024 was $1.1 million, compared with ($0.1) million (adjusted)2 for the fourth quarter of 2023.
    • Adjusted EBITDA3 in the fourth quarter of 2024 was $2.6 million, compared with ($0.3) million (adjusted)2 for the fourth quarter of 2023.
    • Total ARR1, which includes SaaS license and recurring maintenance fees, was $59.7 million at December 31, 2024, an increase of 60% from $37.4 million at December 31, 2023.
    • SaaS ARR1, the proportion of ARR attributable to SaaS licenses, was $59.6 million at December 31, 2024, an increase of 60% from $37.3 million at December 31, 2023.

    Full Year 2024 Highlights

    • Total revenues for the full year 2024 increased 43% to $48.9 million, compared to $34.2 million for 2023.
    • SaaS revenue grew 48%, reaching $44.6 million for the full year 2024, versus $30.1 million for 2023.
    • Full-year 2024 gross profit was $36.8 million, an increase of 59% compared to $23.1 million (adjusted)2 for the full year 2023.
    • Gross margin for the full year 2024 was 75%, compared to 68% (adjusted)2 for all of 2023.
    • EBITDA3 for the full year 2024 was $5.6 million, compared with ($5.7) million (adjusted)2 for all of 2023.
    • Adjusted EBITDA3 for the full year 2024 was $7.0 million, compared with ($3.2) million (adjusted)2 for all of 2023.
    • Net Revenue Retention Rate (NRR)1, which reflects the expansion of ARR by customers on the platform at the start of 2024 over the course of the year, was 151% for the year ended December 31, 2024.

    2024 Business Highlights

    • Over the course of 2024, Kneat announced the addition of five large strategic customers, including a consumer products company; a critical care company; pharmaceutical company; a contract development and manufacturing organization; and a medical device maker.
    • In 2024, Kneat formalized its partner program further, exceeded its goal of new partner additions, and welcomed two large strategic partners, Körber and ALTEN Group, which plan to leverage Kneat Gx to digitize their own processes as well as those of their customers.
    • Throughout 2024, a number of business functions within Kneat leveraged AI tools to enhance productivity, including Customer Success, Support and R&D. Concurrently, our product team have been evaluating the potential for AI to enhance the efficiency of the Kneat Gx platform, and we expect to incorporate some AI capabilities into it this year.
    • Kneat completed two equity financings in 2024, in February and October. In total, 13,653,880 common shares of the Company were sold for aggregate gross proceeds of $55,625,110.
    • For the fourth consecutive year, Kneat was recognized as one of Ireland’s fastest-growing technology companies. At the 2024 Deloitte Technology Fast 50 Awards, which ranks the 50 fastest-growing technology companies across Ireland, Kneat was also honoured with the 2024 Scale Ireland award for global expansion.

    Kneat’s business momentum continues into 2025:

    • In January 2025, Kneat announced that it has partnered with Capgemini. The collaboration brings together Capgemini’s expertise in enterprise IT systems integration with Kneat’s digital validation platform, Kneat Gx. The partnership is designed to enable life sciences companies to seamlessly deploy Kneat Gx enterprise-wide; connect with core systems such as ERP, QMS, and DMS; and scale digital validation processes with ease.
    • Also in January 2025, Kneat announced that a European-headquartered leader in specialty therapeutics selected Kneat to digitize its validation processes.
    • In February 2025, Kneat announced that a European-headquartered global consumer products company selected Kneat to digitize its validation processes within a specialized health sciences division.

    “We expected 2024 to be a year of material progress toward profitability, and it was. Gross profit grew at almost four times the rate of operating expense in 2024 as our land and expand strategy continued to deliver. We enter 2025 with a solid balance sheet and well-positioned to invest in ways that best serve the needs of companies looking to modernize their data-intensive work processes.”

    – said Hugh Kavanagh, Chief Financial Officer of Kneat. 

    _______________
    1 ARR, SaaS ARR, and NRR are supplementary measures and are not recognized, defined or standardized measures under IFRS. These measures are defined in the “Supplementary and Non-IFRS Measures” section of this news release.
    2 The Company has adjusted the comparative consolidated financial information for immaterial errors related to the accounting for share-based compensation. Refer to note 21 to the audited consolidated financial statements for the year ended December 31, 2024 for further details.
    3 EBITDA and Adjusted EBITDA are non-IFRS measures and are not recognized, defined or standardized measures under IFRS. These measures are defined in the “Supplementary and Non-IFRS Measures” section of this news release.

    Quarterly Conference Call

    Eddie Ryan, Chief Executive Officer of Kneat, and Hugh Kavanagh, Chief Financial Officer of Kneat, will host a conference call to discuss Kneat’s fourth-quarter and full-year 2024 results and hold a Q&A session for analysts and investors via webcast on February 27, 2025, at 9:00 a.m. ET.

    Interested parties can register for the live webcast via the following link:

    Register Here

    Supplementary and Non-IFRS Financial Measures

    The Company uses supplementary financial measures as key performance indicators in its MD&A and other communications. Management uses both IFRS measures and supplementary, non-IFRS financial measures as key performance indicators when planning, monitoring and evaluating the Company’s performance.

    Annual Recurring Revenue (“ARR”)

    ARR is used by Kneat to assess the expected recurring annual revenues from the customers that are live on the Kneat Gx platform at the end of the period. ARR is calculated as the licenses delivered to customers at the period end, multiplied by the expected customer retention rate of 100% and multiplied by the full agreed annual SaaS license or maintenance fee. Since many of the customer contracts are in currencies other than the Canadian dollar, the Canadian dollar equivalent is calculated using the related period end exchange rate multiplied by the contracted currency amount.

    Software-as-a-Service Annual Recurring Revenue (“SaaS ARR”)

    SaaS ARR is a component of ARR that is used by Kneat to assess the expected recurring revenues exclusively from license subscriptions to the Kneat Gx platform at the end of the period. SaaS ARR is calculated as the SaaS licenses delivered to customers at the period end, multiplied by the expected customer retention rate of 100% and multiplied by the full agreed SaaS license fee. Since many of the customer contracts are in currencies other than the Canadian dollar, the Canadian dollar equivalent is calculated using the related period end exchange rate multiplied by the contracted currency amount.

    Net Revenue Retention Rate (“NRR”)

    We believe that our Net Revenue Retention Rate is a key measure to provide insight into the long-term value of our customers and our ability to retain and expand revenue from our customer base over time. Our Net Revenue Retention Rate is calculated over a trailing twelve-month period by considering the cohort of customers on our platform as of the beginning of the period and dividing the ARR attributable to this group of customers at the end of the period by the ARR at the beginning of the period. By implication, this ratio excludes any ARR from new customers acquired during the period but includes revenue changes for this cohort base of customers during the period being measured. This measure provides insight into customer expansions, downgrades, and churn, and illustrates the level of scaling by those customers.

    Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

    EBITDA is calculated as net income (loss) attributable to kneat.com excluding interest income (expense), provision for income taxes, depreciation and amortization. We provide and use this non-IFRS measure of our operating performance to highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures and to inform financial comparisons with other companies. A reconciliation of EBITDA to IFRS financial measures is provided in the financial statements accompanying this press release.

    Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)

    Adjusted EBITDA is calculated as net income (loss) attributable to kneat.com excluding interest income (expense), provision for income taxes, depreciation and amortization, foreign exchange loss (gain), and stock-based compensation expense. We provide and use this non-IFRS measure of our operating performance to highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures and to inform financial comparisons with other companies. A reconciliation of Adjusted EBITDA to IFRS financial measures is provided in the financial statements accompanying this press release.

    About Kneat

    Kneat Solutions provides leading companies in highly regulated industries with unparalleled efficiency in validation and compliance through its digital validation platform Kneat Gx. As an industry leader in customer satisfaction, Kneat boasts an excellent record for implementation, powered by our user-friendly design, expert support, and on-demand training academy. Kneat Gx is an industry-leading digital validation platform that enables highly regulated companies to manage any validation discipline from end-to-end. Kneat Gx is fully ISO 9001 and ISO 27001 certified, fully validated, and 21 CFR Part 11/Annex 11 compliant. Multiple independent customer studies show a 40% or more reduction in validation cycle times, nearly 20% faster speed to market, and 80% reduced changeover time. For more information visit www.kneat.com.

    Cautionary and Forward-Looking Statements

    Except for the statements of historical fact contained herein, certain information presented constitutes “forward-looking information” within the meaning of applicable Canadian securities laws. Such forward-looking information includes, but is not limited to, the relationship between Kneat and the customer, Kneat’s business development activities, the use and implementation timelines of Kneat’s software within the customer’s validation processes, the ability and intent of the customer to scale the use of Kneat’s software within the customer’s organization, our ability to win business from new customers and expand business from existing customers, our expected use of the net proceeds from the IPF Facility and the public equity financing completed in both February and October 2024 and the anticipated effects thereof on the business and operations of the company, and the compliance of Kneat’s platform under regulatory audit and inspection. These and other assumptions, risks and uncertainties may cause Kneat’s actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by forward-looking statements.

    Material risks and uncertainties relating to our business are described under the headings “Cautionary Note Regarding Forward-Looking Statements and Information” and “Risk Factors” in our MD&A dated February 26, 2025, under the heading “Risk Factors” in our Annual Information Form dated February 26, 2025 and in our other public documents filed with Canadian securities regulatory authorities, which are available at www.sedarplus.ca. Forward-looking statements are provided to help readers understand management’s expectations as at the date of this release and may not be suitable for other purposes. Readers are cautioned not to place undue reliance on forward-looking statements. Kneat assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by law. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Continued reliance on forward-looking statements is at an investor’s own risk.

    For further information:

    Katie Keita, Kneat Investor Relations
    P: + 1 902-706-9074
    E: katie.keita@kneat.com

    kneat.com, inc.
    Consolidated Statements of Loss and Comprehensive Loss
    (expressed in Canadian dollars)
     
      Three-month period ended   Year ended
      December 31, 2024   December 31, 2023   December 31, 2024   December 31, 2023
          (Adjusted)       (Adjusted)
    Revenue              
    SaaS License fees   12,537,109       8,922,491       44,569,846       30,066,905  
    On-premise license fees   –       –       –       436,126  
    Maintenance fees   123,667       46,819       322,335       277,199  
    Professional services and other   1,072,835       844,689       4,046,238       3,443,178  
    Total Revenue   13,733,611       9,813,999       48,938,419       34,223,408  
                   
    Cost of Revenue   (3,372,387 )     (2,811,181 )     (12,179,880 )     (11,091,576 )
    Gross Profit   10,361,224       7,002,818       36,758,539       23,131,832  
    Gross Margin   75 %     71 %     75 %     68 %
                   
    Expenses              
    Research and development   (4,545,776 )     (3,733,887 )     (17,268,722 )     (15,387,726 )
    Sales and marketing   (4,828,335 )     (4,500,992 )     (17,163,189 )     (14,266,739 )
    General and administrative   (1,823,992 )     (1,925,415 )     (8,273,995 )     (7,411,540 )
    Total Expenses   (11,198,103 )     (10,160,294 )     (42,705,906 )     (37,066,005 )
                   
    Operating Loss   (836,879 )     (3,157,476 )     (5,947,367 )     (13,934,173 )
                   
    Finance Expense   (1,034,424 )     (629,794 )     (3,665,098 )     (1,081,853 )
    Interest income   298,308       621       678,388       6,635  
    Foreign exchange loss/(gain)   (828,354 )     1,083,675       1,399,547       545,776  
                   
    Income (loss) before income taxes   (2,401,349 )     (2,702,974 )     (7,534,530 )     (14,463,615 )
    Income tax expense   (61,907 )     (47,342 )     (192,598 )     (55,891 )
                   
    Net loss for period   (2,463,256 )     (2,750,316 )     (7,727,128 )     (14,519,506 )
                   
    Other comprehensive loss              
    Foreign currency translation adjustment to presentation currency   411,921       750,382       (995,322 )     (263,950 )
                   
    Comprehensive loss for the period   (2,051,335 )     (1,999,934 )     (8,722,450 )     (14,783,456 )
                   
    Loss per share – Basic and diluted $ (0.03 )   $ (0.04 )   $ (0.09 )   $ (0.19 )
                   
    Weighted Average Number of Common Shares Outstanding – Basic and diluted   93,005,493       78,093,350       86,545,119       77,833,268  
                   
    Reconciliation:              
    Total income (loss) for the period   (2,463,256 )     (2,750,316 )     (7,727,128 )     (14,519,506 )
    Interest expense   863,766       629,794       3,494,441       1,081,853  
    Interest income   (298,308 )     (621 )     (678,388 )     (6,635 )
    Income taxes   61,907       47,342       192,598       55,891  
    Depreciation expense   174,751       192,038       745,639       786,085  
    Amortization expense   2,791,627       1,803,172       9,560,000       6,889,552  
    EBITDA   1,130,487       (78,591 )     5,587,162       (5,712,760 )
                   
    Adjustments to EBITDA              
    Foreign exchange (gain) loss   828,354       (1,083,675 )     (1,399,547 )     (545,776 )
    Stock-based compensation expense   669,201       834,569       2,785,906       3,049,967  
    Adjusted EBITDA   2,628,042       (327,697 )     6,973,521       (3,208,569 )
                                   
    kneat.com, inc.
    Consolidated Statements of Financial Position
    (expressed in Canadian dollars)
                   
      December 31,     December 31,  
      2024     2023  
              (Adjusted)  
    Assets              
                   
    Current assets              
    Cash   58,889,572       15,252,526  
    Amounts receivable   18,377,009       11,601,558  
    Prepayments   1,870,095       1,138,382  
        79,136,676       27,992,466  
    Non-current assets              
    Amounts receivable   2,368,006       1,650,795  
    Property and equipment   6,782,179       7,209,953  
    Intangible assets   36,290,869       29,005,092  
                   
    Total Assets   124,577,730       65,858,306  
                   
    Liabilities              
                   
    Current liabilities              
    Accounts payable and accrued liabilities   8,580,104       7,874,332  
    Contract liabilities   21,631,416       13,647,071  
    Loan payable and accrued interest   4,116,723       –  
    Lease liabilities   434,096       535,832  
        34,762,339       22,057,235  
    Non-current liabilities              
    Contract liabilities   33,393       41,084  
    Lease liabilities   5,671,952       5,976,380  
    Loan payable and accrued interest   19,038,203       21,657,423  
                   
    Total Liabilities   59,505,887       49,732,122  
                   
    Equity              
    Shareholders’ equity   65,071,843       16,126,184  
                   
    Total Liabilities and Equity   124,577,730       65,858,306  
                   
    kneat.com, inc.
    Consolidated Statement of Cash Flows
    (expressed in Canadian dollars)
    For the years ended
           
      December 31,   December 31,
        2024       2023  
          (Adjusted)
    Operating activities      
    Net loss for the year   (7,727,128 )     (14,519,506 )
    Charges to loss not involving cash:      
    Depreciation of property and equipment   745,639       786,085  
    Share-based compensation   3,825,512       3,998,749  
    Interest Expense   3,494,441       1,081,853  
    Tax expense   192,598       55,891  
    Amortization of the intangible asset   9,389,343       6,828,213  
    Amortization of loan issuance costs   171,593       61,164  
    Write-off of property and equipment   –       26,721  
    Impact of lease termination   –       (67,600 )
    Foreign exchange (gain)   (1,399,547 )     (545,776 )
    Decrease in non-current contract liabilities   (9,436 )     (905,846 )
    Net change in non-cash working capital related to operations   1,107,145       2,868,609  
    Net cash provided by/(used in) operating activities   9,790,160       (331,443 )
           
    Financing activities      
    Payment of principal and interest on loans payable   (2,475,283 )     (630,410 )
    Proceeds from the exercise of stock options   2,086,699       295,350  
    Repayment of lease liabilities   (744,061 )     (752,802 )
    Proceeds received from loan financing   –       21,978,000  
    Issuance costs associated with loan financing   –       (624,596 )
    Proceeds received from public equity financing   55,625,110       –  
    Share issuance costs associated with public equity financing   (3,869,212 )     –  
    Net cash provided by financing activities   50,623,253       20,265,542  
           
    Investing activities      
    Additions to the intangible asset   (19,716,562 )     (17,879,014 )
    Collection of research and development tax credits   2,360,342       1,185,720  
    Additions to property and equipment   (165,592 )     (181,358 )
    Net cash used in investing activities   (17,521,812 )     (16,874,652 )
           
    Effects of exchange rates on cash   745,445       (89,399 )
           
    Net change in cash during the year   43,637,046       2,970,048  
           
    Cash – Beginning of year   15,252,526       12,282,478  
           
    Cash – End of year   58,889,572       15,252,526  
                   
                   

    The MIL Network –

  • MIL-OSI Economics: IPAA Applauds Passage of Rep. Pfluger’s Resolution to Nullify Biden Methane Tax Regulations

    Source: Independent Petroleum Association of America

    Headline: IPAA Applauds Passage of Rep. Pfluger’s Resolution to Nullify Biden Methane Tax Regulations

    Feb 26, 2025 IPAA Applauds Passage of Rep. Pfluger’s Resolution to Nullify Biden Methane Tax Regulations

    WASHINGTON – The Independent Petroleum Association of America (IPAA) issued the following statement following the House passage of Congressman August Pfluger’s 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) congratulates Congressman Pfluger for his leadership in overturning the EPA’s Waste Emissions Charge (Methane Tax) regulations. The Congressional Review Act (CRA) resolution which passed today with bipartisan support 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. Combined with the CRA effort in the Senate, IPAA urges quick action by President Trump to enact this resolution and 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 Pfluger to repeal the Methane Tax.

    MIL OSI Economics –

  • MIL-OSI USA: Implementing the President’s “Department of Government Efficiency” Cost Efficiency Initiative

    US Senate News:

    Source: The White House
    class=”has-text-align-left”>     By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:
         Section 1.  Purpose.  This order commences a transformation in Federal spending on contracts, grants, and loans to ensure Government spending is transparent and Government employees are accountable to the American public.
         Sec. 2.  Definitions.  As used in this order:(a)  “Administrator” means the Administrator of the United States DOGE Service, as defined in Executive Order 14158 of January 20, 2025 (Establishing and Implementing the President’s “Department of Government Efficiency”).(b)  “Agency” has the meaning given to that term in section 3502 of title 44, United States Code, except that such term does not include the Executive Office of the President or any components thereof.(c)  “Agency Head” means the highest-ranking official of an agency, such as the Secretary, Administrator, Chairman, or Director.  Agency Heads may select designees within their agencies to carry out the responsibilities specified in this order.(d)  “Covered contracts and grants” means discretionary spending through Federal contracts, grants, loans, and related instruments, but excludes direct assistance to individuals; expenditures related to immigration enforcement, law enforcement, the military, public safety, and the intelligence community; and other critical, acute, or emergency spending, as determined by the relevant Agency Head.  Notification shall be made to the agency’s DOGE Team Lead.(e)  “DOGE Team Lead” means the leader of the DOGE Team at each agency, as defined in Executive Order 14158.Sec. 3.  Cutting Costs to Save Taxpayers Money.  each Agency Head shall, with assistance as requested from the agency’s DOGE Team Lead, build a centralized technological system within the agency to seamlessly record every payment issued by the agency pursuant to each of the agency’s covered contracts and grants, along with a brief, written justification for each payment submitted by the agency employee who approved the payment.  This system shall include a mechanism for the Agency Head to pause and rapidly review any payment for which the approving employee has not submitted a brief, written justification within the technological system. (i)   Once the system described in subsection (a) of this section is in place, the Agency Head shall issue guidance, in consultation with the agency’s DOGE Team Lead, to require that the relevant agency employee promptly submit a brief, written justification prior to that employee’s approval of a payment under covered contracts and grants, subject to any exceptions the Agency Head deems appropriate.(ii)  To the maximum extent permitted by law, and to the maximum extent deemed practicable by the Agency Head, the payment justifications described in subsection (a)(i) of this section shall be posted publicly.(b)  Review of Covered Contracts and Grants.  Each Agency Head, in consultation with the agency’s DOGE Team Lead, shall review all existing covered contracts and grants and, where appropriate and consistent with applicable law, terminate or modify (including through renegotiation) such covered contracts and grants to reduce overall Federal spending or reallocate spending to promote efficiency and advance the policies of my Administration.  This process shall commence immediately and shall prioritize the review of funds disbursed under covered contracts and grants to educational institutions and foreign entities for waste, fraud, and abuse.  Each Agency Head shall complete this review within 30 days of the date of this order.(c)  Contract and Grant Process Review.  Each Agency Head, in consultation with the agency’s DOGE Team Lead, shall conduct a comprehensive review of each agency’s contracting policies, procedures, and personnel.  Each Agency Head shall complete this process within 30 days of the date of this order and shall not issue or approve new contracting officer warrants during the review period, unless the Agency Head determines such approval is necessary. (d)  CoveredContract and Grant Approval.  (i)   Following the review specified in subsection (c) of this section, and prior to entering into new contracts, each Agency Head shall, in consultation with the agency’s DOGE Team Lead, issue guidance on signing new contracts or modifying existing contracts to promote Government efficiency and the policies of my Administration.  The Agency Head may approve new contracts prior to the issuance of such guidance on a case-by-case basis. (ii)  Each DOGE Team Lead shall provide the Administrator with a monthly informational report on contracting activities.  As soon as an agency’s contract and grant justification process described in subsection (a) of this section is established, this report shall include all payment justifications provided pursuant to that process, to the extent consistent with law.(e)  Non-Essential Travel Justification.  Each Agency Head shall, with assistance from the agency’s DOGE Team Lead, build a technological system within each agency that centrally records approval for federally funded travel for conferences and other non-essential purposes.  Once an agency’s system is in place, the Agency Head shall prohibit agency employees from engaging in federally funded travel for conferences or other non-essential purposes unless the travel-approving official has submitted a brief, written justification for the federally funded travel within such system.  Each DOGE Team Lead shall, to the extent consistent with law, provide the Administrator with a monthly informational report listing each agency’s justifications for non-essential travel.  Such justifications shall be posted publicly unless prohibited by law or unless the Agency Head grants an exemption from this requirement.(f)  Credit Card Freeze.  To the maximum extent permitted by law, all credit cards held by agency employees shall be treated as frozen for 30 days from the date of this order, except for any credit cards held by employees engaged in, or charges related to employees utilizing such credit cards for, disaster relief or natural disaster response benefits or operations or other critical services as determined by the Agency Head, and subject to such additional individualized or categorical exceptions as the Agency Head, in consultation with the agency’s DOGE Team Lead, deems appropriate.(g)  Real Property Disposition.  Agencies shall take the following actions:(i)    Real Property Report.  Within 7 days of the date of this order, each Agency Head shall confirm to the Administrator of General Services or his designee that the Agency Head has submitted updates to the Federal Real Property Profile Management System to ensure the system reflects a complete and accurate inventory of real property subject to the agency’s administration.(ii)   Real Property Leases.  Within 30 days of the date of this order, each Agency Head shall promptly identify all termination rights the Agency Head may have under existing leases of Government-owned real property and, in consultation with agency’s DOGE Team Lead and the Administrator of General Services or his designee, determine whether to exercise such rights.(iii)  Real Property Disposition.  Within 60 days of the date of this order, the Administrator of General Services shall submit a plan to the Director of the Office of Management and Budget (OMB) for the disposition of Government-owned real property which has been deemed by the agency as no longer needed.
         Sec. 4.  General Exclusions.  This order does not apply to:(a)  Law enforcement officers, as defined in 5 U.S.C. 5541(3) and 5 C.F.R. 550.103, or covered contracts and grants directly related to the enforcement of Federal criminal or immigration law;(b)  U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement in the Department of Homeland Security;(c)  the Uniformed Services, as defined in 20 C.F.R. 404.1330;(d)  any other covered grant or contract, agency component, or real property that the relevant Agency Head exempts in writing from all or part of this order, in consultation with the agency’s DOGE Team Lead and the Director of OMB; or(e)  classified information or classified information systems.
         Sec. 5.  General Provisions.  (a)  Nothing in this order shall be construed to impair or otherwise affect:(i)   the authority granted by law to an executive department or agency, or the head thereof; or(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.(b)  This order shall be implemented consistent with applicable law and subject to the availability of appropriations.(c)  This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
    THE WHITE HOUSE,    February 26, 2025.

    MIL OSI USA News –

  • MIL-OSI USA: Kennedy condemns Biden admin for doling out $2B to Abrams-backed climate change organization

    US Senate News:

    Source: United States Senator John Kennedy (Louisiana)

    Watch Kennedy’s comments here.

    WASHINGTON – Sen. John Kennedy (R-La.), in a speech on the Senate floor, questioned how a six-month-old nonprofit with $100 in the bank and ties to former Georgia gubernatorial candidate Stacey Abrams was able to secure a $2 billion climate change grant from President Biden’s Environmental Protection Agency (EPA).

    Key excerpts of the speech are below:

    “I try to see the world from other people’s bell towers as much as I can, but I cannot come up, not for the life of me, with a single rational justification as to why the EPA under the Biden administration thought it was appropriate to give Power Forward and Rewiring America—two brand new nonprofits with no business experience, no accomplishments according to the IRS forms, and only 100 bucks in the bank—to give them $2 billion of taxpayer money, especially to the exclusion of every other qualified applicant for that money, if there were any other qualified applicants.”

    . . .

    “The average Louisianian, because of President Biden’s inflation, had to spend an extra $890 a month—extra—for food and clothing and car notes, and they didn’t get an $890-a-month raise.

    “President Biden and my Democratic colleagues told us that the Inflation Reduction Act—I remember when it was passed. They said: ‘If you spend $1.2 trillion on the Inflation Reduction Act, it will be a lifeline to every family in America.’ That is not what it looks like to me. It is starting to look like to me that it was really a slush fund—a slush fund for Washington insiders.”

    . . .

    “Now, this is just the beginning of the type of spending porn that President Trump and Mr. [Elon] Musk are uncovering that people are screaming about. I am going to repeat what I started with: There is nothing wrong with wanting to know what they do and did with our money, and that is all President Trump and Mr. Musk are doing.”

    Background

    • In April 2024, President Biden’s EPA announced the award of a $2 billion federal grant to Power Forward Communities through the Inflation Reduction Act’s Green House Gas Reduction Fund. The grant was to help homes transition from gas appliances to electric.
    • Power Forward Communities formed in Oct. 2023 as a coalition of nonprofits, including Habitat for Humanity International, United Way Worldwide, and Rewiring America. According to its tax filings, Power Forward Communities had just $100 in revenues in 2023.
    • Rewiring America similarly formed in 2023. Abrams joined the nonprofit in March 2023 as senior counsel. The organization stated in its tax filings that 2023 was a “startup year for the organization.” Rewiring America’s only listed accomplishment was that it had “joined a coalition of other national organizations to apply for a grant from the Inflation Reduction Act’s Greenhouse Gas Reduction Fund.”
    • EPA Administrator Lee Zeldin has pledged to claw back more than $20 billion in improper Inflation Reduction Act grants, including the $2 billion to Power Forward Communities.

    Watch Kennedy’s full speech here.

