Category: Taxation

MIL-OSI: Great Elm Group Reports Fiscal 2025 Second Quarter Financial Results

Source: GlobeNewswire (MIL-OSI)

PALM BEACH GARDENS, Fla., Feb. 05, 2025 (GLOBE NEWSWIRE) — Great Elm Group, Inc. (“we,” “our,” “GEG,” “Great Elm,” or “the Company”), (NASDAQ: GEG), an alternative asset manager, today announced financial results for its fiscal second quarter ended December 31, 2024.

Fiscal Second Quarter 2025 and Recent Highlights

Great Elm Capital Corp. (NASDAQ: GECC) raised an additional $13.2 million of equity at NAV in December 2024, through the issuance of approximately 1.1 million shares of GECC common stock to Summit Grove Partners (“SGP”).
On February 4, 2025, the Company acquired the assets of Greenfield CRE, a leading construction management company and longstanding partner of Monomoy.
- In connection with the acquisition, Great Elm formed Monomoy Construction Services, LLC (“MCS”) and combined Greenfield with Monomoy BTS Construction Management to launch an integrated, full-service construction business.
- MCS will be dedicated to serving Great Elm’s various real estate verticals, as well as expanding its existing third-party consulting business.
GEG’s fee-paying assets under management (“FPAUM”) and assets under management (“AUM”) totaled approximately $538 million and $751 million, respectively.
- FPAUM and AUM growth of 17% and 14%, respectively, compared to the prior-year period.
Total revenue for the second quarter grew 24% to $3.5 million, compared to $2.8 million for the prior-year period.
- Growth in revenue was primarily driven by increased revenue from Monomoy BTS, Corporation and increased GECC management fees, due to growth in FPAUM.
- Great Elm collected incentive fees from GECC totaling $0.5 million for the three months ended December 31, 2024.
Net income from continuing operations for the second quarter was $1.4 million, compared to a net loss from continuing operations of ($0.2) million in the prior-year period.
Adjusted EBITDA for the second quarter was $1.0 million, compared to $0.6 million in the prior-year period.
Through February 4, 2025, Great Elm has repurchased approximately 4.1 million shares for $7.4 million, at an average price of $1.83 per share, through its share repurchase program.
- Book value per share was $2.30 as of December 31, 2024, excluding Consolidated Funds.
As of December 31, 2024, GEG had approximately $44 million of cash on its balance sheet to support growth initiatives across its alternative asset management platform.

Management Commentary

Jason Reese, Chief Executive Officer of the Company, stated, “We delivered a solid fiscal second quarter 2025, continuing our positive momentum by expanding our assets under management, growing revenue across our credit and real estate businesses and generating strong returns on our investments. Our BDC closed another successful capital raise at NAV, increased its first quarter dividend to 37 cents per share and announced a special dividend in December of 5 cents per share. Additionally, the Great Elm Credit Income Fund (“GECIF”) continued to perform very well, closing December with net inception-to-date returns of approximately 13.9%.¹ GECIF’s established track record leaves us well-positioned to attract further capital to scale our investment management platform.”

“In Real Estate, we were thrilled to announce the acquisition of Greenfield CRE into our newly formed Monomoy Construction Services business. We expect this transaction to enhance our construction management expertise, expand our scope of services, and fortify our overall real estate value proposition to our investors and tenants. Our long-standing relationship with Greenfield will allow us to quickly benefit from the launch of our fully integrated, full-service real estate platform. Importantly, we maintained our commitment to the GEG share repurchase program, continuing to buy back shares at an attractive discount to book value. Looking ahead, we remain focused on executing on our strategic priorities: growing our core credit and real estate businesses, pursuing compelling investment opportunities across our platform and leveraging our strong balance sheet to maximize shareholder value.”

GEG Managed Vehicle Highlights

GECC demonstrated continued strong performance, raised meaningful capital and increased its quarterly base distribution.
- GECC raised $13.2 million of equity at Net Asset Value (“NAV”) through the issuance of approximately 1.1 million shares of GECC common stock to SGP.
- GEG demonstrated its commitment to growing its credit platform through a $3.3 million investment in SGP.
- GECC announced a 5.7% increase on its quarterly base distribution to $0.37 per share for the first quarter of 2025 (compared to the prior $0.35 per share) and paid a special cash distribution of $0.05 per share in January 2025.
Monomoy BTS and Monomoy REIT continued to execute on their strategic priorities.
- Monomoy BTS completed construction of its second build-to-suit property in Mississippi and made meaningful progress on its third project in Florida.
- Monomoy REIT closed on three property purchases for approximately $3.8 million and maintains a strong pipeline of transaction opportunities and open requirements from our tenants.
GECIF delivered a strong return on invested capital of approximately 13.9%, net of fees, for the period from its inception through December 31, 2024.¹

Discussion of Financial Results for the Fiscal Second Quarter Ended December 31, 2024

GEG reported total revenue of $3.5 million, up 24% from $2.8 million in the prior-year period.

GEG recorded net income from continuing operations of $1.4 million, compared to a net loss from continuing operations of ($0.2) million in the prior-year period.

GEG recorded Adjusted EBITDA of $1.0 million, compared to $0.6 million in the prior-year period.

Monomoy CRE, LLC Acquisition

On February 4, 2025, Great Elm acquired the assets of Greenfield, a leading construction management company and longstanding partner of MCRE, our real estate investment manager. In connection with the acquisition, Great Elm formed Monomoy Construction Services, LLC and combined the assets of Greenfield with the assets of Monomoy BTS Construction Management to launch an integrated, full-service construction business. With MCS, Monomoy will offer a full-service, in-house suite of project management, procurement, construction management, asset management, market analysis and feasibility services for its industrial real estate tenants.

Stock Repurchase Program

In the fiscal first quarter 2025, GEG’s Board of Directors approved an incremental stock repurchase program under which GEG is authorized to repurchase up to $20 million in the aggregate of its outstanding common stock in the open market. As of February 4, 2025, the Company has repurchased approximately 4.1 million shares for $7.4 million under this program.

Fiscal 2025 Second Quarter Conference Call & Webcast Information

When:		Thursday, February 6, 2025, 8:30 a.m. Eastern Time (ET)

Call:		All interested parties are invited to participate in the conference call by dialing +1 (877) 407-0752; international callers should dial +1 (201) 389-0912. Participants should enter the Conference ID 13746970 if asked.

Webcast:		The conference call will be webcast simultaneously and can be accessed here. A copy of the slide presentation accompanying the conference call, can be found here.

About Great Elm Group, Inc.

Great Elm Group, Inc. (NASDAQ: GEG) is a publicly-traded, alternative asset manager focused on growing a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance, and other alternative strategies. Great Elm Group, Inc. and its subsidiaries currently manage Great Elm Capital Corp., a publicly-traded business development company, and Monomoy Properties REIT, LLC, an industrial-focused real estate investment trust, in addition to other investments. Great Elm Group, Inc.’s website can be found at www.greatelmgroup.com.

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

Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability, acquisition opportunities and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm’s assumptions and expectations in light of currently available information. These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the Securities and Exchange Commission (“SEC”), including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC and available for download at its website www.greatelmgroup.com or at the SEC website www.sec.gov.

Non-GAAP Financial Measures

The SEC has adopted rules to regulate the use in filings with the SEC, and in public disclosures, of financial measures that are not in accordance with US GAAP, such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA is derived from methodologies other than in accordance with US GAAP. Great Elm believes that Adjusted EBITDA is an important measure for investors to use in evaluating Great Elm’s businesses. In addition, Great Elm’s management reviews Adjusted EBITDA as they evaluate acquisition opportunities.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it either in isolation from, or as a substitute for, analyzing Great Elm’s results as reported under US GAAP. Non-GAAP financial measures reported by Great Elm may not be comparable to similarly titled amounts reported by other companies.

Included in the financial tables below is a reconciliation of Adjusted EBITDA to the most directly comparable US GAAP financial measure, net income from continuing operations.

Endnotes
¹Assumes invested at inception on November 1, 2023, and remained invested throughout the succeeding fourteen months ended December 31, 2024, with distributions reinvested, net of founder’s class fees and expenses. Performance results should not be regarded as final until audited financial statements are issued covering the period shown. Past performance is no guarantee of future results. This press release does not constitute an offer to sell or a solicitation of an offer to buy interests in any investment vehicle managed by Great Elm or its affiliates. Any such offer or solicitation will only be made pursuant to the applicable offering documents for such investment vehicle.

Media & Investor Contact:
Investor Relations
geginvestorrelations@greatelmcap.com

Great Elm Group, Inc.
Condensed Consolidated Balance Sheets (unaudited)
Dollar amounts in thousands (except per share data)

ASSETS	December 31, 2024			June 30, 2024
Current assets
Cash and cash equivalents	$	44,288		$	48,147
Restricted cash		–			1,571
Receivables from managed funds		3,725			2,259
Investments in marketable securities		–			9,929
Investments, at fair value		49,918			44,585
Prepaid and other current assets		5,275			1,215
Real estate assets, net		6,524			5,769
Assets of Consolidated Funds:
Cash and cash equivalents		2,568			2,371
Investments, at fair value		11,902			11,471
Other assets		223			253
Total current assets		124,423			127,570
Identifiable intangible assets, net		10,510			11,037
Right-of-use assets		1,784			225
Other assets		1,770			1,614
Total assets	$	138,487		$	140,446
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	185		$	317
Payable for securities purchased		19			–
Accrued expenses and other current liabilities		2,817			7,009
Current portion of related party payables		254			634
Current portion of lease liabilities		335			137
Liabilities of Consolidated Funds:
Payable for securities purchased		340			100
Accrued expenses and other liabilities		151			162
Total current liabilities		4,101			8,359
Lease liabilities, net of current portion		1,442			57
Long-term debt (face value $26,945)		26,231			26,090
Related party payables, net of current portion		–			–
Convertible notes (face value $36,380 and $35,494, including $16,578 and $16,174 held by related parties, respectively)		35,838			34,900
Other liabilities		817			845
Total liabilities		68,429			70,251
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.001 par value; 5,000,000 authorized and zero outstanding		–			–
Common stock, $0.001 par value; 350,000,000 shares authorized and 29,519,825 shares issued and 27,150,036 outstanding at December 31, 2024; and 31,875,285 shares issued and 30,494,448 outstanding at June 30, 2024		26			30
Additional paid-in-capital		3,311,447			3,315,638
Accumulated deficit		(3,249,139	)		(3,252,954	)
Total Great Elm Group, Inc. stockholders’ equity		62,334			62,714
Non-controlling interests		7,724			7,481
Total stockholders’ equity		70,058			70,195
Total liabilities and stockholders’ equity	$	138,487		$	140,446

Great Elm Group, Inc.
Condensed Consolidated Statements of Operations (unaudited)
Amounts in thousands (except per share data)

	For the three months ended December 31,						For the six months ended December 31,
	2024			2023			2024			2023
Revenues	$	3,507		$	2,819		$	7,499		$	6,129
Cost of revenues		458			–			1,093			–
Operating costs and expenses:
Investment management expenses		3,431			2,839			6,489			5,601
Depreciation and amortization		284			283			557			566
Selling, general and administrative		1,306			2,393			3,312			4,108
Expenses of Consolidated Funds		5			–			21			–
Total operating costs and expenses		5,026			5,515			10,379			10,275
Operating loss		(1,977	)		(2,696	)		(3,973	)		(4,146	)
Dividends and interest income		1,567			2,072			3,125			4,058
Net realized and unrealized gain		2,428			1,204			6,206			4,488
Net realized and unrealized gain (loss) on investments of Consolidated Funds		(29	)		114			249			114
Interest and other income of Consolidated Funds		395			128			779			128
Interest expense		(1,030	)		(1,061	)		(2,058	)		(2,123	)
(Loss) income before income taxes from continuing operations		1,354			(239	)		4,328			2,519
Income tax benefit (expense)		–			–			–			–
Net (loss) income from continuing operations		1,354			(239	)		4,328			2,519
Discontinued operations:
Net income from discontinued operations		–			–			–			16
Net (loss) income	$	1,354		$	(239	)	$	4,328		$	2,535
Less: net income attributable to non-controlling interest, continuing operations		178			111			513			111
Net (loss) income attributable to Great Elm Group, Inc.	$	1,176		$	(350	)	$	3,815		$	2,424
Net (loss) income attributable to shareholders per share
Basic	$	0.04		$	(0.01	)	$	0.13		$	0.08
Diluted	$	0.04		$	(0.01	)		0.12			0.08
Weighted average shares outstanding
Basic		27,983			29,889			28,531			29,734
Diluted		28,767			29,889			39,793			30,916

Great Elm Group, Inc.
Reconciliation from Net Income (loss) from Continuing Operations to Adjusted EBITDA
Dollar amounts in thousands

	Three months ended December 31,						Six months ended December 31,
(in thousands)	2024			2023			2024			2023
Net income (loss) from continuing operations – GAAP	$	1,354		$	(239	)	$	4,328		$	2,519
Interest expense		1,030			1,061			2,058			2,123
Income tax expense (benefit)		–			–			–			–
Depreciation and amortization		284			283			557			566
Non-cash compensation		755			839			1,872			1,726
(Gain) loss on investments		(2,399	)		(1,318	)		(6,455	)		(4,602	)
Change in contingent consideration		–			18			(6	)		36
Adjusted EBITDA	$	1,024		$	644		$	2,354		$	2,368

The MIL Network –

February 6, 2025

MIL-OSI: Paycor Announces Second Quarter Fiscal Year 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

Entered into a definitive agreement to be acquired by Paychex, Inc.
Q2 Total revenues of $180.4 million, an increase of 13% year-over-year, while expanding operating margins
Q2 Recurring revenues of $167.4 million, an increase of 14% year-over-year

CINCINNATI, Feb. 05, 2025 (GLOBE NEWSWIRE) — Paycor HCM, Inc. (Nasdaq: PYCR) (“Paycor” or the “Company”), a leading provider of human capital management (“HCM”) software, today announced financial results for the second quarter fiscal year 2025, which ended December 31, 2024.

Second Quarter Fiscal Year 2025 Financial Highlights

Total revenues were $180.4 million, an increase of 13% from the second quarter of FY 2024.
Operating profit was $1.2 million, compared to an operating loss of $26.2 million from the second quarter of FY 2024 or 1% of Total revenues compared to (16%) in the second quarter of FY 2024.
Adjusted operating income* was $31.8 million, compared to $23.3 million or an increase of 36% from the second quarter of FY 2024, or 18% of Total revenues compared to 15% in the second quarter of FY 2024.
Net loss was $2.0 million, compared to $26.2 million for the second quarter of FY 2024.
Adjusted net income* was $25.0 million, compared to $18.7 million for the second quarter of FY 2024.
Net cash provided by operating activities improved to $37.1 million from $26.2 million for the second quarter of FY 2024.
Adjusted free cash flow* improved to $28.5 million from $14.8 million for the second quarter of FY 2024.

*Adjusted operating income, adjusted net income and adjusted free cash flow are non-GAAP financial measures. Please see the discussion below under the heading “Non-GAAP Financial Measures” and the reconciliations at the end of this press release for information concerning these and other non-GAAP financial measures referenced in this press release.

Pending Merger with Paychex, Inc.

On January 7, 2025, we announced that we had entered into a definitive agreement (“Merger Agreement”) to be acquired by Paychex, Inc. (“Paychex”) in an all-cash transaction structured as a merger and valued at approximately $4.1 billion, or $22.50 per share. The per-share merger consideration represents a premium of approximately 19% over Paycor’s 30-day volume weighted average trading price as of the unaffected trading date of January 3, 2025. The Merger Agreement has been unanimously approved by Company’s Board of Directors, as well as the holders of a majority of the Company’s outstanding common stock. The merger is expected to close in the first half of calendar 2025, subject to satisfaction of regulatory approvals and other customary closing conditions. Upon completion of the merger, we will become a wholly-owned subsidiary of Paychex, and our common stock will be delisted from Nasdaq.

Given the pending transaction, we will not be hosting an earnings conference call, are suspending financial guidance for fiscal year 2025, and will not provide financial guidance for the third quarter ending March 31, 2025. For further detail and discussion of our financial performance, please refer to our Form 10-Q for the fiscal quarter ended December 31, 2024.

Additional Information and Where to Find It

We intend to file relevant materials with the SEC, including a preliminary and definitive information statement relating to the proposed transaction. The definitive information statement will be mailed to Paycor’s stockholders. STOCKHOLDERS ARE URGED TO CAREFULLY READ THE INFORMATION STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

A free copy of the information statement and other related documents (when available) filed by the Company with the SEC may be found on the “SEC Filings” section of Paycor’s investor relations website at https://www.investors.paycor.com and on the SEC website at www.sec.gov.

No Offer

No person has commenced soliciting proxies in connection with the proposed transaction referenced in this release, and this release is neither an offer to purchase nor a solicitation of an offer to sell securities.

About Paycor

Paycor’s HR, payroll, and talent platform connects leaders to people, data, and expertise. We help leaders drive engagement and retention by giving them tools to coach, develop, and grow employees. We give them unprecedented insights into their operational data with a unified HCM experience that can seamlessly connect to other mission-critical technology. By providing expert guidance and consultation, we help them achieve business results and become an extension of their teams. Learn more at paycor.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including statements regarding our future results of operations and financial position, our business outlook, our business strategy and plans, our objectives for future operations, and any statements of a general economic or industry specific nature, are forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” “outlook,” “potential,” “targets,” “contemplates,” or the negative or plural of these words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our most recent Annual Report on Form 10-K, as well as in our other filings with the Securities and Exchange Commission. Additionally, these forward-looking statements are subject to a number of risks, uncertainties and assumptions related to the Merger Agreement. We believe that these risks include, but are not limited to: the risk that the merger may not be completed in a timely manner or at all, which may adversely affect our business and the price of our common stock; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement; potential litigation relating to the merger that could be instituted against the parties to the Merger Agreement or their respective directors or officers, including the effects of any outcomes related thereto; certain restrictions during the pendency of the merger that may impact our ability to pursue certain business opportunities or strategic transactions; uncertainty as to timing of completion of the merger; risks that the benefits of the merger are not realized when and as expected; our ability to manage our growth effectively; the potential unauthorized access to our customers’ or their employees’ personal data as a result of a breach of our or our vendors’ security measures; the expansion and retention of our direct sales force with qualified and productive persons and the related effects on the growth of our business; the impact on customer expansion and retention if implementation, user experience, customer service, or performance relating to our solutions is not satisfactory; the timing of payments made to employees and taxing authorities relative to the timing of when a customer’s electronic funds transfers are settled to our account; future acquisitions of other companies’ businesses, technologies, or customer portfolios; the continued service of our key executives; our ability to innovate and deliver high-quality, technologically advanced products and services; risks specifically associated with our development and use of artificial intelligence in our solutions; our ability to attract and retain qualified personnel; the proper operation of our software; our relationships with third parties that provide financial and other functionality integrated into our HCM platform; the extent to which negative macroeconomic conditions persist or worsen in the markets in which we or our customers operate; and the impact of an economic downturn or recession in the United States or global economy. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations and assumptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We undertake no obligation to publicly update any forward-looking statement after the date of this report, whether as a result of new information, future developments or otherwise, or to conform these statements to actual results or revised expectations, except as may be required by law.

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present the following non-GAAP financial measures in this press release: adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted operating income margin, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted research and development expense, adjusted net income, adjusted net income per share, adjusted free cash flow and adjusted free cash flow margin. Management believes these non-GAAP measures are useful in evaluating our core operating performance and trends to prepare and approve our annual budget, and to develop short-term and long-term operating plans. Management believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. We define (i) adjusted gross profit as gross profit before amortization of intangible assets and stock-based compensation expense, in each case that are included in costs of revenues, (ii) adjusted gross profit margin as adjusted gross profit divided by total revenues, (iii) adjusted operating income as income (loss) from operations before amortization of acquired intangible assets and naming rights, stock-based compensation expense, exit costs due to exiting leases of certain facilities and other certain corporate expenses, such as costs related to secondary offerings, professional, consulting and other costs and acquisition costs, (iv) adjusted operating income margin as adjusted operating income divided by total revenues, (v) adjusted sales and marketing expense as sales and marketing expenses before amortization of naming rights and stock-based compensation expense, (vi) adjusted general and administrative expense as general and administrative expenses before amortization of acquired intangible assets, stock-based compensation expense, exit costs due to exiting leases of certain facilities and other certain corporate expenses, such as costs related to secondary offerings, professional, consulting and other costs and acquisition costs, (vii) adjusted research and development expense as research and development expenses before stock-based compensation expense, (viii) adjusted net income as income (loss) before expense (benefit) for income taxes after adjusting for amortization of acquired intangible assets and naming rights, accretion expense associated with the naming rights, change in fair value of contingent consideration, stock-based compensation expense, exit costs due to exiting leases of certain facilities and other certain corporate expenses, such as costs related to secondary offerings, professional, consulting and other costs and acquisition costs, all of which are tax effected by applying an adjusted effective income tax rate, (ix) adjusted net income per share as adjusted net income divided by adjusted shares outstanding, which includes potentially dilutive securities excluded from the GAAP dilutive net income (loss) per share calculation, (x) adjusted free cash flow as cash provided (used) by operating activities less the purchase of property and equipment and internally developed software costs, excluding other certain corporate expenses, which are included in cash provided (used) by operating activities and (xi) adjusted free cash flow margin as adjusted free cash flow divided by total revenues.

The non-GAAP financial measures presented in this press release are not measures of financial performance under GAAP and should not be considered a substitute for gross profit, gross margin, income (loss) from operations, operating income margin, sales and marketing expense, general and administrative expense, research and development expense, net income (loss), diluted net income (loss) per share and cash provided (used) by operating activities. Non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. The non-GAAP financial measures that we present may not be comparable to similarly titled measures used by other companies. A reconciliation is provided below under “Reconciliations of Non-GAAP Measures to GAAP Measures,” for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Investor Relations:
Rachel White
513-954-7388
IR@paycor.com

Media Relations:
Carly Pennekamp
513-954-7282
PR@paycor.com

*Paycor HCM, Inc. and Subsidiaries* *Condensed Consolidated Balance Sheets* *(in thousands, except share amounts)*
	December 31, 2024		June 30, 2024
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	114,569	$	117,958
Accounts receivable, net allowance for credit losses		58,252		48,164
Deferred contract costs		75,440		70,377
Prepaid expenses		13,284		12,749
Other current assets		9,397		3,458
Current assets before funds held for clients		270,942		252,706
Funds held for clients		1,333,368		1,109,136
Total current assets		1,604,310		1,361,842
Property and equipment, net		34,087		35,220
Operating lease right-of-use assets		14,308		14,417
Goodwill		765,904		766,653
Intangible assets, net		137,327		171,493
Capitalized software, net		72,046		67,376
Long-term deferred contract costs		199,450		189,826
Other long-term assets		2,770		2,566
Total assets	$	2,830,202	$	2,609,393
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	21,327	$	27,309
Accrued expenses and other current liabilities		24,851		26,450
Accrued payroll and payroll related expenses		36,190		44,923
Deferred revenue		13,395		13,600
Current liabilities before client fund obligations		95,763		112,282
Client fund obligations		1,333,944		1,111,373
Total current liabilities		1,429,707		1,223,655
Deferred income taxes		10,726		16,019
Long-term operating leases		12,765		13,447
Other long-term liabilities		67,986		69,346
Total liabilities		1,521,184		1,322,467
Commitments and contingencies
Stockholders’ equity:
Common stock $0.001 par value per share, 500,000,000 shares authorized, 181,251,037 shares outstanding at December 31, 2024 and 178,210,263 shares outstanding at June 30, 2024		181		178
Treasury stock, at cost, 10,620,260 shares at December 31, 2024 and June 30, 2024		(245,074)		(245,074)
Preferred stock, $0.001 par value, 50,000,000 shares authorized, — shares outstanding at December 31, 2024 and June 30, 2024		—		—
Additional paid-in capital		2,111,961		2,081,668
Accumulated deficit		(557,769)		(548,437)
Accumulated other comprehensive loss		(281)		(1,409)
Total stockholders’ equity		1,309,018		1,286,926
Total liabilities and stockholders’ equity	$	2,830,202	$	2,609,393

Paycor HCM, Inc. and Subsidiaries *Condensed Consolidated Statements of Operations (Unaudited)* *(in thousands, except share amounts)*
	Three Months Ended				Six Months Ended
	December 31,				December 31,
		2024		2023		2024		2023
Revenues:
Recurring and other revenue	$	167,388	$	147,232	$	321,387	$	279,940
Interest income on funds held for clients		13,050		12,309		26,527		23,189
Total revenues		180,438		159,541		347,914		303,129
Cost of revenues		62,186		55,125		121,403		106,503
Gross profit		118,252		104,416		226,511		196,626
Operating expenses:
Sales and marketing		60,137		57,753		116,926		110,531
General and administrative		38,554		56,173		86,850		104,922
Research and development		18,369		16,665		35,797		30,720
Total operating expenses		117,060		130,591		239,573		246,173
Income (loss) from operations		1,192		(26,175)		(13,062)		(49,547)
Other (expense) income:
Interest expense		(1,135)		(1,153)		(2,273)		(2,397)
Other		780		(1,745)		2,450		(814)
Income (loss) before benefit for income taxes		837		(29,073)		(12,885)		(52,758)
Income tax expense (benefit)		2,885		(2,824)		(3,553)		(5,913)
Net loss	$	(2,048)	$	(26,249)	$	(9,332)	$	(46,845)
Basic and diluted net loss per share	$	(0.01)	$	(0.15)	$	(0.05)	$	(0.26)
Weighted average common shares outstanding:
Basic and diluted		179,592,666		177,567,397		179,161,188		177,260,396

*Paycor HCM, Inc. and Subsidiaries* *Condensed Consolidated Statements of Cash Flows (Unaudited)* *(in thousands)*
	Six Months Ended
	December 31,
		2024		2023
Cash flows from operating activities:
Net loss	$	(9,332)	$	(46,845)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		2,848		2,997
Amortization of intangible assets and software		57,533		68,312
Amortization of deferred contract costs		38,638		29,876
Stock-based compensation expense		28,806		35,964
Deferred tax benefit		(6,040)		(5,937)
Bad debt expense		3,301		2,870
Loss on sale of investments		147		142
Loss on foreign currency exchange		442		4
Gain on lease exit		—		(29)
Naming rights accretion expense		2,012		2,061
Change in fair value of deferred consideration		(112)		2,816
Other		44		44
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable		(11,689)		(17,003)
Prepaid expenses and other assets		(6,055)		(7,487)
Accounts payable		(5,824)		(3,207)
Accrued liabilities and other		(12,757)		(10,892)
Deferred revenue		112		255
Deferred contract costs		(53,325)		(53,904)
Net cash provided by operating activities		28,749		37
Cash flows from investing activities:
Purchases of client funds available-for-sale securities		(114,162)		(151,939)
Proceeds from sale and maturities of client funds available-for-sale securities		106,052		103,453
Purchase of property and equipment		(1,756)		(2,068)
Acquisition of intangible assets		(1,553)		(4,133)
Acquisition of businesses, net of cash acquired		—		(28)
Internally developed software costs		(26,484)		(25,308)
Net cash used in investing activities		(37,903)		(80,023)
Cash flows from financing activities:
Net change in cash and cash equivalents held to satisfy client funds obligations		221,962		270,540
Payment of contingent consideration		(1,329)		—
Payment of capital expenditure financing		—		(3,689)
Repayments of debt and finance lease obligations		(597)		(536)
Withholding taxes paid related to net share settlements		(1,957)		(1,829)
Proceeds from employee stock purchase plan		3,444		4,172
Net cash provided by financing activities		221,523		268,658
Impact of foreign exchange on cash and cash equivalents		21		11
Net change in cash, cash equivalents, restricted cash and short-term investments, and funds held for clients		212,390		188,683
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, beginning of period		910,580		879,046
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, end of period	$	1,122,970	$	1,067,729
Supplemental disclosure of non-cash investing, financing and other cash flow information:
Capital expenditures in accounts payable	$	54	$	39
Cash paid for interest	$	—	$	145
Capital lease asset obtained in exchange for capital lease liabilities	$	—	$	3,393
Reconciliation of cash, cash equivalents, restricted cash and short-term investments, and funds held for clients to the Consolidated Balance Sheets
Cash and cash equivalents	$	114,569	$	61,719
Funds held for clients		1,008,401		1,006,010
Total cash, cash equivalents, restricted cash and short-term investments, and funds held for clients	$	1,122,970	$	1,067,729

Reconciliations of Non-GAAP Measures to GAAP Measures

Adjusted Gross Profit and Adjusted Gross Profit Margin (Unaudited)

	Three Months Ended				Six Months Ended
(in thousands)	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Gross Profit*	$	118,252	$	104,416	$	226,511	$	196,626
Gross Profit Margin		65.5%		65.4%		65.1%		64.9%
Amortization of intangible assets		914		634		1,789		2,009
Stock-based compensation expense		1,954		2,404		3,456		3,999
Corporate adjustments		—		—		21		—
Adjusted Gross Profit*	$	121,120	$	107,454	$	231,777	$	202,634
Adjusted Gross Profit Margin		67.1%		67.4%		66.6%		66.8%

* Gross Profit and Adjusted Gross Profit were burdened by depreciation expense of $0.5 million and $0.6 million for the three months ended December 31, 2024 and 2023, respectively, and $1.1 million and $1.2 million for the six months ended December 31, 2024 and 2023, respectively. Gross Profit and Adjusted Gross Profit were burdened by amortization of capitalized software of $11.2 million and $9.2 million for the three months ended December 31, 2024 and 2023, respectively, and $21.8 million and $17.6 million for the six months ended December 31, 2024 and 2023, respectively. Gross Profit and Adjusted Gross Profit are burdened by amortization of deferred contract costs of $11.4 million and $8.8 million for the three months ended December 31, 2024 and 2023, respectively, and $22.2 million and $17.0 million for the six months ended December 31, 2024 and 2023, respectively.

Adjusted Operating Income (Unaudited)

	Three Months Ended				Six Months Ended
(in thousands)	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Income (Loss) from Operations	$	1,192	$	(26,175)	$	(13,062)	$	(49,547)
Operating Margin		0.7%		(16.4)%		(3.8)%		(16.3)%
Amortization of intangible assets		12,023		24,963		35,719		50,673
Stock-based compensation expense		16,141		23,049		28,806		35,964
(Gain) loss on lease exit*		(6)		115		—		(29)
Corporate adjustments**		2,442		1,345		3,129		2,156
Adjusted Operating Income	$	31,792	$	23,297	$	54,592	$	39,217
Adjusted Operating Income Margin		17.6%		14.6%		15.7%		12.9%

Adjusted Operating Expenses (Unaudited)

	Three Months Ended				Six Months Ended
(in thousands)	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Sales and Marketing expenses	$	60,137	$	57,753	$	116,926	$	110,531
Amortization of intangible assets		(1,058)		(1,058)		(2,117)		(2,117)
Stock-based compensation expense		(5,330)		(7,224)		(9,515)		(11,542)
Adjusted Sales and Marketing expenses	$	53,749	$	49,471	$	105,294	$	96,872
General and Administrative expenses	$	38,554	$	56,173	$	86,850	$	104,922
Amortization of intangible assets		(10,051)		(23,272)		(31,813)		(46,548)
Stock-based compensation expense		(6,051)		(9,951)		(10,837)		(15,023)
Gain (loss) on lease exit*		6		(115)		—		29
Corporate adjustments**		(2,442)		(1,345)		(3,108)		(2,156)
Adjusted General and Administrative expenses	$	20,016	$	21,490	$	41,092	$	41,224
Research and Development expenses	$	18,369	$	16,665	$	35,797	$	30,720
Stock-based compensation expense		(2,806)		(3,470)		(4,998)		(5,400)
Adjusted Research and Development expenses	$	15,563	$	13,195	$	30,799	$	25,320

Adjusted Net Income and Adjusted Net Income Per Share (Unaudited)

	Three Months Ended				Six Months Ended
(in thousands)	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Net gain (loss) before benefit for income taxes	$	837	$	(29,073)	$	(12,885)	$	(52,758)
Amortization of intangible assets		12,023		24,963		35,719		50,673
Naming rights accretion expense		1,006		1,031		2,012		2,061
Change in fair value of deferred consideration		—		2,816		(112)		2,816
Stock-based compensation expense		16,141		23,049		28,806		35,964
(Gain) loss on lease exit*		(6)		115		—		(29)
Corporate adjustments**		2,442		1,345		3,129		2,156
Non-GAAP adjusted income before applicable income taxes		32,443		24,246		56,669		40,883
Income tax effect on adjustments***		(7,462)		(5,577)		(13,034)		(9,403)
Adjusted Net Income	$	24,981	$	18,669	$	43,635	$	31,480

Adjusted Net Income Per Share	$	0.14	$	0.11	$	0.24	$	0.18
Adjusted shares outstanding****		180,681,049		177,740,047		179,772,462		177,537,308

* Represents exit costs due to exiting leases of certain facilities.
** Corporate adjustments for the three and six months ended December 31, 2024 relate to professional costs associated with the Paychex merger of $1.7 million for both periods and professional, consulting, and other costs associated with strategic initiatives of $0.7 million and $1.4 million, respectively. Corporate adjustments for the three and six months ended December 31, 2023 relate to costs associated with the secondary offering completed in December 2023 (“December 2023 Secondary Offering”) of $0.6 million and $0.6 million, respectively, and professional, consulting, and other costs of $0.7 million and $1.5 million, respectively.
*** Non-GAAP adjusted income before applicable income taxes is tax effected using an adjusted effective income tax rate of 23.0% for each of the three and six months ended December 31, 2024 and 2023, respectively.
**** Adjusted shares outstanding for the three and six months ended December 31, 2024 and 2023 are based on the if-converted method and include potentially dilutive securities that are excluded from the U.S. GAAP dilutive net income per share calculation because including them in the computation of net income per share would have an anti-dilutive effect.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (Unaudited)

	Three Months Ended				Six Months Ended
(in thousands)	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Net cash provided by operating activities	$	37,060	$	26,166	$	28,749	$	37
Purchase of property and equipment*		(418)		(633)		(1,587)		(2,068)
Internally developed software costs		(13,043)		(12,054)		(26,484)		(25,308)
Corporate adjustments**		4,885		1,345		5,572		2,156
Adjusted Free Cash Flow	$	28,484	$	14,824	$	6,250	$	(25,183)
Adjusted Free Cash Flow Margin		15.8%		9.3%		1.8%		(8.3)%

* Represents purchases of property & equipment, net of $0.2 million of leasehold improvements related to the new Headquarters lease for the three and six months ended December 31, 2024.
** Corporate adjustments for the three and six months ended December 31, 2024 relate to contingent consideration of $4.2 million for both periods and professional, consulting, and other costs associated with strategic initiatives of $0.7 million and $1.4 million, respectively. Corporate adjustments for the three and six months ended December 31, 2023 relate to costs associated with the secondary offering completed in December 2023 (“December 2023 Secondary Offering”) of $0.6 million and $0.6 million, respectively, and professional, consulting, and other costs of $0.7 million and $1.5 million, respectively.

The MIL Network –

February 6, 2025

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

Source: GlobeNewswire (MIL-OSI)

Fourth quarter revenue of $1,341 million decreased 5% sequentially and 2% year-over-year; full year revenue of $5,513 million increased 7% from prior year, driven by international revenue growth of 10%
Fourth quarter operating income of $198 million decreased 19% sequentially and 8% year-over-year; full year operating income of $938 million increased 14% from prior year
Fourth quarter net income of $112 million, an 8.4% margin, decreased 29% sequentially and 20% year-over-year; full year net income of $506 million, a 9.2% margin, increased by 21% from prior year
Fourth quarter adjusted EBITDA* of $326 million, a 24.3% margin, decreased 8%, or 88 basis points, sequentially and increased 2%, or 74 basis points, year-over-year; full year adjusted EBITDA* of $1,382 million, a 25.1% margin, increased 17%, or 197 basis points, from prior year
Fourth quarter cash provided by operating activities of $249 million and adjusted free cash flow* of $162 million; full year cash provided by operating activities of $792 million and adjusted free cash flow* of $524 million
Shareholder return of $67 million for the quarter, which included dividend payments of $18 million and share repurchases of $49 million
Board approved quarterly cash dividend of $0.25 per share, payable on March 19, 2025, to shareholders of record as of February 21, 2025

^{*Non-GAAP – refer to the section titled Non-GAAP Financial Measures Defined and GAAP to Non-GAAP Financial Measures Reconciled}

HOUSTON, Feb. 05, 2025 (GLOBE NEWSWIRE) — Weatherford International plc (NASDAQ: WFRD) (“Weatherford” or the “Company”) announced today its results for the fourth quarter of 2024 and full year 2024.

Revenues for the fourth quarter of 2024 were $1,341 million, a decrease of 5% sequentially and 2% year-over-year. Operating income was $198 million in the fourth quarter of 2024, compared to $243 million in the third quarter of 2024 and $216 million in the fourth quarter of 2023. Net income in the fourth quarter of 2024 was $112 million, with an 8.4% margin, a decrease of 29%, or 279 basis points, sequentially, and a decrease of 20%, or 193 basis points, year-over-year. Adjusted EBITDA* was $326 million, a 24.3% margin, a decrease of 8%, or 88 basis points, sequentially, and an increase of 2%, or 74 basis points, year-over-year. Basic income per share in the fourth quarter of 2024 was $1.54 compared to $2.14 in the third quarter of 2024 and $1.94 in the fourth quarter of 2023. Diluted income per share in the fourth quarter of 2024 was $1.50 compared to $2.06 in the third quarter of 2024 and $1.90 in the fourth quarter of 2023.

Fourth quarter 2024 cash flows provided by operating activities were $249 million, compared to $262 million in the third quarter of 2024, and $375 million in the fourth quarter of 2023. Adjusted free cash flow* was $162 million, a decrease of $22 million sequentially, and $153 million year-over-year. Capital expenditures were $100 million in the fourth quarter of 2024, compared to $78 million in the third quarter of 2024, and $67 million in the fourth quarter of 2023.

Revenue for the full year 2024 was $5,513 million, compared to revenues of $5,135 million in 2023. Operating income for the full year was $938 million, compared to $820 million in 2023. The Company’s full year 2024 net income was $506 million, compared to $417 million in 2023. Full year cash flows provided by operations were $792 million, compared to $832 million in 2023. Adjusted free cash flow* for the full year was $524 million compared to $651 million in 2023. Capital expenditures for the full year 2024 were $299 million, compared to $209 million in 2023.

Girish Saligram, President and Chief Executive Officer, commented, “The fourth quarter witnessed a significant drop in activity levels in Latin America and a more cautious tone in a few key geographies. Despite a challenging environment in the fourth quarter, the overall full year 2024 was another one of setting new operational highs, and I would like to express my gratitude to the One Weatherford team for that. We ended the year with the best safety record we have ever had, strong margin expansion and solid cash generation.

While the activity outlook continues to evolve, margins and cash flow performance continue to be the cornerstone of our financial and strategic objectives. We are well-positioned to deliver another year of strong cash flow generation in 2025. While there is some temporary activity reduction, we continue to believe in the industry’s mid to long-term resilience and remain committed to our goal of achieving EBITDA margins in the high 20’s over the next few years.”

*Non-GAAP – refer to the section titled Non-GAAP Financial Measures Defined and GAAP to Non-GAAP Financial Measures Reconciled

Operational & Commercial Highlights

ADNOC awarded Weatherford a three-year contract for the provision of rigless services as part of the reactivation of ADNOC’s onshore strings.
Kuwait Oil Company (KOC) awarded Weatherford a Managed Pressure Drilling (MPD) services contract focused on improving operational efficiency, enhancing safety, accelerating well-delivery timelines, and reducing costs by deploying Weatherford’s innovative Victus^TM Intelligent MPD system.
KOC awarded Weatherford a one-year contract to provide and operate two onshore Real Time Decision Centers.
A National Oil Company (NOC) in Qatar awarded Weatherford a five-year contract to provide fishing and drilling tools, with a five-year extension option.
An NOC in Asia awarded Weatherford a three-year contract for the provision of Wireline conveyance and tooling services and a three-year contract for Tubular Running Services (TRS) in onshore India.
OMV Petrom awarded Weatherford a two-year contract for openhole and cased-hole logging services in Romania.
A major operator in Asia awarded Weatherford a three-year contract for providing Modus^TM MPD services for two zones in North and South Sumatra, and awarded a five-year contract to provide openhole and cased-hole Wireline in onshore Indonesia.
Khalda awarded Weatherford a three-year contract to deploy up to 300 wells in Egypt using CygNet^® SCADA and ForeSite^® platform.
Azule Energy awarded Weatherford a three-year contract to provide TRS for the NGC Project in offshore Angola. This is in addition to the recently awarded TRS contract in block 15/06 in the deepwater block.
PTTEP awarded Weatherford a 24-month contract to provide openhole Wireline Services in onshore Thailand.
A major operator in Asia awarded Weatherford with a four-year contract to provide Rotating Control Devices to enable MPD in offshore Indonesia.
Shell Petroleum Development Company awarded Weatherford a three-year contract to provide Well Completions and other related specialized services in onshore Nigeria.