    MIL OSI USA News –

  • MIL-OSI United Nations: Deputy Secretary-General’s remarks at the G20 Tax Side Event – Domestic Resource Mobilisation: Bridging the Tax Gap [as prepared for delivery]

    Source: United Nations secretary general

    H.E. Mr. Enoch Godongwana, Minister of Finance of South Africa, 
    Excellencies,
    It is a pleasure to join you for this important discussion on domestic resource mobilization and bridging the tax gap.
    This challenge stands at the heart of financing sustainable development, and demands our urgent attention.
    We are not on track to achieve the Sustainable Development Goals. 
    We have an estimated $4 trillion sustainable development financing gap annually. 
    Domestic public finance is essential for financing the Sustainable Development Goals, increasing equity and strengthening macroeconomic stability. 
    Robust fiscal systems, including both tax and expenditure, drive economic growth, industrial transformation and environmental sustainability – contributing to alleviating poverty and reducing inequalities. 
    Beyond raising revenue, taxation remains fundamental to fairness, trust, and sovereignty.
    Yet, after significant increases in taxation in developing countries in the decade before 2009, average tax-to-GDP ratios for all developing country groups are below 2010 levels, remaining far below those of developed countries. 
    Successive shocks over the last two decades have severely impacted the mobilization of domestic resources for development.  
    As global crises intensify, it becomes more critical than ever to increase countries’ taxation capabilities. 
    The good news is that there is a large unmet tax potential in many developing countries. 
    Many governments have invested in tax reforms, demonstrating how nations can unlock unmet potential. 
    Strengthening tax systems requires sustained investment in capacity development based on country needs and priorities.  
    As economies evolve, so must tax systems. 
    The increasingly digitalized economy presents new opportunities, but also poses new challenges to an international tax system that has been designed for traditional business models. 
    We must develop future-ready tax policies that ensure global fair taxation without imposing excessive burdens – both on taxpayers and tax authorities. 
    Many organizations – including the UN, IMF, OECD, World Bank, and regional and national tax bodies – are supporting countries in this effort. 
    Initiatives like Tax Inspectors Without Borders help countries enhance domestic revenue mobilization. The Addis Tax Initiative and broader multilateral and regional efforts provide platforms for collaboration, knowledge-sharing, and technical assistance. 
    However, political will remains insufficient – with countries not investing enough in tax system reform and administration capacity, and donors not delivering promised assistance for supporting revenue mobilization.
    The Fourth International Conference on Financing for Development, in Sevilla in June, offers a pivotal moment to turn commitments for domestic tax reforms into actions, and make tax systems more fair, transparent, efficient and effective.
    In our interconnected world, strengthening countries’ fiscal frameworks must go hand-in-hand with international tax cooperation. 
    Every year, billions of dollars that should fund education, healthcare, and infrastructure are lost to tax avoidance and evasion, illicit financial flows, and financial crime. 
    Africa alone loses approximately $88.6 billion annually to illicit financial flows – around 3.7% of the continent’s GDP – draining resources vital for economic development. 
    The G20 has played an important role in advancing tax transparency and tackling tax avoidance. Expanding the automatic exchange of information and enhancing transparency in beneficial ownership remain paramount. 
    But more must be done to ensure that all countries – particularly those with limited administrative capacity – can fully participate in shaping global tax norms. 
    The ongoing negotiations on a UN Framework Convention on International Tax Cooperation, present a historic opportunity for progress toward a fair, inclusive, and effective international tax system.
    Through the Pact for the Future, Member States have committed to improving the inclusiveness and effectiveness of tax cooperation under the UN. 
    Ensuring that international tax rules reflect the diverse needs, priorities, and capacities of all countries is central to this effort.  
    The two early protocols in the UN Convention – on taxation of income from cross-border services in a digitalized and globalized economy and on preventing and resolving tax disputes – can demonstrate an inclusive and impactful approach. 
    The UN process can strengthen global cooperation, enhance legitimacy, certainty, resilience, and fairness of international tax rules, while addressing challenges in domestic resource mobilization and ensuring that all countries have a seat at the table.  
    Today’s discussion is an opportunity to drive forward these critical issues. 
    The United Nations remains fully committed to these efforts.
    Together, we can build a fairer, more transparent, and more effective international tax system – one that provides every country with the means to invest in its future and achieve the Sustainable Development Goals.
    Thank you.

    MIL OSI United Nations News –

  • MIL-OSI: Ormat Technologies Reports Fourth Quarter and Year-End 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    STRATEGIC PORTFOLIO EXPANSION SUPPORTS CONTINUED REVENUE AND ADJUSTED EBITDA GROWTH

    STRONG FULL-YEAR RESULTS REINFORCES ORMAT’S MOMENTUM, REMAINING ON PACE TO ACHIEVE GENERATING CAPACITY GOALS OF 2.6 TO 2.8 GW BY 2028

    HIGHLIGHTS

    • TOTAL REVENUES FOR THE FULL-YEAR INCREASED 6.1% COMPARED TO 2023, DRIVEN BY GROWTH IN ALL THREE SEGMENTS
    • FULL YEAR OPERATING INCOME AND ADJUSTED EBITDA IMPROVED 3.5% AND 14.3%, RESPECTIVELY
    • FOURTH QUARTER NET INCOME AND ADJUSTED NET INCOME IMPROVED BY 14.3% AND 7.7% YEAR-OVER-YEAR, RESPECTIVELY
    • ORMAT ANNOUNCES FULL YEAR 2025 OUTLOOK AND GROWTH EXPECTATIONS

    RENO, Nev., Feb. 26, 2025 (GLOBE NEWSWIRE) — Ormat Technologies, Inc. (NYSE: ORA) (the “Company” or “Ormat”), a leading renewable energy company, today announced financial results for the fourth quarter and full year ended December 31, 2024.

    KEY FINANCIAL RESULTS

      Q4
    2024    		 Q4
    2023    		 Change (%) 12 months 2024 12 months 2023 Change (%)  
    GAAP Measures              
    Revenues ($ millions)              
    Electricity 180.1   183.9   (2.1)%   702.3   666.8   5.3%    
    Product 39.6   50.4   (21.4)%   139.7   133.8   4.4%    
    Energy Storage 11.0   7.0   56.7%   37.7   28.9   30.6%    
    Total Revenues 230.7   241.3   (4.4)%   879.7   829.4   6.1%    
    Gross Profit              
    73.6   78.5   (6.2)%   272.6   264.0   3.3%    
    Gross margin (%)              
    Electricity 34.9%   39.5%     34.6%   36.6%      
    Product 24.5%   12.6%     18.4%   13.4%      
    Energy Storage 9.5%   (8.9)%     10.9%   6.4%      
    Gross margin (%) 31.9%   32.5%     31.0%   31.8%      
                   
    Operating income ($ millions) 49.1   51.6   (4.9)%   172.5   166.6   3.5%    
    Net income attributable to the Company’s stockholders 40.8   35.7   14.3%   123.7   124.4   (0.5)%    
    Diluted EPS ($) 0.67   0.59   13.6%   2.04   2.08   (1.9)%    
                   
    Non-GAAP Measures              
    Adjusted Net income attributable to the Company’s stockholders 43.6   40.5   7.7%   133.7   121.9   9.7%    
    Adjusted Diluted EPS ($) 0.72   0.67   7.5%   2.20   2.05   7.3%    
    Adjusted EBITDA1($ millions) 145.5   139.0   4.6%   550.5   481.7   14.3%    

    “2024 was another successful year for Ormat and our growth trajectory, highlighted by a top-line improvement of 6.1%, translating into a 3.5% increase in operating income and a 14.3% increase in adjusted EBITDA, with solid growth performance across all three of our business segments,” said Doron Blachar, Chief Executive Officer of Ormat Technologies. “In 2024, we added 253MW of new capacity organically and through strategic, accretive M&A, with 133MW added to our Electricity segment and 120MW to our Energy Storage business.”

    “Within our Electricity segment, the Enel assets Ormat acquired at the beginning of the year have been immediately accretive and have played a key role in our year-over-year growth. Our performance was further supported by the Heber complex repowering project, the enhanced output at the Olkaria power plant, and the improved generation performance and pricing at the Puna power plant, helping to more than offset the impact of unplanned maintenance at Dixie Valley and the previously disclosed curtailments in the U.S.”

    “We continue to make great progress towards improving the revenue and margin profile of our Energy Storage business, positioning the segment to become a more stable and consistent factor in our consolidated growth. This strategic effort is reflected by the 56.7% and 30.6% increase in revenue on a quarter-over-quarter and year-over-year basis, respectively. We expect this improved performance to carry forward into 2025 as we begin to recognize the benefits of the recent CODs at our 80MW/320MWh Bottleneck and 20MW/20MWh Montague facilities, as well as the other Energy Storage projects in our development pipeline that are expected to come online later this year.”

    Blachar continued, “Looking ahead, we expect to benefit from the growing global demand for renewable power needed to support data centers and the transition to a cleaner energy future. We are currently in negotiations for approximately 250MW with hyper-scalers with favorable conditions for both new projects and expiring PPAs at rates exceeding $100 per MWh. To help ensure that we are well-positioned to meet the growing level of demand we have taken strategic actions to safe harbor, for PTC eligibility (pursuant to the current provisions of the Inflation Reduction Act and related guidance), all geothermal projects with expected CODs through 2028, as well as the associated ITC benefits for all energy storage projects through 2026. This has strengthened our confidence in our trajectory, and we believe will help us remain on track to achieve our generating capacity goals of 2.6 to 2.8 GW by the end of 2028.”

    FINANCIAL HIGHLIGHTS

    • Net income attributable to the Company’s stockholders for the fourth quarter and for the full year 2024 was $40.8 million and $123.7 million, respectively, an increase of 14.3% and a decrease of 0.5%, respectively, compared to last year. Diluted EPS for the fourth quarter and for the full year 2024 were $0.67 and $2.04 per share, respectively, an increase of 13.6% and a decrease of 1.9%, respectively, compared to last year.
    • Adjusted net income attributable to the Company’s stockholders and diluted EPS for the fourth quarter increased 7.7% and 7.5% compared to last year. Adjusted net income attributable to the Company’s stockholders and diluted EPS for the full year 2024 increased 9.7% and 7.3% compared to last year.
    • Adjusted EBITDA for the fourth quarter and for the year was $145.5 million, and $550.5 million, respectively, an increase of 4.6% and 14.3%, respectively, compared to 2023. The year-over-year increase in Adjusted EBITDA was driven, in the Electricity segment, by the contribution of the acquired assets in the first quarter of 2024, the improved performance of the Olkaria complex in Kenya, higher pricing of our Puna power plant and the sale of tax benefits from newly built plants. In the Product segment, the increase was derived from the improved contracts’ margin and Energy Storage drove improved performance due to the contribution of the new assets as well as a legal settlement with a battery supplier, which we expect to continue to receive over the next 5 quarters, to compensate us for lost revenues as a result of battery non- supply.
    • Electricity segment revenues decreased by 2.1% for the fourth quarter and increased by 5.3% in the full year 2024, compared to 2023. The year-over-year decrease in fourth quarter revenue was driven by the partial outage at our Dixie Valley power plant, which returned to full operation in November 2024. Additionally, in the fourth quarter we experienced heavy curtailments mainly to our McGinness complex due to maintenance on the transmission line by the local grid operator. Full-year revenue growth was driven by the contribution of our acquired Enel assets, Heber complex repowering, and higher generation and pricing at Puna.
    • Product segment revenues decreased by 21.4% in the fourth quarter and increased by 4.4% in the full year 2024, largely due to the timing of revenue recognition. Gross margin increased from 12.6% in the fourth quarter 2023 to 24.5% in 2024 and from 13.4% in the full year 2023 to 18.4% in 2024.
    • Product segment backlog stands at a record of approximately $340.0 million as of February 25, 2025, and includes approximately $210.0 million from the recently signed Engineering, Procurement, and Construction (EPC) contract for the development of the Te Mihi Stage 2 geothermal plant in New Zealand.
    • Energy Storage segment revenues increased 56.7% for the fourth quarter and 30.6% for the full year compared to 2023, supported by a total of 120MW/360 MWh of new capacity that started operation since the beginning of 2024 as well as new assets that came online during the second half of 2023.

    BUSINESS HIGHLIGHTS:

    • Won a tender, in February 2025, issued by the Israeli Electricity Authority and was awarded two separate 15-year tolling agreements for two energy storage facilities. The facilities under the tolling agreements are expected to have a combined capacity of approximately 300MW/1200MWh and we will have 50% equity interest.
    • In February 2025, commenced commercial operations of the 35MW Ijen geothermal power plant in Indonesia, in which the Company holds a 49% equity interest.
    • Signed a 10-year Power Purchase Agreement (PPA), in January 2025, with Calpine Energy Solutions for up to 15MW of carbon-free geothermal capacity at favorable terms that will replace the current lower price PPA with Southern California Edison for Mammoth 2 in the first quarter of 2027.
    • In December 2024, commenced commercial operations at the Montague energy storage facility to deliver 20MW/20MWh of energy storage capacity to the PJM market.
    • In October 2024, commenced commercial operations of the 80MW/320MWh Bottleneck Energy Storage facility in the Central Valley of California. The Bottleneck facility is the Company’s largest energy storage facility in its portfolio.

    2025 GUIDANCE TBU

    • Total revenues of between $935 million and $975 million.
    • Electricity segment revenues between $710 million and $725 million.
    • Product segment revenues of between $172 million and $187 million.
    • Energy Storage revenues of between $53 million and $63 million.
    • Adjusted EBITDA to be between $563 million and $593 million.
      • Adjusted EBITDA attributable to minority interest of approximately $23 million.

    The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three and twelve months ended December 31, 2024. However, the Company does not provide guidance on net income and is unable to provide a reconciliation for its Adjusted EBITDA guidance range to net income without unreasonable efforts due to high variability and complexity with respect to estimating certain forward-looking amounts. These include impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.

    DIVIDEND

    On February 26, 2025, the Company’s Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share pursuant to the Company’s dividend policy. The dividend will be paid on March 26, 2025, to stockholders of record as of the close of business on March 12, 2025. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in each of the next three quarters.

    CONFERENCE CALL DETAILS

    Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, February 27, 2025, at 10:00 a.m. ET.

    Participants within the United States and Canada, please dial +1-800-715-9871, approximately 15 minutes prior to the scheduled start of the call. If you are calling outside of the United States and Canada, please dial +1-646-960-0440. The access code for the call is 9044930. Please request the “Ormat Technologies, Inc. call” when prompted by the conference call operator. The conference call will also be accompanied by a live webcast which will be hosted on the Investor Relations section of the Company’s website.

    A replay will be available one hour after the end of the conference call. To access the replay within the United States and Canada, please dial 1-800-770-2030. From outside of the United States and Canada, please dial +1-647-362-9199. Please use the replay access code 9044930. The webcast will also be archived on the Investor Relations section of the Company’s website.

    ABOUT ORMAT TECHNOLOGIES

    With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,400 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1,538MW with a 1,248MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 290MW energy storage portfolio that is located in the U.S.

    ORMAT’S SAFE HARBOR STATEMENT

    Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and incentives and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under “Risk Factors” as described in Ormat’s most recent annual report, and in subsequent filings.

    These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Condensed Consolidated Statement of Operations
    For the three and twelve month periods Ended December 31, 2024, and 2023

      Three Months Ended
    December 31,    		 Year Ended 
    December 31,
      2024   2023   2024   2023  
      (Dollars in thousands, except per share data)
    Revenues:        
    Electricity 180,147   183,921   702,264   666,767  
    Product 39,643   50,432   139,661   133,763  
    Energy storage 10,951   6,987   37,729   28,894  
    Total revenues 230,741   241,340   879,654   829,424  
    Cost of revenues:        
    Electricity 117,340   111,201   459,526   422,549  
    Product 29,929   44,073   113,911   115,802  
    Energy storage 9,911   7,610   33,598   27,055  
    Total cost of revenues 157,180   162,884   607,035   565,406  
    Gross profit 73,561   78,456   272,619   264,018  
    Operating expenses:        
    Research and development expenses 1,391   2,452   6,501   7,215  
    Selling and marketing expenses 4,153   4,307   17,694   18,306  
    General and administrative expenses 19,583   18,654   80,119   68,179  
    Other operating income (3,125)   —   (9,375)   —  
    Impairment of long-lived assets —   —   1,280   —  
    Write-off of unsuccessful exploration activities and storage activities 2,474   1,415   3,930   3,733  
    Operating income 49,085   51,628   172,470   166,585  
    Other income (expense):        
    Interest income 1,389   2,363   7,883   11,983  
    Interest expense, net (34,525)   (25,803)   (134,031)   (98,881)  
    Derivatives and foreign currency transaction gains (losses) (4,319)   712   (4,187)   (3,278)  
    Income attributable to sale of tax benefits 20,020   18,676   73,054   61,157  
    Other non-operating income (expense), net 66   1,272   188   1,519  
    Income from operations before income tax and equity in earnings (losses) of investees 31,716   48,848   115,377   139,085  
    Income tax (provision) benefit 11,771   (8,188)   16,289   (5,983)  
    Equity in earnings (losses) of investees (862)   (1,827)   (425)   35  
    Net income 42,625   38,833   131,241   133,137  
    Net income attributable to noncontrolling interest (1,804)   (3,107)   (7,508)   (8,738)  
    Net income attributable to the Company’s stockholders 40,821   35,726   123,733   124,399  
    Earnings per share attributable to the Company’s stockholders:        
    Basic: 0.67   0.59   2.05   2.09  
    Diluted: 0.67   0.59   2.04   2.08  
    Weighted average number of shares used in computation of earnings per share attributable to the Company’s stockholders:        
    Basic 60,480   60,367   60,455   59,424  
    Diluted 60,770   60,505   60,790   59,762  
             

    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Condensed Consolidated Balance Sheet
    For the Periods Ended December 31, 2024, and 2023

      December 31,
    2024    		   December 31,
    2023
    ASSETS
    Current assets:      
    Cash and cash equivalents 94,395     195,808  
    Restricted cash and cash equivalents (primarily related to VIEs) 111,377     91,962  
    Receivables:      
    Trade less allowance for credit losses of $224 and $90, respectively (primarily related to VIEs) 164,050     208,704  
    Other 50,792     44,530  
    Inventories 38,092     45,037  
    Costs and estimated earnings in excess of billings on uncompleted contracts 29,243     18,367  
    Prepaid expenses and other 59,173     41,595  
    Total current assets 547,122     646,003  
    Investment in an unconsolidated company 144,585     125,439  
    Deposits and other 75,383     44,631  
    Deferred income taxes 153,936     152,570  
    Property, plant and equipment, net ($3,271,248 and $2,802,920 related to VIEs, respectively) 3,501,886     2,998,949  
    Construction-in-process ($251,442 and $376,602 related to VIEs, respectively) 755,589     814,967  
    Operating leases right of use ($13,989 and $9,326 related to VIEs, respectively) 32,114     24,057  
    Finance leases right of use (none related to VIEs) 2,841     3,510  
    Intangible assets, net 301,745     307,609  
    Goodwill 151,023     90,544  
    Total assets 5,666,224     5,208,279  
           
    LIABILITIES AND EQUITY
    Current liabilities:      
    Accounts payable and accrued expenses 234,334     214,518  
    Short term revolving credit lines with banks (full recourse) —     20,000  
    Commercial paper (less deferred financing costs of $23 and $29, respectively) 99,977     99,971  
    Billings in excess of costs and estimated earnings on uncompleted contracts 23,091     18,669  
    Current portion of long-term debt:      
    Limited and non-recourse (primarily related to VIEs):
    (primarily related to VIEs and less deferred financing costs of $8,473 and $7,889, respectively)    		 70,262     57,207  
    Full recourse 161,313     116,864  
    Financing Liability 4,093     5,141  
    Operating lease liabilities 3,633     3,329  
    Finance lease liabilities 1,375     1,313  
    Total current liabilities 598,078     537,012  
    Long-term debt, net of current portion:      
    Limited and non-recourse (primarily related to VIEs and less deferred financing costs of $8,849 and $7,889, respectively) 578,204     447,389  
    Full recourse (less deferred financing costs of $4,671 and $3,056, respectively) 822,828     698,187  
    Convertible senior notes (less deferred financing costs of $6,820 and $8,146, respectively) 469,617     423,104  
    LT Financing liability-Dixie 216,476     220,619  
    Operating lease liabilities 22,523     19,790  
    Finance lease liabilities 1,529     2,238  
    Liability associated with sale of tax benefits 152,292     184,612  
    Deferred income taxes 68,616     66,748  
    Liability for unrecognized tax benefits 6,272     8,673  
    Liabilities for severance pay 10,488     11,844  
    Asset retirement obligation 129,651     114,370  
    Other long-term liabilities 29,270     22,107  
    Total liabilities 3,105,844     2,756,693  
           
    Redeemable noncontrolling interest 9,448     10,599  
           
    Equity:      
    The Company’s stockholders’ equity:      
    Common stock, par value $0.001 per share; 200,000,000 shares authorized; 60,500,580 and 60,358,887 issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 61     60  
    Additional paid-in capital 1,635,245     1,614,769  
    Treasury stock, at cost (258,667 shares held as of December 31, 2024 and 2023, respectively) (17,964)     (17,964)  
    Retained earnings 814,518     719,894  
    Accumulated other comprehensive loss (6,731)     (1,332)  
    Total stockholders’ equity attributable to Company’s stockholders 2,425,129     2,315,427  
    Noncontrolling interest 125,803     125,560  
    Total equity 2,550,932     2,440,987  
    Total liabilities, redeemable noncontrolling interest and equity 5,666,224     5,208,279  

    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Reconciliation of EBITDA and Adjusted EBITDA
    For the three and twelve month period ended December 31, 2024 and 2023

    We calculate EBITDA as net income before interest, taxes, depreciation, amortization and accretion. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives not designated as hedging instruments; (ii) stock-based compensation, (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) costs related to a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items. We adjust for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. We believe that presentation of these measures will enhance an investor’s ability to evaluate our financial and operating performance. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. Our Board of Directors and senior management use EBITDA and Adjusted EBITDA to evaluate our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

    The following table reconciles net income to EBITDA and Adjusted EBITDA for the three and twelve month periods ended December 31, 2024, and 2023:

      Three Months Ended
    December 31,    		   Year Ended December 31,
      2024     2023     2024     2023  
      (Dollars in thousands)   (Dollars in thousands)
    Net income 42,625     38,833     131,241     133,137  
    Adjusted for:              
    Interest expense, net (including amortization of deferred financing costs) 33,136     23,440     126,148     86,898  
    Income tax provision (benefit) (11,771)     8,188     (16,289)     5,983  
    Adjustment to investment in unconsolidated companies: our Proportionate share in interest expense, tax and depreciation and amortization in Sarulla and Ijen 4,964     5,243     17,637     16,069  
    Depreciation, amortization and accretion 68,907     59,331     259,151     221,415  
    EBITDA 137,861     135,035     517,888     463,502  
    Mark-to-market on derivative instruments (14)     (2,490)     856     (2,206)  
    Stock-based compensation 5,310     4,243     20,197     15,478  
    Impairment of long-lived assets —     —     1,280     —  
    Allowance for bad debts 13     —     355     —  
    Merger and acquisition transaction costs 570     816     1,949     1,234  
    Legal fees related to a settlement agreement with a third-party battery systems supplier (750)     —     4,000     —  
    Write-off of unsuccessful exploration and Storage activities 2,474     1,415     3,930     3,733  
    Adjusted EBITDA 145,464     139,019     550,455     481,741  

    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Reconciliation of Adjusted Net Income attributable to the Company’s stockholders and Adjusted EPS
    For the Three and twelve-month periods ended December 31, 2024, and 2023

    Adjusted Net Income attributable to the Company’s stockholders and Adjusted EPS are adjusted for one-time expense items that are not representative of our ongoing business and operations. The use of Adjusted Net income attributable to the Company’s stockholders and Adjusted EPS is intended to enhance the usefulness of our financial information by providing measures to assess the overall performance of our ongoing business.

    The following tables reconciles Net income attributable to the Company’s stockholders and Adjusted EPS for the three and twelve -month periods ended December 31, 2024, and 2023.

                   
      Three Months Ended December 31,   Twelve Months Ended December 31,
      2024     2023   2024   2023  
                   
    GAAP Net income attributable to the Company’s stockholders 40.8     35.7   123.7   124.4  
    Impact of changes in the Kenya Finance Act 2023 —     2.0   —   (7.4)  
    Tax asset write-off in Sarulla, our unconsolidated company 0.9     1.0   0.9   1.0  
    Impairment of long-lived assets —     —   1.0   —  
    Write-off of unsuccessful exploration activities and Storage activities 2.0     1.1   3.1   2.9  
    Merger and acquisition transaction costs 0.5     0.6   1.5   1.0  
    Allowance for bad debts 0.0     —   0.3   —  
    Legal fees related to a settlement agreement with a third-party battery supplier (0.6)     —   3.2   —  
    Adjusted Net income attributable to the Company’s stockholders 43.6     40.5   133.7   121.9  
    GAAP diluted EPS 0.67     0.59   2.04   2.08  
    Impact of changes in the Kenya Finance Act 2023 —     0.03   —   (0.12)  
    Tax asset write-off in Sarulla, our unconsolidated company 0.01     0.02   0.01   0.02  
    Impairment of long-lived assets         0.02    
    Write-off of unsuccessful exploration activities and Storage activities 0.03     0.02   0.05   0.05  
    Merger and acquisition transaction costs 0.01     0.01   0.03   0.02  
    Allowance for bad debts 0.00     —   0.00   —  
    Legal fees related to a settlement agreement with a third-party battery supplier (0.01)     —   0.05   —  
    Diluted Adjusted EPS ($) 0.72     0.67   2.20   2.05  
    Ormat Technologies Contact: Investor Relations Agency Contact:
    Smadar Lavi Joseph Caminiti or Josh Carroll
    VP Head of IR and ESG Planning & Reporting Alpha IR Group
    775-356-9029 (ext. 65726) 312-445-2870
    slavi@ormat.com ORA@alpha-ir.com

    The MIL Network –

  • MIL-OSI: NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2025

    Source: GlobeNewswire (MIL-OSI)

    • Record quarterly revenue of $39.3 billion, up 12% from Q3 and up 78% from a year ago
    • Record quarterly Data Center revenue of $35.6 billion, up 16% from Q3 and up 93% from a year ago
    • Record full-year revenue of $130.5 billion, up 114%

    SANTA CLARA, Calif., Feb. 26, 2025 (GLOBE NEWSWIRE) — NVIDIA (NASDAQ: NVDA) today reported revenue for the fourth quarter ended January 26, 2025, of $39.3 billion, up 12% from the previous quarter and up 78% from a year ago.

    For the quarter, GAAP earnings per diluted share was $0.89, up 14% from the previous quarter and up 82% from a year ago. Non-GAAP earnings per diluted share was $0.89, up 10% from the previous quarter and up 71% from a year ago.

    For fiscal 2025, revenue was $130.5 billion, up 114% from a year ago. GAAP earnings per diluted share was $2.94, up 147% from a year ago. Non-GAAP earnings per diluted share was $2.99, up 130% from a year ago.

    “Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,” said Jensen Huang, founder and CEO of NVIDIA.

    “We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter. AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries.”

    NVIDIA will pay its next quarterly cash dividend of $0.01 per share on April 2, 2025, to all shareholders of record on March 12, 2025.

    Q4 Fiscal 2025 Summary

    GAAP
    ($ in millions, except earnings
    per share)    		 Q4 FY25 Q3 FY25 Q4 FY24 Q/Q Y/Y
    Revenue $39,331 $35,082 $22,103 Up 12% Up 78%
    Gross margin 73.0% 74.6% 76.0% Down 1.6 pts Down 3.0 pts
    Operating expenses $4,689 $4,287 $3,176 Up 9% Up 48%
    Operating income $24,034 $21,869 $13,615 Up 10% Up 77%
    Net income $22,091 $19,309 $12,285 Up 14% Up 80%
    Diluted earnings per share* $0.89 $0.78 $0.49 Up 14% Up 82%
    Non-GAAP
    ($ in millions, except earnings
    per share)    		 Q4 FY25 Q3 FY25 Q4 FY24 Q/Q Y/Y
    Revenue $39,331 $35,082 $22,103 Up 12% Up 78%
    Gross margin 73.5% 75.0% 76.7% Down 1.5 pts Down 3.2 pts
    Operating expenses $3,378 $3,046 $2,210 Up 11% Up 53%
    Operating income $25,516 $23,276 $14,749 Up 10% Up 73%
    Net income $22,066 $20,010 $12,839 Up 10% Up 72%
    Diluted earnings per share* $0.89 $0.81 $0.52 Up 10% Up 71%


    Fiscal 2025 Summary

    GAAP
    ($ in millions, except earnings
    per share)    		 FY25 FY24 Y/Y
    Revenue $130,497 $60,922 Up 114%
    Gross margin 75.0% 72.7% Up 2.3 pts
    Operating expenses $16,405 $11,329 Up 45%
    Operating income $81,453 $32,972 Up 147%
    Net income $72,880 $29,760 Up 145%
    Diluted earnings per share* $2.94 $1.19 Up 147%
    Non-GAAP
    ($ in millions, except earnings
    per share)    		 FY25 FY24 Y/Y
    Revenue $130,497 $60,922 Up 114%
    Gross margin 75.5% 73.8% Up 1.7 pts
    Operating expenses $11,716 $7,825 Up 50%
    Operating income $86,789 $37,134 Up 134%
    Net income $74,265 $32,312 Up 130%
    Diluted earnings per share* $2.99 $1.30 Up 130%

    *All per share amounts presented herein have been retroactively adjusted to reflect the ten-for-one stock split, which was effective June 7, 2024.

    Outlook
    NVIDIA’s outlook for the first quarter of fiscal 2026 is as follows:

    • Revenue is expected to be $43.0 billion, plus or minus 2%.
    • GAAP and non-GAAP gross margins are expected to be 70.6% and 71.0%, respectively, plus or minus 50 basis points.
    • GAAP and non-GAAP operating expenses are expected to be approximately $5.2 billion and $3.6 billion, respectively.
    • GAAP and non-GAAP other income and expense are expected to be an income of approximately $400 million, excluding gains and losses from non-marketable and publicly-held equity securities.
    • GAAP and non-GAAP tax rates are expected to be 17.0%, plus or minus 1%, excluding any discrete items.

    Highlights

    NVIDIA achieved progress since its previous earnings announcement in these areas: 

    Data Center

    • Fourth-quarter revenue was a record $35.6 billion, up 16% from the previous quarter and up 93% from a year ago. Full-year revenue rose 142% to a record $115.2 billion.
    • Announced that NVIDIA will serve as a key technology partner for the $500 billion Stargate Project.
    • Revealed that cloud service providers AWS, CoreWeave, Google Cloud Platform (GCP), Microsoft Azure and Oracle Cloud Infrastructure (OCI) are bringing NVIDIA® GB200 systems to cloud regions around the world to meet surging customer demand for AI.
    • Partnered with AWS to make the NVIDIA DGX™ Cloud AI computing platform and NVIDIA NIM™ microservices available through AWS Marketplace.
    • Revealed that Cisco will integrate NVIDIA Spectrum-X™ into its networking portfolio to help enterprises build AI infrastructure.
    • Revealed that more than 75% of the systems on the TOP500 list of the world’s most powerful supercomputers are powered by NVIDIA technologies.
    • Announced a collaboration with Verizon to integrate NVIDIA AI Enterprise, NIM and accelerated computing with Verizon’s private 5G network to power a range of edge enterprise AI applications and services.
    • Unveiled partnerships with industry leaders including IQVIA, Illumina, Mayo Clinic and Arc Institute to advance genomics, drug discovery and healthcare.
    • Launched NVIDIA AI Blueprints and Llama Nemotron model families for building AI agents and released NVIDIA NIM microservices to safeguard applications for agentic AI.
    • Announced the opening of NVIDIA’s first R&D center in Vietnam.
    • Revealed that Siemens Healthineers has adopted MONAI Deploy for medical imaging AI.

    Gaming and AI PC

    • Fourth-quarter Gaming revenue was $2.5 billion, down 22% from the previous quarter and down 11% from a year ago. Full-year revenue rose 9% to $11.4 billion.
    • Announced new GeForce RTX™ 50 Series graphics cards and laptops powered by the NVIDIA Blackwell architecture, delivering breakthroughs in AI-driven rendering to gamers, creators and developers.
    • Launched GeForce RTX 5090 and 5080 graphics cards, delivering up to a 2x performance improvement over the prior generation.
    • Introduced NVIDIA DLSS 4 with Multi Frame Generation and image quality enhancements, with 75 games and apps supporting it at launch, and unveiled NVIDIA Reflex 2 technology, which can reduce PC latency by up to 75%.
    • Unveiled NVIDIA NIM microservices, AI Blueprints and the Llama Nemotron family of open models for RTX AI PCs to help developers and enthusiasts build AI agents and creative workflows.

    Professional Visualization

    • Fourth-quarter revenue was $511 million, up 5% from the previous quarter and up 10% from a year ago. Full-year revenue rose 21% to $1.9 billion.
    • Unveiled NVIDIA Project DIGITS, a personal AI supercomputer that provides AI researchers, data scientists and students worldwide with access to the power of the NVIDIA Grace™ Blackwell platform.
    • Announced generative AI models and blueprints that expand NVIDIA Omniverse™ integration further into physical AI applications, including robotics, autonomous vehicles and vision AI.
    • Introduced NVIDIA Media2, an AI-powered initiative transforming content creation, streaming and live media experiences, built on NIM and AI Blueprints.

    Automotive and Robotics

    • Fourth-quarter Automotive revenue was $570 million, up 27% from the previous quarter and up 103% from a year ago. Full-year revenue rose 55% to $1.7 billion.
    • Announced that Toyota, the world’s largest automaker, will build its next-generation vehicles on NVIDIA DRIVE AGX Orin™ running the safety-certified NVIDIA DriveOS operating system.  
    • Partnered with Hyundai Motor Group to create safer, smarter vehicles, supercharge manufacturing and deploy cutting-edge robotics with NVIDIA AI and NVIDIA Omniverse.
    • Announced that the NVIDIA DriveOS safe autonomous driving operating system received ASIL-D functional safety certification and launched the NVIDIA DRIVE™ AI Systems Inspection Lab.
    • Launched NVIDIA Cosmos™, a platform comprising state-of-the-art generative world foundation models, to accelerate physical AI development, with adoption by leading robotics and automotive companies 1X, Agile Robots, Waabi, Uber and others.
    • Unveiled the NVIDIA Jetson Orin Nano™ Super, which delivers up to a 1.7x gain in generative AI performance.

    CFO Commentary
    Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com.

    Conference Call and Webcast Information
    NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal 2025 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its first quarter of fiscal 2026.

    Non-GAAP Measures
    To supplement NVIDIA’s condensed 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, non-GAAP operating income, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense, acquisition-related and other costs, other, gains from non-marketable and publicly-held equity securities, net, interest expense related to amortization of debt discount, and the associated tax impact of these items where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases related to property and equipment and intangible assets and principal payments on property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.

     NVIDIA CORPORATION 
      CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
     (In millions, except per share data) 
     (Unaudited) 
                       
          Three Months Ended   Twelve Months Ended
          January 26,   January 28,   January 26,   January 28,
            2025       2024       2025       2024  
                       
    Revenue $ 39,331     $ 22,103     $ 130,497     $ 60,922  
    Cost of revenue    10,608       5,312       32,639       16,621  
    Gross profit   28,723       16,791       97,858       44,301  
                       
    Operating expenses              
      Research and development     3,714       2,465       12,914       8,675  
      Sales, general and administrative   975       711       3,491       2,654  
        Total operating expenses   4,689       3,176       16,405       11,329  
                       
    Operating income   24,034       13,615       81,453       32,972  
      Interest income   511       294       1,786       866  
      Interest expense   (61 )     (63 )     (247 )     (257 )
      Other, net   733       260       1,034       237  
        Other income (expense), net   1,183       491       2,573       846  
                       
    Income before income tax   25,217       14,106       84,026       33,818  
    Income tax expense   3,126       1,821       11,146       4,058  
    Net income $ 22,091     $ 12,285     $ 72,880     $ 29,760  
                       
    Net income per share:              
      Basic $ 0.90     $ 0.51     $ 2.97     $ 1.21  
      Diluted $ 0.89     $ 0.49     $ 2.94     $ 1.19  
                       
    Weighted average shares used in per share computation:              
      Basic   24,489       24,660       24,555       24,690  
      Diluted   24,706       24,900       24,804       24,940  
    NVIDIA CORPORATION
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)
                 
            January 26,   January 28,
            2025   2024
    ASSETS        
                 
    Current assets:        
      Cash, cash equivalents and marketable securities   $ 43,210   $ 25,984
      Accounts receivable, net     23,065     9,999
      Inventories     10,080     5,282
      Prepaid expenses and other current assets     3,771     3,080
        Total current assets     80,126     44,345
                 
    Property and equipment, net     6,283     3,914
    Operating lease assets     1,793     1,346
    Goodwill     5,188     4,430
    Intangible assets, net     807     1,112
    Deferred income tax assets     10,979     6,081
    Other assets      6,425     4,500
        Total assets   $ 111,601   $ 65,728
                 
    LIABILITIES AND SHAREHOLDERS’ EQUITY
                 
    Current liabilities:        
      Accounts payable   $ 6,310   $ 2,699
      Accrued and other current liabilities     11,737     6,682
      Short-term debt     –     1,250
        Total current liabilities     18,047     10,631
                 
    Long-term debt     8,463     8,459
    Long-term operating lease liabilities     1,519     1,119
    Other long-term liabilities     4,245     2,541
        Total liabilities     32,274     22,750
                 
    Shareholders’ equity     79,327     42,978
        Total liabilities and shareholders’ equity   $ 111,601   $ 65,728
     NVIDIA CORPORATION 
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
     (In millions) 
     (Unaudited) 
                     
          Three Months Ended     Twelve Months Ended 
         January 26,   January 28,   January 26,   January 28,
           2025       2024       2025       2024  
                      
    Cash flows from operating activities:              
    Net income $ 22,091     $ 12,285     $ 72,880     $ 29,760  
    Adjustments to reconcile net income to net cash              
    provided by operating activities:              
      Stock-based compensation expense   1,321       993       4,737       3,549  
      Depreciation and amortization   543       387       1,864       1,508  
      Deferred income taxes   (598 )     (78 )     (4,477 )     (2,489 )
      Gains on non-marketable equity securities and publicly-held equity securities, net   (727 )     (260 )     (1,030 )     (238 )
      Other   (138 )     (109 )     (502 )     (278 )
    Changes in operating assets and liabilities, net of acquisitions:              
      Accounts receivable   (5,370 )     (1,690 )     (13,063 )     (6,172 )
      Inventories   (2,424 )     (503 )     (4,781 )     (98 )
      Prepaid expenses and other assets   331       (1,184 )     (395 )     (1,522 )
      Accounts payable   867       281       3,357       1,531  
      Accrued and other current liabilities   360       1,072       4,278       2,025  
      Other long-term liabilities   372       305       1,221       514  
    Net cash provided by operating activities   16,628       11,499       64,089       28,090  
                      
    Cash flows from investing activities:              
      Proceeds from maturities of marketable securities   1,710       1,731       11,195       9,732  
      Proceeds from sales of marketable securities   177       50       495       50  
      Proceeds from sales of non-marketable equity securities   –       –       171       1  
      Purchases of marketable securities   (7,010 )     (7,524 )     (26,575 )     (18,211 )
      Purchase related to property and equipment and intangible assets   (1,077 )     (253 )     (3,236 )     (1,069 )
      Purchases of non-marketable equity securities   (478 )     (113 )     (1,486 )     (862 )
      Acquisitions, net of cash acquired   (542 )     –       (1,007 )     (83 )
      Other   22       –       22       (124 )
    Net cash used in investing activities   (7,198 )     (6,109 )     (20,421 )     (10,566 )
                      
    Cash flows from financing activities:              
      Proceeds related to employee stock plans   –       –       490       403  
      Payments related to repurchases of common stock   (7,810 )     (2,660 )     (33,706 )     (9,533 )
      Payments related to tax on restricted stock units   (1,861 )     (841 )     (6,930 )     (2,783 )
      Repayment of debt   –       –       (1,250 )     (1,250 )
      Dividends paid   (245 )     (99 )     (834 )     (395 )
      Principal payments on property and equipment and intangible assets   (32 )     (29 )     (129 )     (74 )
      Other   –       –       –       (1 )
    Net cash used in financing activities   (9,948 )     (3,629 )     (42,359 )     (13,633 )
                      
    Change in cash, cash equivalents, and restricted cash   (518 )     1,761       1,309       3,891  
    Cash, cash equivalents, and restricted cash at beginning of period   9,107       5,519       7,280       3,389  
    Cash, cash equivalents, and restricted cash at end of period $ 8,589     $ 7,280     $ 8,589     $ 7,280  
                      
    Supplemental disclosures of cash flow information:              
    Cash paid for income taxes, net $ 4,129     $ 1,874     $ 15,118     $ 6,549  
    Cash paid for interest $ 22     $ 26     $ 246     $ 252  
       NVIDIA CORPORATION 
       RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES 
       (In millions, except per share data) 
       (Unaudited) 
                         
             Three Months Ended      Twelve Months Ended 
            January 26,   October 27,   January 28,   January 26,   January 28,
              2025       2024       2024       2025       2024  
                             
      GAAP cost of revenue $ 10,608     $ 8,926     $ 5,312     $ 32,639     $ 16,621  
      GAAP gross profit $ 28,723     $ 26,156     $ 16,791     $ 97,858     $ 44,301  
        GAAP gross margin   73.0 %     74.6 %     76.0 %     75.0 %     72.7 %
        Acquisition-related and other costs (A)   118       116       119       472       477  
        Stock-based compensation expense (B)   53       50       45       178       141  
        Other (C)     –       –       4       (3 )     40  
      Non-GAAP cost of revenue $ 10,437     $ 8,759     $ 5,144     $ 31,992     $ 15,963  
      Non-GAAP gross profit $ 28,894     $ 26,322     $ 16,959     $ 98,505     $ 44,959  
        Non-GAAP gross margin   73.5 %     75.0 %     76.7 %     75.5 %     73.8 %
                             
      GAAP operating expenses $ 4,689     $ 4,287     $ 3,176     $ 16,405     $ 11,329  
        Stock-based compensation expense (B)     (1,268 )     (1,202 )     (948 )     (4,559 )     (3,408 )
        Acquisition-related and other costs (A)   (43 )     (39 )     (18 )     (130 )     (106 )
        Other (C)     –       –       –       –       10  
      Non-GAAP operating expenses $ 3,378     $ 3,046     $ 2,210     $ 11,716     $ 7,825  
                             
      GAAP operating income $ 24,034     $ 21,869     $ 13,615     $ 81,453     $ 32,972  
        Total impact of non-GAAP adjustments to operating income   1,482       1,407       1,134       5,336       4,162  
      Non-GAAP operating income $ 25,516     $ 23,276     $ 14,749     $ 86,789     $ 37,134  
                             
      GAAP other income (expense), net $ 1,183     $ 447     $ 491     $ 2,573     $ 846  
        Gains from non-marketable equity securities and publicly-held equity securities, net   (727 )     (37 )     (260 )     (1,030 )     (238 )
        Interest expense related to amortization of debt discount   1       1       1       4       4  
      Non-GAAP other income (expense), net $ 457     $ 411     $ 232     $ 1,547     $ 612  
                             
      GAAP net income $ 22,091     $ 19,309     $ 12,285     $ 72,880     $ 29,760  
        Total pre-tax impact of non-GAAP adjustments   756       1,371       875       4,310       3,928  
        Income tax impact of non-GAAP adjustments (D)   (781 )     (670 )     (321 )     (2,925 )     (1,376 )
      Non-GAAP net income  $ 22,066     $ 20,010     $ 12,839     $ 74,265     $ 32,312  
                             
      Diluted net income per share (E)                  
        GAAP   $ 0.89     $ 0.78     $ 0.49     $ 2.94     $ 1.19  
        Non-GAAP    $ 0.89     $ 0.81     $ 0.52     $ 2.99     $ 1.30  
                             
      Weighted average shares used in diluted net income per share computation (E)   24,706       24,774       24,900       24,804       24,936  
                             
      GAAP net cash provided by operating activities $ 16,628     $ 17,629     $ 11,499     $ 64,089     $ 28,090  
        Purchases related to property and equipment and intangible assets   (1,077 )     (813 )     (253 )     (3,236 )     (1,069 )
        Principal payments on property and equipment and intangible assets   (32 )     (29 )     (29 )     (129 )     (74 )
      Free cash flow   $ 15,519     $ 16,787     $ 11,217     $ 60,724     $ 26,947  
                             
       
                             
      (A) Acquisition-related and other costs are comprised of amortization of intangible assets, transaction costs, and certain compensation charges and are included in the following line items:
            Three Months Ended   Twelve Months Ended
            January 26,   October 27,   January 28,   January 26,   January 28,
              2025       2024       2024       2025       2024  
        Cost of revenue   $ 118     $ 116     $ 119     $ 472     $ 477  
        Research and development   $ 27     $ 23     $ 12     $ 79     $ 49  
        Sales, general and administrative   $ 16     $ 16     $ 6     $ 51     $ 57  
                             
      (B) Stock-based compensation consists of the following:      
            Three Months Ended   Twelve Months Ended
            January 26,   October 27,   January 28,   January 26,   January 28,
              2025       2024       2024       2025       2024  
        Cost of revenue   $ 53     $ 50     $ 45     $ 178     $ 141  
        Research and development   $ 955     $ 910     $ 706     $ 3,423     $ 2,532  
        Sales, general and administrative   $ 313     $ 292     $ 242     $ 1,136     $ 876  
                             
      (C) Other consists of IP-related costs and assets held for sale related adjustments
     
      (D) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).
                             
      (E) Reflects a ten-for-one stock split on June 7, 2024
     NVIDIA CORPORATION 
     RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK 
         
         Q1 FY2026 Outlook 
        ($ in millions)
         
    GAAP gross margin   70.6 %
      Impact of stock-based compensation expense, acquisition-related costs, and other costs   0.4 %
    Non-GAAP gross margin   71.0 %
         
    GAAP operating expenses $ 5,150  
      Stock-based compensation expense, acquisition-related costs, and other costs   (1,550 )
    Non-GAAP operating expenses $ 3,600  
           

    About NVIDIA
    NVIDIA (NASDAQ: NVDA) is the world leader in accelerated computing.

    Certain statements in this press release including, but not limited to, statements as to: AI advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries; expectations with respect to growth, performance and benefits of NVIDIA’s products, services and technologies, including Blackwell, and related trends and drivers; expectations with respect to supply and demand for NVIDIA’s products, services and technologies, including Blackwell, and related matters including inventory, production and distribution; expectations with respect to NVIDIA’s third party arrangements, including with its collaborators and partners; expectations with respect to technology developments and related trends and drivers; future NVIDIA cash dividends or other returns to stockholders; NVIDIA’s financial and business outlook for the first quarter of fiscal 2026 and beyond; projected market growth and trends; expectations with respect to AI and related industries; and other statements that are not historical facts are risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic and political conditions; NVIDIA’s reliance on third parties to manufacture, assemble, package and test NVIDIA’s products; the impact of technological development and competition; development of new products and technologies or enhancements to NVIDIA’s existing product and technologies; market acceptance of NVIDIA’s products or NVIDIA’s partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of NVIDIA’s products or technologies when integrated into systems; and changes in applicable laws and regulations, as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

    © 2025 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce RTX, NVIDIA Cosmos, NVIDIA Spectrum-X, NVIDIA DGX, NVIDIA DRIVE, NVIDIA DRIVE AGX Orin, NVIDIA Grace, NVIDIA Jetson Orin Nano, NVIDIA NIM and NVIDIA Omniverse are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability and specifications are subject to change without notice.

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/aabe86db-ce89-4434-b83c-495082979801

    The MIL Network –

  • MIL-OSI Security: Shelbyville Woman Pleads Guilty To Employment Tax And Wire Fraud Charges; Agrees To Pay More Than $1.1. Million In Restitution

    Source: Office of United States Attorneys

    CHATTANOOGA, Tenn. – On February 26, 2025, Rebekah Proctor, 33, of Shelbyville, Tennessee, pleaded guilty in the United States District Court for the Eastern District of Tennessee in Chattanooga to one count of willful failure to collect, account for, and pay over a tax, in violation of Title 26, United States Code, Section 7202, and one count of wire fraud, in violation of Title 18, United States Code, Section 1343.               

    Proctor will be sentenced on July 11, 2025, by the Honorable Travis R. McDonough, United States District Judge. She faces up to five years of imprisonment on the tax offense and up to 30 years of imprisonment for wire fraud.

    According to the plea agreement filed in this case, Proctor operated Franklin Springs Academy, a daycare business in middle Tennessee.  Although she withheld income taxes and Federal Insurance Contributions Act (“FICA”) taxes (commonly known as Social Security and Medicare taxes) from her employees’ paychecks and additionally owed the employer’s portion of the FICA taxes, Proctor willfully failed to truthfully account for and pay such taxes to the IRS for the first quarter of 2022.  For that quarter alone, she owed tens of thousands of dollars in unpaid taxes.

    Proctor also fraudulently applied for and received a COVID-relief Paycheck Protection Program (“PPP”) loan to which she was not entitled.  Proctor made several false certifications on her April 4, 2020, application for over $100,000 in PPP funds, including that she was current on her federal tax obligations and that the loan funds would be used to retain workers and for other business expenses.  In fact, Proctor used the funds for her own personal expenses and for her husband’s personal expenses.

    As set forth in her plea agreement with the government, Proctor agreed that the restitution owed to the IRS, for her employment taxes only, is $893,232.26, which includes unpaid taxes plus penalties and interest required by law.  She further agreed that the restitution owed to the Small Business Association is $223,800, which is comprised of the $105,800 in PPP loan proceeds she received in April 2020 and $118,000 in additional fraudulently obtained PPP loan proceeds she received in February 2021.

    United States Attorney Francis M. Hamilton III of the Eastern District of Tennessee and Special Agent in Charge Donald “Trey” Eakins of IRS Criminal Investigation, Charlotte Field Office, made the announcement.

    Assistant United States Attorney Joseph G. DeGaetano represents the United States.  

                                                                                                       ###

    MIL Security OSI –

  • MIL-OSI: Expand Energy Corporation Reports Fourth Quarter and Full-Year 2024 Results, Issues 2025 Outlook

    Source: GlobeNewswire (MIL-OSI)

    OKLAHOMA CITY, Feb. 26, 2025 (GLOBE NEWSWIRE) — Expand Energy Corporation (NASDAQ:EXE) (“Expand Energy” or the “Company”) today reported fourth quarter and full-year 2024 financial and operating results and issued its 2025 outlook.

    Fourth Quarter Highlights

    • Net cash provided by operating activities of $382 million
    • Net loss of $399 million, or $1.72 per fully diluted share; adjusted net income(1)of $131 million, or $0.55 per share
    • Adjusted EBITDAX(1)of $964 million
    • Produced approximately 6.41 Bcfe/d net (91% natural gas)
    • Debut $750 million Investment Grade issuance, setting record spread for energy rising star (+132 bps to 10-year Treasury)

    2025 Outlook

    • Increasing expected synergy capture to ~$400 million in 2025, with the total target of $500 million in annual synergies expected to be achieved by year end 2026
    • Quarterly base dividend of $0.575 per common share to be paid in March 2025, 16th straight quarter paying a dividend
    • Expected to produce ~7.1 Bcfe/d for ~$2.7 billion of capital and deploy $300 million of incremental capital to create an additional ~300 MMcfe/d of productive capacity in 2026

    (1) Definitions of non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are included at the end of this news release.

    “The global need for reliable, affordable, lower carbon energy has never been greater. Our strong fourth quarter results and 2025 outlook clearly demonstrate, as the nation’s largest gas producer, we are ready to answer the call and expand opportunity for consumers and investors alike,” said Nick Dell’Osso, Expand Energy’s President and Chief Executive Officer. “The powerful combination of our attractive, market-connected portfolio, peer-leading returns program, and resilient financial foundation is distinctly unique among domestic natural gas producers. Our focus on integration and operational execution continues to deliver, allowing us to capture 80% of our $500 million synergy target in 2025 as we drive to lower our breakeven costs and more efficiently reach markets in need. Importantly, our capital plan positions us to continue our strategy to build productive capacity, positioning the company to efficiently and rapidly respond with production in 2026 should market conditions warrant.”

    Operations Update

    In the fourth quarter, Expand Energy operated an average of twelve rigs to drill 44 wells and turned 41 wells in line, resulting in net production of approximately 6.41 Bcfe per day (91% natural gas). A detailed breakdown of fourth quarter production, capital expenditures and activity can be found in supplemental slides which have been posted at https://investors.expandenergy.com/events-presentations.

    2025 Annual Synergy, Capital and Operating Outlook

    In 2025, Expand Energy expects to run ~12 rigs and invest approximately $2.7 billion yielding an estimated daily production of approximately 7.1 Bcfe/d. The company intends to build incremental productive capacity for an additional $300 million by running ~15 rigs in the second half of the year. This positions the company to efficiently grow production from a year-end 2025 exit rate of approximately 7.2 Bcfe/d to average approximately 7.5 Bcfe/d in 2026 should market conditions warrant.

    Expand Energy is increasing its 2025 expected annual synergy target by $175 million to approximately $400 million. The company expects to achieve the full $500 million in annual synergies by year end 2026.

    A detailed breakdown of 2025 annual synergy, capital, and operating outlook can be found in supplemental slides which have been posted at https://investors.expandenergy.com/events-presentations.

    Shareholder Returns Update

    Expand Energy enhanced its capital return framework in 2024 to more efficiently return cash to shareholders and reduce net debt. The company plans to pay its quarterly base dividend of $0.575 per share on March 27, 2025 to shareholders of record at the close of business on March 11, 2025. The company expects to allocate $500 million to net debt reduction in 2025, and at current market conditions, to have additional free cash flow available to allocate to the combination of variable dividends, share repurchases, and the balance sheet.

    Conference Call Information

    A conference call to discuss Expand Energy’s fourth quarter and full-year 2024 financial and operating results and 2025 outlook has been scheduled for 9 a.m. EDT on February 27, 2025. Participants can access the live webcast at https://edge.media-server.com/mmc/p/jwd532c5/. Participants who would like to ask a question, can register at https://register.vevent.com/register/BIada59e18f58249708a9b9b311a92efae, and will receive the dial-in info and a unique PIN to join the call. Links to the conference call will be provided at https://investors.expandenergy.com/. A replay will be available on the website following the call.

    Financial Statements, Non-GAAP Financial Measures and 2025 Guidance and Outlook Projections

    This news release contains the non-GAAP financial measures described below in the section titled “Non-GAAP Financial Measures.” Reconciliations of each non-GAAP financial measure used in this news release to the most directly comparable GAAP financial measure are provided below. Additional detail on the company’s 2024 fourth quarter and full-year financial and operational results, along with non-GAAP measures that adjust for items typically excluded by securities analysts, are available on the company’s website. Non-GAAP measures should not be considered as an alternative to, or more meaningful than, GAAP measures. Management’s guidance for 2025 can be found on the company’s website at www.expandenergy.com.

    Expand Energy Corporation (NASDAQ: EXE) is the largest independent natural gas producer in the United States, powered by dedicated and innovative employees focused on disrupting the industry’s traditional cost and market delivery model to responsibly develop assets in the nation’s most prolific natural gas basins. Expand Energy’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. Expand Energy is committed to expanding America’s energy reach to fuel a more affordable, reliable, lower carbon future.

    Forward-Looking Statements

    This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include our current expectations or forecasts of future events, including matters relating to armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, and the impact of each on our business, financial condition, results of operations and cash flows, actions by, or disputes among or between, members of OPEC+ and other foreign oil-exporting countries, market factors, market prices, our ability to meet debt service requirements, our ability to continue to pay cash dividends, our ability to capture synergies, the amount and timing of any cash dividends and our ESG initiatives. Forward-looking and other statements in this news release regarding our environmental, social and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the Securities and Exchange commission (“SEC”). In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Forward-looking statements often address our expected future business, financial performance and financial condition, and often contain words such as “aim”, “predict”, “should”, “expect,” “could,” “may,” “anticipate,” “intend,” “plan,” “ability,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “guidance,” “outlook,” “opportunity” or “strategy.” The absence of such words or expressions does not necessarily mean the statements are not forward-looking.

    Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:

    • Reduce demand for natural gas, oil, and natural gas liquids;
    • negative public perceptions of our industry;
    • competition in the natural gas and oil exploration and production industry;
    • the volatility of natural gas, oil and NGL prices, which are affected by general economic and business conditions, as well as increased demand for (and availability of) alternative fuels and electric vehicles;
    • risks from regional epidemics or pandemics and related economic turmoil, including supply chain constraints;
    • write-downs of our natural gas and oil asset carrying values due to low commodity prices;
    • significant capital expenditures are required to replace our reserves and conduct our business;
    • our ability to replace reserves and sustain production;
    • uncertainties inherent in estimating quantities of natural gas, oil and NGL reserves and projecting future rates of production and the amount and timing of development expenditures;
    • drilling and operating risks and resulting liabilities;
    • our ability to generate profits or achieve targeted results in drilling and well operations;
    • leasehold terms expiring before production can be established;
    • risks from our commodity price risk management activities;
    • uncertainties, risks and costs associated with natural gas and oil operations;
    • our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used;
    • pipeline and gathering system capacity constraints and transportation interruptions;
    • risks related to our plans to participate in the global LNG value chain;
    • terrorist activities and/or cyber-attacks adversely impacting our operations;
    • risks from failure to protect personal information and data and compliance with data privacy and security laws and regulations;
    • disruption of our business by natural or human causes beyond our control;
    • a deterioration in general economic, business or industry conditions;
    • the impact of inflation and commodity price volatility, including as a result of decisions made by OPEC+ and armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, on our business, financial condition, employees, contractors, vendors and the global demand for natural gas and oil and on U.S. and global financial markets;
    • our inability to access the capital markets on favorable terms;
    • the limitations on our financial flexibility due to our level of indebtedness and restrictive covenants from our indebtedness;
    • challenges with employee retention and increasingly competitive labor market
    • risks related to acquisitions or dispositions, or potential acquisitions or dispositions; risks related to loss of management personnel, other key employees, customers, suppliers, vendors, landlords, joint venture partners and other business partners as a result of the merger with Southwestern Energy Company (“Southwestern”); the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; and the risk that the combined company may be unable to achieve synergies or other anticipated benefits of the Southwestern merger or it may take longer than expected to achieve those synergies or benefits;
    • security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or from breaches of information technology systems of third parties with whom we transact business;
    • our ability to achieve and maintain ESG certifications, goals and commitments;
    • environmental and ESG legislation and regulatory initiatives, including those addressing the impact of climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal;
    • federal and state tax proposals affecting our industry;
    • risks related to an annual limitation on the utilization of our tax attributes, which was triggered upon the completion of the Southwestern merger, as well as trading in our common stock, additional issuance of common stock, and certain other stock transactions, which could lead to an additional, potentially more restrictive, annual limitation; and
    • other factors that are described under Risk Factors in Item 1A of Part I of our Annual Report on Form 10-K filed with the SEC.