Technology Highlights
On January 14, 2025, at the annual IKTVA forum held at Dahan Dharan Expo, Weatherford signed an agreement with SPARK, a fully integrated industrial ecosystem aimed at making Saudi Arabia a global energy hub. This strategic partnership, aligned with Saudi Arabia’s Vision 2030, enhances Weatherford’s local presence, boosts production capabilities, and supports the region’s energy goals. By advancing local content, fostering talent, and driving innovation, Weatherford demonstrates its commitment to economic growth and to supporting Saudi Arabia’s leadership in energy innovation.

Drilling & Evaluation (“DRE”)
- In the North Sea, Weatherford successfully deployed the world’s first Dual Advanced Kickover Tool for Equinor. The unique solution enables gas lift valve replacements in just a single run, which significantly increases efficiency and reduces cost of conventional systems.
- In Saudi Arabia, Weatherford deployed its compact wireline logging tools with shuttle technology to achieve a record total depth for Aramco. This extended reach well features the longest horizontal section, measuring 23,000 feet.
Well Construction and Completions (“WCC”)
- In deepwater Brazil, Weatherford successfully installed the first OptiRoss^® RFID Multi-Cycle Sliding Sleeve Valve for a major operator. The system enhances acid stimulation efficiency, improving production and boosting the reservoir’s oil recovery factor.
- In the Middle East, Weatherford successfully deployed its market-leading Optimax Tubing Retrievable Safety Valve for an NOC. This deployment enabled gas lift valve replacements in a single run, significantly increasing efficiency and reducing costs compared to conventional systems.
Production and Intervention (“PRI”)
- In the Middle East, Weatherford’s Alpha1Go remote re-entry system was deployed for an NOC, optimizing rig site operations by significantly reducing whipstock preparation time and minimizing red-zone exposure. This deployment improved both efficiency and safety, demonstrating the system’s effectiveness in facilitating well re-entry operations and real-time team collaboration in various rig environments.
- In US land operations, Weatherford successfully deployed its first Reclaim Dual Barrier Plug and Abandon (P&A) system for a major operator. This innovative dual barrier P&A system safely and reliably abandons wells without the need to pull tubing. By eliminating the requirement for conventional drilling rigs, it significantly reduces costs and minimizes the carbon footprint.

Shareholder Return

During the fourth quarter of 2024, Weatherford repurchased shares for approximately $49 million and paid dividends of $18 million, resulting in total shareholder return of $67 million. Since the inception of the shareholder return program introduced earlier in 2024, the Company repurchased shares for approximately $99 million and paid dividends of $36 million, resulting in total shareholder return of $135 million.

On January 29, 2025, our Board declared a cash dividend of $0.25 per share of the Company’s ordinary shares, payable on March 19, 2025, to shareholders of record as of February 21, 2025.

Results by Reportable Segment

Drilling and Evaluation (“DRE”)

	Three Months Ended									Variance				Twelve Months Ended						Variance
($ in Millions)	Dec 31, 2024			Sep 30, 2024			Dec 31, 2023			Seq.		YoY		Dec 31, 2024			Dec 31, 2023			YoY
Revenue	$	398		$	435		$	382		(9	)%	4	%	$	1,682		$	1,536		10	%
Segment Adjusted EBITDA	$	96		$	111		$	97		(14	)%	(1	)%	$	467		$	422		11	%
Segment Adj EBITDA Margin		24.1	%		25.5	%		25.4	%	(140)	bps	(127)	bps		27.8	%		27.5	%	29	bps

Fourth quarter 2024 DRE revenue of $398 million decreased by $37 million, or 9% sequentially, primarily from lower activity in Latin America, partly offset by higher international Wireline activity. Year-over-year DRE revenues increased by $16 million, or 4%, primarily from higher activity in North America and higher international Wireline activity, partly offset by lower activity in Latin America.

Fourth quarter 2024 DRE segment adjusted EBITDA of $96 million decreased by $15 million, or 14% sequentially, primarily driven by lower activity in Latin America, partly offset by higher international Wireline activity. Year-over-year DRE segment adjusted EBITDA decreased by $1 million, or 1%, primarily due to lower activity in Latin America, partly offset by improved performance in Middle East/North Africa/Asia.

Full year 2024 DRE revenues of $1,682 million increased by $146 million, or 10% compared to 2023, as higher Wireline and Drilling-related services activity were partly offset by lower Drilling Services in Latin America.

Full year 2024 DRE segment adjusted EBITDA of $467 million increased by $45 million, or 11% compared to 2023, as higher MPD and Wireline activity were partly offset by lower activity in Latin America.

Well Construction and Completions (“WCC”)

	Three Months Ended									Variance				Twelve Months Ended						Variance
($ in Millions)	Dec 31, 2024			Sep 30, 2024			Dec 31, 2023			Seq.		YoY		Dec 31, 2024			Dec 31, 2023			YoY
Revenue	$	505		$	509		$	480		(1	)%	5	%	$	1,976		$	1,800		10	%
Segment Adjusted EBITDA	$	148		$	151		$	131		(2	)%	13	%	$	564		$	455		24	%
Segment Adj EBITDA Margin		29.3	%		29.7	%		27.3	%	(36)	bps	202	bps		28.5	%		25.3	%	326	bps

Fourth quarter 2024 WCC revenue of $505 million decreased by $4 million, or 1% sequentially, primarily due to lower activity in Europe/Sub-Sahara Africa/Russia, partly offset by higher Completions and TRS activity in Middle East/North Africa/Asia. Year-over-year WCC revenues increased by $25 million, or 5%, primarily due to higher activity in Middle East/North Africa/Asia and higher Liner Hangers and Well Services activity in Latin America, partly offset by lower activity in North America.

Fourth quarter 2024 WCC segment adjusted EBITDA of $148 million decreased by $3 million, or 2% sequentially, primarily due to lower activity in Europe/Sub-Sahara Africa/Russia, partly offset by higher Completions and TRS activity in Middle East/North Africa/Asia. Year-over-year WCC segment adjusted EBITDA increased by $17 million, or 13%, primarily due to higher activity in Middle East/North Africa/Asia, partly offset by lower activity in Europe/Sub-Sahara Africa/Russia.

Full year 2024 WCC revenues of $1,976 million increased by $176 million, or 10% compared to 2023, primarily from higher activity in Middle East/North Africa/Asia and Latin America, partly offset by lower activity in North America.

Full year 2024 WCC segment adjusted EBITDA of $564 million increased by $109 million, or 24% compared to 2023, primarily due to improved fall through in major product lines across all geographies.

Production and Intervention (“PRI”)

	Three Months Ended									Variance				Twelve Months Ended						Variance
($ in Millions)	Dec 31, 2024			Sep 30, 2024			Dec 31, 2023			Seq.		YoY		Dec 31, 2024			Dec 31, 2023			YoY
Revenue	$	364		$	371		$	386		(2	)%	(6	)%	$	1,452		$	1,472		(1	)%
Segment Adjusted EBITDA	$	78		$	83		$	88		(6	)%	(11	)%	$	319		$	323		(1	)%
Segment Adj EBITDA Margin		21.4	%		22.4	%		22.8	%	(94)	bps	(137)	bps		22.0	%		21.9	%	3	bps

Fourth quarter 2024 PRI revenue of $364 million decreased by $7 million, or 2% sequentially, primarily due to lower activity in Latin America and lower Intervention Services and Drilling Tools (ISDT) activity in Europe/Sub-Sahara Africa/Russia and North America. Year-over-year PRI revenue decreased by $22 million, or 6%, as lower activity in Middle East/North Africa/Asia and Latin America was partly offset by higher Artificial Lift activity in North America.

Fourth quarter 2024 PRI segment adjusted EBITDA of $78 million, decreased by $5 million, or 6% sequentially, primarily from lower activity in Latin America and lower ISDT activity in Europe/Sub-Sahara Africa/Russia and North America, partly offset by higher Artificial Lift activity in Middle East/North Africa/Asia. Year-over-year PRI segment adjusted EBITDA decreased by $10 million, or 11% year-over-year, primarily due to lower activity in Latin America and Europe/Sub-Sahara Africa/Russia, partly offset by better ISDT and Artificial Lift fall through in North America.

Full year 2024 PRI revenues of $1,452 million decreased by $20 million, or 1% compared to 2023, primarily due to lower international Pressure Pumping and Digital Solutions activity, partly offset by higher ISDT activity in Europe/Sub-Sahara Africa/Russia and Middle East/North Africa/Asia.

Full year 2024 PRI segment adjusted EBITDA of $319 million decreased by $4 million, or 1% compared to 2023, as lower activity in international Pressure Pumping and Digital Solutions was partly offset by improved performance in Artificial Lift.

Revenue by Geography

	Three Months Ended								Variance		Twelve Months Ended				Variance
*($ in Millions)*	Dec 31, 2024		Sep 30, 2024		Dec 31, 2023		Seq.		YoY		Dec 31, 2024		Dec 31, 2023		YoY
North America	$	261	$	266	$	248	(2	)%	5	%	$	1,046	$	1,068	(2	)%

International	$	1,080	$	1,143	$	1,114	(6	)%	(3	)%	$	4,467	$	4,067	10	%
Latin America		312		358		342	(13	)%	(9	)%		1,393		1,387	—	%
Middle East/North Africa/Asia		542		542		547	—	%	(1	)%		2,123		1,815	17	%
Europe/Sub-Sahara Africa/Russia		226		243		225	(7	)%	—	%		951		865	10	%
Total Revenue	$	1,341	$	1,409	$	1,362	(5	)%	(2	)%	$	5,513	$	5,135	7	%

North America

Fourth quarter 2024 North America revenue of $261 million decreased by $5 million, or 2% sequentially, primarily due to activity decreases in the North and South regions, partly offset by activity increase offshore in the Gulf of Mexico. Year-over-year, North America increased by $13 million, or 5%, primarily from higher Artificial Lift and Wireline activity, partly offset by a decrease in activity across the WCC segment.

Full year 2024 North America revenue of $1,046 million decreased by $22 million, or 2%, compared to 2023, primarily due to lower activity in the WCC and PRI segments, partly offset by higher Wireline activity.

International

Fourth quarter 2024 international revenue of $1,080 million decreased 6% sequentially and decreased 3% year-over-year, and full year 2024 international revenue of $4,467 million increased 10%, compared to 2023.

Fourth quarter 2024 Latin America revenue of $312 million decreased by $46 million, or 13% sequentially, primarily due to lower Drilling-related Services, partly offset by higher Liner Hangers activity. Year-over-year, Latin America revenue decreased by $30 million, primarily due to lower activity in the DRE and PRI segments, partly offset by higher activity in Liner Hangers and Well Services.

Full year 2024 Latin America revenue of $1,393 million was largely flat, compared to 2023.

Fourth quarter 2024 revenue of $542 million in Middle East/North Africa/Asia was flat sequentially, as higher activity from Completions and Artificial Lift were largely offset by lower MPD and Integrated Services & Projects. Year-over-year, the Middle East/North Africa/Asia revenue decreased by $5 million, or 1%, primarily due to lower activity in the PRI segment, partly offset by higher Drilling-related services and Completions activity.

Full year 2024 revenue of $2,123 million in Middle East/North Africa/Asia increased by $308 million, or 17%, compared to 2023, mainly due to increased activity in the DRE and WCC segments, partly offset by lower activity in Digital Solutions, Artificial Lift and Pressure Pumping.

Fourth quarter 2024 Europe/Sub-Sahara Africa/Russia revenue of $226 million decreased by $17 million, or 7%, sequentially, mainly driven by lower Completions and ISDT activity, partly offset by higher Wireline activity. Year-over-year Europe/Sub-Sahara Africa/Russia revenue was largely flat due to increased activity in the DRE segment, largely offset by lower activity in the WCC and PRI segments.

Full year 2024 Europe/Sub-Sahara Africa/Russia revenue of $951 million increased by $86 million, or 10% compared to 2023, due to increased activity in the DRE and WCC segments, partly offset by lower Pressure Pumping and Artificial Lift activity.

About Weatherford
Weatherford delivers innovative energy services that integrate proven technologies with advanced digitalization to create sustainable offerings for maximized value and return on investment. Our world-class experts partner with customers to optimize their resources and realize the full potential of their assets. Operators choose us for strategic solutions that add efficiency, flexibility, and responsibility to any energy operation. The Company conducts business in approximately 75 countries and has approximately 19,000 team members representing more than 110 nationalities and 330 operating locations. Visit weatherford.com for more information and connect with us on social media.

Conference Call Details

Weatherford will host a conference call on Thursday, February 6, 2025, to discuss the Company’s results for the fourth quarter ended December 31, 2024. The conference call will begin at 8:30 a.m. Eastern Time (7:30 a.m. Central Time).

Listeners are encouraged to download the accompanying presentation slides which will be available in the investor relations section of the Company’s website.

Listeners can participate in the conference call via a live webcast at https://www.weatherford.com/investor-relations/investor-news-and-events/events/ or by dialing +1 877-328-5344 (within the U.S.) or +1 412-902-6762 (outside of the U.S.) and asking for the Weatherford conference call. Participants should log in or dial in approximately 10 minutes prior to the start of the call.

A telephonic replay of the conference call will be available until February 20, 2025, at 5:00 p.m. Eastern Time. To access the replay, please dial +1 877-344-7529 (within the U.S.) or +1 412-317-0088 (outside of the U.S.) and reference conference number 9530137. A replay and transcript of the earnings call will also be available in the investor relations section of the Company’s website.

Contacts
For Investors:
Luke Lemoine
Senior Vice President, Corporate Development & Investor Relations
+1 713-836-7777
investor.relations@weatherford.com

For Media:
Kelley Hughes
Senior Director, Communications & Employee Engagement
media@weatherford.com

Forward-Looking Statements

This news release contains projections and forward-looking statements concerning, among other things, the Company’s quarterly and full-year revenues, adjusted EBITDA*, adjusted EBITDA margin*, adjusted free cash flow*, net leverage*, shareholder return program, forecasts or expectations regarding business outlook, prospects for its operations, capital expenditures, expectations regarding future financial results, and are also generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “outlook,” “budget,” “intend,” “strategy,” “plan,” “guidance,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words. Such statements are based upon the current beliefs of Weatherford’s management and are subject to significant risks, assumptions, and uncertainties. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those indicated in our forward-looking statements. Readers are cautioned that forward-looking statements are only predictions and may differ materially from actual future events or results, based on factors including but not limited to: global political disturbances, war, terrorist attacks, changes in global trade policies and tariffs, weak local economic conditions and international currency fluctuations; general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; various effects from conflicts in the Middle East and the Russia Ukraine conflict, including, but not limited to, nationalization of assets, extended business interruptions, sanctions, treaties and regulations imposed by various countries, associated operational and logistical challenges, and impacts to the overall global energy supply; cybersecurity issues; our ability to comply with, and respond to, climate change, environmental, social and governance and other sustainability initiatives and future legislative and regulatory measures both globally and in specific geographic regions; the potential for a resurgence of a pandemic in a given geographic area and related disruptions to our business, employees, customers, suppliers and other partners; the price and price volatility of, and demand for, oil and natural gas; the macroeconomic outlook for the oil and gas industry; our ability to generate cash flow from operations to fund our operations; our ability to effectively and timely adapt our technology portfolio, products and services to remain competitive, and to address and participate in changes to the market demands, including for the transition to alternate sources of energy such as geothermal, carbon capture and responsible abandonment, including our digitalization efforts; our ability to effectively execute our capital allocation framework; our ability to return capital to shareholders, including those related to the timing and amounts (including any plans or commitments in respect thereof) of any dividends and share repurchases; and the realization of additional cost savings and operational efficiencies.

These risks and uncertainties are more fully described in Weatherford’s reports and registration statements filed with the Securities and Exchange Commission, including the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Accordingly, you should not place undue reliance on any of the Company’s forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law, and we caution you not to rely on them unduly.

*Non-GAAP – refer to the section titled Non-GAAP Financial Measures Defined and GAAP to Non-GAAP Financial Measures Reconciled

Weatherford International plc
Selected Statements of Operations (Unaudited)

	Three Months Ended									Year Ended
*($ in Millions, Except Per Share Amounts)*	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024				December 31, 2023
Revenues:
DRE Revenues	$	398		$	435		$	382		$	1,682			$	1,536
WCC Revenues		505			509			480			1,976				1,800
PRI Revenues		364			371			386			1,452				1,472
All Other		74			94			114			403				327
Total Revenues		1,341			1,409			1,362			5,513				5,135

Operating Income:
DRE Segment Adjusted EBITDA^[1]	$	96		$	111		$	97		$	467			$	422
WCC Segment Adjusted EBITDA^[1]		148			151			131			564				455
PRI Segment Adjusted EBITDA^[1]		78			83			88			319				323
All Other^[2]		11			23			13			84				38
Corporate^[2]		(7	)		(13	)		(8	)		(52	)			(52	)
Depreciation and Amortization		(83	)		(89	)		(83	)		(343	)			(327	)
Share-based Compensation		(10	)		(10	)		(9	)		(45	)			(35	)
Other Charges		(35	)		(13	)		(13	)		(56	)			(4	)
Operating Income		198			243			216			938				820

Other Expense:
Interest Expense, Net of Interest Income of $12, $13, $12, $56 and $59		(25	)		(24	)		(31	)		(102	)			(123	)
Loss on Blue Chip Swap Securities		—			—			—			(10	)			(57	)
Other Expense, Net		(4	)		(41	)		(36	)		(87	)	—		(134	)
Income Before Income Taxes		169			178			149			739				506
Income Tax Provision		(45	)		(12	)		(2	)		(189	)			(57	)
Net Income		124			166			147			550				449
Net Income Attributable to Noncontrolling Interests		12			9			7			44				32
Net Income Attributable to Weatherford	$	112		$	157		$	140		$	506			$	417

Basic Income Per Share	$	1.54		$	2.14		$	1.94		$	6.93			$	5.79
Basic Weighted Average Shares Outstanding		72.6			73.2			72.1			73.0				71.9

Diluted Income Per Share^[3]	$	1.50		$	2.06		$	1.90		$	6.75			$	5.66
Diluted Weighted Average Shares Outstanding		74.5			75.2			73.9			74.9				73.7

^[1]		^{Segment adjusted EBITDA is our primary measure of segment profitability under U.S. GAAP ASC 280 “Segment Reporting” and represents segment earnings before interest, taxes, depreciation, amortization, share-based compensation and other adjustments. Research and development expenses are included in segment adjusted EBITDA.}
^[2]		^{All Other includes results from non-core business activities (including integrated services and projects), and Corporate includes overhead support and centrally managed or shared facilities costs. All Other and Corporate do not individually meet the criteria for segment reporting.}
^[3]		^{Included the maximum potentially dilutive shares contingently issuable for an acquisition consideration during the three months ended September 30, 2024, the value of which was adjusted out of Net Income Attributable to Weatherford in calculating diluted income per share.}

Weatherford International plc
Selected Balance Sheet Data (Unaudited)

*($ in Millions)*	December 31, 2024		December 31, 2023
Assets:
Cash and Cash Equivalents	$	916	$	958
Restricted Cash		59		105
Accounts Receivable, Net		1,261		1,216
Inventories, Net		880		788
Property, Plant and Equipment, Net		1,061		957
Intangibles, Net		325		370

Liabilities:
Accounts Payable		792		679
Accrued Salaries and Benefits		302		387
Current Portion of Long-term Debt		17		168
Long-term Debt		1,617		1,715

Shareholders’ Equity:
Total Shareholders’ Equity		1,283		922

Weatherford International plc
Selected Cash Flows Information (Unaudited)

	Three Months Ended									Year Ended
*($ in Millions)*	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Cash Flows From Operating Activities:
Net Income	$	124		$	166		$	147		$	550		$	449
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation and Amortization		83			89			83			343			327
Foreign Exchange Losses (Gain)		(2	)		35			43			56			116
Loss on Blue Chip Swap Securities		—			—			—			10			57
Gain on Disposition of Assets		(2	)		(1	)		—			(35	)		(11	)
Deferred Income Tax Provision (Benefit)		—			(19	)		(19	)		8			(86	)
Share-Based Compensation		10			10			9			45			35
Changes in Accounts Receivable, Inventory, Accounts Payable and Accrued Salaries and Benefits		24			30			151			(120	)		(84	)
Other Changes, Net		12			(48	)		(39	)		(65	)		29
Net Cash Provided By Operating Activities		249			262			375			792			832

Cash Flows From Investing Activities:
Capital Expenditures for Property, Plant and Equipment		(100	)		(78	)		(67	)		(299	)		(209	)
Proceeds from Disposition of Assets		13			—			7			31			28
Purchases of Blue Chip Swap Securities		—			—			—			(50	)		(110	)
Proceeds from Sales of Blue Chip Swap Securities		—			—			—			40			53
Business Acquisitions, Net of Cash Acquired		—			(15	)		—			(51	)		(4	)
Other Investing Activities		1			1			(71	)		36			(47	)
Net Cash Used In Investing Activities		(86	)		(92	)		(131	)		(293	)		(289	)

Cash Flows From Financing Activities:
Repayments of Long-term Debt		(23	)		(5	)		(80	)		(287	)		(386	)
Distributions to Noncontrolling Interests		(20	)		(10	)		(31	)		(39	)		(52	)
Tax Remittance on Equity Awards		(22	)		—			(2	)		(31	)		(56	)
Share Repurchases		(49	)		(50	)		—			(99	)		—
Dividends Paid		(18	)		(18	)		—			(36	)		—
Other Financing Activities		(1	)		(6	)		(13	)		(19	)		(20	)
Net Cash Used In Financing Activities	$	(133	)	$	(89	)	$	(126	)	$	(511	)	$	(514	)

Weatherford International plc

Non-GAAP Financial Measures Defined (Unaudited)

We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, Weatherford’s management believes that certain non-GAAP financial measures (as defined under the SEC’s Regulation G and Item 10(e) of Regulation S-K) may provide users of this financial information additional meaningful comparisons between current results and results of prior periods and comparisons with peer companies. The non-GAAP amounts shown in the following tables should not be considered as substitutes for results reported in accordance with GAAP but should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.