    We caution you not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of the filing date, and we undertake no obligation and have no intention to update any forward-looking statement, except as required by law. We urge you to carefully review and consider the disclosures in this news release and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.

    All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

             
    CONSOLIDATED BALANCE SHEETS (unaudited)        
             
    ($ in millions, except per share data)   December 31, 2024   December 31, 2023
    Assets        
    Current assets:        
    Cash and cash equivalents   $ 317     $ 1,079  
    Restricted cash     78       74  
    Accounts receivable, net     1,226       593  
    Derivative assets     84       637  
    Other current assets     292       226  
    Total current assets     1,997       2,609  
    Property and equipment:        
    Natural gas and oil properties, successful efforts method        
    Proved natural gas and oil properties     23,093       11,468  
    Unproved properties     5,897       1,806  
    Other property and equipment     654       497  
    Total property and equipment     29,644       13,771  
    Less: accumulated depreciation, depletion and amortization     (5,362 )     (3,674 )
    Total property and equipment, net     24,282       10,097  
    Long-term derivative assets     1       74  
    Deferred income tax assets     589       933  
    Other long-term assets     1,025       663  
    Total assets   $ 27,894     $ 14,376  
             
    Liabilities and stockholders’ equity        
    Current liabilities:        
    Accounts payable   $ 777     $ 425  
    Current maturities of long-term debt, net     389       —  
    Accrued interest     100       39  
    Derivative liabilities     71       3  
    Other current liabilities     1,786       847  
    Total current liabilities     3,123       1,314  
    Long-term debt, net     5,291       2,028  
    Long-term derivative liabilities     68       9  
    Asset retirement obligations, net of current portion     499       265  
    Long-term contract liabilities     1,227       —  
    Other long-term liabilities     121       31  
    Total liabilities     10,329       3,647  
    Contingencies and commitments        
    Stockholders’ equity:        
    Common stock, $0.01 par value, 450,000,000 shares authorized: 231,769,886 and 130,789,936 shares issued     2       1  
    Additional paid-in capital     13,687       5,754  
    Retained earnings     3,876       4,974  
    Total stockholders’ equity     17,565       10,729  
    Total liabilities and stockholders’ equity   $ 27,894     $ 14,376  
                     
         
    CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
        2024   2023   2024   2023
    ($ in millions, except per share data)                
    Revenues and other:                
    Natural gas, oil and NGL   $ 1,595     $ 763     $ 2,969     $ 3,547  
    Marketing     649       513       1,290       2,500  
    Natural gas, oil and NGL derivatives     (245 )     533       (38 )     1,728  
    Gains on sales of assets     2       139       14       946  
    Total revenues and other     2,001       1,948       4,235       8,721  
    Operating expenses:                
    Production     158       63       316       356  
    Gathering, processing and transportation     556       190       1,035       853  
    Severance and ad valorem taxes     39       31       97       167  
    Exploration     3       8       10       27  
    Marketing     654       514       1,310       2,499  
    General and administrative     53       32       186       127  
    Separation and other termination costs     —       2       23       5  
    Depreciation, depletion and amortization     647       379       1,729       1,527  
    Other operating expense, net     277       3       332       18  
    Total operating expenses     2,387       1,222       5,038       5,579  
    Income (loss) from operations     (386 )     726       (803 )     3,142  
    Other income (expense):                
    Interest expense     (64 )     (22 )     (123 )     (104 )
    Gains (losses) on purchases, exchanges or extinguishments of debt     1       —       (1 )     —  
    Other income, net     28       31       86       79  
    Total other income (expense)     (35 )     9       (38 )     (25 )
    Income (loss) before income taxes     (421 )     735       (841 )     3,117  
    Income tax expense (benefit)     (22 )     166       (127 )     698  
    Net income (loss)   $ (399 )   $ 569     $ (714 )   $ 2,419  
    Earnings (loss) per common share:                
    Basic   $ (1.72 )   $ 4.34     $ (4.55 )   $ 18.21  
    Diluted   $ (1.72 )   $ 4.02     $ (4.55 )   $ 16.92  
    Weighted average common shares outstanding (in thousands):                
    Basic     231,539       130,999       156,989       132,840  
    Diluted     231,539       141,491       156,989       142,976  
                                     
         
    CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
    ($ in millions)   2024   2023   2024   2023
    Cash flows from operating activities:                
    Net income (loss)   $ (399 )   $ 569     $ (714 )   $ 2,419  
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
    Depreciation, depletion and amortization     647       379       1,729       1,527  
    Deferred income tax expense (benefit)     (18 )     109       (123 )     428  
    Derivative (gains) losses, net     245       (533 )     38       (1,728 )
    Cash receipts on derivative settlements, net     252       187       947       354  
    Share-based compensation     9       8       38       33  
    Gains on sales of assets     (2 )     (139 )     (14 )     (946 )
    Contract amortization     (57 )     —       (57 )     —  
    (Gains) losses on purchases, exchanges or extinguishments of debt     (1 )     —       1       —  
    Other     51       (17 )     35       18  
    Changes in assets and liabilities     (345 )     (93 )     (315 )     275  
    Net cash provided by operating activities     382       470       1,565       2,380  
    Cash flows from investing activities:                
    Capital expenditures     (536 )     (379 )     (1,557 )     (1,829 )
    Receipts of deferred consideration     50       —       166       —  
    Business combination, net     (459 )     —       (459 )     —  
    Contributions to investments     (4 )     (82 )     (75 )     (231 )
    Proceeds from divestitures of property and equipment     4       566       21       2,533  
    Net cash provided by (used in) investing activities     (945 )     105       (1,904 )     473  
    Cash flows from financing activities:                
    Proceeds from Credit Facility     20       —       20       1,125  
    Payments on Credit Facility     (20 )     —       (20 )     (2,175 )
    Proceeds from issuance of senior notes, net     747       —       747       —  
    Funds held for transition services     —       (91 )     —       —  
    Proceeds from warrant exercise     2       —       3       —  
    Debt issuance and other financing costs     (7 )     —       (11 )     —  
    Cash paid to repurchase and retire common stock     —       (42 )     —       (355 )
    Cash paid to purchase debt     (767 )     —       (767 )     —  
    Cash paid for common stock dividends     (134 )     (75 )     (388 )     (487 )
    Other     (3 )     —       (3 )     —  
    Net cash used in financing activities     (162 )     (208 )     (419 )     (1,892 )
    Net increase (decrease) in cash, cash equivalents and restricted cash     (725 )     367       (758 )     961  
    Cash, cash equivalents and restricted cash, beginning of period     1,120       786       1,153       192  
    Cash, cash equivalents and restricted cash, end of period   $ 395     $ 1,153     $ 395     $ 1,153  
                     
    Cash and cash equivalents   $ 317     $ 1,079     $ 317     $ 1,079  
    Restricted cash     78       74       78       74  
    Total cash, cash equivalents and restricted cash   $ 395     $ 1,153     $ 395     $ 1,153  
                                     
             
    NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)        
                                     
        Three Months Ended December 31, 2024
        Natural Gas   Oil   NGL   Total
        MMcf per day   $/Mcf   MBbl per day   $/Bbl   MBbl per day   $/Bbl   MMcfe per day   $/Mcfe
    Haynesville   2,338   2.57   —   —   —   —   2,338   2.57
    Northeast Appalachia   2,425   2.34   —   —   —   —   2,425   2.34
    Southwest Appalachia   1,067   2.42   12   60.41   85   27.44   1,649   3.42
    Total   5,830   2.45   12   60.41   85   27.44   6,412   2.70
                                     
    Average NYMEX Price       2.79       70.27                
    Average Realized Price (including realized derivatives)       2.91       61.28       26.90       3.11
        Three Months Ended December 31, 2023
        Natural Gas   Oil   NGL   Total
        MMcf per day   $/Mcf   MBbl per day   $/Bbl   MBbl per day   $/Bbl   MMcfe per day   $/Mcfe
    Haynesville   1,497   2.41   —   —   —   —   1,497   2.41
    Northeast Appalachia   1,801   2.15   —   —   —   —   1,801   2.15
    Eagle Ford   52   2.42   6   82.49   7   25.67   129   6.30
    Total   3,350   2.27   6   82.49   7   25.67   3,427   2.42
                                     
    Average NYMEX Price       2.88       78.35                
    Average Realized Price (including realized derivatives)       2.87       82.49       25.67       3.01
        Year Ended December 31, 2024
        Natural Gas   Oil   NGL   Total
        MMcf per day   $/Mcf   MBbl per day   $/Bbl   MBbl per day   $/Bbl   MMcfe per day   $/Mcfe
    Haynesville   1,532   2.14   —   —   —   —   1,532   2.14
    Northeast Appalachia   1,809   1.88   —   —   —   —   1,809   1.88
    Southwest Appalachia   270   2.42   3   60.41   21   27.44   417   3.42
    Total   3,611   2.03   3   60.41   21   27.44   3,758   2.16
                                     
    Average NYMEX Price       2.27       75.72                
    Average Realized Price (including realized derivatives)       2.75       61.04       26.91       2.84
        Year Ended December 31, 2023
        Natural Gas   Oil   NGL   Total
        MMcf per day   $/Mcf   MBbl per day   $/Bbl   MBbl per day   $/Bbl   MMcfe per day   $/Mcfe
    Haynesville   1,551   2.30   —   —   —   —   1,551   2.30
    Northeast Appalachia   1,834   2.22   —   —   —   —   1,834   2.22
    Eagle Ford   85   2.25   21   77.80   10   25.62   274   7.64
    Total   3,470   2.25   21   77.80   10   25.62   3,659   2.66
                                     
    Average NYMEX Price       2.74       77.63                
    Average Realized Price (including realized derivatives)       2.64       72.89       25.62       2.99
                                     
         
    CAPITAL EXPENDITURES ACCRUED (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
        2024
    		   2023
    		   2024
    		   2023
    ($ in millions)                
    Drilling and completion capital expenditures:                
    Haynesville   $ 300     $ 187     $ 777     $ 891  
    Northeast Appalachia     97       119       377       443  
    Southwest Appalachia     103       —       103       —  
    Eagle Ford     —       —       —       222  
    Total drilling and completion capital expenditures     500       306       1,257       1,556  
    Non-drilling and completion – field     51       50       157       150  
    Non-drilling and completion – corporate     42       20       115       76  
    Total capital expenditures   $ 593     $ 376     $ 1,529     $ 1,782  
                                     
       
    NON-GAAP FINANCIAL MEASURES  
       

    As a supplement to the financial results prepared in accordance with U.S. GAAP, Expand Energy’s quarterly earnings releases contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Net Debt. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. Management believes these adjusted financial measures are a meaningful adjunct to earnings and cash flows calculated in accordance with GAAP because (a) management uses these financial measures to evaluate the company’s trends and performance, (b) these financial measures are comparable to estimates provided by securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items.

    Expand Energy’s definitions of each non-GAAP measure presented herein are provided below. Because not all companies or securities analysts use identical calculations, Expand Energy’s non-GAAP measures may not be comparable to similarly titled measures of other companies or securities analysts.

    Adjusted Net Income: Adjusted Net Income is defined as net income (loss) adjusted to exclude unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Expand Energy believes that Adjusted Net Income facilitates comparisons of the company’s period-over-period performance, by excluding the impact of items that, in the opinion of management, do not reflect Expand Energy’s core operating performance. Adjusted Net Income should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

    Adjusted Diluted Earnings Per Common Share: Adjusted Diluted Earnings Per Common Share is defined as diluted earnings (loss) per common share adjusted to exclude the per diluted share amounts attributed to unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Expand Energy believes that Adjusted Diluted Earnings Per Common Share facilitates comparisons of the company’s period-over-period performance, by excluding the impact of items that, in the opinion of management, do not reflect Expand Energy’s core operating performance. Adjusted Diluted Earnings Per Common Share should not be considered an alternative to, or more meaningful than, earnings (loss) per common share as presented in accordance with GAAP.

    Adjusted EBITDAX: Adjusted EBITDAX is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration expense, unrealized (gains) losses on natural gas and oil derivatives, separation and other termination costs, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results. Adjusted EBITDAX is presented as it provides investors an indication of the company’s ability to internally fund exploration and development activities and service or incur debt. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

    Free Cash Flow: Free Cash Flow is defined as net cash provided by operating activities less cash capital expenditures. Free Cash Flow is a liquidity measure that provides investors additional information regarding the company’s ability to service or incur debt and return cash to shareholders. Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

    Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as net cash provided by operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results. Adjusted Free Cash Flow is a liquidity measure that provides investors additional information regarding the company’s ability to service or incur debt and return cash to shareholders and is used to determine Expand Energy’s payout of enhanced returns framework. Adjusted Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

    Net Debt: Net Debt is defined as GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents. Net Debt is useful to investors as a widely understood measure of liquidity and leverage, but this measure should not be considered as an alternative to, or more meaningful than, total debt presented in accordance with GAAP.

    Present Value of Estimated Future Net Revenues or PV-10: Present Value of Estimated Future Net Revenues or PV-10 is defined as the estimated future gross revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using prices calculated as the average natural gas and oil price during the preceding 12-month period prior to the end of the current reporting period, (determined as the unweighted arithmetic average of prices on the first day of each month within the 12-month period) and costs in effect at the determination date (unless such costs are subject to change pursuant to contractual provisions), without giving effect to non-property related expenses such as general and administrative expenses, debt service and future income tax expense or to depreciation, depletion and amortization, discounted using an annual discount rate of 10%. PV-10 is derived from the standardized measure, which is the most directly comparable financial measure computed using GAAP and differs in that PV-10 does not include the effects of income taxes on future net revenues. Management uses PV-10, which is calculated without deducting estimated future income tax expenses, as a measure of the value of the Company’s current proved reserves and to compare relative values among peer companies. Present Value of Estimated Future Net Revenues or PV-10 should not be considered an alternative to, or more meaningful than, the standardized measure presented in accordance with GAAP. Neither PV-10 nor the standardized measure represents an estimate of the fair market value of the Company’s natural gas and oil properties.

         
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
    ($ in millions)   2024   2023   2024   2023
    Net income (loss) (GAAP)   $ (399 )   $ 569     $ (714 )   $ 2,419  
                     
    Adjustments:                
    Unrealized (gains) losses on natural gas and oil derivatives     490       (347 )     979       (1,278 )
    Separation and other termination costs     —       2       23       5  
    Gains on sales of assets     (2 )     (139 )     (14 )     (946 )
    Other operating expense, net(a)     267       4       325       22  
    (Gains) losses on purchases, exchanges or extinguishments of debt     (1 )     —       1       —  
    Contract amortization     (57 )     —       (57 )     —  
    Other     (21 )     (18 )     (38 )     (37 )
    Tax effect of adjustments(b)     (146 )     114       (271 )     517  
    Adjusted net income (Non-GAAP)   $ 131     $ 185     $ 234     $ 702  
    (a)   The three- and twelve-month periods ended December 31, 2024 include an adjustment for costs incurred related to the Southwestern Merger.
    (b)   The three- and twelve-month periods ended December 31, 2024 include a tax effect attributed to the reconciling adjustments using a statutory rate of 22% and the three- and twelve-month periods December 31, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
         
         
    RECONCILIATION OF EARNINGS (LOSS) PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
    ($/share)   2024   2023   2024   2023
    Earnings (loss) per common share (GAAP)   $ (1.72 )   $ 4.34     $ (4.55 )   $ 18.21  
    Effect of dilutive securities     —       (0.32 )     —       (1.29 )
    Diluted earnings (loss) per common share (GAAP)   $ (1.72 )   $ 4.02     $ (4.55 )   $ 16.92  
                     
    Adjustments:                
    Unrealized (gains) losses on natural gas and oil derivatives     2.12       (2.44 )     6.24       (8.94 )
    Separation and other termination costs     —       0.01       0.14       0.04  
    Gains on sales of assets     (0.01 )     (0.99 )     (0.09 )     (6.62 )
    Other operating expense, net(a)     1.16       0.03       2.07       0.15  
    (Gains) losses on purchases, exchanges or extinguishments of debt     —       —       0.01       —  
    Contract amortization     (0.24 )     —       (0.36 )     —  
    Other     (0.09 )     (0.13 )     (0.24 )     (0.26 )
    Tax effect of adjustments(b)     (0.64 )     0.81       (1.73 )     3.62  
    Effect of dilutive securities     (0.03 )     —       (0.08 )     —  
    Adjusted diluted earnings per common share (Non-GAAP)   $ 0.55     $ 1.31     $ 1.41     $ 4.91  
    (a)   The three- and twelve-month periods ended December 31, 2024 include an adjustment for costs incurred related to the Southwestern Merger.
    (b)   The three- and twelve-month periods ended December 31, 2024 include a tax effect attributed to the reconciling adjustments using a statutory rate of 22% and the three- and twelve-month periods December 31, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
         
         
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDAX (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
        2024   2023   2024   2023
    ($ in millions)                
    Net income (loss) (GAAP)   $ (399 )   $ 569     $ (714 )   $ 2,419  
                     
    Adjustments:                
    Interest expense     64       22       123       104  
    Income tax expense (benefit)     (22 )     166       (127 )     698  
    Depreciation, depletion and amortization     647       379       1,729       1,527  
    Exploration     3       8       10       27  
    Unrealized (gains) losses on natural gas and oil derivatives     490       (347 )     979       (1,278 )
    Separation and other termination costs     —       2       23       5  
    Gains on sales of assets     (2 )     (139 )     (14 )     (946 )
    Other operating expense, net(a)     267       4       325       22  
    (Gains) losses on purchases, exchanges or extinguishments of debt     (1 )     —       1       —  
    Contract amortization     (57 )     —       (57 )     —  
    Other     (26 )     (29 )     (83 )     (65 )
    Adjusted EBITDAX (Non-GAAP)   $ 964     $ 635     $ 2,195     $ 2,513  
    (a)   The three- and twelve-month periods ended December 31, 2024 include an adjustment for costs incurred related to the Southwestern Merger.
         
         
    RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)    
             
        Three Months Ended December 31,   Year Ended December 31,
        2024   2023   2024   2023
    ($ in millions)                
    Net cash provided by operating activities (GAAP)   $ 382     $ 470     $ 1,565     $ 2,380  
    Cash capital expenditures     (536 )     (379 )     (1,557 )     (1,829 )
    Free cash flow (Non-GAAP)     (154 )     91       8       551  
    Cash paid for merger expenses     231       —       269       —  
    Cash contributions to investments     (4 )     (82 )     (75 )     (231 )
    Free cash flow associated with divested assets(a)     —       (48 )     —       (243 )
    Adjusted free cash flow (Non-GAAP)   $ 73     $ (39 )   $ 202     $ 77  
    (a)   In March and April of 2023, we closed two divestitures of certain Eagle Ford assets. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction. Additionally, in November 2023, we closed the divestiture of the final portion of our Eagle Ford assets, with an effective date of February 1, 2023 and the cash generated by these assets was delivered to the buyer through a reduction in the proceeds we received at the closing of the transaction.
         
         
    RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)    
         
    ($ in millions)   December 31, 2024
    Total debt (GAAP)   $ 5,680  
    Premiums, discounts and issuance costs on debt     6  
    Principal amount of debt     5,686  
    Cash and cash equivalents     (317 )
    Net debt (Non-GAAP)   $ 5,369  
             
             
    PROVED RESERVES (unaudited)        
             
        SEC pricing(a)   Five-year strip pricing(b)
    ($ in millions)        
    Proved reserves (Bcfe)     20,800       26,816  
    Standardized measure   $ 7,531     $ 22,120  
    PV-10(c)   $ 7,567     $ 25,975  
    (a)   SEC proved reserves as of December 31, 2024 were based on a natural gas price of $2.13 per Mcf and an oil price of $75.48 per barrel of oil and NGL. Pricing was determined in accordance with the SEC requirement using the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended December 31, 2024. The average adjusted product prices weighted by production over the remaining lives of the properties are $0.65 per Mcf of gas, $65.16 per barrel of oil and $15.20 per barrel of NGL.
    (b)   Pricing used in the five-year strip pricing sensitivity reflects five-year strip pricing as of February 19, 2025 and held constant thereafter using (i) the NYMEX five-year strip adjusted for regional differentials using Henry Hub for gas and (ii) the NYMEX West Texas Intermediate five-year strip for oil, adjusted for regional differentials consistent with those used in the SEC pricing, and holding all other assumptions constant. The average adjusted product prices weighted by production over the remaining lives of the properties would be $2.35 per Mcf of gas, $54.16 per barrel of oil, and $12.86 per barrel of NGL.

    The NYMEX strip price for proved reserves and related metrics are intended to illustrate reserve sensitivities to market expectations of commodity prices and should not be confused with SEC pricing for proved reserves and do not comply with SEC pricing assumptions. Management believes that the presentation of reserve volume and related metrics using NYMEX forward strip prices provides investors with additional useful information about the Company’s reserves because the forward prices are based on the market’s forward-looking expectations of oil and gas prices as of a certain date. The price at which the Company can sell its production in the future is the major determinant of the likely economic producibility of the Company’s reserves. The Company hedges certain amounts of future production based on futures prices. In addition, the Company uses such forward-looking market-based data in developing its drilling plans, assessing its capital expenditure needs and projecting future cash flows. While NYMEX strip prices represent a consensus estimate of future pricing, such prices are only an estimate and are not necessarily an accurate projection of future oil and gas prices. Actual future prices may vary significantly from NYMEX prices; therefore, actual revenue and value generated may be more or less than the amounts disclosed. Investors should be careful to consider forward prices in addition to, and not as a substitute for, SEC pricing, when considering the Company’s reserves.
    (c)   PV-10 differs from the standardized measure because the former does not include the effects of estimated future income tax expense. PV-10 using SEC pricing excludes $36 million of estimated future income tax expense, and PV-10 using February 19, 2025 strip pricing excludes $3,855 million of estimated future income tax expense.
         
         
    INVESTOR CONTACT: MEDIA CONTACT: EXPAND ENERGY CORPORATION
    Chris Ayres Brooke Coe 6100 North Western Avenue
    (405) 935-8870 (405) 935-8878 P.O. Box 18496
    ir@expandenergy.com media@expandenergy.com Oklahoma City, OK 73154
         

    The MIL Network –

  • MIL-OSI: Nutanix Reports Second Quarter Fiscal 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Delivers Outperformance Across All Guided Metrics

    Reports 19% YoY ARR Growth and Strong Free Cash Flow

    SAN JOSE, Calif., Feb. 26, 2025 (GLOBE NEWSWIRE) — Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its second quarter ended January 31, 2025.

    “During our second quarter we delivered outperformance across our guided metrics,” said Rajiv Ramaswami, President and CEO of Nutanix. “Our results are benefiting from the strength of the Nutanix Cloud Platform, demand from businesses looking for a trusted long-term partner committed to innovation and customer care, and go-to-market leverage from our partnerships and programs.”

    “Our second quarter results included 19% year-over-year ARR growth and strong year-to-date free cash flow generation, reflecting our focus on delivering sustainable, profitable growth,” said Rukmini Sivaraman, CFO of Nutanix. “We also recently strengthened our balance sheet and increased our financial flexibility with the issuance of convertible notes at attractive terms and by establishing a new revolving credit facility.”

    Second Quarter Fiscal 2025 Financial Summary

      Q2 FY’25 Q2 FY’24 Y/Y Change
    Annual Recurring Revenue (ARR)¹ $2.06 billion $1.74 billion 19%
    Average Contract Duration² 3.0 years 2.8 years 0.2 year
    Revenue $654.7 million $565.2 million 16%
    GAAP Gross Margin 87.0% 85.6% 140 bps
    Non-GAAP Gross Margin 88.3% 87.3% 100 bps
    GAAP Operating Expenses $504.0 million $446.6 million 13%
    Non-GAAP Operating Expenses $417.0 million $369.4 million 13%
    GAAP Operating Income $65.4 million $37.0 million $28.4 million
    Non-GAAP Operating Income $161.3 million $123.9 million $37.4 million
    GAAP Operating Margin 10.0% 6.6% 340 bps
    Non-GAAP Operating Margin 24.6% 21.9% 270 bps
    Net Cash Provided by Operating Activities $221.7 million $186.4 million $35.3 million
    Free Cash Flow $187.1 million $162.6 million $24.5 million

    Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided in the tables of this press release.

    Recent Company Highlights

    Third Quarter Fiscal 2025 Outlook

       
    Revenue $620 – $630 million
    Non-GAAP Operating Margin 17% to 18%
    Weighted Average Shares Outstanding (Diluted)³ Approximately 296 million


    Fiscal 2025 Outlook

       
    Revenue $2.495 – $2.515 billion
    Non-GAAP Operating Margin 17.5% to 18.5%
    Free Cash Flow $650 – $700 million

    Supplementary materials to this press release, including our second quarter fiscal 2025 earnings presentation, can be found at https://ir.nutanix.com/financial/quarterly-results.

    Webcast and Conference Call Information

    Nutanix executives will discuss the Company’s second quarter fiscal 2025 financial results on a conference call today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com. An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

    Footnotes

    ¹Annual Recurring Revenue, or ARR, for any given period, is defined as the sum of ACV for all subscription contracts in effect as of the end of a specific period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract. Excludes all life-of-device contracts. ACV is defined as the total annualized value of a contract. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract. Excludes amounts related to professional services and hardware.

    ²Average Contract Duration represents the dollar-weighted term, calculated on a billings basis, across all subscription contracts, as well as our limited number of life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

    ³Weighted average share count used in computing diluted non-GAAP net income per share.

    Non-GAAP Financial Measures and Other Key Performance Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press release includes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, free cash flow, Annual Recurring Revenue (or ARR), and Average Contract Duration. In computing non-GAAP financial measures, we exclude certain items such as stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, income tax-related impact, and other acquisition-related costs), restructuring charges, litigation settlement accruals and legal fees related to certain litigation matters, the amortization and conversion of the debt discount and issuance costs related to convertible senior notes, interest expense related to convertible senior notes, inducement expense related to the repurchase of convertible senior notes, and other non-recurring transactions and the related tax impact. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin are financial measures which we believe provide useful information to investors because they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to our management and investors about the amount of cash generated by the business after capital expenditures, and we define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth of our subscription business because it takes into account variability in term lengths. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross margin, operating expenses, operating income (loss), operating margin, or net cash provided by (used in) operating activities, respectively. There is no GAAP measure that is comparable to ARR or Average Contract Duration, so we have not reconciled the ARR or Average Contract Duration data included in this press release to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned “Reconciliation of GAAP to Non-GAAP Profit Measures” and “Reconciliation of GAAP Net Cash Provided By Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business. This press release also includes the following forward-looking non-GAAP financial measures as part of our third quarter fiscal 2025 outlook and/or our fiscal 2025 outlook: non-GAAP operating margin and free cash flow. We are unable to reconcile these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures without unreasonable efforts, as we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact the GAAP financial measures for these periods but would not impact the non-GAAP financial measures.

    Forward-Looking Statements

    This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business momentum and prospects, including the strength of our platform, demand from businesses looking for a long-term partner committed to innovation and customer care, and go-to-market leverage from our partnerships; our focus on delivering sustainable, profitable growth; our third quarter fiscal 2025 outlook; and our fiscal 2025 outlook.