Adjusted EBITDA* – Adjusted EBITDA* is a non-GAAP measure and represents consolidated income before interest expense, net, income taxes, depreciation and amortization expense, and excludes, among other items, restructuring charges, share-based compensation expense, as well as other charges and credits. Management believes adjusted EBITDA* is useful to assess and understand normalized operating performance and trends. Adjusted EBITDA* should be considered in addition to, but not as a substitute for consolidated net income and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.

Adjusted EBITDA Margin* – Adjusted EBITDA margin* is a non-GAAP measure which is calculated by dividing consolidated adjusted EBITDA* by consolidated revenues. Management believes adjusted EBITDA margin* is useful to assess and understand normalized operating performance and trends. Adjusted EBITDA margin* should be considered in addition to, but not as a substitute for consolidated net income margin and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.

Adjusted Free Cash Flow* – Adjusted Free Cash Flow* is a non-GAAP measure and represents cash flows provided by (used in) operating activities, less capital expenditures plus proceeds from the disposition of assets. Management believes adjusted free cash flow* is useful to understand our performance at generating cash and demonstrates our discipline around the use of cash. Adjusted free cash flow* should be considered in addition to, but not as a substitute for cash flows provided by operating activities and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.

Net Debt* – Net Debt* is a non-GAAP measure that is calculated taking short and long-term debt less cash and cash equivalents and restricted cash. Management believes the net debt* is useful to assess the level of debt in excess of cash and cash and equivalents as we monitor our ability to repay and service our debt. Net debt* should be considered in addition to, but not as a substitute for overall debt and total cash and should be viewed in addition to the Company’s results prepared in accordance with GAAP.

Net Leverage* – Net Leverage* is a non-GAAP measure which is calculated by dividing by taking net debt* divided by adjusted EBITDA* for the trailing 12 months. Management believes the net leverage* is useful to understand our ability to repay and service our debt. Net leverage* should be considered in addition to, but not as a substitute for the individual components of above defined net debt* divided by consolidated net income attributable to Weatherford and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.

*Non-GAAP – as defined above and reconciled to the GAAP measures in the section titled GAAP to Non-GAAP Financial Measures Reconciled

Weatherford International plc
GAAP to Non-GAAP Financial Measures Reconciled (Unaudited)


	Three Months Ended									Year Ended
*($ in Millions, Except Margin in Percentages)*	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Revenues	$	1,341		$	1,409		$	1,362		$	5,513		$	5,135
Net Income Attributable to Weatherford	$	112		$	157		$	140		$	506		$	417
Net Income Margin		8.4	%		11.1	%		10.3	%		9.2	%		8.1	%
Adjusted EBITDA*	$	326		$	355		$	321		$	1,382		$	1,186
Adjusted EBITDA Margin*		24.3	%		25.2	%		23.6	%		25.1	%		23.1	%

Net Income Attributable to Weatherford	$	112		$	157		$	140		$	506		$	417
Net Income Attributable to Noncontrolling Interests		12			9			7			44			32
Income Tax Provision		45			12			2			189			57
Interest Expense, Net of Interest Income of $12, $13, $12, $56 and $59		25			24			31			102			123
Loss on Blue Chip Swap Securities		—			—			—			10			57
Other Expense, Net		4			41			36			87			134
Operating Income		198			243			216			938			820
Depreciation and Amortization		83			89			83			343			327
Other Charges^[1]		35			13			13			56			4
Share-Based Compensation		10			10			9			45			35
Adjusted EBITDA*	$	326		$	355		$	321		$	1,382		$	1,186

Net Cash Provided By Operating Activities	$	249		$	262		$	375		$	792		$	832
Capital Expenditures for Property, Plant and Equipment		(100	)		(78	)		(67	)		(299	)		(209	)
Proceeds from Disposition of Assets		13			—			7			31			28
Adjusted Free Cash Flow*	$	162		$	184		$	315		$	524		$	651

^[1]		^{Other charges in the three and twelve months ended December 31, 2024, primarily included severance and restructuring costs and fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.}

^{*Non-GAAP – as reconciled to the GAAP measures above and defined in the section titled Non-GAAP Financial Measures Defined}

Weatherford International plc
GAAP to Non-GAAP Financial Measures Reconciled Continued (Unaudited)



*($ in Millions)*	December 31, 2024			September 30, 2024			December 31, 2023
Current Portion of Long-term Debt	$	17		$	21		$	168
Long-term Debt		1,617			1,627			1,715
Total Debt	$	1,634		$	1,648		$	1,883

Cash and Cash Equivalents	$	916		$	920		$	958
Restricted Cash		59			58			105
Total Cash	$	975		$	978		$	1,063

Components of Net Debt
Current Portion of Long-term Debt	$	17		$	21		$	168
Long-term Debt		1,617			1,627			1,715
Less: Cash and Cash Equivalents		916			920			958
Less: Restricted Cash		59			58			105
Net Debt*	$	659		$	670		$	820

Net Income for trailing 12 months	$	506		$	534		$	417
*Adjusted EBITDA for trailing 12 months**	$	1,382		$	1,377		$	1,186

*Net Leverage (Net Debt/Adjusted EBITDA)**		0.48	x		0.49	x		0.69	x

^{*Non-GAAP – as reconciled to the GAAP measures above and defined in the section titled Non-GAAP Financial Measures Defined}

The MIL Network –

February 6, 2025

MIL-OSI Australia: Online tax schemes on the rise
Source: Australian Department of Revenue

The ATO is warning the community to be alert for potentially dodgy tax schemes which are spreading online, including through social media.

Acting Deputy Commissioner Sarah Taylor is urging individuals to be wary of online promotion of tax schemes promising to significantly reduce or avoid tax altogether.

‘Sometimes tax schemes can be peddled as investment schemes. We don’t want to see honest people lured into unlawful tax schemes with false promises of high returns and tax savings – if an offer seems too good to be true, it probably is,’ Ms Taylor said.

‘Those who invest in unlawful tax schemes stand to lose their hard-earned cash, and risk paying tax with interest and heavy penalties.’

‘Promoters of these schemes are often opportunistic and target vulnerable people. Protect yourself and your money by getting advice from a registered tax practitioner before committing to anything,’ Ms Taylor said.

The ATO’s website lists a number of tax schemes to look out for. In one particular recent scheme, individuals are being advised to invest in a start-up company that allegedly qualifies as an early-stage innovation company (ESIC). By investing in an ESIC, they’re told they can then claim the early-stage investor tax offset on shares purchased through the financing arrangement.

The ATO is concerned individuals may be entering into these arrangements under the belief they are entitled to the tax benefits claimed using the financing arrangements. We are also concerned that the companies may not qualify as ESICs.

Another type of tax scheme being promoted in the community promises individuals they can avoid paying tax by setting up a purported non-profit foundation and diverting their income to it. These schemes are not effective and the individuals will still have to pay the tax on the income.

If you are approached with tax arrangements that sound like either of these examples, or sound too good to be true, seek advice from a registered tax practitioner and report it to the ATO.

The ATO takes a strong stance against all types of unlawful tax schemes and their promotion.

‘Promoting and participating in unlawful tax schemes are not victimless crimes. Those who choose to engage in these behaviours are attempting to obtain an unfair advantage over those who do the right thing,’ Ms Taylor said.

‘We take targeted action against unlawful tax schemes that promote tax avoidance behaviours and against those who promote these schemes. We are committed to helping protect the community against misinformation about schemes spread on various channels.’

If you are offered an unlawful tax scheme, you should reject it and report it to the ATO confidentially by:
- completing the tip-off form on the ATO website
- phoning the tip-off hotline on 1800 060 062.
If you suspect that you’ve inadvertently become involved in an unlawful tax scheme, you should also contact the ATO immediately. If you proactively approach the ATO, you may be eligible for a reduction in any penalties imposed.

To check if a tax practitioner is registered, use the Tax Practitioners Board’s public registerExternal Link.

More information about unlawful tax schemes can be found at ato.gov.au/taxschemes.

MIL OSI News –
February 6, 2025
MIL-OSI Security: Mt. Pleasant Business Owner Sentenced to 1.5 Years in Federal Prison

Source: Office of United States Attorneys

CHARLESTON, S.C. — Jonathan Ramaci, 60, of Mt. Pleasant, was sentenced to one and a half years in federal prison after pleading guilty to wire fraud and filing a false income tax return.

Evidence presented to the court showed that Ramaci defrauded the Small Business Association in his application and receipt of approximately $214,000 of fraudulent Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) loans that were authorized pursuant to the CARES Act. Evidence showed that Ramaci submitted fraudulent tax documentation to the SBA and its approved third-party lenders, that were relied on to fund a PPP loan Ramaci received. For the fraudulent EIDL loans, Ramaci falsely represented to the SBA revenue and costs of goods sold for the businesses he was applying for.

As for Ramaci’s tax offense, evidence submitted to the court showed that from 2017 to 2021, Ramaci either failed to file and/or filed false income tax returns and owes the IRS $289,531. Specifically, Ramaci was paying for personal expenses from a business he owned and operated, Elements of Genius, headquartered in Charleston. He was also not reporting his income.

“This defendant’s actions revealed corrupt business practices that cost the taxpayer and the government hundreds of thousands of dollars,” said U.S. Attorney Adair Ford Boroughs for the District of South Carolina. “His deceptive financial scheme warrants this prison sentence and sends the message that such practices will not be tolerated.”

“IRS Criminal Investigation, along with our law enforcement partners, will vigorously pursue business owners who victimize their investors and violate the public trust,” said Special Agent in Charge Donald “Trey” Eakins, Charlotte Field Office, IRS-CI. “The defendant used his position of power to defraud not just his own company, but the honest, hardworking Americans who pay their tax obligations.”

United States District Judge Richard M. Gergel sentenced Ramaci to 18 months imprisonment, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system. As part of the judgement, the court ordered Ramaci to pay $538,178.88 in restitution for the offenses of conviction. The court also ordered Ramaci to pay restitution in the amount of $1,009,684.00 to victims of offenses that the defendant did not plead guilty to, which was agreed to by the parties in the plea agreement.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

This case was investigated by the FBI Columbia Field Office and IRS Criminal Investigation. Assistant U.S. Attorney Amy Bower is prosecuting the case.

###

MIL Security OSI –

February 6, 2025
MIL-OSI USA: Barrasso Votes to Confirm Scott Turner as Secretary of Housing and Urban Development

US Senate News:

Source: United States Senator for Wyoming John Barrasso

WASHINGTON, D.C. – U.S. Senator John Barrasso (R-Wyo.), Senate Majority Whip, today spoke on the Senate Floor prior to voting to confirm Scott Turner, President Donald J. Trump’s nominee for Secretary of Housing and Urban Development.

Click HERE to watch Senator Barrasso’s remarks.

Sen. Barrasso’s remarks as prepared:

“The Senate will soon vote on the confirmation of Scott Turner to be the Secretary of Housing and Urban Development.

“Scott grew up in Texas. He dreamed of a career in the National Football League. He achieved that dream and so much more.

“He used his platform as a player to help others achieve their own dreams.

“These leadership qualities are fundamental to who Scott is. They will serve him well as Secretary of Housing and Urban Development.

“Scott also has extensive experience in state and federal governments.

“After playing in the NFL, he served his community in the Texas legislature.

“In 2019, Scott oversaw investments in Opportunity Zones under President Trump.

“In that role, Scott secured more than $50 billion in private investments for over 8,700 economically-distressed communities.

“These investments helped to revitalize forgotten communities.

“Senator Tim Scott of South Carolina – the now-Chairman of the Banking Committee – created these Opportunity Zones in the Tax Cuts and Jobs Act of 2017.

“Scott Turner was instrumental in their success. He is the right man to help restore opportunity now.

“He will put his experience and his leadership skills to work for the American people.

“I strongly support his nomination.”

MIL OSI USA News –

February 6, 2025
MIL-OSI Russia: Materials for the Government meeting on February 6, 2025

Translartion. Region: Russians Fedetion –

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

The following issues are planned to be considered at the meeting:

1. On the draft federal law “On Amendments to Articles 164 and 165 of Part Two of the Tax Code of the Russian Federation”

The purpose of the bill is to ensure favorable tax conditions for the provision of services for the transportation (organization of transportation) of passengers and baggage on the high-speed railway Moscow – St. Petersburg.

2. On the draft amendments of the Government of the Russian Federation to the draft federal law No. 782171-8 “On Amendments to the Federal Law “On State Pension Provision in the Russian Federation””

The draft amendments provide, among other things, for changes to a number of legislative acts in terms of the assignment of disability pensions to citizens who served in volunteer formations, without an application, and the establishment of the period from which they are assigned, clarification of the types of pensions that are established for family members of deceased (dead) citizens who served in volunteer formations, when they exercise their right to receive two pensions simultaneously.

3. On the allocation of budgetary appropriations from the reserve fund of the Government of the Russian Federation to the Ministry of Labor of Russia in 2025 for the provision of an interbudgetary transfer to the budget of the Pension and Social Insurance Fund of the Russian Federation

The draft act provides subsidies to legal entities and individual entrepreneurs registered in the Belgorod, Bryansk and Kursk regions for partial compensation of expenses for paying for employees’ downtime for reasons beyond the control of the employer and employee.

4. On the draft federal law “On Amendments to the Code of the Russian Federation on Administrative Offenses”

The bill is aimed at strengthening administrative liability for violation of requirements for the protection of information, including restricted access information contained in information systems.

5. On the draft federal law “On Amendments to the Federal Law “On Self-Propelled Machines and Other Types of Equipment””

The bill was developed in order to improve the legal regulation of relations related to the state registration of special airport equipment intended for servicing aircraft and operational maintenance of airfields, and to ensure the possibility of such equipment leaving the territory of the airfield (airport) onto public roads.

6. On amendments to the Resolution of the Government of the Russian Federation of July 30, 2004 No. 395 (in terms of amendments to the Regulation on the Ministry of Transport of the Russian Federation)

The draft resolution grants the Russian Ministry of Transport the authority to regulate issues in the area of transport security.

7. On the draft federal law “On Amendments to Certain Legislative Acts of the Russian Federation” (in terms of improving the regulatory framework in the sphere of state cadastral valuation)

The draft law contains provisions on granting the public-law company Roscadastre (PLC) the authority to maintain the state cadastral valuation data fund and to establish requirements for sending to PLC the information and materials necessary for inclusion in the specified data fund.

8. On the draft federal law “On Amendments to Article 4 of the Federal Law “On the Public-Law Company “Roskadastr” and Certain Legislative Acts of the Russian Federation”

The draft law was developed in order to implement the instructions of the President of the Russian Federation regarding the adoption of measures aimed at increasing the efficiency of real estate management, reducing the number of land plots whose boundaries are not defined in accordance with the requirements established by law, by optimizing activities to resolve issues related to the registration of rights to real estate objects, determining the location of the boundaries of real estate objects, and correcting registry errors in the information in the Unified State Register of Real Estate on real estate objects.

9. On the draft federal law “On Amendments to Article 3911 of the Land Code of the Russian Federation”

The bill proposes to amend the Land Code of the Russian Federation in terms of including the urban development plan of a land plot in the documentation when holding an auction for the sale of a land plot in state or municipal ownership, or an auction for the right to conclude a lease agreement for a land plot in state or municipal ownership.

10. On the draft federal law “On Amendments to Article 22 of the Federal Law “On Fire Safety” and Article 35 of the Federal Law “On Emergency Rescue Services and the Status of Rescuers””

The bill was developed in order to improve the efficiency of the activities of rescuers (firefighters) and their leaders, to determine the conditions, causes, and factors that contributed to harm (damage) to other persons during emergency rescue operations and fire extinguishing, and to take measures aimed at improving the activities of emergency rescue services and ensuring fire safety.

11. On the draft federal law “On Amendments to Article 3 of the Federal Law “On the Use of Atomic Energy””

The purpose of the legislative changes is to extend the legal framework and principles for regulating relations arising from the use of atomic energy, as defined by Federal Law No. 170-FZ of November 21, 1995 “On the Use of Atomic Energy”, to designed and operating thermonuclear reactors and installations.

Moscow, February 5, 2025

The content of the press releases of the Department of Press Service and References is a presentation of materials submitted by federal executive bodies for discussion at a meeting of the Government of the Russian Federation.

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

MIL OSI Russia News –

February 6, 2025
MIL-OSI Russia: Government meeting (2025, No. 3)

Translartion. Region: Russians Fedetion –

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

1. On the draft federal law “On Amendments to Articles 164 and 165 of Part Two of the Tax Code of the Russian Federation”

The purpose of the bill is to ensure favorable tax conditions for the provision of services for the transportation (organization of transportation) of passengers and baggage on the high-speed railway Moscow – St. Petersburg.

2. On the draft amendments of the Government of the Russian Federation to the draft federal law No. 782171-8 “On Amendments to the Federal Law “On State Pension Provision in the Russian Federation””

The draft amendments provide, among other things, for changes to a number of legislative acts in terms of the assignment of disability pensions to citizens who served in volunteer formations, without an application, and the establishment of the period from which they are assigned, clarification of the types of pensions that are established for family members of deceased (dead) citizens who served in volunteer formations, when they exercise their right to receive two pensions simultaneously.

3. On the allocation of budgetary appropriations to the Ministry of Labor of Russia in 2025 from the reserve fund of the Government of the Russian Federation for the provision of an interbudgetary transfer to the budget of the Pension and Social Insurance Fund of the Russian Federation

The draft act provides subsidies to legal entities and individual entrepreneurs registered in the Belgorod, Bryansk and Kursk regions for partial compensation of expenses for paying for employees’ downtime for reasons beyond the control of the employer and employee.

4. On the draft federal law “On Amendments to the Code of the Russian Federation on Administrative Offenses”

The bill is aimed at strengthening administrative liability for violation of requirements for the protection of information, including restricted access information contained in information systems.

5. On the draft federal law “On Amendments to the Federal Law “On Self-Propelled Machines and Other Types of Equipment””

The bill was developed in order to improve the legal regulation of relations related to the state registration of special airport equipment intended for servicing aircraft and operational maintenance of airfields, and to ensure the possibility of such equipment leaving the territory of the airfield (airport) onto public roads.

6. On amendments to the Resolution of the Government of the Russian Federation of July 30, 2004 No. 395 (in terms of amendments to the Regulation on the Ministry of Transport of the Russian Federation)

The draft resolution grants the Russian Ministry of Transport the authority to regulate issues in the area of transport security.

7. On the draft federal law “On Amendments to Certain Legislative Acts of the Russian Federation” (in terms of improving the regulatory framework in the sphere of state cadastral valuation)

The draft law contains provisions on granting the public-law company Roscadastre (PLC) the authority to maintain the state cadastral valuation data fund and to establish requirements for sending to PLC the information and materials necessary for inclusion in the specified data fund.

8. On the draft federal law “On Amendments to Article 4 of the Federal Law “On the Public-Law Company “Roskadastr” and Certain Legislative Acts of the Russian Federation”

The draft law was developed in order to implement the instructions of the President of the Russian Federation regarding the adoption of measures aimed at increasing the efficiency of real estate management, reducing the number of land plots whose boundaries are not defined in accordance with the requirements established by law, by optimizing activities to resolve issues related to the registration of rights to real estate objects, determining the location of the boundaries of real estate objects, and correcting registry errors in the information in the Unified State Register of Real Estate on real estate objects.

9. On the draft federal law “On Amendments to Article 3911 of the Land Code of the Russian Federation”

The bill proposes to amend the Land Code of the Russian Federation in terms of including the urban development plan of a land plot in the documentation when holding an auction for the sale of a land plot in state or municipal ownership, or an auction for the right to conclude a lease agreement for a land plot in state or municipal ownership.

10. On the draft federal law “On Amendments to Article 22 of the Federal Law “On Fire Safety” and Article 35 of the Federal Law “On Emergency Rescue Services and the Status of Rescuers””

The bill was developed in order to improve the efficiency of the activities of rescuers (firefighters) and their leaders, to determine the conditions, causes, and factors that contributed to harm (damage) to other persons during emergency rescue operations and fire extinguishing, and to take measures aimed at improving the activities of emergency rescue services and ensuring fire safety.

11. On the draft federal law “On Amendments to Article 3 of the Federal Law “On the Use of Atomic Energy””

The purpose of the legislative changes is to extend the legal framework and principles for regulating relations arising from the use of atomic energy, as defined by Federal Law No. 170-FZ of November 21, 1995 “On the Use of Atomic Energy”, to designed and operating thermonuclear reactors and installations.

Moscow, February 5, 2025

The content of the press releases of the Department of Press Service and References is a presentation of materials submitted by federal executive bodies for discussion at a meeting of the Government of the Russian Federation.

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

MIL OSI Russia News –

February 6, 2025
MIL-OSI Security: Carrizo Springs Business Owner Indicted for 7 Counts of Tax Fraud

Source: Office of United States Attorneys

SAN ANTONIO – A federal grand jury in San Antonio returned an indictment charging a Carrizo Springs man with seven counts of failure to account for and pay over withholding taxes.

According to court documents, Mark Douglass Plocek, 60, handled the day-to-day operations, including payroll, as an owner, operator and vice president of Production Lease Operating Services Oil & Gas Services LP (PLOS). The indictment alleges that, from the second quarter of 2016 through the third quarter of 2019, Plocek used PLOS to make hundreds of thousands of dollars for his personal benefit while, at the same time, failing to truthfully account for and pay over to the IRS payroll tax withheld from PLOS’s employees’ paychecks. Plocek allegedly spent hundreds of thousands of dollars on discretionary living expenditures including but not limited to gambling, purchasing real estate and investing in an unrelated restaurant business.

Plocek made his initial court appearance today before U.S. Magistrate Judge Richard B. Farrer of the U.S. District Court for the Western District of Texas. If convicted, he faces up to five years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Jaime Esparza for the Western District of Texas made the announcement.

IRS Criminal Investigation is investigating the case.

Assistant U.S. Attorney William Harris is prosecuting the case.

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

###

MIL Security OSI –

February 6, 2025

MIL-OSI: Symbotic Reports First Quarter Fiscal Year 2025 Results

Source: GlobeNewswire (MIL-OSI)

WILMINGTON, Mass., Feb. 05, 2025 (GLOBE NEWSWIRE) — Symbotic Inc. (Nasdaq: SYM), a leader in A.I.-enabled robotics technology for the supply chain, announced financial results for its first fiscal quarter of 2025, ended December 28, 2024. Symbotic posted revenue of $487 million, a net loss of $19 million and adjusted EBITDA¹ of $18 million for the first quarter of fiscal 2025. In the first quarter of fiscal 2024, Symbotic had revenue of $360 million, a net loss of $19 million and adjusted EBITDA¹ of $8 million. Cash and cash equivalents increased by $176 million from the prior quarter to $903 million at the end of the first quarter of fiscal year 2025.

“In the first quarter, we continued to deliver high growth while enhancing our technology position,” said Rick Cohen, Chairman and Chief Executive Officer of Symbotic. “With our recent acquisition of Walmart’s Advanced Systems and Robotics business now completed, we look forward to enhancing an already strong position to drive exceptional results for our stakeholders.”

“First quarter revenue grew over 35% year-over-year driven by solid progress across our 44 systems in the process of deployment,” said Symbotic Chief Financial Officer, Carol Hibbard. “Looking forward to the fiscal second quarter of 2025, we expect another quarter of at least 30% year-over-year revenue growth with expanding margins.”

OUTLOOK

For the second quarter of fiscal 2025, Symbotic expects revenue of $510 million to $530 million, and adjusted EBITDA² of $26 million to $30 million.

WEBCAST INFORMATION

Symbotic will host a webcast today at 5:00 pm ET to discuss its first quarter of fiscal year 2025 results. The webcast link is: https://edge.media-server.com/mmc/go/Symbotic-Q1-2025.

_______________________________
¹ Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is a non-GAAP financial measure as defined below under “Use of Non-GAAP Financial Information.” See the tables below for reconciliations to net loss, the most comparable GAAP measure.
² Symbotic is not providing guidance for net loss, which is the most comparable GAAP financial measure to adjusted EBITDA, because information reconciling forward-looking adjusted EBITDA to net loss is unavailable to it without unreasonable effort. Symbotic is not able to provide reconciliations of adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of Symbotic’s control and/or cannot be reasonably predicted, such as the provision for stock-based compensation.

ABOUT SYMBOTIC

Symbotic is an automation technology leader reimagining the supply chain with its end-to-end, A.I.-powered robotic and software platform. Symbotic reinvents the warehouse as a strategic asset for the world’s largest retail, wholesale, and food & beverage companies. Applying next-generation technology, high-density storage and machine learning to solve today’s complex distribution challenges, Symbotic enables companies to move goods with unmatched speed, agility, accuracy and efficiency. As the backbone of commerce, Symbotic transforms the flow of goods and the economics of the supply chain for its customers. For more information, visit www.symbotic.com.

USE OF NON-GAAP FINANCIAL INFORMATION

Symbotic reports its financial results in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). This press release contains financial measures that are not recognized under U.S. GAAP (“non-GAAP financial measures”), including adjusted EBITDA, adjusted gross profit, adjusted gross profit margin, and free cash flow. These non-GAAP financial measures have limitations as an analytical tool as they do not have a standardized meaning prescribed by U.S. GAAP. The non-GAAP financial measures Symbotic uses may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies and, therefore, are unlikely to be comparable to similar measures presented by other companies. Rather, these non-GAAP financial measures are provided as a supplement to corresponding U.S. GAAP measures to provide additional information regarding the results of operations from management’s perspective. Accordingly, non-GAAP financial measures should not be considered a substitute for, in isolation from, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. All non-GAAP financial measures presented in this press release are reconciled to their closest reported U.S. GAAP financial measures. Symbotic recommends that investors review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release, and not rely on any single financial measure to evaluate its business.

Symbotic defines adjusted EBITDA, a non-GAAP financial measure, as GAAP net income or loss excluding the following items: interest income; income taxes; depreciation and amortization; stock-based compensation; business combination transaction expenses; joint venture formation fees; internal control remediation; equity method investment; and other non-recurring items that may arise from time to time. Symbotic defines adjusted gross profit, a non-GAAP financial measure, as GAAP gross profit excluding the following items: depreciation and stock-based compensation. Symbotic defines adjusted gross profit margin, a non-GAAP financial measure, as adjusted gross profit divided by revenue. Symbotic defines free cash flow, a non-GAAP financial measure, as net cash provided by or used in operating activities less purchases of property and equipment and capitalization of internal use software development costs. In addition to Symbotic’s financial results determined in accordance with U.S. GAAP, Symbotic believes that adjusted EBITDA, adjusted gross profit, adjusted gross profit margin, and free cash flow non-GAAP financial measures, are useful in evaluating the performance of Symbotic’s business because they highlight trends in its core business.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, Symbotic’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events, backlog or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions.

Forward-looking statements include, but are not limited to, statements about the ability of or expectations regarding Symbotic to:

meet the technical requirements of existing or future supply agreements with its customers, including with respect to existing backlog;
expand its target customer base and maintain its existing customer base;
realize the benefits expected from the acquisition of Walmart’s Advanced Systems and Robotics business, the GreenBox joint venture, the Commercial Agreement with GreenBox, Symbotic’s acquisitions of developed technology intangible assets, and the commercial agreement with Walmart de México y Centroamérica;
realize its outlook, including its system gross margin;
anticipate industry trends;
maintain and enhance its system;
maintain the listing of the Symbotic Class A Common Stock on Nasdaq;
execute its growth strategy;
develop, design and sell systems that are differentiated from those of competitors;
execute its research and development strategy;
acquire, maintain, protect and enforce intellectual property;
attract, train and retain effective officers, key employees or directors;
comply with laws and regulations applicable to its business;
stay abreast of modified or new laws and regulations applying to its business;
successfully defend litigation;
issue equity securities in connection with future transactions;
meet future liquidity requirements and, if applicable, comply with restrictive covenants related to long-term indebtedness;
timely and effectively remediate any material weaknesses in its internal control over financial reporting;
anticipate rapid technological changes; and
effectively respond to general economic and business conditions.

Forward-looking statements also include, but are not limited to, statements with respect to:

the future performance of Symbotic’s business and operations;
expectations regarding revenues, expenses, adjusted EBITDA and anticipated cash needs;
expectations regarding cash flow, liquidity and sources of funding;
expectations regarding capital expenditures;
the anticipated benefits of Symbotic’s leadership structure;
the effects of pending and future legislation;
business disruption;
disruption to the business due to Symbotic’s dependency on certain customers;
increasing competition in the warehouse automation industry;
any delays in the design, production or launch of Symbotic’s systems and products;
the failure to meet customers’ requirements under existing or future contracts or customer’s expectations as to price or pricing structure;
any defects in new products or enhancements to existing products;
the fluctuation of operating results from period to period due to a number of factors, including the pace of customer adoption of Symbotic’s new products and services and any changes in its product mix that shift too far into lower gross margin products; and
any consequences associated with joint ventures and legislative and regulatory actions and reforms.

Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. Certain of these risks are identified and discussed in Symbotic’s Annual Report on Form 10-K for the fiscal year ended September 28, 2024, filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 4, 2024. These risk factors will be important to consider in determining future results and should be reviewed in their entirety. These forward-looking statements are expressed in good faith, and Symbotic believes there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned not to place undue reliance on these forward-looking statements because of their inherent uncertainty and to appreciate the limited purposes for which they are being used by management. While we believe that the assumptions and expectations reflected in the forward-looking statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-looking statements speak only as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. Symbotic is not under any obligation, and expressly disclaims any obligation to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review the statements set forth in the reports that Symbotic has filed or will file from time to time with the SEC.

In addition to factors previously disclosed in Symbotic’s Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed with the SEC on December 4, 2024 and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: failure to realize the benefits expected from the acquisition of Walmart’s Advanced Systems and Robotics business and risks related to the acquisition.

Any financial projections in this press release or discussed in the webcast are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond Symbotic’s control. While all projections are necessarily speculative, Symbotic believes that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection extends from the date of preparation. The assumptions and estimates underlying the projected results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. The inclusion of projections in this communication should not be regarded as an indication that Symbotic, or its representatives, considered or considers the projections to be a reliable prediction of future events.

Annualized, projected and estimated numbers are not forecasts and may not reflect actual results.

This communication is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in Symbotic and is not intended to form the basis of an investment decision in Symbotic. The forward-looking statements contained in this press release and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf are expressly qualified in their entirety by these cautionary statements.

INVESTOR RELATIONS CONTACT

Charlie Anderson
Vice President, Investor Relations & Corporate Development
ir@symbotic.com

MEDIA INQUIRIES
mediainquiry@symbotic.com


Symbotic Inc. and Subsidiaries Consolidated Statements of Operations

	Three Months Ended
(in thousands, except share and per share information)	December 28, 2024			September 28, 2024			December 30, 2023
Revenue:
Systems	$	464,059		$	536,447		$	347,705
Software maintenance and support		5,525			5,893			2,169
Operation services		17,109			22,226			10,069
Total revenue		486,693			564,566			359,943
Cost of revenue:
Systems		381,819			442,009			283,946
Software maintenance and support		1,884			2,748			1,726
Operation services		22,951			23,392			10,214
Total cost of revenue		406,654			468,149			295,886
Gross profit		80,039			96,417			64,057
Operating expenses:
Research and development expenses		43,592			40,130			42,144
Selling, general, and administrative expenses		61,076			45,399			47,012
Total operating expenses		104,668			85,529			89,156
Operating income (loss)		(24,629	)		10,888			(25,099	)
Other income, net		7,823			9,416			6,199
Income (loss) before income tax		(16,806	)		20,304			(18,900	)
Income tax expense		(150	)		(4,110	)		(172	)
Loss from equity method investment		(1,564	)		(240	)		—
Net income (loss)		(18,520	)		15,954			(19,072	)
Net income (loss) attributable to noncontrolling interests		(15,044	)		13,118			(16,236	)
Net income (loss) attributable to common stockholders	$	(3,476	)	$	2,836		$	(2,836	)

Income (loss) per share of Class A Common Stock:
Basic and Diluted⁽¹⁾	$	(0.03	)	$	0.03		$	(0.03	)
Weighted-average shares of Class A Common Stock outstanding:
Basic		106,098,566			104,146,479			83,320,943
Diluted⁽²⁾	n/a				108,646,977		n/a

(1) For the three months ended September 28, 2024, basic and diluted EPS were calculated as the same value and as such presented on the same line.

(2) Periods in which the Company was in a net loss position, diluted weighted-average shares of Class A Common Stock outstanding is the same as basic and as such indicated with “n/a”.


Symbotic Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures

The following table reconciles GAAP net income (loss) to Adjusted EBITDA:

	Three Months Ended
(in thousands)	December 28, 2024			September 28, 2024			December 30, 2023
Net income (loss)	$	(18,520	)	$	15,954		$	(19,072	)
Interest income		(7,769	)		(9,353	)		(6,149	)
Income tax expense		150			4,110			172
Depreciation and amortization		6,860			5,780			2,565
Stock-based compensation		28,741			26,100			29,462
Business Combination transaction expenses		3,802			324			—
Joint venture formation fees		—			—			1,089
Internal controls remediation		3,076			—			—
Restructuring charges		—			(775	)		—
Equity method investment		1,564			240			—
Adjusted EBITDA	$	17,904		$	42,380		$	8,067

The following table reconciles GAAP gross profit to Adjusted gross profit:

	Three Months Ended
(in thousands)	December 28, 2024			September 28, 2024			December 30, 2023
Gross profit	$	80,039		$	96,417		$	64,057
Depreciation		2,469			2,208			93
Stock-based compensation		3,709			3,260			3,431
Restructuring charges		—			(775	)		—
Adjusted gross profit	$	86,217		$	101,110		$	67,581

Gross profit margin		16.4	%		17.1	%		17.8	%
Adjusted gross profit margin		17.7	%		17.9	%		18.8	%

The following table reconciles GAAP net cash provided by (used in) operating activities to free cash flow:

	Three Months Ended
(in thousands)	December 28, 2024			September 28, 2024			December 30, 2023

Net cash provided by (used in) operating activities	$	205,027		$	(99,383	)	$	(30,150	)
Purchases of property and equipment		(7,357	)		(20,730	)		(2,173	)
Capitalization of internal use software development costs		—			(637	)		(820	)
Free cash flow	$	197,670		$	(120,750	)	$	(33,143	)


Symbotic Inc. and Subsidiaries Supplemental Common Share Information

Total Common Shares issued and outstanding:

	December 28, 2024	September 28, 2024
Class A Common Shares issued and outstanding	106,521,915	104,689,377
Class V-1 Common Shares issued and outstanding	76,588,618	76,965,386
Class V-3 Common Shares issued and outstanding	404,309,196	404,309,196
	587,419,729	585,963,959


Symbotic Inc. and Subsidiaries Consolidated Balance Sheets

(in thousands, except share data)	December 28, 2024			September 28, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	903,034		$	727,310
Accounts receivable		134,391			201,548
Unbilled accounts receivable		223,349			218,233
Inventories		108,691			106,136
Deferred expenses		3,221			1,058
Prepaid expenses and other current assets		85,740			101,252
Total current assets		1,458,426			1,355,537
Property and equipment, net		105,079			97,109
Intangible assets, net		14,949			3,664
Equity method investment		85,946			81,289
Other assets		51,222			40,953
Total assets	$	1,715,622		$	1,578,552
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	206,324		$	175,188
Accrued expenses and other current liabilities		203,353			165,644
Deferred revenue		787,174			676,314
Total current liabilities		1,196,851			1,017,146
Deferred revenue		76,712			129,233
Other liabilities		48,134			42,043
Total liabilities		1,321,697			1,188,422
Commitments and contingencies		—			—
Equity:
Class A Common Stock, 3,000,000,000 shares authorized, 106,521,915 and 104,689,377 shares issued and outstanding at December 28, 2024 and September 28, 2024, respectively		13			13
Class V-1 Common Stock, 1,000,000,000 shares authorized, 76,588,618 and 76,965,386 shares issued and outstanding at December 28, 2024 and September 28, 2024, respectively		7			7
Class V-3 Common Stock, 450,000,000 shares authorized, 404,309,196 shares issued and outstanding at December 28, 2024 and September 28, 2024		40			40
Additional paid-in capital		1,526,573			1,523,692
Accumulated deficit		(1,327,401	)		(1,323,925	)
Accumulated other comprehensive loss		(2,696	)		(2,594	)
Total stockholders’ equity		196,536			197,233
Noncontrolling interest		197,389			192,897
Total equity		393,925			390,130
Total liabilities and equity	$	1,715,622		$	1,578,552


Symbotic Inc. and Subsidiaries Consolidated Statements of Cash Flows

	Three Months Ended
(in thousands)	December 28, 2024			September 28, 2024			December 30, 2023
Cash flows from operating activities:
Net income (loss)	$	(18,520	)	$	15,954		$	(19,072	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		7,645			6,432			3,197
Foreign currency (gains) losses, net		(32	)		—			22
Loss on disposal of assets		201			337			—
Provision for excess and obsolete inventory		688			(775	)		70
Stock-based compensation		26,773			25,350			29,462
Changes in operating assets and liabilities:
Accounts receivable		67,376			(101,010	)		(83,789	)
Inventories		(10,425	)		30,202			(1,567	)
Prepaid expenses and other current assets		10,317			(114,889	)		(32,653	)
Deferred expenses		(2,164	)		5,690			(7,152	)
Other assets		(1,079	)		(3,848	)		(5,906	)
Accounts payable		31,145			47,399			(7,261	)
Accrued expenses and other current liabilities		45,540			(6,209	)		15,716
Deferred revenue		58,336			6,309			69,966
Other liabilities		(10,774	)		(10,325	)		8,817
Net cash provided by (used in) operating activities		205,027			(99,383	)		(30,150	)
Cash flows from investing activities:
Purchases of property and equipment		(7,357	)		(20,730	)		(2,173	)
Capitalization of internal use software development costs		—			(637	)		(820	)
Proceeds from maturities of marketable securities		—			—			150,000
Purchases of marketable securities		—			—			(48,317	)
Acquisitions of strategic investments		(17,992	)		(23,996	)		—
Net cash provided by (used in) investing activities		(25,349	)		(45,363	)		98,690
Cash flows from financing activities:
Payment for taxes related to net share settlement of stock-based compensation awards		(3,012	)		—			(56	)
Net proceeds from issuance of common stock under employee stock purchase plan		—			2,308			—
Distributions to or on behalf of Symbotic Holdings LLC partners		(850	)		(561	)		—
Proceeds from exercise of warrants		—			—			158,702
Net cash provided by (used in) financing activities		(3,862	)		1,747			158,646
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(84	)		21			(2	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		175,732			(142,978	)		227,184
Cash, cash equivalents, and restricted cash – beginning of period		730,354			873,332			260,918
Cash, cash equivalents, and restricted cash – end of period	$	906,086		$	730,354		$	488,102


	Three Months Ended
(in thousands)	December 28, 2024			September 28, 2024			December 30, 2023
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	903,034		$	727,310		$	485,952
Restricted cash		3,052			3,044			2,150
Cash, cash equivalents, and restricted cash	$	906,086		$	730,354		$	488,102

The MIL Network –

February 6, 2025

MIL-OSI: FormFactor, Inc. Reports 2024 Fourth Quarter Results

Source: GlobeNewswire (MIL-OSI)

FY24 revenue of $764 million, up 15.2% from $663 million in FY23, driven by growth in HBM revenue;
Announces acquisition of minority interest in FICT Limited, a key supplier of industry-leading, high-performance advanced probe card components

LIVERMORE, Calif., Feb. 05, 2025 (GLOBE NEWSWIRE) — FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the fourth quarter of fiscal 2024 ended December 28, 2024. Quarterly revenues were $189.5 million, a decrease of 8.9% compared to $207.9 million in the third quarter of fiscal 2024, and an increase of 12.7% from $168.2 million in the fourth quarter of fiscal 2023. For fiscal 2024, FormFactor recorded revenues of $764 million, up 15.2% from $663 million in fiscal 2023.