    These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: the inherent uncertainty or assumptions and estimates underlying our projections and guidance, which are necessarily speculative in nature; any failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, strategies, initiatives, vision, objectives, momentum, prospects and outlook; our ability to achieve, sustain and/or manage future growth effectively; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new solutions, products, services, product features or technology; macroeconomic or geopolitical uncertainty; our ability to attract, recruit, train, retain, and, where applicable, ramp to full productivity, qualified employees and key personnel; factors that could result in the significant fluctuation of our future quarterly operating results (including anticipated changes to our revenue and product mix, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing and availability of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions); our ability to form new or maintain and strengthen existing strategic alliances and partnerships, as well as our ability to manage any changes thereto; our ability to make share repurchases; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 filed with the U.S. Securities and Exchange Commission, or the SEC, on September 19, 2024 and our subsequent Quarterly Reports on Form 10-Q filed with the SEC. Additional information will be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2025, which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of our website at ir.nutanix.com and on the SEC’s website at www.sec.gov. These forward-looking statements speak only as of the date of this press release and, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances.

    About Nutanix

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

    © 2025 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix.

    Investor Contact:
    Richard Valera
    ir@nutanix.com

    Media Contact:
    Jennifer Massaro
    pr@nutanix.com

     
    NUTANIX, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)
     
        As of
        July 31,
    2024    		   January 31,
    2025
        (in thousands)
    Assets            
    Current assets:            
    Cash and cash equivalents   $ 655,270     $ 1,072,161  
    Short-term investments     339,072       670,686  
    Accounts receivable, net     229,796       327,294  
    Deferred commissions—current     159,849       153,330  
    Prepaid expenses and other current assets     97,307       111,923  
    Total current assets     1,481,294       2,335,394  
    Property and equipment, net     136,180       138,753  
    Operating lease right-of-use assets     109,133       112,051  
    Deferred commissions—non-current     198,962       184,904  
    Intangible assets, net     5,153       3,443  
    Goodwill     185,235       185,235  
    Other assets—non-current     27,961       29,210  
    Total assets   $ 2,143,918     $ 2,988,990  
    Liabilities and Stockholders’ Deficit            
    Current liabilities:            
    Accounts payable   $ 45,066     $ 45,903  
    Accrued compensation and benefits     195,602       203,040  
    Accrued expenses and other current liabilities     24,967       22,428  
    Deferred revenue—current     954,543       1,024,364  
    Operating lease liabilities—current     24,163       21,819  
    Total current liabilities     1,244,341       1,317,554  
    Deferred revenue—non-current     918,163       995,173  
    Operating lease liabilities—non-current     90,359       93,828  
    Convertible senior notes, net     570,073       1,341,388  
    Other liabilities—non-current     49,130       48,721  
    Total liabilities     2,872,066       3,796,664  
    Stockholders’ deficit:            
    Common stock     7       7  
    Additional paid-in capital     4,118,898       4,120,529  
    Accumulated other comprehensive loss     146       404  
    Accumulated deficit     (4,847,199 )     (4,928,614 )
    Total stockholders’ deficit     (728,148 )     (807,674 )
    Total liabilities and stockholders’ deficit   $ 2,143,918     $ 2,988,990  
    NUTANIX, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
     
        Three Months Ended
    January 31,    		   Six Months Ended
    January 31,
        2024   2025   2024   2025
        (in thousands, except per share data)
    Revenue:                        
    Product   $ 299,660     $ 354,187     $ 546,582     $ 656,106  
    Support, entitlements and other services     265,573       300,534       529,705       589,571  
    Total revenue     565,233       654,721       1,076,287       1,245,677  
    Cost of revenue:                        
    Product (1)(2)     9,402       8,823       19,636       17,193  
    Support, entitlements and other services (1)     72,154       76,465       143,879       150,765  
    Total cost of revenue     81,556       85,288       163,515       167,958  
    Gross profit     483,677       569,433       912,772       1,077,719  
    Operating expenses:                        
    Sales and marketing (1)(2)     236,702       261,382       472,025       514,783  
    Research and development (1)     160,401       182,785       312,376       356,744  
    General and administrative (1)     49,529       59,828       97,032       113,504  
    Total operating expenses     446,632       503,995       881,433       985,031  
    Income from operations     37,045       65,438       31,339       92,688  
    Other income (expense), net     2,096       (355 )     (3,179 )     9,218  
    Income before provision for income taxes     39,141       65,083       28,160       101,906  
    Provision for income taxes     6,346       8,656       11,218       15,553  
    Net income   $ 32,795     $ 56,427     $ 16,942     $ 86,353  
    Net income per share attributable to Class A common stockholders, basic   $ 0.13     $ 0.21     $ 0.07     $ 0.32  
    Net income per share attributable to Class A common stockholders, diluted   $ 0.12     $ 0.19     $ 0.09     $ 0.30  
    Weighted average shares used in computing net income per share attributable to Class A common stockholders, basic     243,853       267,138       242,667       266,842  
    Weighted average shares used in computing net income per share attributable to Class A common stockholders, diluted     298,540       293,351       294,851       291,086  

    ____________________________
    (1) Includes the following stock-based compensation expense:

        Three Months Ended
    January 31,    		   Six Months Ended
    January 31,
        2024   2025   2024   2025
        (in thousands)
    Product cost of revenue   $ 1,697     $ 812     $ 3,625     $ 2,024  
    Support, entitlements and other services cost of revenue     7,183       7,325       14,299       14,145  
    Sales and marketing     20,738       21,397       42,209       42,045  
    Research and development     40,541       46,765       78,945       90,327  
    General and administrative     15,810       17,129       30,889       33,636  
    Total stock-based compensation expense   $ 85,969     $ 93,428     $ 169,967     $ 182,177  

    ____________________________
    (2) Includes the following amortization of intangible assets:

        Three Months Ended
    January 31,    		   Six Months Ended
    January 31,
        2024   2025   2024   2025
        (in thousands)
    Product cost of revenue   $ 749     $ 767     $ 1,860     $ 1,534  
    Sales and marketing     82       88       119       176  
    Total amortization of intangible assets   $ 831     $ 855     $ 1,979     $ 1,710  
    NUTANIX, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
     
        Six Months Ended
    January 31,
        2024   2025
        (in thousands)
    Cash flows from operating activities:            
    Net income   $ 16,942     $ 86,353  
    Adjustments to reconcile net income to net cash provided by operating activities:            
    Depreciation and amortization     36,389       36,427  
    Stock-based compensation     169,967       182,177  
    Amortization of debt discount and issuance costs     22,300       1,185  
    Inducement expense from partial repurchase of the 2027 Notes     —       11,347  
    Operating lease cost, net of accretion     16,046       13,962  
    Non-cash interest expense     10,064       —  
    Other     (8,859 )     (2,130 )
    Changes in operating assets and liabilities:            
    Accounts receivable, net     (19,662 )     (72,745 )
    Deferred commissions     4,830       20,577  
    Prepaid expenses and other assets     40,575       (5,833 )
    Accounts payable     8,695       (334 )
    Accrued compensation and benefits     34,158       7,792  
    Accrued expenses and other liabilities     (86,009 )     (1,680 )
    Operating leases, net     (14,884 )     (15,754 )
    Deferred revenue     101,329       122,077  
        Net cash provided by operating activities     331,881       383,421  
    Cash flows from investing activities:            
    Maturities of investments     429,219       162,139  
    Purchases of investments     (455,254 )     (493,156 )
    Payments for acquisitions, net of cash acquired     (4,500 )     —  
    Purchases of property and equipment     (36,784 )     (44,438 )
        Net cash used in investing activities     (67,319 )     (375,455 )
    Cash flows from financing activities:            
    Proceeds from sales of shares through employee equity incentive plans     15,153       29,300  
    Taxes paid related to net share settlement of equity awards     (53,180 )     (148,194 )
    Proceeds from the issuance of convertible notes, net of issuance costs     —       848,010  
    Payment of third-party debt issuance costs     —       (2,771 )
    Partial repurchase of the 2027 Notes     —       (95,453 )
    Repurchases of common stock     (59,192 )     (220,100 )
    Payment of finance lease obligations     (1,758 )     (1,945 )
        Net cash (used in) provided by financing activities     (98,977 )     408,847  
    Net increase in cash, cash equivalents and restricted cash   $ 165,585     $ 416,813  
    Cash, cash equivalents and restricted cash—beginning of period     515,771       655,662  
    Cash, cash equivalents and restricted cash—end of period   $ 681,356     $ 1,072,475  
    Restricted cash(1)     2,110       314  
    Cash and cash equivalents—end of period   $ 679,246     $ 1,072,161  
    Supplemental disclosures of cash flow information:            
    Cash paid for income taxes   $ 14,168     $ 19,283  
    Supplemental disclosures of non-cash investing and financing information:            
    Purchases of property and equipment included in accounts payable and accrued and other liabilities   $ 1,648     $ 1,601  
    Unpaid taxes related to net share settlement of equity awards included in accrued expenses and other liabilities   $ —     $ 11,460  

    ____________________________
    (1) Included within other assets—non-current in the condensed consolidated balance sheets.

    Reconciliation of Revenue to Billings
    (Unaudited)
     
        Three Months Ended
    January 31,    		   Six Months Ended
    January 31,
        2024   2025   2024   2025
        (in thousands)
    Total revenue   $ 565,233     $ 654,721     $ 1,076,287     $ 1,245,677  
    Change in deferred revenue     51,250       121,637       101,329       122,077  
    Total billings   $ 616,483     $ 776,358     $ 1,177,616     $ 1,367,754  
    Disaggregation of Revenue and Billings
    (Unaudited)
     
        Three Months Ended
    January 31,    		   Six Months Ended
    January 31,
        2024   2025   2024   2025
        (in thousands)
    Disaggregation of revenue:                        
    Subscription revenue   $ 531,983     $ 624,418     $ 1,011,461     $ 1,185,114  
    Professional services revenue     25,008       28,030       47,843       55,315  
    Other non-subscription product revenue     8,242       2,273       16,983       5,248  
    Total revenue   $ 565,233     $ 654,721     $ 1,076,287     $ 1,245,677  
    Disaggregation of billings:                        
    Subscription billings   $ 572,759     $ 733,737     $ 1,101,673     $ 1,298,029  
    Professional services billings     35,482       40,348       58,960       64,477  
    Other non-subscription product billings     8,242       2,273       16,983       5,248  
    Total billings   $ 616,483     $ 776,358     $ 1,177,616     $ 1,367,754  


    Subscription revenue —     Subscription revenue includes any performance obligation which has a defined term, and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based software-as-a-service, or SaaS, offerings.

    • Ratable — We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions.
    • Upfront — Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer.

    Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

    Other non-subscription product revenue — Other non-subscription product revenue includes approximately $7.0 million and $15.2 million of non-portable software revenue for the three and six months ended January 31, 2024, respectively, $0.5 million and $2.3 million of non-portable software revenue for the three and six months ended January 31, 2025, respectively, $1.2 million and $1.8 million of hardware revenue for the three and six months ended January 31, 2024, respectively, and $1.8 million and $2.9 million of hardware revenue for the three and six months ended January 31, 2025, respectively.

    • Non-portable software revenue — Non-portable software revenue includes sales of our platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and can be used over the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.
    • Hardware revenue — In the infrequent transactions where the hardware appliance is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.
    Annual Recurring Revenue
    (Unaudited)
     
        Three Months Ended
    January 31,
    		   Six Months Ended
    January 31,
        2024
    		   2025
    		   2024
    		   2025
        (in thousands)
    Annual Recurring Revenue (ARR)   $ 1,737,364     $ 2,059,506     $ 1,737,364     $ 2,059,506  
    Reconciliation of GAAP to Non-GAAP Profit Measures
    (Unaudited)
     
        GAAP   Non-GAAP Adjustments   Non-GAAP
        Three Months Ended January 31, 2025   (1)   (2)   (3)   (4)   (5)   (6)   (7)   Three Months Ended January 31, 2025
        (in thousands, except percentages and per share data)
    Gross profit   $ 569,433     $ 8,137     $ 767     $ —     $ —     $ —     $ —     $ —     $ 578,337  
    Gross margin     87.0 %     1.2 %     0.1 %     —       —       —       —       —       88.3 %
    Operating expenses:                                                      
    Sales and marketing     261,382       (21,397 )     (88 )     —       —       —       —       —       239,897  
    Research and development     182,785       (46,765 )     —       —       —       —       —       —       136,020  
    General and administrative     59,828       (17,129 )     —       (1,568 )     —       —       —       —       41,131  
    Total operating expenses     503,995       (85,291 )     (88 )     (1,568 )     —       —       —       —       417,048  
    Income from operations     65,438       93,428       855       1,568       —       —       —       —       161,289  
    Operating margin     10.0 %     14.3 %     0.1 %     0.2 %     —       —       —       —       24.6 %
    Net income   $ 56,427     $ 93,428     $ 855     $ 1,568     $ (20 )   $ 1,674     $ 11,347     $ (151 )   $ 165,128  
    Weighted shares outstanding, basic     267,138                                                 267,138  
    Weighted shares outstanding, diluted (8)     293,351                                                 293,351  
    Net income per share, basic   $ 0.21     $ 0.35     $ –     $ 0.01     $ –     $ 0.01     $ 0.04     $ –     $ 0.62  
    Net income per share, diluted (9)   $ 0.19                                               $ 0.56  

    ____________________________
    (1) Stock-based compensation expense
    (2) Amortization of intangible assets
    (3) Legal fees
    (4) Other
    (5) Amortization of debt issuance costs and interest expense related to convertible senior notes
    (6) Inducement expense related to partial repurchase of the 2027 Notes
    (7) Income tax effect primarily related to stock-based compensation expense
    (8) Includes 26,214 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
    (9) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $691 of interest expense related to the convertible senior notes

        GAAP   Non-GAAP Adjustments   Non-GAAP
        Six Months Ended January 31, 2025   (1)   (2)   (3)   (4)   (5)   (6)   (7)   Six Months Ended January 31, 2025
        (in thousands, except percentages and per share data)
    Gross profit   $ 1,077,719     $ 16,169     $ 1,534     $ —     $ —     $ —     $ —     $ —     $ 1,095,422  
    Gross margin     86.5 %     1.3 %     0.1 %     —       —       —       —       —       87.9 %
    Operating expenses:                                                      
    Sales and marketing     514,783       (42,045 )     (176 )     —       —       —       —       —       472,562  
    Research and development     356,744       (90,327 )     —       —       —       —       —       —       266,417  
    General and administrative     113,504       (33,636 )     —       (2,935 )     —       —       —       —       76,933  
    Total operating expenses     985,031       (166,008 )     (176 )     (2,935 )     —       —       —       —       815,912  
    Income from operations     92,688       182,177       1,710       2,935       —       —       —       —       279,510  
    Operating margin     7.4 %     14.7 %     0.1 %     0.2 %     —       —       —       —       22.4 %
    Net income   $ 86,353     $ 182,177     $ 1,710     $ 2,935     $ (130 )   $ 11,347     $ 2,419     $ 90     $ 286,901  
    Weighted shares outstanding, basic     266,842                                                 266,842  
    Weighted shares outstanding, diluted (8)     291,086                                                 291,086  
    Net income per share, basic   $ 0.32     $ 0.69     $ 0.01     $ 0.01     $ –     $ 0.04     $ 0.01     $ –     $ 1.08  
    Net income per share, diluted (9)   $ 0.30                                               $ 0.99  

    ____________________________
    (1) Stock-based compensation expense
    (2) Amortization of intangible assets
    (3) Legal fees
    (4) Other
    (5) Inducement expense related to partial repurchase of the 2027 Notes
    (6) Amortization of debt issuance costs and interest expense related to convertible senior notes
    (7) Income tax effect primarily related to stock-based compensation expense
    (8) Includes 24,243 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
    (9) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $975 of interest expense related to the convertible senior notes

        GAAP
    		   Non-GAAP Adjustments   Non-GAAP
        Three Months Ended January 31, 2024   (1)   (2)   (3)   (4)   (5)   (6)   Three Months Ended January 31, 2024
        (in thousands, except percentages and per share data)
    Gross profit   $ 483,677     $ 8,880     $ 749     $ —     $ —     $ —     $ —     $ 493,306  
    Gross margin     85.6 %     1.6 %     0.1 %     —       —       —       —       87.3 %
    Operating expenses:                                                
    Sales and marketing     236,702       (20,738 )     (82 )     194       —       —       —       216,076  
    Research and development     160,401       (40,541 )     —       —       —       —       —       119,860  
    General and administrative     49,529       (15,810 )     —       —       (227 )     —       —       33,492  
    Total operating expenses     446,632       (77,089 )     (82 )     194       (227 )     —       —       369,428  
    Income from operations     37,045       85,969       831       (194 )     227       —       —       123,878  
    Operating margin     6.6 %     15.2 %     0.1 %     —       —       —       —       21.9 %
    Net income   $ 32,795     $ 85,969     $ 831     $ (194 )   $ 117     $ 16,651     $ 177     $ 136,346  
    Weighted shares outstanding, basic     243,853                                           243,853  
    Weighted shares outstanding, diluted (7)     298,540                                           298,540  
    Net income per share, basic   $ 0.13     $ 0.36     $ –     $ –     $ –     $ 0.07     $ –     $ 0.56  
    Net income per share, diluted (8)   $ 0.12                                         $ 0.46  

    ____________________________
    (1) Stock-based compensation expense
    (2) Amortization of intangible assets
    (3) Restructuring charges (reversals)
    (4) Other
    (5) Amortization of debt discount and issuance costs and interest expense related to convertible senior notes
    (6) Income tax effect primarily related to stock-based compensation expense
    (7) Includes 54,687 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
    (8) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $4,271 of interest expense related to the convertible senior notes

        GAAP   Non-GAAP Adjustments   Non-GAAP
        Six Months Ended January 31, 2024   (1)   (2)   (3)   (4)   (5)   (6)   Six Months Ended January 31, 2024
        (in thousands, except percentages and per share data)
    Gross profit   $ 912,772     $ 17,924     $ 1,860     $ —     $ —     $ —     $ —     $ 932,556  
    Gross margin     84.8 %     1.6 %     0.2 %     —       —       —       —       86.6 %
    Operating expenses:                                                
    Sales and marketing     472,025       (42,209 )     (119 )     194       —       —       —       429,891  
    Research and development     312,376       (78,945 )     —       —       —       —       —       233,431  
    General and administrative     97,032       (30,889 )     —       —       (273 )     —       —       65,870  
    Total operating expenses     881,433       (152,043 )     (119 )     194       (273 )     —       —       729,192  
    Income from operations     31,339       169,967       1,979       (194 )     273       —       —       203,364  
    Operating margin     2.9 %     15.8 %     0.2 %     —       —       —       —       18.9 %
    Net income   $ 16,942     $ 169,967     $ 1,979     $ (194 )   $ 1,083     $ 32,998     $ 451     $ 223,226  
    Weighted shares outstanding, basic     242,667                                           242,667  
    Weighted shares outstanding, diluted(7)     294,851                                           294,851  
    Net income per share, basic   $ 0.07     $ 0.70     $ 0.01     $ –     $ –     $ 0.14     $ –     $ 0.92  
    Net income per share, diluted(8)   $ 0.09                                         $ 0.76  

    ____________________________
    (1) Stock-based compensation expense
    (2) Amortization of intangible assets
    (3) Restructuring charges (reversals)
    (4) Other
    (5) Amortization of debt discount and issuance costs and interest expense related to convertible senior notes
    (6) Income tax effect primarily related to stock-based compensation expense
    (7) Includes 52,184 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
    (8) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $8,451 of interest expense related to the convertible senior notes

    Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow
    (Unaudited)
     
        Three Months Ended
    January 31,    		   Six Months Ended
    January 31,
        2024   2025   2024   2025
        (in thousands)  
    Net cash provided by operating activities   $ 186,408     $ 221,670     $ 331,881     $ 383,421  
    Purchases of property and equipment     (23,764 )     (34,607 )     (36,784 )     (44,438 )
    Free cash flow   $ 162,644     $ 187,063     $ 295,097     $ 338,983  

    The MIL Network –

  • MIL-OSI: Ambarella, Inc. Announces Fourth Quarter and Fiscal Year 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    SANTA CLARA, Calif., Feb. 26, 2025 (GLOBE NEWSWIRE) — Ambarella, Inc. (NASDAQ: AMBA), an edge AI semiconductor company, today announced fourth quarter and full year fiscal 2025 financial results for the period ended January 31, 2025.

    • Revenue for the fourth quarter of fiscal 2025 was $84.0 million, up 62.8% from $51.6 million in the same period in fiscal 2024. For the fiscal year ended January 31, 2025, revenue was $284.9 million, up 25.8% from $226.5 million for the fiscal year ended January 31, 2024.
    • Gross margin under U.S. generally accepted accounting principles (GAAP) for the fourth quarter of fiscal 2025 was 60.0%, compared with 59.8% for the same period in fiscal 2024. For the fiscal year ended January 31, 2025, GAAP gross margin was 60.5%, compared with 60.4% for the fiscal year ended January 31, 2024.
    • GAAP net loss for the fourth quarter of fiscal 2025 was $20.2 million, or loss per diluted ordinary share of $0.48, compared with a GAAP net loss of $60.6 million, or loss per diluted ordinary share of $1.50, for the same period in fiscal 2024. GAAP net loss for the fiscal year ended January 31, 2025 was $117.1 million, or loss per diluted ordinary share of $2.84. This compares with GAAP net loss of $169.4 million, or loss per diluted ordinary share of $4.25, for the fiscal year ended January 31, 2024.

    Financial results on a non-GAAP basis for the fourth quarter and full year fiscal 2025 are as follows:

    • Gross margin on a non-GAAP basis for the fourth quarter of fiscal 2025 was 62.0%, compared with 62.5% for the same period in fiscal 2024. For the fiscal year ended January 31, 2025, non-GAAP gross margin was 62.7%, compared with 63.3% for the fiscal year ended January 31, 2024.
    • Non-GAAP net profit for the fourth quarter of fiscal 2025 was $4.8 million, or earnings per diluted ordinary share of $0.11. This compares with non-GAAP net loss of $9.8 million, or loss per diluted ordinary share of $0.24, for the same period in fiscal 2024. Non-GAAP net loss for the fiscal year ended January 31, 2025 was $6.8 million, or loss per diluted ordinary share of $0.16. This compares with non-GAAP net loss of $33.1 million, or loss per diluted ordinary share of $0.83, for the fiscal year ended January 31, 2024.

    Based on information available as of today, Ambarella is offering the following guidance for the first quarter of fiscal year 2026, ending April 30, 2025:

    • Revenue is expected to be between $81.0 million and $87.0 million
    • Gross margin on a non-GAAP basis is expected to be between 61.0% and 62.5%
    • Non-GAAP operating expenses are expected to be between $50.0 million and $53.0 million

    Ambarella reports gross margin, net income (loss) and earnings (losses) per share in accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP financial information excludes the impact of stock-based compensation, acquisition-related costs and restructuring expense adjusted for the associated tax impact, which includes the effect of any benefits or shortfalls recognized. Non-GAAP financial information also excludes the impact of the recognition or release of a valuation allowance on certain deferred tax assets. A reconciliation of the GAAP to non-GAAP gross margin, net income (loss) and earnings (losses) per share for the periods presented, as well as a description of the items excluded from the non-GAAP calculations, is included in the financial statements portion of this press release.

    Total cash, cash equivalents and marketable debt securities on hand at the end of the fourth quarter of fiscal 2025 was $250.3 million, compared with $226.5 million at the end of the prior quarter and $219.9 million at the end of the same quarter a year ago.

    “We finished fiscal 2025 with strong results and are starting the new year with positive momentum. We exited the year with more than 70% of our total revenue from edge AI, representing both a quarterly and annual record. Cumulatively, we have shipped about 30 million edge AI processors, with each SoC integrating our proprietary deep learning AI accelerator,” said Fermi Wang, President & CEO. “In fiscal 2026, we anticipate mid to high teens revenue growth, led by our 5nm products, including the ongoing ramp in the CV5 family and now the CV7 family, which generated production revenue for the first time in Q4. Together with a focus on efficient operations, we intend to continue to drive positive operating leverage.”

    Quarterly Conference Call

    Ambarella plans to hold a conference call at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time today with Fermi Wang, President and Chief Executive Officer, and John Young, Chief Financial Officer, to discuss the fourth quarter of fiscal year 2025 results. A live and archived webcast of the call will be available on Ambarella’s website at http://www.ambarella.com/ for up to 30 days after the call.

    About Ambarella

    Ambarella’s products are used in a wide variety of human vision and edge AI applications, including video security, advanced driver assistance systems (ADAS), electronic mirror, drive recorder, driver/cabin monitoring, autonomous driving and robotics applications. Ambarella’s low-power systems-on-chip (SoCs) offer high-resolution video compression, advanced image and radar processing, and powerful deep neural network processing to enable intelligent perception, fusion and planning. For more information, please visit www.ambarella.com.

    “Safe harbor” statement under the Private Securities Litigation Reform Act of 1995

    This press release contains forward-looking statements that are not historical facts and often can be identified by terms such as “outlook,” “projected,” “intends,” “will,” “estimates,” “anticipates,” “expects,” “believes,” “could,” “should,” or similar expressions, including the guidance for the first quarter of fiscal year 2026 ending April 30, 2025, and the comments of our CEO relating to our expectation of future revenue growth, customer demand and the growth potential for our edge AI inference products, including our CV5 and CV7 families of products, and our ability to generate positive operating leverage in future periods. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. Our actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of our future performance.

    The risks and uncertainties referred to above include, but are not limited to, global economic and political conditions; changes in government policies, including possible trade tariffs and restrictions; revenue being generated from new customers or design wins, neither of which is assured; the commercial success of our customers’ products; our customers’ ability to manage their inventory requirements; our growth strategy; our ability to anticipate future market demands and future needs of our customers, particularly for AI inference applications; our ability to introduce, and to generate revenue from, new and enhanced solutions; our ability to develop, and to generate revenue from, new advanced technologies, such as computer vision, AI functionality and advanced networks, including vision-language models and GenAI; our ability to retain and expand customer relationships and to achieve design wins; the expansion of our current markets and our ability to successfully enter new markets, such as the OEM automotive and robotics markets; anticipated trends and challenges, including competition, in the markets in which we operate; risks associated with global health conditions and associated risk mitigation measures; our ability to effectively manage growth; our ability to retain key employees; and the potential for intellectual property disputes or other litigation.

    Further information on these and other factors that could affect our financial results is included in the company’s Annual Report on Form 10-K for our 2024 fiscal year, which is on file with the Securities and Exchange Commission. Additional information will also set forth in the company’s quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings the company makes with the Securities and Exchange Commission from time to time, copies of which may be obtained by visiting the Investor Relations portion of our web site at www.ambarella.com or the SEC’s web site at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. The results we report in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 could differ from the preliminary results announced in this press release.

    Ambarella assumes no obligation and does not intend to update the forward-looking statements made in this press release, except as required by law.

    Non-GAAP Financial Measures

    The company has provided in this release non-GAAP financial information, including non-GAAP gross margin, net income (loss), and earnings (losses) per share, as a supplement to the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles (“GAAP”). Management uses these non-GAAP financial measures internally in analyzing the company’s financial results to assess operational performance and liquidity. The company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning, forecasting and analyzing future periods. Further, the company believes these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key financial metrics that the company uses in making operating decisions and because the company believes that investors and analysts use them to help assess the health of its business and for comparison to other companies. Non-GAAP results are presented for supplemental informational purposes only for understanding the company’s operating results. The non-GAAP information should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP measures used by other companies.