High Bandwidth Memory grew fourfold in fiscal 2024 compared to the prior year, driven by adoption of Generative AI, overcoming persistent lackluster demand in important high-unit-volume markets like PCs and mobile handsets.
DRAM probe-card revenue during the fourth quarter set third consecutive quarterly record.
Continued focus on expanding and diversifying FormFactor’s market position in enabling advanced packaging, through new customer qualifications in client PCs and server applications and new high-performance-compute applications.
FICT acquisition with MBK Partners solidifies FormFactor’s access to FICT’s technologies and products, which are an important component of advanced probe cards.

“As expected, FormFactor reported sequentially lower fourth-quarter revenue, gross margin, and non-GAAP earnings per share, driven by the forecasted reduction in Foundry & Logic probe-card revenue,” said Mike Slessor, CEO of FormFactor, Inc. “This was partially offset by growth in DRAM probe-card revenue, with HBM increasing to approximately half of DRAM revenue.”

FormFactor also announced today that together with MBK Partners (“MBKP”), the largest private equity firm in North Asia, it is acquiring FICT Limited (“FICT”) from Advantage Partners Inc. FICT, headquartered in Nagano, Japan, has been providing the semiconductor test and high-performance computing industries with complex multi-layer organic substrates, printed circuit boards, and related leading-edge technologies and services since its inception as a Fujitsu business unit in 1967. This acquisition is designed to strengthen and grow FICT’s business, and the FormFactor+MBKP consortium is committed to advancing FICT’s mission to serve its entire customer base.

With this transaction, FormFactor invests approximately US$60M into the consortium. FormFactor will hold a minority, non-controlling stake of 20% and will be granted a seat on the company’s board of directors. All required regulatory and third-party approvals and conditions have been satisfied and the transaction is expected to close within the current quarter. The transaction is not expected to have a material impact on FormFactor’s results of operations.

“The semiconductor industry’s rapidly accelerating adoption of advanced packaging requires increased investment and stronger collaboration across the test and assembly supply chain,” said Mike Slessor, FormFactor’s CEO. “FormFactor’s investment in FICT builds on our long-term collaboration with them as a supplier of the industry-leading, high-performance components we use in our advanced probe cards, and provides a platform for accelerated development of tomorrow’s test and packaging consumables.”

“We’ve built a partnership with MBKP, North Asia’s leading private equity firm, with a shared vision to enhance FICT’s long-term value by fully serving all of FICT’s existing and potential customers,” Slessor concluded.

Fourth Quarter and Fiscal 2024 Highlights

On a GAAP basis, net income for the fourth quarter of fiscal 2024 was $9.7 million, or $0.12 per fully-diluted share, compared to net income for the third quarter of fiscal 2024 of $18.7 million, or $0.24 per fully-diluted share, and net income for the fourth quarter of fiscal 2023 of $75.8 million, or $0.97 per fully-diluted share. Net income for fiscal 2024 was $69.6 million, or $0.89 per fully-diluted share, compared to net income for fiscal 2023 of $82.4 million, or $1.05, per fully-diluted share. Gross margin for the fourth quarter of 2024 was 38.8%, compared with 40.7% in the third quarter of 2024, and 40.4% in the fourth quarter of 2023. Gross margin for fiscal 2024 was 40.3%, compared to 39.0% for fiscal 2023. The GAAP financial results for the fourth quarter of 2023 and fiscal 2023 include a $73.0 million gain from the sale of FRT that has been excluded from FormFactor’s fourth quarter and fiscal 2023 non-GAAP results. The GAAP financial results for fiscal 2024 include a $20.3 million gain from the sale of our China operations that has been excluded from FormFactor’s fiscal 2024 non-GAAP results.

On a non-GAAP basis, net income for the fourth quarter of fiscal 2024 was $21.3 million, or $0.27 per fully-diluted share, compared to net income for the third quarter of fiscal 2024 of $27.2 million, or $0.35 per fully-diluted share, and net income for the fourth quarter of fiscal 2023 of $15.7 million, or $0.20 per fully-diluted share. Non-GAAP net income for fiscal 2024 was $90.2 million, or $1.15 per fully-diluted share, compared to net income of $56.8 million, or $0.73 per fully-diluted share for fiscal 2023. On a non-GAAP basis, gross margin for the fourth quarter of 2024 was 40.2%, compared with 42.2% in the third quarter of 2024, and 42.1% in the fourth quarter of 2023. Non-GAAP gross margin for fiscal 2024 was 41.7%, compared to 40.7% for fiscal 2023.

A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below.

GAAP net cash provided by operating activities for the fourth quarter of fiscal 2024 was $35.9 million, compared to $26.7 million for the third quarter of fiscal 2024, and $9.3 million for the fourth quarter of fiscal 2023. Free cash flow for the fourth quarter of fiscal 2024 was $28.8 million, compared to free cash flow for the third quarter of fiscal 2024 of $20.0 million, and free cash flow for the fourth quarter of 2023 of negative $0.3 million. GAAP net cash provided by operating activities for fiscal 2024 was $117.5 million, compared to $64.6 million for fiscal 2023. Free cash flow for fiscal 2024 and fiscal 2023 was $82.8 million and $11.4 million, respectively. A reconciliation of net cash provided by operating activities to non-GAAP free cash flow is provided in the schedules included below.

Outlook

Dr. Slessor added, “We continue to see slow demand in important high-unit-volume markets, like client PCs and mobile handsets, through the first quarter, with anticipated sequential reductions in demand for both non-HBM DRAM probe cards and Systems. That notwithstanding, as we move through 2025, we expect an overall increase in demand for FormFactor’s products.”

For the first quarter ending March 29, 2025, FormFactor is providing the following outlook*:

	GAAP	Reconciling Items**	Non-GAAP
Revenue	$170 million +/- $5 million	—	$170 million +/- $5 million
Gross Margin	36.5% +/- 1.5%	$3 million	38% +/- 1.5%
Net income per diluted share	$0.07 +/- $0.04	$0.12	$0.19 +/- $0.04

*This outlook assumes consistent foreign currency rates.
**Reconciling items are stock-based compensation, amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, and restructuring charges, net of applicable income tax impacts.

We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:25 p.m. PT, or 4:25 p.m. ET, today.

The public is invited to listen to a live webcast of FormFactor’s conference call on the Investor Relations section of our website at www.formfactor.com. A telephone replay of the conference call will be available approximately two hours after the conclusion of the call. The replay will be available on the Investor Relations section of our website, www.formfactor.com.

Use of Non-GAAP Financial Information:

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we disclose certain non-GAAP measures of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three and twelve months ended months ended December 28, 2024, and for outlook provided before, as well as for the comparable periods of fiscal 2023, are provided below, and on the Investor Relations section of our website at www.formfactor.com. Information regarding the ways in which management uses non-GAAP financial information to evaluate its business, management’s reasons for using this non-GAAP financial information, and limitations associated with the use of non-GAAP financial information, is included under “About our Non-GAAP Financial Measures” following the tables below.

About FormFactor:

FormFactor, Inc. (NASDAQ: FORM), is a leading provider of essential test and measurement technologies along the full semiconductor product life cycle – from characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com.

Forward-looking Statements:

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws, including with respect to the Company’s future financial and operating results, and the Company’s plans, strategies and objectives for future operations. These statements are based on management’s current expectations and beliefs as of the date of this release, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding future financial and operating results, including under the heading “Outlook” above, customer demand, conditions in the semiconductor industry, the timing of completion of the FICT acquisition, the expected benefit thereof and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” “forecast,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; delays in the consummation of the FICT acquisition; the potential impact on the business of FormFactor and FICT due to uncertainties in connection with the acquisition; the retention of employees of FICT following acquisition; the ability of FormFactor to achieve expected benefits from the FICT acquisition; the availability, benefits, and speed of customer acceptance or implementation of new products and technologies; manufacturing, processing, and design capacity, goals, expansion, volumes, and progress; difficulties or delays in research and development; industry seasonality; risks to the Company’s realization of benefits from acquisitions, investments in capacity and investments in new electronic data systems and information technology; reliance on customers or third parties (including suppliers); changes in macro-economic environments; events affecting global and regional economic and market conditions and stability such as military conflicts, political volatility, infectious diseases and pandemics, and similar factors, operating separately or in combination; and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. In addition, there are varying barriers to international trade, including restrictive trade and export regulations such as the US-China restrictions, dynamic tariffs, trade disputes between the U.S. and other countries, and national security developments or tensions, that may substantially restrict or condition our sales to or in certain countries, increase the cost of doing business internationally, and disrupt our supply chain. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise.


FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)

	Three Months Ended								Twelve Months Ended
	December 28, 2024		September 28, 2024			December 30, 2023			December 28, 2024		December 30, 2023
Revenues	$	189,483	$	207,917		$	168,163		$	763,599	$	663,102
Cost of revenues		115,903		123,212			100,229			455,676		404,522
Gross profit		73,580		84,705			67,934			307,923		258,580
Operating expenses:
Research and development		30,504		31,243			28,166			121,938		115,765
Selling, general and administrative		35,226		35,607			31,451			141,786		133,012
Total operating expenses		65,730		66,850			59,617			263,724		248,777
Gain on sale of business		—		—			72,953			20,581		72,953
Operating income		7,850		17,855			81,270			64,780		82,756
Interest income, net		3,472		3,650			2,376			13,693		6,796
Other income (expense), net		617		(558	)		(1,546	)		939		(285	)
Income before income taxes		11,939		20,947			82,100			79,412		89,267
Provision for income taxes		2,234		2,211			6,254			9,798		6,880
Net income	$	9,705	$	18,736		$	75,846		$	69,614	$	82,387
Net income per share:
Basic	$	0.13	$	0.24		$	0.98		$	0.90	$	1.06
Diluted	$	0.12	$	0.24		$	0.97		$	0.89	$	1.05
Weighted-average number of shares used in per share calculations:
Basic		77,267		77,406			77,684			77,340		77,370
Diluted		77,982		78,439			78,410			78,437		78,159


FORMFACTOR, INC. NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (In thousands, except per share amounts) (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
GAAP Gross Profit	$	73,580		$	84,705		$	67,934		$	307,923		$	258,580
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions		555			530			756			2,216			4,336
Stock-based compensation		1,944			1,934			2,053			7,738			6,854
Restructuring charges		32			524			—			639			357
Non-GAAP Gross Profit	$	76,111		$	87,693		$	70,743		$	318,516		$	270,127

GAAP Gross Margin		38.8	%		40.7	%		40.4	%		40.3	%		39.0	%
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions		0.4	%		0.3	%		0.5	%		0.3	%		0.6	%
Stock-based compensation		1.0	%		0.9	%		1.2	%		1.0	%		1.0	%
Restructuring charges		—	%		0.3	%		—	%		0.1	%		0.1	%
Non-GAAP Gross Margin		40.2	%		42.2	%		42.1	%		41.7	%		40.7	%

GAAP operating expenses	$	65,730		$	66,850		$	59,617		$	263,724		$	248,777
Adjustments:
Amortization of intangibles and other		(191	)		(191	)		(518	)		(764	)		(4,081	)
Stock-based compensation		(8,269	)		(7,002	)		(7,230	)		(32,025	)		(31,762	)
Restructuring charges		(371	)		(298	)		—			(767	)		(1,183	)
Costs related to sale and acquisition of businesses		(1,689	)		(13	)		(268	)		(2,391	)		(2,407	)
Non-GAAP operating expenses	$	55,210		$	59,346		$	51,601		$	227,777		$	209,344

GAAP operating income	$	7,850		$	17,855		$	81,270		$	64,780		$	82,756
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other		746			721			1,274			2,980			8,417
Stock-based compensation		10,213			8,936			9,283			39,763			38,616
Restructuring charges		403			822			—			1,406			1,540
Gain on sale of business, net of cost related to sale and acquisition of businesses		1,689			13			(72,685	)		(18,190	)		(70,546	)
Non-GAAP operating income	$	20,901		$	28,347		$	19,142		$	90,739		$	60,783


FORMFACTOR, INC. NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (In thousands, except per share amounts) (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
GAAP net income	$	9,705		$	18,736		$	75,846		$	69,614		$	82,387
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other		746			721			1,274			2,980			8,417
Stock-based compensation		10,213			8,936			9,283			39,763			38,616
Restructuring charges		415			822			—			1,418			1,540
Gain on sale of business, net of cost related to sale and acquisition of businesses		1,689			13			(72,685	)		(18,190	)		(70,546	)
Income tax effect of non-GAAP adjustments		(1,445	)		(2,002	)		2,026			(5,368	)		(3,624	)
Non-GAAP net income	$	21,323		$	27,226		$	15,744		$	90,217		$	56,790

GAAP net income per share:
Basic	$	0.13		$	0.24		$	0.98		$	0.90		$	1.06
Diluted	$	0.12		$	0.24		$	0.97		$	0.89		$	1.05

Non-GAAP net income per share:
Basic	$	0.28		$	0.35		$	0.20		$	1.17		$	0.73
Diluted	$	0.27		$	0.35		$	0.20		$	1.15		$	0.73


FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	Twelve Months Ended
	December 28, 2024			December 30, 2023
Cash flows from operating activities:
Net income	$	69,614		$	82,387
Selected adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		30,321			30,603
Amortization		2,582			6,850
Stock-based compensation expense		39,763			38,616
Provision for excess and obsolete inventories		12,342			15,003
Gain on sale of business		(20,581	)		(72,953	)
Non-cash restructuring charges		428			—
Other activity impacting operating cash flows		(16,507	)		(35,904	)
Net cash provided by operating activities		117,534			64,602
Cash flows from investing activities:
Acquisition of property, plant and equipment		(38,436	)		(56,027	)
Proceeds from sale of business		21,585			101,785
Purchases of marketable securities, net		(15,129	)		(16,709	)
Purchase of promissory note receivable		(1,500	)		—
Net cash provided by (used in) investing activities		(33,480	)		29,049
Cash flows from financing activities:
Purchase of common stock through stock repurchase program		(53,302	)		(19,801	)
Proceeds from issuances of common stock		9,748			8,822
Principal repayments on term loans		(1,075	)		(1,045	)
Tax withholdings related to net share settlements of equity awards		(19,983	)		(10,687	)
Net cash used in financing activities		(64,612	)		(22,711	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(3,509	)		(2,649	)
Net increase in cash, cash equivalents and restricted cash		15,933			68,291
Cash, cash equivalents and restricted cash, beginning of period		181,273			112,982
Cash, cash equivalents and restricted cash, end of period	$	197,206		$	181,273


FORMFACTOR, INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW (In thousands) (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Net cash provided by operating activities	$	35,913		$	26,731		$	9,250		$	117,534		$	64,602
Adjustments:
Sale of business and acquisition related payments in working capital		506			2,134			268			3,317			2,407
Cash paid for interest		93			97			105			391			422
Capital expenditures		(7,663	)		(8,939	)		(9,933	)		(38,436	)		(56,027	)
Free cash flow	$	28,849		$	20,023		$	(310	)	$	82,806		$	11,404


FORMFACTOR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	December 28, 2024			September 28, 2024			December 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	190,728		$	184,506		$	177,812
Marketable securities		169,295			169,961			150,507
Accounts receivable, net of allowance for credit losses		104,294			116,866			102,957
Inventories, net		101,676			105,374			111,685
Restricted cash		3,746			3,773			1,152
Prepaid expenses and other current assets		35,389			34,302			29,667
Total current assets		605,128			614,782			573,780
Restricted cash		2,732			2,210			2,309
Operating lease, right-of-use-assets		22,579			25,034			30,519
Property, plant and equipment, net of accumulated depreciation		210,230			204,108			204,399
Goodwill		199,171			200,137			201,090
Intangibles, net		10,355			11,017			12,938
Deferred tax assets		92,012			92,826			78,964
Other assets		4,008			3,669			2,795
Total assets	$	1,146,215		$	1,153,783		$	1,106,794

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	62,287		$	52,086		$	63,857
Accrued liabilities		43,742			46,508			41,037
Current portion of term loan, net of unamortized issuance costs		1,106			1,098			1,075
Deferred revenue		15,847			20,972			16,704
Operating lease liabilities		8,363			8,512			8,422
Total current liabilities		131,345			129,176			131,095
Term loan, less current portion, net of unamortized issuance costs		12,208			12,488			13,314
Long-term operating lease liabilities		17,550			19,731			25,334
Deferred grant		18,000			18,000			18,000
Other liabilities		19,344			19,378			10,247
Total liabilities		198,447			198,773			197,990

Stockholders’ equity:
Common stock		77			77			77
Additional paid-in capital		837,586			845,466			861,448
Accumulated other comprehensive loss		(10,840	)		(1,773	)		(4,052	)
Accumulated income		120,945			111,240			51,331
Total stockholders’ equity		947,768			955,010			908,804
Total liabilities and stockholders’ equity	$	1,146,215		$	1,153,783		$	1,106,794

About our Non-GAAP Financial Measures:

We believe that the presentation of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow provides supplemental information that is important to understanding financial and business trends and other factors relating to our financial condition and results of operations. Non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income are among the primary indicators used by management as a basis for planning and forecasting future periods, and by management and our board of directors to determine whether our operating performance has met certain targets and thresholds. Management uses non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income when evaluating operating performance because it believes that the exclusion of the items indicated herein, for which the amounts or timing may vary significantly depending upon our activities and other factors, facilitates comparability of our operating performance from period to period. We use free cash flow to conduct and evaluate our business as an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. Many investors also prefer to track free cash flow, as opposed to only GAAP earnings. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures, and therefore it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. We have chosen to provide this non-GAAP information to investors so they can analyze our operating results closer to the way that management does, and use this information in their assessment of our business and the valuation of our Company. We compute non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income, by adjusting GAAP net income, GAAP net income per basic and diluted share, GAAP gross profit, GAAP gross margin, GAAP operating expenses, and GAAP operating income to remove the impact of certain items and the tax effect, if applicable, of those adjustments. These non-GAAP measures are not in accordance with, or an alternative to, GAAP, and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income, net income per basic and diluted share, gross profit, gross margin, operating expenses, or operating income in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We may expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. For more information on the non-GAAP adjustments, please see the table captioned “Non-GAAP Financial Measure Reconciliations” and “Reconciliation of Cash Provided by Operating Activities to non-GAAP Free Cash Flow” included in this press release.

Source: FormFactor, Inc.
FORM-F

Investor Contact:
Stan Finkelstein
Investor Relations
(925) 290-4273
ir@formfactor.com

The MIL Network –

February 6, 2025

MIL-OSI: AMSC Reports Third Quarter Fiscal Year 2024 Financial Results and Provides Business Outlook

Source: GlobeNewswire (MIL-OSI)

	Third Quarter Financial Highlights:
	• Increased Revenue by 56% Year Over Year to Above $60 Million • Net Income of over $2 Million • Generated nearly $6 Million of Operating Cash Flow

Company to host conference call tomorrow, February 6, at 10:00 am ET

AYER, Mass., Feb. 05, 2025 (GLOBE NEWSWIRE) — AMSC (Nasdaq: AMSC), a leading system provider of megawatt-scale power resiliency solutions that orchestrate the rhythm and harmony of power on the grid™ and protect and expand the capability and resiliency of our Navy’s fleet, today reported financial results for its third quarter of fiscal year 2024 ended December 31, 2024.

Revenues for the third quarter of fiscal 2024 were $61.4 million compared with $39.4 million for the same period of fiscal 2023. The year-over-year increase was driven by organic growth and the acquisition of NWL, Inc.

AMSC’s net income for the third quarter of fiscal 2024 was $2.5 million, or $0.07 per share, compared to a net loss of $1.6 million, or $0.06 per share, for the same period of fiscal 2023. The Company’s non-GAAP net income for the third quarter of fiscal 2024 was $6.0 million, or $0.16 per share, compared with a non-GAAP net income of $0.9 million, or $0.03 per share, in the same period of fiscal 2023. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

Cash, cash equivalents, and restricted cash on December 31, 2024, totaled $80.0 million, compared with $74.8 million at September 30, 2024.

“AMSC delivered the best quarterly results in years. Fiscal third quarter revenue surpassed $60 million, that’s revenue growth of 56% when compared to the same period last year, and net income exceeded $2 million, making it our second consecutive quarter of reporting net income,” said Daniel P. McGahn, Chairman, President and CEO, AMSC. “Bookings and backlog during the quarter continued to be robust. We believe our company’s diverse bookings and strengthened balance sheet allow us to seize opportunities in new markets and extend our customer reach. We are proud of these results and remain focused on driving execution and strong performance as we move into the fourth fiscal quarter of the year.”

Business Outlook
For the fourth quarter ending March 31, 2025, AMSC expects that its revenues will be in the range of $59.0 million to $63.0 million. The Company’s net loss for the fourth quarter of fiscal 2024 is expected not to exceed $1.0 million, or $0.03 per share. The Company’s non-GAAP net income (as defined below) is expected to exceed $2.5 million, or $0.07 per share.

Conference Call Reminder
In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. Eastern Time on Thursday, February 6, 2025, to discuss the Company’s financial results and business outlook. Those who wish to listen to the live or archived conference call webcast should visit the “Investors” section of the Company’s website at https://ir.amsc.com. The live call can be accessed by dialing 1-844-481-2802 or 1-412-317-0675 and asking to join the AMSC call. A replay of the call may be accessed 2 hours following the call by dialing 1-877-344-7529 and using conference passcode 9514460.

About AMSC (Nasdaq: AMSC)
AMSC generates the ideas, technologies and solutions that meet the world’s demand for smarter, cleaner … better energy™. Through its Gridtec™ Solutions, AMSC provides the engineering planning services and advanced grid systems that optimize network reliability, efficiency and performance. Through its Marinetec™ Solutions, AMSC provides ship protection systems and is developing propulsion and power management solutions designed to help fleets increase system efficiencies, enhance power quality and boost operational safety. Through its Windtec® Solutions, AMSC provides wind turbine electronic controls and systems, designs and engineering services that reduce the cost of wind energy. The Company’s solutions are enhancing the performance and reliability of power networks, increasing the operational safety of navy fleets, and powering gigawatts of renewable energy globally. Founded in 1987, AMSC is headquartered near Boston, Massachusetts with operations in Asia, Australia, Europe and North America. For more information, please visit www.amsc.com.

AMSC, American Superconductor, D-VAR, D-VAR VVO, Gridtec, Marinetec, Windtec, Neeltran, NEPSI, Smarter, Cleaner … Better Energy, and Orchestrate the Rhythm and Harmony of Power on the Grid are trademarks or registered trademarks of American Superconductor Corporation. All other brand names, product names, trademarks or service marks belong to their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this release regarding execution of our goals and strategies; backlog; expectations regarding the fourth quarter of fiscal 2024; our expected GAAP and non-GAAP financial results for the quarter ending March 31, 2025; and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: We have a history of operating losses, which may continue in the future. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; We have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us; Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business; Changes in exchange rates could adversely affect our results of operations; We may be required to issue performance bonds or provide letters of credit, which restricts our ability to access any cash used as collateral for the bonds or letters of credit; If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data; We may not realize all of the sales expected from our backlog of orders and contracts; Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government and include certain other provisions in favor of the government. The continued funding of such contracts remains subject to annual congressional appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit; Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business; Pandemics, epidemics or other public health crises may adversely impact our business, financial condition and results of operations; We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business; Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationship; Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; A significant portion of our Wind segment revenues are derived from a single customer. If this customer’s business is negatively affected, it could adversely impact our business; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our business and operations would be adversely impacted in the event of a failure or security breach of our or any critical third parties’ information technology infrastructure and networks; We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results; Many of our revenue opportunities are dependent upon subcontractors and other business collaborators; If we fail to implement our business strategy successfully, our financial performance could be harmed; Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share; Many of our customers outside of the United States may be either directly or indirectly related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States; We have had limited success marketing and selling our superconductor products and system-level solutions, and our failure to more broadly market and sell our products and solutions could lower our revenue and cash flow; We or third parties on whom we depend may be adversely affected by natural disasters, including events resulting from climate change, and our business continuity and disaster recovery plans may not adequately protect us or our value chain from such events; Adverse changes in domestic and global economic conditions could adversely affect our operating results; Our international operations are subject to risks that we do not face in the United States, which could have an adverse effect on our operating results; Our products face competition, which could limit our ability to acquire or retain customers; We have operations in, and depend on sales in, emerging markets, including India, and global conditions could negatively affect our operating results or limit our ability to expand our operations outside of these markets. Changes in India’s political, social, regulatory and economic environment may affect our financial performance; Our success depends upon the commercial adoption of the REG system, which is currently limited, and a widespread commercial market for our products may not develop; Industry consolidation could result in more powerful competitors and fewer customers; Increasing focus and scrutiny on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results; Growth of the wind energy market depends largely on the availability and size of government subsidies, economic incentives and legislative programs designed to support the growth of wind energy: Lower prices for other energy sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business; We may be unable to adequately prevent disclosure of trade secrets and other proprietary information; Our patents may not provide meaningful or long-term protection for our technology, which could result in us losing some or all of our market position; There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products; Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights; Our common stock has experienced, and may continue to experience, market price and volume fluctuations, which may prevent our stockholders from selling our common stock at a profit and could lead to costly litigation against us that could divert our management’s attention; Unfavorable results of legal proceedings could have a material adverse effect on our business, operating results and financial condition; and the other important factors discussed under the caption “Risk Factors” in Part 1. Item 1A of our Form 10-K for the fiscal year ended March 31, 2024, and our other reports filed with the SEC. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

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

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
Revenues
Grid	$	52,306		$	33,603		$	131,578		$	87,854
Wind		9,097			5,750			24,585			15,757
Total revenues		61,403			39,353			156,163			103,611

Cost of revenues		45,077			29,369			112,000			78,759

Gross margin		16,326			9,984			44,163			24,852

Operating expenses:
Research and development		3,000			2,199			7,932			5,693
Selling, general and administrative		11,567			7,833			30,990			23,648
Amortization of acquisition-related intangibles		444			538			1,289			1,614
Change in fair value of contingent consideration		—			852			6,682			3,052
Restructuring		—			—			—			(14	)
Total operating expenses		15,011			11,422			46,893			33,993

Operating income (loss)		1,315			(1,438	)		(2,730	)		(9,141	)

Interest income, net		802			150			2,901			518
Other income (expense), net		272			(298	)		(214	)		(618	)
Income (loss) before income tax expense (benefit)		2,389			(1,586	)		(43	)		(9,241	)

Income tax (benefit) expense		(76	)		63			(4,871	)		291

Net income (loss)	$	2,465		$	(1,649	)	$	4,828		$	(9,532	)

Net income (loss) per common share
Basic	$	0.07		$	(0.06	)	$	0.13		$	(0.33	)
Diluted	$	0.06		$	(0.06	)	$	0.13		$	(0.33	)

Weighted average number of common shares outstanding
Basic		37,661			29,092			36,766			28,728
Diluted		38,463			29,092			37,457			28,728

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)

	December 31, 2024			March 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	75,203		$	90,522
Accounts receivable, net		44,135			26,325
Inventory, net		74,588			41,857
Prepaid expenses and other current assets		10,194			7,295
Restricted cash		1,314			468
Total current assets		205,434			166,467

Property, plant and equipment, net		38,390			10,861
Intangibles, net		6,622			6,369
Right-of-use assets		4,050			2,557
Goodwill		48,950			43,471
Restricted cash		3,523			1,290
Deferred tax assets		1,155			1,119
Equity-method investments		1,397			—
Other assets		757			637
Total assets	$	310,278		$	232,771

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	29,425		$	24,235
Lease liability, current portion		675			716
Debt, current portion		—			25
Contingent consideration		—			3,100
Deferred revenue, current portion		74,325			50,732
Total current liabilities		104,425			78,808

Deferred revenue, long term portion		9,003			7,097
Lease liability, long term portion		2,725			1,968
Deferred tax liabilities		1,423			300
Other liabilities		26			27
Total liabilities		117,602			88,200

Stockholders’ equity:
Common stock, $0.01 par value, 75,000,000 shares authorized; 39,863,084 and 37,343,812 shares issued and 39,459,733 and 36,946,181 shares outstanding at December 31, 2024 and March 31, 2024, respectively		399			373
Additional paid-in capital		1,256,210			1,212,913
Treasury stock, at cost, 403,351 and 397,631 at December 31, 2024 and March 31, 2024, respectively		(3,765	)		(3,639	)
Accumulated other comprehensive income		1,662			1,582
Accumulated deficit		(1,061,830	)		(1,066,658	)
Total stockholders’ equity		192,676			144,571
Total liabilities and stockholders’ equity	$	310,278		$	232,771

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

	Nine Months Ended December 31,
	2024			2023
Cash flows from operating activities:

Net income (loss)	$	4,828		$	(9,532	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Depreciation and amortization		3,984			3,360
Stock-based compensation expense		4,933			3,608
Provision for excess and obsolete inventory		1,186			1,536
Amortization of operating lease right-of-use assets		753			457
Deferred income taxes		(5,171	)		3
Earnings from equity method investments		(152	)		—
Change in fair value of contingent consideration		6,682			3,052
Other non-cash items		(177	)		494
Changes in operating asset and liability accounts:
Accounts receivable		(1,650	)		5,945
Inventory		(10,836	)		(8,737	)
Prepaid expenses and other assets		(1,658	)		6,682
Operating leases		(1,531	)		(450	)
Accounts payable and accrued expenses		118			(15,409	)
Deferred revenue		20,686			8,894
Net cash provided by (used in) operating activities		21,995			(97	)

Cash flows from investing activities:
Purchases of property, plant and equipment		(1,376	)		(635	)
Cash paid to settle contingent consideration liabilities		(3,278	)		—
Cash paid for acquisition, net of cash acquired		(29,577	)		—
Change in other assets		167			(8	)
Net cash used in investing activities		(34,064	)		(643	)

Cash flows from financing activities:
Repurchase of treasury stock		(126	)		—
Repayment of debt		(25	)		(49	)
Cash paid related to registration of common stock shares		(148	)		—
Proceeds from exercise of employee stock options and ESPP		157			136
Net cash (used in) provided by financing activities		(142	)		87

Effect of exchange rate changes on cash		(29	)		3

Net decrease in cash, cash equivalents and restricted cash		(12,240	)		(650	)
Cash, cash equivalents and restricted cash at beginning of period		92,280			25,675
Cash, cash equivalents and restricted cash at end of period	$	80,040		$	25,025

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS) (In thousands, except per share data)

	Three Months Ended December 31,					Nine Months Ended December 31,
	2024		2023			2024		2023
Net income (loss)	$	2,465	$	(1,649	)	$	4,828	$	(9,532	)
Stock-based compensation		2,861		1,140			4,933		3,608
Acquisition costs		15		—			1,095		—
Amortization of acquisition-related intangibles		706		538			1,727		1,620
Change in fair value of contingent consideration		—		852			6,682		3,052
Non-GAAP net income (loss)	$	6,047	$	881		$	19,265	$	(1,252	)

Non-GAAP net income (loss) per share – basic	$	0.16	$	0.03		$	0.52	$	(0.04	)
Non-GAAP net income (loss) per share – diluted	$	0.16	$	0.03		$	0.51	$	(0.04	)
Weighted average shares outstanding – basic		37,661		29,092			36,766		28,728
Weighted average shares outstanding – diluted		38,463		29,428			37,457		28,728

Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Income (In millions, except per share data)

	Three Months Ending
	March 31, 2025
Net loss	$	(1.0	)
Stock-based compensation		2.8
Amortization of acquisition-related intangibles		0.7
Non-GAAP net income	$	2.5
Non-GAAP net income per share	$	0.07
Shares outstanding		37.9

Note: Non-GAAP net income (loss) is defined by the Company as net income (loss) before stock-based compensation; amortization of acquisition-related intangibles; acquisition costs; change in fair value of contingent consideration, other non-cash or unusual charges, and the tax effect of adjustments calculated at the relevant rate for our non-GAAP metric. The Company believes non-GAAP net income (loss) and non-GAAP net income (loss) per share assist management and investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring or other charges that it does not believe are indicative of its core operating performance. Actual GAAP and non-GAAP net loss for the fiscal quarter ending March 31, 2025, including the above adjustments, may differ materially from those forecasted in the table above. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measure included in this release, however, should be considered in addition to, and not as a substitute for or superior to, operating income or other measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP net income (loss) is set forth in the table above.

AMSC Contacts
Investor Relations Contact:
LHA Investor Relations
Carolyn Capaccio
(212) 838-3777
amscIR@lhai.com

Public Relations Contact:
RooneyPartners
Joe Luongo
(914) 906-5903

AMSC Director, Communications:
Nicol Golez
978-399-8344
Nicol.Golez@amsc.com

The MIL Network –

February 6, 2025

MIL-OSI: LiveRamp Announces Results for Third Quarter FY25

Source: GlobeNewswire (MIL-OSI)

Revenue up 12% Year-Over-Year

Fourth Consecutive Quarter of Double-Digit Revenue Growth

Fiscal YTD Operating Cash Flow up 17% Year-Over-Year

SAN FRANCISCO, Feb. 05, 2025 (GLOBE NEWSWIRE) — LiveRamp ^® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2025 third quarter ended December 31, 2024.

Q3 Financial Highlights¹

Total revenue was $195 million, up 12%.
Subscription revenue was $146 million, up 10%.
Marketplace & Other revenue was $50 million, up 20%.
GAAP gross profit was $140 million, up 9%. GAAP gross margin compressed by two percentage points to 72%. Non-GAAP gross profit was $146 million, up 11%. Non-GAAP gross margin compressed by one percentage point to 74%.
GAAP operating income was $15 million, in-line with the prior year. GAAP operating margin compressed by one percentage point to 8%. Non-GAAP operating income was $45 million, up 24%. Non-GAAP operating margin expanded by two percentage points to 23%.
GAAP and Non-GAAP diluted earnings per share were $0.17 and $0.55, respectively.
Net cash provided by operating activities was $45 million, up from $17 million.
Third quarter share repurchases totaled approximately 368,000 shares for $10 million. Fiscal year to date through December 31, 2024 share repurchases totaled approximately 2.8 million shares for $76 million.

A reconciliation between GAAP and non-GAAP results is provided in the schedules in this press release.

Commenting on the results, CEO Scott Howe said, “We posted a strong quarter, with revenue and operating income exceeding our expectations, and revenue growing at a double-digit rate for the fourth consecutive quarter. Our sales momentum improved appreciably in the third quarter as our Data Collaboration Platform and clean room solution are resonating with customers. This confirms the substantial market demand for our platform that helps customers efficiently use their first-party data to deliver, measure and optimize their digital advertising.”

GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for the fiscal 2025 third quarter ended December 31, 2024 ($ in millions, except per share amounts):

_________________________

¹ Unless otherwise indicated, all comparisons are to the prior year period.


	GAAP		Non-GAAP
	Q3 FY25	Q3 FY24	Q3 FY25	Q3 FY24
Subscription revenue	$146	$132	—	—
YoY change %	10%	5%	—	—
Marketplace & Other revenue	$50	$42	—	—
YoY change %	20%	29%	—	—
Total revenue	$195	$174	—	—
YoY change %	12%	10%	—	—

Gross profit	$140	$129	$146	$131
% Gross margin	72%	74%	74%	75%
YoY change, pts	(2 pts)	1 pt	(1 pt)	(1 pt)

Operating income	$15	$15	$45	$36
% Operating margin	8%	9%	23%	21%
YoY change, pts	(1 pt)	24 pts	2 pts	5 pts

Net earnings	$11	$14	$37	$32
Diluted earnings per share	$0.17	$0.21	$0.55	$0.47

Shares to calculate diluted EPS	66.7	67.9	66.7	67.9
YoY change %	(2%)	5%	(2%)	4%

Operating cash flow	$45	$17	—	—
Free cash flow	—	—	$45	$14

Totals and year-over-year changes may not reconcile due to rounding.

A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules in this press release.

Additional Business Highlights & Metrics

On February 25, 2025 we will host an investor day presentation in San Francisco (additional information). The event coincides with RampUp 2025, our annual customer and partner conference on February 25-27, 2025 (additional information).
In November 2024 we announced an expansion of the Quick Start Insights available on our Data Collaboration Platform to now offer media intelligence across a network of premium publishers. These standardized insights enable our customers to more quickly access and deploy media performance metrics — such as audience overlaps, optimal frequency, and last-touch attribution — from premium publisher and CTV data. As a result, LiveRamp customers now have a simplified way to enhance media buying and planning strategies and increase the time-to-value from clean room partnerships.
In January 2025 we announced in partnership with Mohegan, a leader in casino and entertainment destinations, the industry’s first casino media network. For the first time, brands can access Mohegan’s rich first-party insights to reach guests and players in addition to the ability to measure campaigns across the casino’s digital channels and on-premise experiences – such as in-app, loyalty programs, slot machines, and kiosks (additional information).
LiveRamp ended the quarter with 125 customers whose annualized subscription revenue exceeds $1 million, compared to 105 in the prior year period.
LiveRamp ended the quarter with 865 direct subscription customers, compared to 895 in the prior year period.
Subscription net retention was 108% and platform net retention was 111% for the quarter.
Annual recurring revenue (ARR), which is the last month of the quarter fixed subscription revenue annualized, was $491 million, up 10% compared to the prior year period.
Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $434 million, up 13% compared to the prior year period.

Financial Outlook

LiveRamp’s non-GAAP operating income guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges.

For the fourth quarter of fiscal 2025, LiveRamp expects to report:

Revenue of between $184 million and $186 million, an increase of between 7% and 8%
GAAP operating loss of $8 million
Non-GAAP operating income of $22 million

For fiscal 2025, LiveRamp increases its guidance and expects to report:

Revenue of between $741 million and $743 million, an increase of between 12% and 13%
GAAP operating income of $10 million
Non-GAAP operating income of $135 million

Conference Call

LiveRamp will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to further discuss this information. Interested parties are invited to listen to a webcast of the conference, which can be accessed on LiveRamp’s investor site. A slide presentation will be referenced during the call and is available here.

About LiveRamp

LiveRamp is a global technology company that helps companies build enduring brand and business value by collaborating responsibly with data. A groundbreaking leader in foundational identity, LiveRamp offers a connected customer view with clarity and context while protecting brand and consumer trust. We offer flexibility to collaborate wherever data lives to support a wide range of data collaboration use cases—within organizations, between brands, and across our global network of premier partners. Global innovators, from iconic consumer brands and tech platforms to retailers, financial services, and healthcare leaders, turn to LiveRamp to deepen customer engagement and loyalty, activate new partnerships, and maximize the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at LiveRamp.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations for fiscal 2025 and beyond, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof.

These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.

Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to high interest rates, cost increases, the possibility of a recession, general inflationary pressure, geo-political circumstances that could result in increased economic uncertainties and the associated impacts of these potential events on our suppliers, customers and partners; the Company’s dependence upon customer renewals, new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; rapidly changing technology’s impact on our products and services; the risk that we fail to realize the potential benefits of or have difficulty integrating acquired businesses (including Habu); and attracting, motivating and retaining talent. Additional risks include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition, divestiture and other activities affecting our workforce. Our global workforce strategy could possibly encounter difficulty and not be as beneficial as planned. Our international operations are also subject to risks, including the performance of third parties as well as impacts from war and civil unrest, that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ data and/or computer systems, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center or cloud hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Continued changes in the judicial, legislative, regulatory, accounting, cultural and consumer environments affecting our business, including but not limited to litigation, investigations, legislation, regulations and customs at the state, federal and international levels relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.

For a discussion of these and other risks and uncertainties that could affect LiveRamp’s business, reputation, results of operation, financial condition and stock price, please refer to LiveRamp’s filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of LiveRamp’s most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and subsequent filings.

The financial information set forth in this press release reflects estimates based on information available at this time.

LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.

To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.