    With respect to its financial results for the fourth quarter of fiscal year 2025, the company has provided below reconciliations of its non-GAAP financial measures to its most directly comparable GAAP financial measures. With respect to the company’s expectations for the first quarter of fiscal year 2026, a reconciliation of non-GAAP gross margin and non-GAAP operating expenses guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges excluded from these non-GAAP measures. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

    AMBARELLA, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except share and per share data)
    (unaudited)
                     
        Three Months Ended January 31,   Twelve Months Ended January 31,
          2025       2024       2025       2024  
             
    Revenue   $ 84,015     $ 51,616     $ 284,865     $ 226,474  
                     
    Cost of revenue     33,634       20,763       112,535       89,657  
    Gross profit     50,381       30,853       172,330       136,817  
                     
    Operating expenses:                
    Research and development     56,823       51,992       226,109       215,052  
    Selling, general and administrative     18,911       20,575       72,816       76,325  
                     
    Total operating expenses     75,734       72,567       298,925       291,377  
                     
    Loss from operations     (25,353 )     (41,714 )     (126,595 )     (154,560 )
                     
    Other income, net     2,360       2,107       8,867       6,030  
                     
    Loss before income taxes     (22,993 )     (39,607 )     (117,728 )     (148,530 )
                     
    Provision (benefit) for income taxes     (2,759 )     21,000       (602 )     20,887  
                     
    Net loss   $ (20,234 )   $ (60,607 )   $ (117,126 )   $ (169,417 )
                     
    Net loss per share attributable to ordinary shareholders:              
    Basic   $ (0.48 )   $ (1.50 )   $ (2.84 )   $ (4.25 )
    Diluted   $ (0.48 )   $ (1.50 )   $ (2.84 )   $ (4.25 )
    Weighted-average shares used to compute net loss per share              
    attributable to ordinary shareholders:                
    Basic     41,828,944       40,384,743       41,303,287       39,878,872  
    Diluted     41,828,944       40,384,743       41,303,287       39,878,872  
                     

    The following tables present details of stock-based compensation, acquisition-related costs and restructuring expense included in each functional line item in the consolidated statements of operations above:

      Three Months Ended January 31,   Twelve Months Ended January 31,
        2025       2024       2025       2024  
      (unaudited, in thousands)
    Stock-based compensation:              
    Cost of revenue $ 931     $ 647     $ 3,270     $ 3,341  
    Research and development   18,372       17,950       73,025       72,759  
    Selling, general and administrative   8,245       9,923       31,748       35,216  
                   
    Total stock-based compensation $ 27,548     $ 28,520     $ 108,043     $ 111,316  
      Three Months Ended January 31,   Twelve Months Ended January 31,
        2025       2024       2025       2024  
      (unaudited, in thousands)
    Acquisition-related costs:              
    Cost of revenue $ 757     $ 757     $ 3,028     $ 3,028  
    Research and development   —       —       —       —  
    Selling, general and administrative   456       520       2,016       2,080  
                   
    Total acquisition-related costs $ 1,213     $ 1,277     $ 5,044     $ 5,108  
      Three Months Ended January 31,   Twelve Months Ended January 31,
        2025       2024       2025       2024  
      (unaudited, in thousands)
    Restructuring expense:              
    Cost of revenue $ —     $ —     $ —     $ 66  
    Research and development   —       36       —       708  
    Selling, general and administrative   —       68       —       182  
                   
    Total restructuring expense $ —     $ 104     $ —     $ 956  
                   

    The difference between GAAP and non-GAAP gross margin was 2.0% and 2.7%, or $1.7 million and $1.4 million, for the three months ended January 31, 2025 and 2024, respectively. The difference between GAAP and non-GAAP gross margin was 2.2% and 2.9%, or $6.3 million and $6.4 million, for the fiscal years ended January 31, 2025 and 2024, respectively. The differences were due to the effect of stock-based compensation, amortization of acquisition-related costs and restructuring expense.

    AMBARELLA, INC.
    RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS (LOSSES) PER SHARE
    (in thousands, except share and per share data)
                   
      Three Months Ended January 31,   Twelve Months Ended January 31,
        2025       2024       2025       2024  
      (unaudited)
    GAAP net loss $ (20,234 )   $ (60,607 )   $ (117,126 )   $ (169,417 )
                   
    Non-GAAP adjustments:              
    Stock-based compensation expense   27,548       28,520       108,043       111,316  
    Acquisition-related costs   1,213       1,277       5,044       5,108  
    Restructuring expense   —       104       —       956  
    Income tax effect   (3,760 )     20,881       (2,744 )     18,971  
    Non-GAAP net income (loss) $ 4,767     $ (9,825 )   $ (6,783 )   $ (33,066 )
                   
    GAAP – diluted weighted average shares   41,828,944       40,384,743       41,303,287       39,878,872  
    Non-GAAP – diluted weighted average shares   42,533,654       40,384,743       41,303,287       39,878,872  
                   
    GAAP – diluted net loss per share $ (0.48 )   $ (1.50 )   $ (2.84 )   $ (4.25 )
    Non-GAAP adjustments:              
    Stock-based compensation expense   0.66       0.71       2.62       2.79  
    Acquisition-related costs   0.03       0.03       0.12       0.13  
    Restructuring expense   —       —       —       0.02  
    Income tax effect   (0.09 )     0.52       (0.06 )     0.48  
    Effect of Non-GAAP – diluted weighted average shares   (0.01 )     —       —       —  
    Non-GAAP – diluted net income (loss) per share $ 0.11     $ (0.24 )   $ (0.16 )   $ (0.83 )
                   
    AMBARELLA, INC.
    CONSOLIDATED BALANCE SHEETS
    (unaudited, in thousands)
           
      January 31,   January 31,
        2025       2024  
           
    ASSETS      
    Current assets:      
    Cash and cash equivalents $ 144,622     $ 144,914  
    Marketable debt securities   105,643       75,013  
    Accounts receivable, net   29,767       24,950  
    Inventories   34,428       29,043  
    Restricted cash   7       7  
    Prepaid expenses and other current assets   6,084       6,230  
    Total current assets   320,551       280,157  
           
    Property and equipment, net   9,084       10,439  
    Intangible assets, net   47,279       55,136  
    Operating lease right-of-use assets, net   5,188       5,250  
    Goodwill   303,625       303,625  
    Other non-current assets   3,241       3,048  
           
    Total assets $ 688,968     $ 657,655  
           
    LIABILITIES AND SHAREHOLDERS’ EQUITY      
    Current liabilities:      
    Accounts payable   21,775       28,503  
    Accrued and other current liabilities   80,781       48,598  
    Operating lease liabilities, current   2,829       3,443  
    Income taxes payable   1,383       1,541  
    Deferred revenue, current   14,226       894  
    Total current liabilities   120,994       82,979  
           
    Operating lease liabilities, non-current   2,436       1,896  
    Other long-term liabilities   4,126       12,909  
           
    Total liabilities   127,556       97,784  
           
    Shareholders’ equity:      
    Preference shares   —       —  
    Ordinary shares   19       18  
    Additional paid-in capital   813,683       694,967  
    Accumulated other comprehensive loss   (233 )     (183 )
    Accumulated deficit   (252,057 )     (134,931 )
    Total shareholders’ equity   561,412       559,871  
           
    Total liabilities and shareholders’ equity $ 688,968     $ 657,655  

    Contact:

    Louis Gerhardy
    408.636.2310
    lgerhardy@ambarella.com

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

    Total Revenue up 4% & Contribution ex-TAC(1)up 9% in Fourth Quarter

    Contribution ex-TAC(1)from CTV Grows 23% in Fourth Quarter

    Adjusted EBITDA Margin(2)of 42% in Fourth Quarter

    NEW YORK, Feb. 26, 2025 (GLOBE NEWSWIRE) —  Magnite (NASDAQ: MGNI), the world’s largest independent sell-side advertising company, today reported its results of operations for the fourth quarter and year ended December 31, 2024.

    Recent Highlights:

    • Revenue of $194.0 million for Q4 2024, up 4% from Q4 2023
    • Contribution ex-TAC(1) of $180.2 million for Q4 2024, an increase of 9% from Q4 2023
    • Contribution ex-TAC(1) attributable to CTV for Q4 2024 of $77.9 million, which exceeded guidance of $75 to $77 million, and was up 23% year-over-year
    • Contribution ex-TAC(1) attributable to DV+ for Q4 2024 of $102.3 million, an increase of 1% year-over-year
    • Net income for Q4 2024 of $36.4 million, or $0.24 per diluted share, compared to net income of $30.9 million, or $0.16 per diluted share for Q4 2023
    • Adjusted EBITDA(1) of $76.5 million in Q4 2024 representing a 42% Adjusted EBITDA margin(2), compared to Adjusted EBITDA(1) of $70.4 million for Q4 2023
    • Non-GAAP diluted earnings per share(1) of $0.34 for Q4 2024, compared to non-GAAP diluted earnings per share(1) of $0.29 for Q4 2023
    • Operating cash flow(3) in Q4 2024 of $64.4 million
    • Contribution ex-TAC(1) attributable to CTV for the full-year 2024 of $260.2 million, an increase of 19% year-over-year, representing 43% of total Contribution ex-TAC(1)
    • Adjusted EBITDA(1) for the full-year 2024 of $196.9 million, an increase of 15% from the full-year 2023
    • Ended 2024 with $483.2 million in cash and cash equivalents

    Expectations:

    • Total Contribution ex-TAC(1) for Q1 2025 to be between $140 and $144 million
    • Contribution ex-TAC(1) attributable to CTV for Q1 2025 to be between $61 and $63 million
    • Contribution ex-TAC(1) attributable to DV+ for Q1 2025 to be between $79 and $81 million
    • Adjusted EBITDA operating expenses(4) for Q1 2025 to be between $111 and $113 million
    • Total Contribution ex-TAC(1) growth above 10% for the full-year 2025
    • Excluding political, total 2025 Contribution ex-TAC(1) growth in the mid-teens
    • Adjusted EBITDA margin(2) expansion of at least 100 basis points for 2025
    • Mid-teens percentage growth of Adjusted EBITDA(1) for 2025
    • High-teens to 20% growth in free cash flow(5) for 2025

    “CTV performed well above expectations based on strength from our partnerships with many of the largest industry players. Our DV+ business grew modestly in Q4 due to marketers pausing campaigns after the election, but has rebounded since the start of 2025 and resumed growth in the mid-to-high single digits. We are very encouraged with partner and agency traction to start 2025, and have also made strides to improve efficiency across our business.” said Michael G. Barrett, CEO of Magnite. “We look forward to a solid growth year in 2025, despite a mixed ad spend environment and political comps. We continue to balance top-line growth and profitability to drive free cash flow, which is reflected in our outlook for 2025. Key areas of investment will be live sports, ClearLine, agency marketplaces, curation, AI and overall platform efficiency.”

                         
    Magnite Fourth Quarter 2024 Results Summary
    (in millions, except per share amounts and percentages)
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   Change
    Favorable/
    (Unfavorable)    		   December 31,
    2024    		   December 31,
    2023    		   Change
    Favorable/
    (Unfavorable)
    Revenue $194.0    $186.9   4%   $668.2     $619.7   8%
    Gross profit $126.2    $116.9   8%   $409.3     $209.8   95%
    Contribution ex-TAC(1) $180.2    $165.3   9%   $606.9     $549.1   11%
    Net income (loss) $36.4    $30.9   18%   $22.8     ($159.2)   NM
    Adjusted EBITDA(1) $76.5    $70.4   9%   $196.9     $171.4   15%
    Adjusted EBITDA margin(2)  42%    43%   (1) ppt    32%      31%   1 ppt
    Basic earnings (loss) per share $0.26   $0.22   18%   $0.16     ($1.17)   NM
    Diluted earnings (loss) per share $0.24   $0.16   50%   $0.16     ($1.17)   NM
    Non-GAAP earnings per share(1) $0.34   $0.29   17%   $0.71     $0.54   31%
                             

    NM = Not meaningful

    Notes:
    (1)   Contribution ex-TAC, Adjusted EBITDA, and non-GAAP earnings per share are non-GAAP financial measures. Please see the discussion in the section called “Non-GAAP Financial Measures” and the reconciliations included at the end of this press release.
    (2)   Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Contribution ex-TAC.
    (3)   Operating cash flow is calculated as Adjusted EBITDA less capital expenditures.
    (4)   Adjusted EBITDA operating expenses is calculated as Contribution ex-TAC less Adjusted EBITDA.
    (5)   Free cash flow is defined as operating cash flow (Adjusted EBITDA less capital expenditures) less net interest expense.
         

    Fourth Quarter 2024 Results Conference Call and Webcast:

    The Company will host a conference call on February 26, 2025 at 1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its fourth quarter of 2024.

       
    Live conference call  
    Toll free number: (844) 875-6911 (for domestic callers)
    Direct dial number: (412) 902-6511 (for international callers)
    Passcode: Ask to join the Magnite conference call
    Simultaneous audio webcast: http://investor.magnite.com, under “Events and Presentations”
       
    Conference call replay  
    Toll free number: (877) 344-7529 (for domestic callers)
    Direct dial number: (412) 317-0088 (for international callers)
    Passcode: 1991482
    Webcast link: http://investor.magnite.com, under “Events and Presentations”

    About Magnite
    We’re Magnite (NASDAQ: MGNI), the world’s largest independent sell-side advertising platform. Publishers use our technology to monetize their content across all screens and formats, including CTV, online video, display, and audio. The world’s leading agencies and brands trust our platform to access brand-safe, high-quality ad inventory and execute billions of advertising transactions each month. Anchored in bustling New York City, sunny Los Angeles, mile-high Denver, historic London, colorful Singapore, and down under in Sydney, Magnite has offices across North America, EMEA, LATAM, and APAC.

    Forward-Looking Statements:
    This press release and management’s prepared remarks during the conference call referred to above include, and management’s answers to questions during the conference call may include, forward-looking statements, including statements based upon or relating to our expectations, assumptions, estimates, and projections. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “anticipate,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions. Forward-looking statements may include, but are not limited to, statements concerning the Company’s guidance or expectations with respect to future financial performance; acquisitions by the Company, or the anticipated benefits thereof; macroeconomic conditions or concerns related thereto; the growth of ad-supported programmatic connected television; our ability to use and collect data to provide our offerings; the scope and duration of client relationships; the fees we may charge in the future; key strategic objectives; anticipated benefits of new offerings; business mix; sales growth; benefits from supply path optimization; our ability to adapt to advancements in artificial intelligence; the development of identity solutions; client utilization of our offerings; the impact of requests for discounts, rebates or other fee concessions; our competitive differentiation; our market share and leadership position in the industry; market conditions, trends, and opportunities; certain statements regarding future operational performance measures; and other statements that are not historical facts. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and estimates and subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

    We discuss many of these risks and additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this press release and in other filings we have made and will make from time to time with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent filings. These forward-looking statements represent our estimates and assumptions only as of the date of the report in which they are included. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Without limiting the foregoing, any guidance we may provide will generally be given only in connection with quarterly and annual earnings announcements, without interim updates, and we may appear at industry conferences or make other public statements without disclosing material nonpublic information in our possession. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. Investors should read this press release and the documents that we reference in this press release and have filed or will file with the SEC completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

    Non-GAAP Financial Measures and Operational Measures:

    In addition to our GAAP results, we review certain non-GAAP financial measures to help us evaluate our business on a consistent basis, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and development and sales and marketing, and assess our operational efficiencies. These non-GAAP financial measures include Contribution ex-TAC, Adjusted EBITDA, Non-GAAP Income (Loss), and Non-GAAP Earnings (Loss) per share, each of which is discussed below.

    These non-GAAP financial measures are not intended to be considered in isolation from, as substitutes for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. You are encouraged to evaluate these adjustments, and review the reconciliation of these non-GAAP financial measures to their most comparable GAAP measures, and the reasons we consider them appropriate. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies. See “Reconciliation of Revenue to Gross Profit to Contribution ex-TAC,” “Reconciliation of net income (loss) to Adjusted EBITDA,” “Reconciliation of net income (loss) to non-GAAP income (loss),” and “Reconciliation of GAAP earnings (loss) per share to non-GAAP earnings (loss) per share” included as part of this press release.

    We do not provide a reconciliation of our non-GAAP financial expectations for Contribution ex-TAC and Adjusted EBITDA, or a forecast of the most comparable GAAP measures, because the amount and timing of many future charges that impact these measures (such as amortization of future acquired intangible assets, acquisition-related charges, foreign exchange (gain) loss, net, stock-based compensation, impairment charges, provision or benefit for income taxes, and our future revenue mix), which could be material, are variable, uncertain, or out of our control and therefore cannot be reasonably predicted without unreasonable effort, if at all. In addition, we believe such reconciliations or forecasts could imply a degree of precision that might be confusing or misleading to investors.

    Contribution ex-TAC:

    Contribution ex-TAC is calculated as gross profit plus cost of revenue, excluding traffic acquisition cost (“TAC”). Traffic acquisition cost, a component of cost of revenue, represents what we must pay sellers for the sale of advertising inventory through our platform for revenue reported on a gross basis. Contribution ex-TAC is a non-GAAP financial measure that is most comparable to gross profit. We believe Contribution ex-TAC is a useful measure in facilitating a consistent comparison against our core business without considering the impact of traffic acquisition costs related to revenue reported on a gross basis.

    Adjusted EBITDA:

    We define Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense, depreciation and amortization, amortization of acquired intangible assets, impairment charges, interest income or expense, and other cash and non-cash based income or expenses that we do not consider indicative of our core operating performance, including, but not limited to foreign exchange gains and losses, acquisition and related items, gains or losses on extinguishment of debt, other debt refinancing expenses, non-operational real estate and other expenses (income), net, and provision (benefit) for income taxes. We also track future expenses on an Adjusted EBITDA basis, and describe them as Adjusted EBITDA operating expenses, which includes total operating expenses. Total operating expenses include cost of revenue. Adjusted EBITDA operating expenses is calculated as Contribution ex-TAC less Adjusted EBITDA. We adjust Adjusted EBITDA operating expenses for the same expense items excluded in Adjusted EBITDA. We believe Adjusted EBITDA is useful to investors in evaluating our performance for the following reasons:

    • Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s performance without regard to items such as those we exclude in calculating this measure, which can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.
    • Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our performance. Adjusted EBITDA is also used as a metric for determining payment of cash incentive compensation.
    • Adjusted EBITDA provides a measure of consistency and comparability with our past performance that many investors find useful, 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.

    Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. These limitations include:

    • Stock-based compensation is a non-cash charge and will remain an element of our long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period.
    • Depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future, but Adjusted EBITDA does not reflect any cash requirements for these replacements.
    • Impairment charges are non-cash charges related to goodwill, intangible assets and/or long-lived assets.
    • Adjusted EBITDA does not reflect certain cash and non-cash charges related to acquisition and related items, such as amortization of acquired intangible assets, merger, acquisition, or restructuring related severance costs, and changes in the fair value of contingent consideration.
    • Adjusted EBITDA does not reflect cash and non-cash charges and changes in, or cash requirements for, acquisition and related items, such as certain transaction expenses.
    • Adjusted EBITDA does not reflect cash and non-cash charges related to certain financing transactions such as gains or losses on extinguishment of debt or other debt refinancing expenses.
    • Adjusted EBITDA does not reflect certain non-operational real estate and other (income) and expense, net, which consists of transactions or expenses that are typically by nature non-operating, one-time items, or unrelated to our core operations.
    • Adjusted EBITDA does not reflect changes in our working capital needs, capital expenditures, or contractual commitments.
    • Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense.
    • Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

    Our Adjusted EBITDA is influenced by fluctuations in our revenue, cost of revenue, and the timing and amounts of the cost of our operations. Adjusted EBITDA should not be considered as an alternative to net income (loss), income (loss) from operations, or any other measure of financial performance calculated and presented in accordance with GAAP.

    Non-GAAP Income (Loss) and Non-GAAP Earnings (Loss) per Share:
    We define non-GAAP earnings (loss) per share as non-GAAP income (loss) divided by non-GAAP weighted-average shares outstanding. Non-GAAP income (loss) is equal to net income (loss) excluding stock-based compensation, cash and non-cash based merger, acquisition, and restructuring costs, which consist primarily of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, and other restructuring activities, including facility closures, relocation costs, contract termination costs, and impairment costs of abandoned technology associated with restructuring activities, amortization of acquired intangible assets, gains or losses on extinguishment of debt, non-operational real estate and other expenses or income, foreign currency gains and losses, interest expense associated with Convertible Senior Notes, other debt refinance expenses, and the tax impact of these items. In periods in which we have non-GAAP income, non-GAAP weighted-average shares outstanding used to calculate non-GAAP earnings per share includes the impact of potentially dilutive shares. Potentially dilutive shares consist of stock options, restricted stock units, performance stock units, and potential shares issued under the Employee Stock Purchase Plan, each computed using the treasury stock method, and the impact of shares that would be issuable assuming conversion of all of the Convertible Senior Notes, calculated under the if-converted method. We believe non-GAAP earnings (loss) per share is useful to investors in evaluating our ongoing operational performance and our trends on a per share basis, and also facilitates comparison of our financial results on a per share basis with other companies, many of which present a similar non-GAAP measure. However, a potential limitation of our use of non-GAAP earnings (loss) per share is that other companies may define non-GAAP earnings (loss) per share differently, which may make comparison difficult. This measure may also exclude expenses that may have a material impact on our reported financial results. Non-GAAP earnings (loss) per share is a performance measure and should not be used as a measure of liquidity. Because of these limitations, we also consider the comparable GAAP measure of net income (loss).

     
    MAGNITE, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (unaudited)
     
      December 31, 2024   December 31, 2023
    ASSETS      
    Current assets:      
    Cash and cash equivalents $ 483,220     $ 326,219  
    Accounts receivable, net   1,200,046       1,176,276  
    Prepaid expenses and other current assets   19,914       20,508  
    TOTAL CURRENT ASSETS   1,703,180       1,523,003  
    Property and equipment, net   68,730       47,371  
    Right-of-use lease asset   50,329       60,549  
    Internal use software development costs, net   26,625       21,926  
    Intangible assets, net   21,309       51,011  
    Goodwill   978,217       978,217  
    Other assets, non-current   6,378       6,729  
    TOTAL ASSETS $ 2,854,768     $ 2,688,806  
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current liabilities:      
    Accounts payable and accrued expenses $ 1,466,377     $ 1,372,176  
    Lease liabilities, current   16,086       20,402  
    Debt, current   3,641       3,600  
    Other current liabilities   9,880       5,957  
    TOTAL CURRENT LIABILITIES   1,495,984       1,402,135  
    Debt, non-current, net of debt issuance costs   550,104       532,986  
    Lease liabilities, non-current   38,983       49,665  
    Other liabilities, non-current   1,479       2,337  
    TOTAL LIABILITIES   2,086,550       1,987,123  
    STOCKHOLDERS’ EQUITY      
    Common stock   2       2  
    Additional paid-in capital           1,433,809       1,387,715  
    Accumulated other comprehensive loss   (4,421 )     (2,076 )
    Accumulated deficit   (661,172 )     (683,958 )
    TOTAL STOCKHOLDERS’ EQUITY   768,218       701,683  
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,854,768     $ 2,688,806  
     
     
    MAGNITE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share amounts)
    (unaudited)
     
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Revenue $ 193,968     $ 186,932     $ 668,170     $ 619,710  
    Expenses (1)(2):              
    Cost of revenue   67,786       70,025       258,838       409,906  
    Sales and marketing   40,628       37,575       166,142       173,982  
    Technology and development   22,262       23,183       95,243       94,318  
    General and administrative   23,074       21,025       96,860       89,048  
    Merger, acquisition, and restructuring costs   —       —       —       7,465  
    Total expenses   153,750       151,808       617,083       774,719  
    Income (loss) from operations   40,218       35,124       51,087       (155,009 )
    Other expense:              
    Interest expense, net   5,433       8,100       27,032       32,369  
    Foreign exchange (gain) loss, net   (6,303 )     3,495       (5,083 )     1,953  
    (Gain) loss on extinguishment of debt   —       (8,348 )     7,706       (26,480 )
    Other income   (1,170 )     (1,287 )     (5,052 )     (5,304 )
    Total other (income) expense, net   (2,040 )     1,960       24,603       2,538  
    Income (loss) before income taxes   42,258       33,164       26,484       (157,547 )
    Provision for income taxes   5,851       2,250       3,698       1,637  
    Net income (loss) $ 36,407     $ 30,914     $ 22,786     $ (159,184 )
    Net earnings (loss) per share:              
    Basic $ 0.26     $ 0.22     $ 0.16     $ (1.17 )
    Diluted $ 0.24     $ 0.16     $ 0.16     $ (1.17 )
    Weighted average shares used to compute net earnings (loss) per share:              
    Basic   141,106       138,212       140,557       136,620  
    Diluted   152,434       143,793       146,810       136,620  
     
    (1) Stock-based compensation expense included in our expenses was as follows:
      Three Months Ended   Year Ended
    December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Cost of revenue $ 423   $ 436   $ 1,924   $ 1,809
    Sales and marketing   7,473     6,394     31,436     27,263
    Technology and development   3,617     4,624     18,210     20,542
    General and administrative   5,845     5,701     24,949     22,860
    Merger, acquisition, and restructuring costs   —     —     —     143
    Total stock-based compensation expense $ 17,358   $ 17,155   $ 76,519   $ 72,617
     
    (2) Depreciation and amortization expense included in our expenses was as follows:
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Cost of revenue $ 13,538   $ 13,901   $ 47,570   $ 211,956
    Sales and marketing   2,473     2,628     10,157     27,584
    Technology and development   88     188     460     779
    General and administrative   71     103     323     501
    Total depreciation and amortization expense $ 16,170   $ 16,820   $ 58,510   $ 240,820
     
       
    MAGNITE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (unaudited)
       
      Year Ended
      December 31, 2024   December 31, 2023
    OPERATING ACTIVITIES:      
    Net income (loss) $ 22,786     $ (159,184 )
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
    Depreciation and amortization   58,510       240,820  
    Stock-based compensation   76,519       72,617  
    (Gain) loss on extinguishment of debt   7,706       (26,480 )
    Provision for doubtful accounts   587       4,666  
    Amortization of debt discount and issuance costs   4,119       6,279  
    Non-cash lease expense   (4,772 )     (1,712 )
    Deferred income taxes   95       (2,379 )
    Unrealized foreign currency (gain) loss, net   (7,001 )     1,266  
    Other items, net   23       3,007  
    Changes in operating assets and liabilities:      
    Accounts receivable   (26,024 )     (220,102 )
    Prepaid expenses and other assets   1,980       1,004  
    Accounts payable and accrued expenses   97,380       294,677  
    Other liabilities   3,293       (112 )
    Net cash provided by operating activities   235,201       214,367  
    INVESTING ACTIVITIES:      
    Purchases of property and equipment   (32,810 )     (26,764 )
    Capitalized internal use software development costs   (14,260 )     (10,619 )
    Other investing activities   (432 )     —  
    Net cash used in investing activities   (47,502 )     (37,383 )
    FINANCING ACTIVITIES:      
    Proceeds from the Term Loan B Facility refinancing and repricing activities, net of debt discount   413,463       —  
    Repayment of the Term Loan B Facility from refinancing and repricing activities   (403,113 )     —  
    Payment for debt issuance costs   (4,547 )     —  
    Repayment of debt   (1,823 )     (3,600 )
    Repurchase of Convertible Senior Notes   —       (165,518 )
    Proceeds from exercise of stock options   572       2,166  
    Proceeds from issuance of common stock under employee stock purchase plan   3,589       3,513  
    Taxes paid related to net share settlement   (22,472 )     (11,814 )
    Purchase of treasury stock   (14,573 )     —  
    Repayment of finance leases   —       (276 )
    Payment of indemnification claims holdback   —       (2,313 )
    Net cash used in financing activities   (28,904 )     (177,842 )
    EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (1,794 )     575  
    CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   157,001       (283 )
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period   326,219       326,502  
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period $ 483,220     $ 326,219  
     
       
    MAGNITE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-(Continued)
    (In thousands)
    (unaudited)
       
      Year Ended
      December 31, 2024   December 31, 2023
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:      
    Cash paid for income taxes $ 3,870   $ 5,357
    Cash paid for interest $ 36,863   $ 37,028
    Capitalized assets financed by accounts payable and accrued expenses and other liabilities $ 6,742   $ 1,690
    Capitalized stock-based compensation $ 2,459   $ 2,012
    Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 13,628   $ 4,017
    Operating lease right-of-use assets reduction and corresponding adjustment to operating lease liabilities from lease terminations $ 4,622   $ —
    Non-cash financing activity related to Amendment No. 1 to the 2024 Credit Agreement $ 311,974   $ —
               
     
    MAGNITE, INC.
    CALCULATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
    (In thousands, except per share data)
    (unaudited)
     
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
       
    Basic and Diluted Earnings (Loss) Per Share:              
    Net income (loss) $ 36,407   $ 30,914     $ 22,786   $ (159,184 )
    Weighted-average common shares outstanding used to compute basic earnings (loss) per share   141,106     138,212       140,557     136,620  
    Basic earnings (loss) per share $ 0.26   $ 0.22     $ 0.16   $ (1.17 )
                   
    Diluted Earnings (Loss) Per Share:              
    Net income (loss) $ 36,407   $ 30,914     $ 22,786   $ (159,184 )
    Adjustments:              
    Interest expense, Convertible Senior Notes, net of tax   517     508       —     —  
    Gain on extinguishment of debt, net of tax   —     (8,151 )     —     —  
    Net income (loss) for calculation of diluted income (loss) $ 36,924   $ 23,271     $ 22,786   $ (159,184 )
                   
    Weighted-average common shares used in basic earnings (loss) per share   141,106     138,212       140,557     136,620  
    Dilutive effect of weighted-average restricted stock units   5,044     545       3,731     —  
    Dilutive effect of weighted-average common stock options   2,012     1,156       1,811     —  
    Dilutive effect of weighted-average performance stock units   1,037     —       669     —  
    Dilutive effect of weighted-average ESPP shares   25     15       42     —  
    Dilutive effect of weighted-average convertible notes   3,210     3,865       —     —  
    Weighted-average shares used to compute diluted net earnings (loss) per share   152,434     143,793       146,810     136,620  
    Diluted net earnings (loss) per share $ 0.24   $ 0.16     $ 0.16   $ (1.17 )
     
     
    MAGNITE, INC.
    RECONCILIATION OF REVENUE TO GROSS PROFIT TO CONTRIBUTION EX-TAC
    (In thousands)
    (unaudited)
     
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Revenue $ 193,968   $ 186,932   $ 668,170   $ 619,710
    Less: Cost of revenue   67,786     70,025     258,838     409,906
    Gross Profit   126,182     116,907     409,332     209,804
    Add back: Cost of revenue, excluding TAC   54,016     48,373     197,610     339,343
    Contribution ex-TAC $ 180,198   $ 165,280   $ 606,942   $ 549,147
                   
     
    MAGNITE, INC.
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
    (In thousands)
    (unaudited)
     
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Net income (loss) $ 36,407     $ 30,914     $ 22,786     $ (159,184 )
    Add back (deduct):              
    Depreciation and amortization expense, excluding amortization of acquired intangible assets   8,698       9,198       28,376       38,330  
    Amortization of acquired intangibles   7,472       7,622       30,134       202,490  
    Stock-based compensation expense   17,358       17,155       76,519       72,617  
    Merger, acquisition, and restructuring costs, excluding stock-based compensation expense   —       —       —       7,322  
    Non-operational real estate and other expense, net   1,597       20       1,579       310  
    Interest expense, net   5,433       8,100       27,032       32,369  
    Foreign exchange (gain) loss, net   (6,303 )     3,495       (5,083 )     1,953  
    (Gain) loss on extinguishment of debt   —       (8,348 )     7,706       (26,480 )
    Other debt refinancing expense   —       —       4,103       —  
    Provision for income taxes   5,851       2,250       3,698       1,637  
    Adjusted EBITDA $ 76,513     $ 70,406     $ 196,850     $ 171,364  
     
     
    MAGNITE, INC.
    RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP INCOME (LOSS)
    (In thousands)
    (unaudited)
     
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Net income (loss) $ 36,407     $ 30,914     $ 22,786     $ (159,184 )
    Add back (deduct):              
    Merger, acquisition, and restructuring costs, including amortization of acquired intangibles and excluding stock-based compensation expense   7,472       7,622       30,134       209,812  
    Stock-based compensation expense   17,358       17,155       76,519       72,617  
    Non-operational real estate and other expense, net   1,597       20       1,579       310  
    Foreign exchange (gain) loss, net   (6,303 )     3,495       (5,083 )     1,953  
    Interest expense, Convertible Senior Notes   421       508       1,686       2,620  
    (Gain) loss on extinguishment of debt   —       (8,348 )     7,706       (26,480 )
    Other debt refinancing expense   —       —       4,103       —  
    Tax effect of Non-GAAP adjustments(1)   (5,339 )     (10,218 )     (32,806 )     (23,740 )
    Non-GAAP income $ 51,613     $ 41,148     $ 106,624     $ 77,908  
     
    (1) Non-GAAP income (loss) includes the estimated tax impact from the reconciling items reconciling between net income (loss) and non-GAAP income (loss).
       
     
    MAGNITE, INC.
    RECONCILIATION OF GAAP EARNINGS (LOSS) PER SHARE TO NON-GAAP EARNINGS PER SHARE
    (In thousands, except per share amounts)
    (unaudited)
     
      Three Months Ended   Year Ended
      December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    GAAP net earnings (loss) per share (1):              
    Basic $ 0.26   $ 0.22   $ 0.16   $ (1.17 )
    Diluted $ 0.24   $ 0.16   $ 0.16   $ (1.17 )
                   
    Non-GAAP income (2) $ 51,613   $ 41,148   $ 106,624   $ 77,908  
    Non-GAAP earnings per share $ 0.34   $ 0.29   $ 0.71   $ 0.54  
                   
    Weighted-average shares used to compute basic net earnings (loss) per share   141,106     138,212     140,557     136,620  
    Dilutive effect of weighted-average common stock options, RSAs, RSUs, and PSUs   8,093     1,701     6,211     3,258  
    Dilutive effect of weighted-average ESPP shares   25     15     42     31  
    Dilutive effect of weighted-average Convertible Senior Notes   3,210     3,865     3,210     4,981  
    Non-GAAP weighted-average shares outstanding (3)   152,434     143,793     150,020     144,890  
     
    (1) Calculated as net income (loss) divided by basic and diluted weighted-average shares used to compute net income (loss) per share as included in the consolidated statement of operations.
    (2) Refer to reconciliation of net income (loss) to non-GAAP income (loss).
    (3) Non-GAAP earnings per share is computed using the same weighted-average number of shares that are used to compute GAAP net income (loss) per share in periods where there is both a non-GAAP loss and a GAAP net loss.
     
     
    MAGNITE, INC.
    CONTRIBUTION EX-TAC BY CHANNEL
    (In thousands, except percentages)
    (unaudited)
     
      Contribution ex-TAC
      Three Months Ended
      December 31, 2024   December 31, 2023
       
    Channel:              
    CTV $ 77,923   43 %   $ 63,530   38 %
    Mobile   71,660   40       71,566   44  
    Desktop   30,615   17       30,184   18  
    Total $ 180,198   100 %   $ 165,280   100 %
     
      Contribution ex-TAC
      Year Ended
      December 31, 2024   December 31, 2023
       
    Channel:              
    CTV $ 260,159   43 %   $ 218,494   40 %
    Mobile   242,018   40       226,826   41  
    Desktop   104,765   17       103,827   19  
    Total $ 606,942   100 %   $ 549,147   100 %

    The MIL Network –

  • MIL-OSI: ARKO Corp. Reports Fourth Quarter and Full Year 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    RICHMOND, Va., Feb. 26, 2025 (GLOBE NEWSWIRE) — ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company”), a Fortune 500 company and one of the largest convenience store operators in the United States, today announced financial results for the fourth quarter and the full year ended December 31, 2024.

    Fourth Quarter and Full Year 2024 Key Highlights (vs. Year-Ago Period)1,2

    • Net loss for the quarter was $2.3 million compared to net income of $1.1 million.  For the year, net income was $20.8 million compared to $34.6 million.
    • Adjusted EBITDA for the quarter was $56.8 million compared to $61.8 million.  For the year, Adjusted EBITDA was $248.9 million compared to $276.3 million. 
    • Merchandise margin rate for the quarter increased to 33.0% compared to 32.9%.  For the year, merchandise margin rate increased to 32.8% compared to 31.8%.
    • Merchandise contribution for the quarter was $134.9 million compared to $146.8 million; more than half of the merchandise contribution decline for the quarter was associated with the Company’s accretive dealerization program.  For the year, merchandise contribution was $579.6 million compared to $585.1 million.
    • Retail fuel margin for the quarter was 38.7 cents per gallon compared to 39.2 cents per gallon, resulting from macroeconomically-driven lower fuel prices and reduced price volatility. For the year, retail fuel margin increased to 39.6 cents per gallon compared to 38.8 cents per gallon.
    • Retail fuel contribution for the quarter was $100.2 million compared to $109.3 million. For the year, retail fuel contribution was $428.2 million compared to $435.3 million.

    Other Key Highlights

    • As part of the Company’s developing transformation plan, the Company converted 153 retail stores to dealer sites during the year ended December 31, 2024, including approximately 100 stores converted in the fourth quarter of 2024. The Company expects to convert a meaningful number of additional stores throughout 2025, including another approximately 100 retail stores by the end of the first quarter of 2025. The stores converted to dealer locations in 2024 are expected to produce an annualized benefit to combined wholesale segment and retail segment operating income of approximately $8.5 million. The Company now expects that, at scale, its channel optimization will yield a cumulative annualized benefit of operating income in excess of $20 million. This channel optimization is also expected to enable the Company to better focus and prioritize future investments in its remaining retail stores.
    • In 2024, the Company expanded its planned pipeline of NTI (new-to-industry) stores to eight, including two stores that opened in 2024 and an additional two stores opened in the first quarter of 2025. The Company expects to open the four remaining NTI locations over the course of 2025.
    • The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on March 21, 2025 to stockholders of record as of March 10, 2025.

    1 See Use of Non-GAAP Measures below.
    2 All figures for fuel costs, fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the Company’s wholesale fuel distribution subsidiary, GPM Petroleum LP (“GPMP”) for the cost of fuel (intercompany charges by GPMP).

    “We navigated a challenging macroeconomic environment in 2024, while advancing the development of our multi-year transformation plan,” said Arie Kotler, Chairman, President, and CEO of ARKO. “We made progress with our dealerization program by strategically refining our retail footprint, strengthening merchandising initiatives, and enhancing customer engagement through value-driven promotions for in-store merchandise and, more recently, a more aggressive value offer at the pump. Our focus on operational efficiencies and the dealerization program allowed us to manage through industry-wide headwinds while making strategic investments in high-growth areas, such as food service and other tobacco products to meet evolving customer preferences.”

    Mr. Kotler continued: “Looking ahead to 2025, we remain committed to driving sustainable long-term growth and value creation for our stakeholders. We plan to strengthen our competitiveness by continuing to invest in higher-growth categories, delivering further value to our customers and further optimizing our store portfolio. We are acutely focused on delivering innovative, value-driven solutions that enhance the customer experience while maximizing profitability and expanding revenue opportunities.”

    Fourth Quarter and Full Year 2024 Segment Highlights

    Retail

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Fuel gallons sold   258,856       279,035       1,080,990       1,122,321  
    Same store fuel gallons sold decrease (%) 1   (4.4 %)     (7.5 %)     (6.1 %)     (5.3 %)
    Fuel contribution 2 $ 100,212     $ 109,336     $ 428,216     $ 435,322  
    Fuel margin, cents per gallon 3   38.7       39.2       39.6       38.8  
    Same store fuel contribution 1,2 $ 96,830     $ 104,262     $ 403,503     $ 422,090  
    Same store merchandise sales (decrease) increase (%) 1   (4.3 %)     (2.8 %)     (5.4 %)     0.4 %
    Same store merchandise sales excluding cigarettes (decrease) increase (%) 1   (2.1 %)     (1.8 %)     (3.8 %)     2.5 %
    Merchandise revenue $ 408,826     $ 446,727     $ 1,767,345     $ 1,838,001  
    Merchandise contribution 4 $ 134,873     $ 146,773     $ 579,569     $ 585,122  
    Merchandise margin 5   33.0 %     32.9 %     32.8 %     31.8 %
    Same store merchandise contribution 1,4 $ 129,376     $ 135,532     $ 543,368     $ 560,321  
    Same store site operating expenses 1 $ 179,302     $ 181,527     $ 736,727     $ 737,158  
                           
    1 Same store is a common metric used in the convenience store industry. The Company considers a store a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. Refer to Use of Non-GAAP Measures below for discussion of this measure.  
    2 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.  
    3 Calculated as fuel contribution divided by fuel gallons sold.  
    4 Calculated as merchandise revenue less merchandise costs.  
    5 Calculated as merchandise contribution divided by merchandise revenue.  
       

    Merchandise contribution for the fourth quarter of 2024 decreased $11.9 million, or 8.1%, compared to the fourth quarter of 2023, while merchandise margin increased to 33.0% in the fourth quarter of 2024 compared to 32.9% in 2023. The decrease in merchandise contribution was due to a decrease in same store merchandise contribution of $6.2 million and a decrease of $7.7 million related to underperforming retail stores that were closed or converted to dealers, partially offset by an increase in merchandise contribution of $2.0 million from the SpeedyQ acquisition that closed in April 2024.  Merchandise contribution at same stores decreased in the fourth quarter of 2024 primarily due to lower contribution from several core destination categories and cigarettes, partially offset by higher contribution from other tobacco products.

    For the year ended December 31, 2024, merchandise contribution decreased $5.6 million, or 0.9%, compared to the year ended December 31, 2023, while merchandise margin increased to 32.8% in 2024 from 31.8% in 2023. The decrease in merchandise contribution was due to a decrease in same store merchandise contribution of $17.0 million and a decrease in merchandise contribution of $11.6 million related to underperforming retail stores that were closed or converted to dealers, partially offset by incremental merchandise contribution from recent acquisitions of $21.7 million.

    For the fourth quarter of 2024, retail fuel contribution decreased $9.1 million to $100.2 million compared to the prior year period, with a same store fuel contribution decrease of $7.4 million attributable to gallon demand declines reflecting the challenging macro-economic environment. Fuel margin of 38.7 cents per gallon was down 0.5 cents per gallon compared to the fourth quarter of 2023, resulting from lower fuel costs and reduced price volatility this year. In addition, a decrease in retail fuel contribution of $3.7 million was related to underperforming retail stores that were closed or converted to dealers, partially offset by incremental fuel contribution from the SpeedyQ acquisition of approximately $1.8 million. 

    For the year ended December 31, 2024, fuel contribution decreased $7.1 million, or 1.6%, compared to the year ended December 31, 2023, while fuel margin per gallon increased. Same store fuel margin per gallon for 2024 increased to 39.7 cents per gallon from 39.0 cents per gallon for 2023. Incremental fuel contribution from recent acquisitions of approximately $16.8 million was more than offset by a decrease in same store fuel contribution of $18.6 million. In addition, a decrease in fuel contribution of $6.1 million was related to underperforming retail stores that were closed or converted to dealers compared to 2023.

    Wholesale

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Fuel gallons sold – fuel supply locations   201,317       199,861       794,796       801,260  
    Fuel gallons sold – consignment agent locations   38,563       40,144       154,560       168,005  
    Fuel contribution 1 – fuel supply locations $ 12,004     $ 11,499     $ 47,930     $ 48,396  
    Fuel contribution 1 – consignment agent locations $ 10,270     $ 10,101     $ 42,420     $ 44,512  
    Fuel margin, cents per gallon 2 – fuel supply locations   6.0       5.8       6.0       6.0  
    Fuel margin, cents per gallon 2 – consignment agent locations   26.6       25.2       27.4       26.5  
                           
    1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.  
    2 Calculated as fuel contribution divided by fuel gallons sold.  
       

    Fuel contribution was approximately $22.3 million for the fourth quarter of 2024 compared to $21.6 million for the fourth quarter of 2023. Fuel contribution for the fourth quarter of 2024 at fuel supply locations increased by $0.5 million, and fuel contribution at consignment agent locations increased by $0.2 million, as compared to the prior year period, with fuel margin increases of 0.2 cents per gallon and 1.4 cents per gallon, respectively. For the fourth quarter of 2024, other revenues, net, increased by approximately $1.8 million, while site operating expenses increased by $0.6 million compared to the prior year period, resulting from the retail stores that were converted to dealers.

    For the year ended December 31, 2024, wholesale operating income increased $0.8 million, compared to 2023. An increase of approximately $3.4 million in other revenues, net, was partially offset by a decrease in fuel contribution of approximately $2.6 million in 2024 compared to 2023. At fuel supply locations, fuel contribution decreased by $0.5 million, and fuel margin per gallon remained consistent with 2023, primarily due to decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites, which was partially offset by incremental contribution from recent acquisitions and the retail stores converted to dealers. At consignment agent locations, fuel contribution decreased $2.1 million while fuel margin per gallon increased for 2024 compared to 2023, primarily due to incremental contribution from recent acquisitions and the retail stores converted to dealers, which was offset by lower rack-to-retail margins and decreased prompt pay discounts related to lower fuel costs.

    Fleet Fueling

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Fuel gallons sold – proprietary cardlock locations   32,888       33,285       136,104       130,995  
    Fuel gallons sold – third-party cardlock locations   3,239       3,201       12,814       9,832  
    Fuel contribution 1 – proprietary cardlock locations $ 15,823     $ 13,146     $ 62,612     $ 54,685  
    Fuel contribution 1 – third-party cardlock locations $ 509     $ 245     $ 1,677     $ 1,215  
    Fuel margin, cents per gallon 2 – proprietary cardlock locations   48.1       39.5       46.0       41.7  
    Fuel margin, cents per gallon 2 – third-party cardlock locations   15.8       7.6       13.1       12.4  
                           
    1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed fee paid to GPMP for the cost of fuel.  
    2 Calculated as fuel contribution divided by fuel gallons sold.  
       

    For the fourth quarter of 2024, fuel contribution increased by $2.9 million compared to the fourth quarter of 2023. At proprietary cardlocks, fuel contribution increased by $2.7 million, and fuel margin per gallon also increased for the fourth quarter of 2024 compared to the fourth quarter of 2023. At third-party cardlock locations, fuel contribution increased by $0.3 million, and fuel margin per gallon also increased for the fourth quarter of 2024 compared to the fourth quarter of 2023.

    For the year ended December 31, 2024, fuel contribution increased by $8.4 million compared to the year ended December 31, 2023. At proprietary cardlocks, fuel contribution increased by $7.9 million, and fuel margin per gallon also increased for the year ended December 31, 2024, compared to the year ended December 31, 2023. At third-party cardlock locations, fuel contribution increased $0.5 million, and fuel margin per gallon also increased for 2024 compared to 2023. These changes were primarily due to higher volumes and the cardlocks acquired in the Company’s acquisition of certain sites from WTG Fuels Holdings, LLC in 2023.

    Site Operating Expenses

    For the quarter ended December 31, 2024, convenience store operating expenses decreased $13.0 million, or 6.5%, compared to the prior year period primarily due to a decrease of $14.3 million from underperforming retail stores that were closed or converted to dealers and a decrease in same store operating expenses of $2.2 million, or 1.2%. The decrease in convenience store operating expenses was partially offset by incremental expenses related to the SpeedyQ acquisition that closed in April 2024.

    For the year ended December 31, 2024, convenience store operating expenses increased $11.2 million, or 1.4%, as compared to the year ended December 31, 2023, primarily due to $33.1 million of incremental expenses related to recent acquisitions. The increase in site operating expenses was partially offset by a decrease in same store operating expenses of $0.4 million, and $22.1 million of reduced expenses for underperforming retail stores that were closed or converted to dealers.

    Liquidity and Capital Expenditures

    As of December 31, 2024, the Company’s total liquidity was approximately $841 million, consisting of approximately $262 million of cash and cash equivalents and approximately $579 million of availability under lines of credit. Outstanding debt was $881 million, resulting in net debt, excluding lease related financing liabilities, of approximately $619 million. Capital expenditures were $36.1 million, and $113.9 million for the quarter and year ended December 31, 2024, respectively. 

    Quarterly Dividend and Share Repurchase Program

    The Company’s ability to return cash to its stockholders through its cash dividend program and share repurchase program is consistent with its capital allocation framework and reflects the Company’s confidence in the strength of its cash generation ability and strong financial position.

    The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on March 21, 2025 to stockholders of record as of March 10, 2025.

    There was approximately $25.7 million remaining under the share repurchase program as of December 31, 2024. 

    Company-Operated Retail Store Count and Segment Update

    The following tables present certain information regarding changes in the retail, wholesale and fleet fueling segments for the periods presented:

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
    Retail Segment 2024     2023     2024     2023  
    Number of sites at beginning of period   1,491       1,552       1,543       1,404  
    Acquired sites   —       —       21       166  
    Newly opened or reopened sites   1       —       3       4  
    Company-controlled sites converted to                      
    consignment or fuel supply locations, net   (102 )     (3 )     (153 )     (16 )
    Sites closed, divested or converted to rentals   (1 )     (6 )     (25 )     (15 )
    Number of sites at end of period   1,389       1,543       1,389       1,543  
                                   
      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
    Wholesale Segment 1 2024     2023     2024     2023  
    Number of sites at beginning of period   1,832       1,825       1,825       1,674  
    Acquired sites   —       —       —       190  
    Newly opened or reopened sites 2   9       25       39       83  
    Consignment or fuel supply locations converted                      
    from Company-controlled or fleet fueling sites, net   102       2       153       15  
    Closed or divested sites   (21 )     (27 )     (95 )     (137 )
    Number of sites at end of period   1,922       1,825       1,922       1,825  
                           
    1 Excludes bulk and spot purchasers.  
    2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.  
       
      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
    Fleet Fueling Segment 2024     2023     2024     2023  
    Number of sites at beginning of period   281       295       298       183  
    Acquired sites   —       —       —       111  
    Newly opened or reopened sites   —       2       1       6  
    Fleet fueling locations converted                      
    from fuel supply locations, net   —       1       —       1  
    Closed or divested sites   (1 )     —       (19 )     (3 )
    Number of sites at end of period   280       298       280       298  
                                   

    First Quarter and Full Year 2025 Guidance

    The Company currently expects first quarter 2025 Adjusted EBITDA to range between $27 million and $33 million, with an assumed range of average retail fuel margin from 37.0 to 39.0 cents per gallon. The Company currently expects full year 2025 Adjusted EBITDA to range between $233 million and $253 million, with an assumed range of average retail fuel margin from 39.5 to 41.5 cents per gallon.   

    The Company is not providing guidance on net income at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with its stock price, as well as depreciation and amortization related to its capital allocation as part of its focus on accelerating organic growth.

    Conference Call and Webcast Details

    The Company will host a conference call today, February 26, 2025, to discuss these results at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the live call can dial 877-605-1792 or 201-689-8728.

    A simultaneous, live webcast will also be available on the Investor Relations section of the Company’s website at https://www.arkocorp.com/news-events/ir-calendar. The webcast will be archived for 30 days.

    About ARKO Corp.

    ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns 100% of GPM Investments, LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, our highly recognizable Family of Community Brands offers delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. We operate in four reportable segments: retail, which includes convenience stores selling merchandise and fuel products to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; fleet fueling, which includes the operation of proprietary and third-party cardlock locations, and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites; and GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites and charges a fixed fee, primarily to our fleet fueling sites. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com.

    Forward-Looking Statements

    This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, the Company’s expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by use of words such as “accretive,” “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “guidance,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; the Company’s ability to maintain the listing of its common stock and warrants on the Nasdaq Stock Market; changes in its strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which it competes; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond its control; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law.

    Use of Non-GAAP Measures

    The Company discloses certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. The Company believes that this information provides greater comparability regarding its ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”).

    The Company defines EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition and divestiture costs, share-based compensation expense, other non-cash items, and other unusual or non-recurring charges. Both EBITDA and Adjusted EBITDA are non-GAAP financial measures.

    The Company uses EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating its performance because they eliminate certain items that it does not consider indicators of its operating performance. EBITDA and Adjusted EBITDA are also used by many of its investors, securities analysts, and other interested parties in evaluating its operational and financial performance across reporting periods. The Company believes that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that it uses internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing its operating performance.

    EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income or any other financial measure presented in accordance with GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of its results as reported under GAAP. The Company strongly encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

    Because non-GAAP financial measures are not standardized, same store measures, EBITDA and Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company’s use of these non-GAAP financial measures with those used by other companies.

    Company Contact
    Jordan Mann
    ARKO Corp.
    investors@gpminvestments.com

    Investor Contact
    Sean Mansouri, CFA
    Elevate IR
    (720) 330-2829
    ARKO@elevate-ir.com

      Consolidated Statements of Operations  
      For the Three Months
    Ended December 31,    		     For the Year Ended
    December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Revenues:                      
    Fuel revenue $ 1,556,185     $ 1,759,216     $ 6,858,919     $ 7,464,372  
    Merchandise revenue   408,826       446,727       1,767,345       1,838,001  
    Other revenues, net   27,098       27,217       105,698       110,358  
    Total revenues   1,992,109       2,233,160       8,731,962       9,412,731  
    Operating expenses:                      
    Fuel costs   1,416,234       1,613,230       6,271,696       6,876,084  
    Merchandise costs   273,953       299,954       1,187,776       1,252,879  
    Site operating expenses   209,906       222,751       875,272       860,134  
    General and administrative expenses   39,690       38,102       162,920       165,294  
    Depreciation and amortization   33,989       32,648       132,414       127,597  
    Total operating expenses   1,973,772       2,206,685       8,630,078       9,281,988  
    Other expenses, net   3,962       1,168       7,858       12,729  
    Operating income   14,375       25,307       94,026       118,014  
    Interest and other financial income   4,229       2,197       30,591       20,273  
    Interest and other financial expenses   (23,942 )     (25,099 )     (97,752 )     (91,516 )
    (Loss) income before income taxes   (5,338 )     2,405       26,865       46,771  
    Income tax benefit (expense)   2,995       (1,317 )     (6,144 )     (12,166 )
    Income (loss) from equity investment   45       38       124       (39 )
    Net (loss) income $ (2,298 )   $ 1,126     $ 20,845     $ 34,566  
    Less: Net income attributable to non-controlling interests   —       48       —       197  
    Net (loss) income attributable to ARKO Corp. $ (2,298 )   $ 1,078     $ 20,845     $ 34,369  
    Series A redeemable preferred stock dividends   (1,445 )     (1,449 )     (5,750 )     (5,750 )
    Net (loss) income attributable to common shareholders $ (3,743 )   $ (371 )   $ 15,095     $ 28,619  
    Net (loss) income per share attributable to common shareholders – basic $ (0.03 )   $ (0.00 )   $ 0.13     $ 0.24  
    Net (loss) income per share attributable to common shareholders – diluted $ (0.03 )   $ (0.00 )   $ 0.13     $ 0.24  
    Weighted average shares outstanding:                      
    Basic   115,771       116,638       116,139       118,782  
    Diluted   115,771       116,638       116,949       119,605  
                                   
      Consolidated Balance Sheets  
      December 31, 2024     December 31, 2023  
      (in thousands)  
    Assets          
    Current assets:          
    Cash and cash equivalents $ 261,758     $ 218,120  
    Restricted cash   30,650       23,301  
    Short-term investments   5,330       3,892  
    Trade receivables, net   95,832       134,735  
    Inventory   231,225       250,593  
    Other current assets   97,413       118,472  
    Total current assets   722,208       749,113  
    Non-current assets:          
    Property and equipment, net   747,548       742,610  
    Right-of-use assets under operating leases   1,386,244       1,384,693  
    Right-of-use assets under financing leases, net   157,999       162,668  
    Goodwill   299,973       292,173  
    Intangible assets, net   182,355       214,552  
    Equity investment   3,009       2,885  
    Deferred tax asset   67,689       52,293  
    Other non-current assets   53,633       49,377  
    Total assets $ 3,620,658     $ 3,650,364  
    Liabilities          
    Current liabilities:          
    Long-term debt, current portion $ 12,944     $ 16,792  
    Accounts payable   190,212       213,657  
    Other current liabilities   159,239       179,536  
    Operating leases, current portion   71,580       67,053  
    Financing leases, current portion   11,515       9,186  
    Total current liabilities   445,490       486,224  
    Non-current liabilities:          
    Long-term debt, net   868,055       828,647  
    Asset retirement obligation   87,375       84,710  
    Operating leases   1,408,293       1,395,032  
    Financing leases   211,051       213,032  
    Other non-current liabilities   223,528       266,602  
    Total liabilities   3,243,792       3,274,247  
                   
    Series A redeemable preferred stock   100,000       100,000  
               
    Shareholders’ equity:          
    Common stock   12       12  
    Treasury stock   (106,123 )     (74,134 )
    Additional paid-in capital   276,681       245,007  
    Accumulated other comprehensive income   9,119       9,119  
    Retained earnings   97,177       96,097  
    Total shareholders’ equity   276,866       276,101  
    Non-controlling interest   —       16  
    Total equity   276,866       276,117  
    Total liabilities, redeemable preferred stock and equity $ 3,620,658     $ 3,650,364  
                   
      Consolidated Statements of Cash Flows  
      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Cash flows from operating activities:                      
    Net (loss) income $ (2,298 )   $ 1,126     $ 20,845     $ 34,566  
    Adjustments to reconcile net (loss) income to net cash provided by operating activities:                      
    Depreciation and amortization   33,989       32,648       132,414       127,597  
    Deferred income taxes   (9,136 )     (652 )     (12,796 )     (4,680 )
    Loss on disposal of assets and impairment charges   1,661       660       6,798       6,203  
    Foreign currency (gain) loss   (6 )     (101 )     35       29  
    Gain from issuance of shares as payment of deferred consideration related to business acquisition   —       —       (2,681 )     —  
    Gain from settlement related to business acquisition   —       —       (6,356 )     —  
    Amortization of deferred financing costs and debt discount   669       661       2,669       2,518  
    Amortization of deferred income   (4,351 )     (1,840 )     (14,477 )     (8,142 )
    Accretion of asset retirement obligation   661       709       2,532       2,399  
    Non-cash rent   3,530       3,750       14,335       14,168  
    Charges to allowance for credit losses   112       244       845       1,265  
    (Income) loss from equity investment   (45 )     (38 )     (124 )     39  
    Share-based compensation   4,077       1,777       12,339       15,015  
    Fair value adjustment of financial assets and liabilities   (222 )     842       (10,985 )     (10,785 )
    Other operating activities, net   (627 )     352       125       2,631  
    Changes in assets and liabilities:                      
    Decrease (increase) in trade receivables   21,946       44,550       38,058       (17,937 )
    Decrease (increase) in inventory   5,262       15,373       22,689       (2,013 )
    (Increase) decrease in other assets   (16 )     (957 )     13,893       (29,386 )
    Decrease in accounts payable   (18,032 )     (35,836 )     (24,169 )     (6,169 )
    (Decrease) increase in other current liabilities   (20,664 )     (8,002 )     (2,820 )     990  
    Decrease in asset retirement obligation   (634 )     (69 )     (917 )     (23 )
    Increase in non-current liabilities   6,852       2,090       29,606       7,809  
    Net cash provided by operating activities   22,728       57,287       221,858       136,094  
    Cash flows from investing activities:                      
    Purchase of property and equipment   (36,133 )     (35,561 )     (113,914 )     (111,164 )
    Purchase of intangible assets   —       —       —       (45 )
    Proceeds from sale of property and equipment   2,196       3,134       53,549       310,240  
    Business and asset acquisitions, net of cash   —       33       (54,549 )     (494,871 )
    Prepayment for acquisitions   —       (1,000 )     —       (1,000 )
    Loans to equity investment, net   14       18       56       18  
    Net cash used in investing activities   (33,923 )     (33,376 )     (114,858 )     (296,822 )
    Cash flows from financing activities:                      
    Receipt of long-term debt, net   —       20,810       47,556       99,643  
    Repayment of debt   (5,794 )     (5,640 )     (26,357 )     (22,157 )
    Principal payments on financing leases   (1,360 )     (1,260 )     (4,940 )     (5,497 )
    Early settlement of deferred consideration related to business acquisition   —       —       (17,155 )     —  
    Proceeds from sale-leaseback   —       —       —       80,397  
    Payment of Additional Consideration   (3,354 )     (3,505 )     (3,354 )     (3,505 )
    Payment of Ares Put Option   —       —       —       (9,808 )
    Common stock repurchased   —       (8,495 )     (31,989 )     (33,694 )
    Dividends paid on common stock   (3,473 )     (3,497 )     (14,015 )     (14,272 )
    Dividends paid on redeemable preferred stock   (1,445 )     (1,449 )     (5,750 )     (5,750 )
    Net cash (used in) provided by financing activities   (15,426 )     (3,036 )     (56,004 )     85,357  
    Net (decrease) increase in cash and cash equivalents and restricted cash   (26,621 )     20,875       50,996       (75,371 )
    Effect of exchange rate on cash and cash equivalents and restricted cash   18       106       (9 )     23  
    Cash and cash equivalents and restricted cash, beginning of period   319,011       220,440       241,421       316,769  
    Cash and cash equivalents and restricted cash, end of period $ 292,408     $ 241,421     $ 292,408     $ 241,421  
                                   

    Supplemental Disclosure of Non-GAAP Financial Information

      Reconciliation of EBITDA and Adjusted EBITDA  
      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Net (loss) income $ (2,298 )   $ 1,126     $ 20,845     $ 34,566  
    Interest and other financing expenses, net   19,713       22,902       67,161       71,243  
    Income tax (benefit) expense   (2,995 )     1,317       6,144       12,166  
    Depreciation and amortization   33,989       32,648       132,414       127,597  
    EBITDA   48,409       57,993       226,564       245,572  
    Acquisition and divestiture costs (a)   1,249       1,099       5,168       9,079  
    Loss on disposal of assets and impairment charges (b)   1,661       660       6,798       6,203  
    Share-based compensation expense (c)   4,077       1,777       12,339       15,015  
    (Income) loss from equity investment (d)   (45 )     (38 )     (124 )     39  
    Fuel and franchise taxes received in arrears (e)   —       —       (1,427 )     —  
    Adjustment to contingent consideration (f)   978       68       (20 )     (604 )
    Other (g)   519       230       (438 )     956  
    Adjusted EBITDA $ 56,848     $ 61,789     $ 248,860     $ 276,260  
                           
    Additional information                      
    Non-cash rent expense (h)   3,530       3,750       14,335       14,168  
                           
    (a) Eliminates costs incurred that are directly attributable to business acquisitions and divestitures (including conversion of retail stores to dealer sites) and salaries of employees whose primary job function is to execute the Company’s acquisition and divestiture strategy and facilitate integration of acquired operations. 
                           
    (b) Eliminates the non-cash loss from the sale or disposal of property and equipment, the loss recognized upon the sale of related leased assets, and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites. 
                           
    (c) Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate employees, certain non-employees and members of the Board. 
                           
    (d) Eliminates the Company’s share of (income) loss attributable to its unconsolidated equity investment. 
                           
    (e) Eliminates the receipt of historical fuel and franchise tax amounts for multiple prior periods. 
                           
    (f) Eliminates fair value adjustments to the contingent consideration owed to the seller for the 2020 Empire acquisition. 
                           
    (g) Eliminates other unusual or non-recurring items that the Company does not consider to be meaningful in assessing operating performance. 
                           
    (h) Non-cash rent expense reflects the extent to which GAAP rent expense recognized exceeded (or was less than) cash rent payments. GAAP rent expense varies depending on the terms of the Company’s lease portfolio. For newer leases, rent expense recognized typically exceeds cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than cash rent payments. 
     

    Supplemental Disclosures of Segment Information

    Retail Segment

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Revenues:                      
    Fuel revenue $ 779,352     $ 913,534     $ 3,509,935     $ 3,858,777  
    Merchandise revenue   408,826       446,727       1,767,345       1,838,001  
    Other revenues, net   15,768       17,104       65,264       74,406  
    Total revenues   1,203,946       1,377,365       5,342,544       5,771,184  
    Operating expenses:                      
    Fuel costs 1   679,140       804,198       3,081,719       3,423,455  
    Merchandise costs   273,953       299,954       1,187,776       1,252,879  
    Site operating expenses   187,981       200,952       790,645       779,448  
    Total operating expenses   1,141,074       1,305,104       5,060,140       5,455,782  
    Operating income $ 62,872     $ 72,261     $ 282,404     $ 315,402  
                           
    1 Excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.  
       

    The table below shows financial information and certain key metrics of the SpeedyQ acquisition in the Retail Segment for which there is no comparable information for any of the prior periods.

      For the Three Months
    Ended December 31, 2024    		     For the Year
    Ended December 31, 2024    		  
      SpeedyQ 1  
      (in thousands)  
    Date of Acquisition: April 9, 2024  
    Revenues:          
    Fuel revenue $ 11,359     $ 38,937  
    Merchandise revenue   6,469       20,719  
    Other revenues, net   311       809  
    Total revenues   18,139       60,465  
    Operating expenses:          
    Fuel costs 2   9,580       33,455  
    Merchandise costs   4,473       14,709  
    Site operating expenses   3,373       9,760  
    Total operating expenses   17,426       57,924  
    Operating income $ 713     $ 2,541  
    Fuel gallons sold   3,768       11,865  
    Fuel contribution 3 $ 1,779     $ 5,482  
    Merchandise contribution 4 $ 1,996     $ 6,010  
    Merchandise margin 5   30.9 %     29.0 %
               
    1 Acquisition of seven Speedy’s retail stores.  
    2 Excludes the estimated fixed margin paid to GPMP for the cost of fuel.  
    3 Calculated as fuel revenue less fuel costs.  
    4 Calculated as merchandise revenue less merchandise costs.  
    5 Calculated as merchandise contribution divided by merchandise revenue.  
       

    Wholesale Segment

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Revenues:                      
    Fuel revenue $ 652,016     $ 700,026     $ 2,799,869     $ 3,039,904  
    Other revenues, net   8,681       6,909       29,140       25,775  
    Total revenues   660,697       706,935       2,829,009       3,065,679  
    Operating expenses:                      
    Fuel costs 1   629,742       678,426       2,709,519       2,946,996  
    Site operating expenses   10,997       10,400       39,679       39,703  
    Total operating expenses   640,739       688,826       2,749,198       2,986,699  
    Operating income $ 19,958     $ 18,109     $ 79,811     $ 78,980  
                           
    1 Excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.  
       

    Fleet Fueling Segment

      For the Three Months
    Ended December 31,    		     For the Year
    Ended December 31,    		  
      2024     2023     2024     2023  
      (in thousands)  
    Revenues:                      
    Fuel revenue $ 117,196     $ 136,801     $ 515,462     $ 530,937  
    Other revenues, net   2,131       2,616       9,135       7,818  
    Total revenues   119,327       139,417       524,597       538,755  
    Operating expenses:                      
    Fuel costs 1   100,864       123,410       451,173       475,037  
    Site operating expenses   6,056       6,259       24,917       22,298  
    Total operating expenses   106,920       129,669       476,090       497,335  
    Operating income $ 12,407     $ 9,748     $ 48,507     $ 41,420  
                           
    1 Excludes the estimated fixed fee paid to GPMP for the cost of fuel.  

    The MIL Network –

  • MIL-OSI: Encore Capital Group Announces Fourth Quarter and Full-Year 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    • Favorable U.S. market for portfolio supply continues
    • Global portfolio purchases in 2024 up 26% to record $1.35 billion
    • Global collections in 2024 up 16% to $2.16 billion
    • Actions taken to resolve Cabot issues resulted in a loss for the quarter and the year

    SAN DIEGO, Feb. 26, 2025 (GLOBE NEWSWIRE) — Encore Capital Group, Inc. (NASDAQ: ECPG), an international specialty finance company, today reported consolidated financial results for the fourth quarter and full year ended December 31, 2024.

    “2024 was a year of significant growth for Encore,” said Ashish Masih, Encore’s President and Chief Executive Officer. “Our global portfolio purchases increased by 26% to an all-time high for us and global collections increased by 16% compared to 2023. Higher portfolio purchasing in recent years is a key driver of our growth in collections and ultimately cash generation growth of 20% for the year.”

    “In the U.S. in 2024, continued growth in bank lending, coupled with rising delinquencies and charge-offs, led to record supply for non-performing loan portfolios and a continuation of the favorable purchasing environment in the U.S. market. As a result, our largest business, MCM, increased U.S. portfolio purchases in 2024 by 23% to a record $1 billion. In addition, anchored by stable consumer payment behavior throughout the year, MCM collections increased by 20% compared to 2023.”

    “For our Cabot business in the U.K. and Europe, 2024 was a year of progress, but also significant restructuring to resolve certain persistent issues and enable future success. Cabot portfolio purchases increased by 36% compared to 2023, driven by exceptional Q4 purchases of $200 million that included large spot-market portfolio purchases at attractive returns. For the year, Cabot collections increased by 8% compared to 2023. Despite these successes, Cabot’s business environment continued to be highly competitive and impacted by macroeconomic factors such as subdued lending growth and low charge-offs. In 2024, we took certain restructuring actions including the exit from two underperforming markets, beginning with the Spanish secured non-performing loan (NPL) market in Q3 followed by the Italian NPL market in Q4. We also made adjustments to Cabot’s estimated remaining collections (ERC), particularly in the fourth quarter. These actions resulted in a $101 million goodwill charge in Q4.”

    “We believe our reported financial results in 2024, and in particular our net loss of $139 million, or ($5.83) per share, are not indicative of the operational performance of our business due to certain non-cash charges, the largest of which were the goodwill impairment related to our Cabot business and the adjustments to Cabot’s ERC in Q4, which reduced earnings for the quarter and the year. We believe these Cabot ERC adjustments, in addition to other actions taken during the year, place Cabot on a more solid footing. We expect Cabot’s future performance to align closely with its rebased ERC.”

    “Looking ahead, guided by our three pillar strategy, we remain committed to our long-standing financial objectives and our capital allocation priorities. We anticipate our global portfolio purchases in 2025 to exceed the $1.35 billion of purchases we made in 2024. We expect global collections in 2025 to increase by 11% to $2.4 billion. As a result of our continued growth in cash generation and its impact on our improving leverage, we plan to resume share repurchases in 2025. We also remain committed to the critical role we play in the consumer credit ecosystem and to helping consumers restore their financial health,” said Masih.

       
    Financial Highlights for the Full Year of 2024:
       
      Year Ended December 31,
    (in thousands, except percentages and earnings per share)   2024       2023     Change
    Collections $ 2,162,478     $ 1,862,567     16 %
    Revenues $ 1,316,361     $ 1,222,680     8 %
    Portfolio purchases(1) $ 1,352,035     $ 1,073,812     26 %
    Estimated Remaining Collections (ERC) $ 8,501,370     $ 8,191,913     4 %
    Operating expenses $ 1,159,031     $ 1,206,145     (4 )%
    GAAP net loss $ (139,244 )   $ (206,492 )   NM
    GAAP loss per share $ (5.83 )   $ (8.72 )   NM

    __________________

    (1) Includes U.S. purchases of $998.9 million and $814.6 million, and Europe purchases of $353.2 million and $259.3 million in 2024 and 2023, respectively.
       
    Financial Highlights for the Fourth Quarter of 2024:
       
      Three Months Ended December 31,
    (in thousands, except percentages and earnings per share)   2024       2023     Change
    Collections $ 554,595     $ 458,350     21 %
    Revenues $ 265,619     $ 277,387     (4 )%
    Portfolio purchases(1) $ 495,144     $ 292,497     69 %
    Operating expenses $ 399,809     $ 494,580     (19 )%
    GAAP net loss $ (225,307 )   $ (270,762 )   NM
    GAAP loss per share $ (9.42 )   $ (11.40 )   NM

    __________________

    (1) Includes U.S. purchases of $295.3 million and $208.5 million, and Europe purchases of $199.8 million and $84.0 million in Q4 2024 and Q4 2023, respectively.
       
    Key Impacts from Cabot Actions and other items for the Fourth Quarter of 2024:
       
      Three Months Ended
    December 31,
    (in thousands, except earnings per share impact)   2024     EPS Impact(1)
    Cabot changes in expected future recoveries $ (129,128 )   $ (5.40 )
    Goodwill impairment $ (100,600 )   $ (4.21 )
    Cabot IT-related asset impairment $ (18,544 )   $ (0.78 )
    Loss on extinguishment of debt $ (7,832 )   $ (0.28 )
    Cabot restructuring charges $ (6,087 )   $ (0.25 )
    Total $ (262,191 )   $ (10.92 )

    __________________

    (1) Basic share count was used to calculate EPS impacts.
       

    Conference Call and Webcast

    The Company will host a conference call and slide presentation today, February 26, 2025, at 2:00 p.m. Pacific time / 5:00 p.m. Eastern time to discuss fourth quarter and full year results.

    Members of the public are invited to access the live webcast via the Internet by logging in on the Investor Relations page of Encore’s website at www.encorecapital.com. To access the live conference call by telephone, please pre-register using this link. Registrants will receive confirmation with dial-in details.

    For those who cannot listen to the live broadcast, a replay of the webcast will be available on the Company’s website shortly after the call concludes.

    Non-GAAP Financial Measures

    This news release includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company has included information concerning adjusted EBITDA because management utilizes this information in the evaluation of its operations and believes that this measure, when added to collections applied to principal balance, is a useful indicator of the Company’s ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. Adjusted EBITDA has not been prepared in accordance with GAAP and should not be considered an alternative to, or more meaningful than, net income as an indicator of the Company’s operating performance. Further, this non-GAAP financial measure, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. The Company has attached to this news release a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

    About Encore Capital Group, Inc.

    Encore Capital Group is an international specialty finance company that provides debt recovery solutions and other related services for consumers across a broad range of financial assets. Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks, credit unions, and utility providers. 

    Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about the company can be found at http://www.encorecapital.com.

    Forward Looking Statements
    The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results (including portfolio purchase volumes, collections and cash generation), performance, business plans or prospects as well as statements regarding future supply, consumer behavior, or macroeconomic environment. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent reports on Form 10-K, as it may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.

    Contact:
    Bruce Thomas
    Encore Capital Group, Inc.
    Vice President, Global Investor Relations
    bruce.thomas@encorecapital.com

    SOURCE: Encore Capital Group, Inc.

    FINANCIAL TABLES FOLLOW

           
    ENCORE CAPITAL GROUP, INC.
    Consolidated Statements of Financial Condition
    (In Thousands, Except Par Value Amounts)
           
      December 31,
    2024    		   December 31,
    2023
    Assets      
    Cash and cash equivalents $ 199,865     $ 158,364  
    Investment in receivable portfolios, net   3,776,369       3,468,432  
    Property and equipment, net   80,597       103,959  
    Other assets   225,090       293,256  
    Goodwill   507,808       606,475  
    Total assets $ 4,789,729     $ 4,630,486  
    Liabilities and Equity      
    Liabilities:      
    Accounts payable and accrued liabilities $ 233,545     $ 189,928  
    Borrowings   3,672,762       3,318,031  
    Other liabilities   116,091       185,989  
    Total liabilities   4,022,398       3,693,948  
    Commitments and contingencies      
    Equity:      
    Convertible preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding   —       —  
    Common stock, $0.01 par value, 75,000 shares authorized, 23,691 shares and 23,545 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively   237       235  
    Additional paid-in capital   19,297       11,052  
    Accumulated earnings   909,927       1,049,171  
    Accumulated other comprehensive loss   (162,130 )     (123,920 )
    Total stockholders’ equity   767,331       936,538  
    Total liabilities and stockholders’ equity $ 4,789,729     $ 4,630,486  
                   

    The following table presents certain assets and liabilities of consolidated variable interest entities (“VIEs”) included in the consolidated statements of financial condition above. Most assets in the table below include those assets that can only be used to settle obligations of consolidated VIEs. The liabilities exclude amounts where creditors or beneficial interest holders have recourse to the general credit of the Company.

           
      December 31,
    2024    		   December 31,
    2023
    Assets      
    Cash and cash equivalents $ 23,875   $ 24,472
    Investment in receivable portfolios, net   895,704     717,556
    Other assets   3,699     19,358
    Liabilities      
    Accounts payable and accrued liabilities   2,946     1,854
    Borrowings   599,830     494,925
    Other liabilities   887     2,452
               
               
           
    ENCORE CAPITAL GROUP, INC.
    Consolidated Statements of Operations
    (In Thousands, Except Per Share Amounts)
           
      (Unaudited)
    Three Months Ended
    December 31,    		   Year Ended
    December 31,
        2024       2023       2024       2023  
    Revenues              
    Revenue from receivable portfolios $ 336,666     $ 304,892     $ 1,302,567     $ 1,204,437  
    Changes in recoveries   (95,760 )     (52,476 )     (89,740 )     (82,530 )
    Total debt purchasing revenue   240,906       252,416       1,212,827       1,121,907  
    Servicing revenue   20,525       19,650       84,783       83,136  
    Other revenues   4,188       5,321       18,751       17,637  
    Total revenues   265,619       277,387       1,316,361       1,222,680  
    Operating expenses              
    Salaries and employee benefits   104,616       96,760       422,910       391,532  
    Cost of legal collections   68,989       56,727       259,298       224,252  
    General and administrative expenses   52,019       36,809       163,847       144,862  
    Other operating expenses   37,786       29,315       130,802       111,179  
    Collection agency commissions   8,288       9,074       30,596       35,657  
    Depreciation and amortization   8,967       8,969       32,434       41,737  
    Goodwill impairment   100,600       238,200       100,600       238,200  
    Impairment of assets   18,544       18,726       18,544       18,726  
    Total operating expenses   399,809       494,580       1,159,031       1,206,145  
    (Loss) income from operations   (134,190 )     (217,193 )     157,330       16,535  
    Other expense              
    Interest expense   (68,498 )     (54,501 )     (252,545 )     (201,877 )
    Loss on extinguishment of debt   (7,832 )     —       (7,832 )     —  
    Other income (expense)   541       (2 )     6,832       5,078  
    Total other expense   (75,789 )     (54,503 )     (253,545 )     (196,799 )
    (Loss) income before income taxes   (209,979 )     (271,696 )     (96,215 )     (180,264 )
    (Provision) benefit for income taxes   (15,328 )     934       (43,029 )     (26,228 )
    Net loss $ (225,307 )   $ (270,762 )   $ (139,244 )   $ (206,492 )
                   
    Loss per share:              
    Basic $ (9.42 )   $ (11.40 )   $ (5.83 )   $ (8.72 )
    Diluted $ (9.42 )   $ (11.40 )   $ (5.83 )   $ (8.72 )
                   
    Weighted average shares outstanding:              
    Basic   23,916       23,741       23,873       23,670  
    Diluted   23,916       23,741       23,873       23,670  
                                   
                                   
       
    ENCORE CAPITAL GROUP, INC.
    Consolidated Statements of Cash Flows
    (In Thousands)
       
      Year Ended December 31,
        2024       2023       2022  
    Operating activities:          
    Net (loss) income $ (139,244 )   $ (206,492 )   $ 194,564  
    Adjustments to reconcile net (loss) income to net cash provided by operating activities:          
    Depreciation and amortization   32,434       41,737       46,419  
    Other non-cash interest expense, net   16,325       17,160       15,875  
    Stock-based compensation expense   14,012       13,854       15,402  
    Deferred income taxes   (22,280 )     (55,916 )     46,410  
    Goodwill impairment   100,600       238,200       —  
    Impairment of assets   18,544       18,726       4,075  
    Changes in recoveries   89,740       82,530       (93,145 )
    Other, net   17,880       (2,259 )     18,798  
    Changes in operating assets and liabilities          
    Other assets   (28,245 )     15,894       (6,722 )
    Accounts payable, accrued liabilities and other liabilities   56,402       (10,443 )     (30,995 )
    Net cash provided by operating activities   156,168       152,991       210,681  
    Investing activities:          
    Purchases of receivable portfolios, net of put-backs   (1,336,442 )     (1,060,206 )     (790,569 )
    Collections applied to investment in receivable portfolios, net   859,911       658,130       709,176  
    Purchases of real estate owned   (212 )     (26,901 )     (39,340 )
    Purchases of property and equipment   (29,007 )     (24,807 )     (37,224 )
    Proceeds from sale of real estate owned   56,396       52,636       27,722  
    Other, net   8,924       (793 )     —  
    Net cash used in investing activities   (440,430 )     (401,941 )     (130,235 )
    Financing activities:          
    Payment of loan and debt refinancing costs   (21,418 )     (13,707 )     (1,659 )
    Proceeds from credit facilities   2,031,470       1,196,046       779,513  
    Repayment of credit facilities   (1,868,111 )     (989,627 )     (515,703 )
    Proceeds from senior secured notes   1,000,000       104,188       —  
    Repayment of senior secured notes   (789,106 )     (39,080 )     (39,080 )
    Proceeds from issuance of convertible senior notes   —       230,000       —  
    Repayment of convertible senior notes   —       (212,480 )     (221,153 )
    Payments to settle derivative instruments   (40,038 )     —       —  
    Repurchase and retirement of common stock   —       —       (87,006 )
    Other, net   4,977       (7,040 )     (22,357 )
    Net cash provided by (used in) financing activities   317,774       268,300       (107,445 )
    Net increase (decrease) in cash and cash equivalents   33,512       19,350       (26,999 )
    Effect of exchange rate changes on cash and cash equivalents   7,989       (4,898 )     (18,734 )
    Cash and cash equivalents, beginning of period   158,364       143,912       189,645  
    Cash and cash equivalents, end of period $ 199,865     $ 158,364     $ 143,912  
               
    Supplemental disclosures of cash flow information:          
    Cash paid for interest $ 210,580     $ 163,815     $ 131,391  
    Cash paid for income taxes, net of refunds   67,091       68,522       71,276  
    Supplemental schedule of non-cash investing and financing activities:          
    Investment in receivable portfolios transferred to real estate owned $ 5,966     $ 7,957     $ 1,903  
                           
                           
           
    ENCORE CAPITAL GROUP, INC.
    Supplemental Financial Information
    Reconciliation of Non-GAAP Metrics
           
    Adjusted EBITDA    
           
    (in thousands, unaudited) Three Months Ended
    December 31,    		   Year Ended
    December 31,
      2024       2023       2024       2023  
    GAAP net loss, as reported $ (225,307 )   $ (270,762 )   $ (139,244 )   $ (206,492 )
    Adjustments:              
    Interest expense   68,498       54,501       252,545       201,877  
    Loss on extinguishment of debt   7,832       —       7,832       —  
    Interest income   (1,971 )     (1,364 )     (7,008 )     (4,746 )
    Provision (benefit) for income taxes   15,328       (934 )     43,029       26,228  
    Depreciation and amortization   8,967       8,969       32,434       41,737  
    Net loss (gain) on derivative instruments(1)   —       342       (267 )     (3,170 )
    Stock-based compensation expense   2,281       2,837       14,012       13,854  
    Acquisition, integration and restructuring related expenses(2)   6,087       827       10,451       7,401  
    Goodwill Impairment(3)   100,600       238,200       100,600       238,200  
    Impairment of assets(3)   18,544       18,726       18,544       18,726  
    Adjusted EBITDA $ 859     $ 51,342     $ 332,928     $ 333,615  
    Collections applied to principal balance(4) $ 337,464     $ 213,769     $ 1,004,230     $ 776,280  

    ________________________

    (1) Amount represents gain or loss recognized on derivative instruments that are not designated as hedging instruments or gain or loss recognized on derivative instruments upon dedesignation of hedge relationships. We adjust for this amount because we believe the gain or loss on derivative contracts is not indicative of ongoing operations.
    (2) Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore, adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
    (3) During the years ended December 31, 2024, and 2023, we recorded a non-cash goodwill impairment charge of $100.6 million and $238.2 million, respectively. We recorded a non-cash impairment of long-lived assets of $18.5 million and a non-cash impairment of intangible assets of $18.7 million during the years ended December 31, 2024, and 2023, respectively. We believe these non-cash impairment charges are not indicative of ongoing operations, therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results. Refer to “Note 15: Goodwill and Identifiable Intangible Assets” and “Note 5: Composition of Certain Financial Statement Items” to our consolidated financial statements for further details.
    (4) Amount represents (a) gross collections from receivable portfolios less (b) debt purchasing revenue, plus (c) proceeds applied to basis from sales of real estate owned (“REO”) assets and exit activities. A reconciliation of “collections applied to investment in receivable portfolios, net” to “collections applied to principal balance” is available in the Form 10-K for the period ending December 31, 2024.

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

    Record-high Revenue, Net Income, and Adjusted EBITDA for the full year and Q4 2024
    $28.8K direct energy cost per bitcoin for 2024 from owned sites
    BTC yield per share of 62.9% for 2024

    Fort Lauderdale, FL, Feb. 26, 2025 (GLOBE NEWSWIRE) — MARA Holdings, Inc. (NASDAQ: MARA) (“MARA” or the “Company”), a global leader in leveraging digital asset compute to support the energy transformation, today announced its fourth quarter and full year 2024 financial results in a letter to shareholders.

    Investors are invited to access the fourth quarter 2024 shareholder letter at MARA’s website at ir.mara.com. A copy of the letter will also be furnished to the Securities and Exchange Commission on a Form 8-K.

    MARA will hold a webcast and conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss these financial results. To register to participate in the conference call, please use this link. The webcast will also be available for replay via the investor relations section of the Company’s website.

    Earnings Webcast and Conference Call Details
    Date: Wednesday, February 26, 2025
    Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
    Registration link: LINK

    If you have any difficulty connecting to the conference call, please contact MARA’s investor relations team at ir@mara.com.

    About MARA
    MARA (NASDAQ: MARA) is a global leader in digital asset compute that develops and deploys innovative technologies to build a more sustainable and inclusive future. MARA secures the world’s preeminent blockchain ledger and supports the energy transformation by converting clean, stranded, or otherwise underutilized energy into economic value.

    For more information, visit www.mara.com, or follow us on:

    Twitter: @MARAHoldings
    LinkedIn: www.linkedin.com/company/MARAHoldings
    Facebook: www.facebook.com/MARAHoldings
    Instagram: @maraholdingsinc

    MARA Company Contact:
    Telephone: 800-804-1690
    Email: ir@mara.com

    MARA Media Contact:
    Email: mara@wachsman.com

    The MIL Network –