For more information, contact:

LiveRamp Investor Relations
Investor.Relations@LiveRamp.com

LiveRamp^®and RampID™ and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the three months ended December 31,
			$		%
	2024	2023	Variance		Variance

Revenues	195,412	173,869	21,543		12.4	%
Cost of revenue	54,998	44,934	10,064		22.4	%
Gross profit	140,414	128,935	11,479		8.9	%
% Gross margin	71.9%	74.2%

Operating expenses
Research and development	42,735	37,788	4,947		13.1	%
Sales and marketing	50,863	46,203	4,660		10.1	%
General and administrative	31,994	27,241	4,753		17.4	%
Gains, losses and other items, net	149	2,502	(2,353	)	(94.0	)%
Total operating expenses	125,741	113,734	12,007		10.6	%

Income from operations	14,673	15,201	(528	)	(3.5	)%
% Margin	7.5%	8.7%

Total other income, net	4,033	6,607	(2,574	)	(39.0	)%

Income from continuing operations before income taxes	18,706	21,808	(3,102	)	(14.2	)%
Income tax expense	9,184	8,429	755		9.0	%
Net earnings from continuing operations	9,522	13,379	(3,857	)	(28.8	)%

Earnings from discontinued operations, net of tax	1,688	598	1,090		182.3	%

Net earnings	11,210	13,977	(2,767	)	(19.8	)%

Basic earnings per share:
Continuing operations	0.15	0.20	(0.06	)	(28.5	)%
Discontinued operations	0.03	0.01	0.02		183.6	%
Basic earnings per share	0.17	0.21	(0.04	)	(19.4	)%

Diluted earnings per share:
Continuing operations	0.14	0.20	(0.05	)	(27.5	)%
Discontinued operations	0.03	0.01	0.02		187.4	%
Diluted earnings per share	0.17	0.21	(0.04	)	(18.4	)%

Basic weighted average shares	65,631	65,961
Diluted weighted average shares	66,743	67,943


Some totals may not sum due to rounding.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the nine months ended December 31,
			$		%
	2024	2023	Variance		Variance

Revenues	556,856	487,809	69,047		14.2	%
Cost of revenue	157,981	131,767	26,214		19.9	%
Gross profit	398,875	356,042	42,833		12.0	%
% Gross margin	71.6 %	73.0 %

Operating expenses
Research and development	130,742	106,040	24,702		23.3	%
Sales and marketing	156,145	135,217	20,928		15.5	%
General and administrative	94,324	79,914	14,410		18.0	%
Gains, losses and other items, net	752	9,192	(8,440	)	(91.8	)%
Total operating expenses	381,963	330,363	51,600		15.6	%

Income from operations	16,912	25,679	(8,767	)	(34.1	)%
% Margin	3.0 %	5.3 %

Total other income, net	12,674	17,887	(5,213	)	(29.1	)%

Income from continuing operations before income taxes	29,586	43,566	(13,980	)	(32.1	)%
Income tax expense	25,821	27,297	(1,476	)	(5.4	)%
Net earnings from continuing operations	3,765	16,269	(12,504	)	(76.9	)%

Earnings from discontinued operations, net of tax	1,688	985	703		71.4	%

Net earnings	5,453	17,254	(11,801	)	(68.4	)%

Basic earnings per share:
Continuing operations	0.06	0.25	(0.19	)	(76.8	)%
Discontinued operations	0.03	0.01	0.01		71.5	%
Basic earnings per share	0.08	0.26	(0.18	)	(68.4	)%

Diluted earnings per share:
Continuing operations	0.06	0.24	(0.18	)	(76.8	)%
Discontinued operations	0.03	0.01	0.01		71.9	%
Diluted earnings per share	0.08	0.25	(0.17	)	(68.3	)%

Basic weighted average shares	66,182	66,247
Diluted weighted average shares	67,505	67,733


Some totals may not sum due to rounding.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the three months ended December 31,		For the nine months ended December 31,
	2024	2023	2024	2023

Income from continuing operations before income taxes	18,706	21,808	29,586	43,566
Income tax expense	9,184	8,429	25,821	27,297
Net earnings from continuing operations	9,522	13,379	3,765	16,269
Earnings from discontinued operations, net of tax	1,688	598	1,688	985
Net earnings	11,210	13,977	5,453	17,254

Basic earnings per share	0.17	0.21	0.08	0.26
Diluted earnings per share	0.17	0.21	0.08	0.25

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,686	1,181	11,280	5,688
Non-cash stock compensation (cost of revenue and operating expenses)	26,760	17,497	83,813	46,524
Restructuring and merger charges (gains, losses, and other)	149	2,502	752	9,192
Transformation costs (general and administrative)	—	—	—	1,875
Total excluded items from continuing operations	30,595	21,180	95,845	63,279

Income from continuing operations before income taxes and excluding items	49,301	42,988	125,431	106,845
Income tax expense (2)	12,421	10,732	30,537	25,935
Non-GAAP net earnings from continuing operations	36,880	32,256	94,894	80,910

Non-GAAP earnings per share from continuing operations
Basic	0.56	0.49	1.43	1.22
Diluted	0.55	0.47	1.41	1.19

Basic weighted average shares	65,631	65,961	66,182	66,247
Diluted weighted average shares	66,743	67,943	67,505	67,733


(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2) Non-GAAP income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with the valuation allowance and smaller pre-tax income for GAAP purposes.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)

	For the three months ended December 31,		For the nine months ended December 31,
	2024	2023	2024	2023

Income from operations	14,673	15,201	16,912	25,679

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,686	1,181	11,280	5,688
Non-cash stock compensation (cost of revenue and operating expenses)	26,760	17,497	83,813	46,524
Restructuring and merger charges (gains, losses, and other)	149	2,502	752	9,192
Transformation costs (general and administrative)	–	–	–	1,875
Total excluded items	30,595	21,180	95,845	63,279

Income from operations before excluded items	45,268	36,381	112,757	88,958


(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)

	For the three months ended December 31,		For the nine months ended December 31,
	2024	2023	2024	2023

Net earnings from continuing operations	9,522	13,379	3,765	16,269
Income tax expense	9,184	8,429	25,821	27,297
Total other income, net	(4,033)	(6,607)	(12,674)	(17,887)

Income from operations	14,673	15,201	16,912	25,679
Depreciation and amortization	4,400	1,782	13,404	7,685

EBITDA	19,073	16,983	30,316	33,364

Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)	26,760	17,497	83,813	46,524
Restructuring and merger charges (gains, losses, and other)	149	2,502	752	9,192
Transformation costs (general and administrative)	–	–	–	1,875

Other adjustments	26,909	19,999	84,565	57,591

Adjusted EBITDA	45,982	36,982	114,881	90,955


(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	December 31	March 31	$	%
	2024	2024	Variance	Variance
Assets
Current assets:
Cash and cash equivalents	376,772	336,867	39,905	11.8	%
Restricted cash	593	2,604	(2,011)	(77.2	)%
Short-term investments	7,500	32,045	(24,545)	(76.6	)%
Trade accounts receivable, net	210,565	190,313	20,252	10.6	%
Refundable income taxes, net	6,630	8,521	(1,891)	(22.2	)%
Other current assets	41,747	31,682	10,065	31.8	%
Total current assets	643,807	602,032	41,775	6.9	%

Property and equipment	24,099	25,394	(1,295)	(5.1	)%
Less – accumulated depreciation and amortization	17,440	17,213	227	1.3	%
Property and equipment, net	6,659	8,181	(1,522)	(18.6	)%

Intangible assets, net	23,302	34,583	(11,281)	(32.6	)%
Goodwill	501,559	501,756	(197)	(0.0	)%
Deferred commissions, net	44,497	48,143	(3,646)	(7.6	)%
Other assets, net	33,389	36,748	(3,359)	(9.1	)%
	1,253,213	1,231,443	21,770	1.8	%

Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	105,334	81,202	24,132	29.7	%
Accrued payroll and related expenses	35,639	61,575	(25,936)	(42.1	)%
Other accrued expenses	45,856	42,857	2,999	7.0	%
Deferred revenue	44,795	30,942	13,853	44.8	%
Total current liabilities	231,624	216,576	15,048	6.9	%

Other liabilities	63,882	65,732	(1,850)	(2.8	)%

Stockholders’ equity:
Preferred stock	–	–	–	n/a
Common stock	15,853	15,594	259	1.7	%
Additional paid-in capital	2,022,227	1,933,776	88,451	4.6	%
Retained earnings	1,319,625	1,314,172	5,453	0.4	%
Accumulated other comprehensive income	3,493	3,964	(471)	(11.9	)%
Treasury stock, at cost	(2,403,491)	(2,318,371)	(85,120)	3.7	%
Total stockholders’ equity	957,707	949,135	8,572	0.9	%
	1,253,213	1,231,443	21,770	1.8	%

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the three months ended December 31,
	2024	2023
Cash flows from operating activities:
Net earnings	11,210	13,977
Earnings from discontinued operations, net of tax	(1,688)	(598)
Non-cash operating activities:
Depreciation and amortization	4,400	1,782
Loss on disposal or impairment of assets	99	911
Provision for doubtful accounts	(97)	544
Deferred income taxes	11	(47)
Non-cash stock compensation expense	26,760	17,497
Changes in operating assets and liabilities:
Accounts receivable, net	(19,013)	(24,778)
Deferred commissions	(1,042)	(4,235)
Other assets	(6,596)	(4,831)
Accounts payable and other liabilities	23,829	21,639
Income taxes	(1,617)	(14,139)
Deferred revenue	8,861	8,834
Net cash provided by operating activities	45,117	16,556
Cash flows from investing activities:
Capital expenditures	(282)	(2,211)
Cash paid in acquisitions, net of cash received	(1,951)	—
Proceeds from sales of investments	1,994	—
Purchases of strategic investments	(1,000)	—
Net cash used in investing activities	(1,239)	(2,211)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans	2,304	1,646
Shares repurchased for tax withholdings upon vesting of stock-based awards	(1,565)	(547)
Acquisition of treasury stock	(10,098)	(10,000)
Net cash used in financing activities	(9,359)	(8,901)
Cash flows from discontinued operations:
From operating activities	2,486	598
Effect of exchange rate changes on cash	(1,217)	735

Net change in cash, cash equivalents and restricted cash	35,788	6,777
Cash, cash equivalents and restricted cash at beginning of period	341,577	492,169
Cash, cash equivalents and restricted cash at end of period	377,365	498,946

Supplemental cash flow information:
Cash paid for income taxes, net from continuing operations	10,990	22,699
Cash received for income taxes, net from discontinued operations	(2,486)	(912)
Cash paid for operating lease liabilities	2,495	2,551

Non-cash investing and financing activities:
Operating lease assets obtained in exchange for operating lease liabilities	1,284	—
Purchases of property, plant and equipment remaining unpaid at period end	85	1,218
Excise tax payable on net stock repurchases	64	—

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the nine months ended December 31,
	2024	2023
Cash flows from operating activities:
Net earnings	5,453	17,254
Earnings from discontinued operations, net of tax	(1,688)	(985)
Non-cash operating activities:
Depreciation and amortization	13,404	7,685
Loss on disposal or impairment of assets	119	1,213
Lease-related impairment and restructuring charges	(36)	2,315
Provision for doubtful accounts	1,148	307
Impairment of goodwill	—	2,875
Deferred income taxes	49	40
Non-cash stock compensation expense	83,813	46,524
Changes in operating assets and liabilities:
Accounts receivable, net	(21,640)	(41,036)
Deferred commissions	3,645	(7,142)
Other assets	(2,598)	912
Accounts payable and other liabilities	(8,165)	8,754
Income taxes	3,953	29,560
Deferred revenue	13,928	9,737
Net cash provided by operating activities	91,385	78,013
Cash flows from investing activities:
Capital expenditures	(749)	(2,464)
Cash paid in acquisitions, net of cash received	(1,951)	—
Purchases of investments	(1,967)	(24,385)
Proceeds from sales of investments	26,989	25,750
Purchases of strategic investments	(1,400)	(1,000)
Net cash provided by (used in) investing activities	20,922	(2,099)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans	8,631	7,221
Shares repurchased for tax withholdings upon vesting of stock-based awards	(9,305)	(5,116)
Acquisition of treasury stock	(75,751)	(45,325)
Net cash used in financing activities	(76,425)	(43,220)
Cash flows from discontinued operations:
From operating activities	2,486	985
Effect of exchange rate changes on cash	(474)	819

Net change in cash, cash equivalents and restricted cash	37,894	34,498
Cash, cash equivalents and restricted cash at beginning of period	339,471	464,448
Cash, cash equivalents and restricted cash at end of period	377,365	498,946

Supplemental cash flow information:
Cash paid (received) for income taxes, net from continuing operations	21,990	(2,440)
Cash received for income taxes, net from discontinued operations	(2,486)	(1,507)
Cash received for tenant improvement allowances	(1,758)	—
Cash paid for operating lease liabilities	7,372	7,699

Non-cash investing and financing activities:
Operating lease assets obtained in exchange for operating lease liabilities	2,327	11,677
Operating lease assets, and related lease liabilities, relinquished in lease terminations	(555)	(4,486)
Purchases of property, plant and equipment remaining unpaid at period end	85	1,218
Excise tax payable on net stock repurchases	64	—

LIVERAMP HOLDINGS, INC AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW (1)
(Unaudited)
(Dollars in thousands)


		6/30/2023			9/30/2023			12/31/2023			3/31/2024			FY2024			6/30/2024			9/30/2024			12/31/2024			FY2025

Net cash provided by (used in) operating activities		$	25,693		$	35,764		$	16,556		$	27,643		$	105,656		$	(9,328	)	$	55,596		$	45,117		$	91,385

Less:
	Capital expenditures		(53	)		(200	)		(2,211	)		(1,791	)		(4,255	)		(226	)		(241	)		(282	)		(749	)

Free Cash Flow		$	25,640		$	35,564		$	14,345		$	25,852		$	101,401		$	(9,554	)	$	55,355		$	44,835		$	90,636


(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
																			Qtr-to-Qtr
	FY2024										FY2025								FY2025 to FY2024
	6/30/2023		9/30/2023		12/31/2023		3/31/2024		FY2024		6/30/2024		9/30/2024		12/31/2024		FY2025		%	$

Revenues		154,069		159,871		173,869		171,852		659,661		175,961		185,483		195,412		556,856	12.4%	21,543
Cost of revenue		45,621		41,212		44,934		47,722		179,489		51,749		51,234		54,998		157,981	22.4%	10,064
Gross profit		108,448		118,659		128,935		124,130		480,172		124,212		134,249		140,414		398,875	8.9%	11,479
% Gross margin		70.4 %		74.2 %		74.2 %		72.2 %		72.8 %		70.6 %		72.4 %		71.9 %		71.6 %

Operating expenses
Research and development		34,519		33,733		37,788		45,161		151,201		44,118		43,889		42,735		130,742	13.1%	4,947
Sales and marketing		44,879		44,135		46,203		60,476		195,693		54,175		51,107		50,863		156,145	10.1%	4,660
General and administrative		26,664		26,009		27,241		30,252		110,166		30,961		31,369		31,994		94,324	17.4%	4,753
Gains, losses and other items, net		116		6,574		2,502		2,516		11,708		206		397		149		752	(94.0)%	(2,353)
Total operating expenses		106,178		110,451		113,734		138,405		468,768		129,460		126,762		125,741		381,963	10.6%	12,007

Income (loss) from operations		2,270		8,208		15,201		(14,275)		11,404		(5,248)		7,487		14,673		16,912	(3.5)%	(528)
% Margin		5.0 %		24.3 %		40.2 %		(31.6)%		1.7 %		(3.0)%		4.0 %		7.5 %		3.0 %

Total other income, net		4,849		6,431		6,607		5,070		22,957		4,444		4,197		4,033		12,674	(39.0)%	(2,574)

Income (loss) from continuing operations before income taxes		7,119		14,639		21,808		(9,205)		34,361		(804)		11,684		18,706		29,586	(14.2)%	(3,102)
Income tax expense (benefit)		8,705		10,163		8,429		(3,027)		24,270		6,685		9,952		9,184		25,821	9.0%	755
Net earnings (loss) from continuing operations		(1,586)		4,476		13,379		(6,178)		10,091		(7,489)		1,732		9,522		3,765	(28.8)%	(3,857)

Earnings from discontinued operations, net of tax		–		387		598		805		1,790		–		–		1,688		1,688	182.3%	1,090

Net earnings (loss)	$	(1,586)	$	4,863	$	13,977	$	(5,373)	$	11,881	$	(7,489)	$	1,732	$	11,210	$	5,453	(19.8)%	(2,767)

Basic earnings (loss) per share:
Continuing Operations		(0.02)		0.07		0.20		(0.09)		0.15		(0.11)		0.03		0.15		0.06	(28.5)%	(0.06)
Discontinued Operations		0.00		0.01		0.01		0.01		0.03		0.00		0.00		0.03		0.03	183.7%	0.02
Basic earnings (loss) per share		(0.02)		0.07		0.21		(0.08)		0.18		(0.11)		0.03		0.17		0.08	(19.4)%	(0.04)

Diluted earnings (loss) per share:
Continuing Operations		(0.02)		0.07		0.20		(0.09)		0.15		(0.11)		0.03		0.14		0.06	(27.5)%	(0.05)
Discontinued Operations		0.00		0.01		0.01		0.01		0.03		0.00		0.00		0.03		0.03	187.3%	0.02
Diluted earnings (loss) per share		(0.02)		0.07		0.21		(0.08)		0.17		(0.11)		0.03		0.17		0.08	(18.4)%	(0.04)


Basic weighted average shares		66,497		66,284		65,961		66,323		66,266		66,621		66,294		65,631		66,182
Diluted weighted average shares		66,497		67,868		67,943		66,323		67,918		66,621		67,309		66,743		67,505

Some earnings (loss) per share amounts may not add due to rounding.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1)
(Unaudited)
(Dollars in thousands)
	FY2024					FY2025
	6/30/2023	9/30/2023	12/31/2023	3/31/2024	FY2024	6/30/2024	9/30/2024	12/31/2024	FY2025
Expenses:
Cost of revenue	45,621	41,212	44,934	47,722	179,489	51,749	51,234	54,998	157,981
Research and development	34,519	33,733	37,788	45,161	151,201	44,118	43,889	42,735	130,742
Sales and marketing	44,879	44,135	46,203	60,476	195,693	54,175	51,107	50,863	156,145
General and administrative	26,664	26,009	27,241	30,252	110,166	30,961	31,369	31,994	94,324
Gains, losses and other items, net	116	6,574	2,502	2,516	11,708	206	397	149	752

Gross profit, continuing operations:	108,448	118,659	128,935	124,130	480,172	124,212	134,249	140,414	398,875
% Gross margin	70.4%	74.2%	74.2%	72.2%	72.8%	70.6%	72.4%	71.9%	71.6%

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,290	1,217	1,181	3,097	8,785	3,846	3,748	3,686	11,280
Non-cash stock compensation (cost of revenue)	629	629	817	1,478	3,553	1,596	1,499	1,455	4,550
Non-cash stock compensation (research and development)	5,077	5,293	6,960	9,859	27,189	10,205	10,920	10,085	31,210
Non-cash stock compensation (sales and marketing)	3,736	4,786	4,089	6,337	18,948	7,093	7,383	7,278	21,754
Non-cash stock compensation (general and administrative)	3,850	5,027	5,631	7,106	21,614	9,091	9,266	7,942	26,299
Restructuring charges (gains, losses, and other)	116	6,574	2,502	2,516	11,708	206	397	149	752
Transformation costs (general and administrative)	1,875	—	—	—	1,875	—		—	—
Total excluded items	18,573	23,526	21,180	30,393	93,672	32,037	33,213	30,595	95,845

Expenses, excluding items:
Cost of revenue	41,702	39,366	42,936	43,147	167,151	46,307	45,987	49,857	142,151
Research and development	29,442	28,440	30,828	35,302	124,012	33,913	32,969	32,650	99,532
Sales and marketing	41,143	39,349	42,114	54,139	176,745	47,082	43,724	43,585	134,391
General and administrative	20,939	20,982	21,610	23,146	86,677	21,870	22,103	24,052	68,025

Gross profit, excluding items:	112,367	120,505	130,933	128,705	492,510	129,654	139,496	145,555	414,705
% Gross margin	72.9%	75.4%	75.3%	74.9%	74.7%	73.7%	75.2%	74.5%	74.5%

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
	FY2024					FY2025
	6/30/2023	9/30/2023	12/31/2023	3/31/2024	FY2024	6/30/2024	9/30/2024	12/31/2024	FY2025

Income (loss) from continuing operations before income taxes	7,119	14,639	21,808	(9,205)	34,361	(804)	11,684	18,706	29,586
Income tax expense (benefit)	8,705	10,163	8,429	(3,027)	24,270	6,685	9,952	9,184	25,821
Net earnings (loss) from continuing operations	(1,586)	4,476	13,379	(6,178)	10,091	(7,489)	1,732	9,522	3,765

Earnings from discontinued operations, net of tax	–	387	598	805	1,790	–	–	1,688	1,688

Net earnings (loss)	(1,586)	4,863	13,977	(5,373)	11,881	(7,489)	1,732	11,210	5,453

Earnings (loss) per share:
Basic	(0.02)	0.07	0.21	(0.08)	0.18	(0.11)	0.03	0.17	0.08
Diluted	(0.02)	0.07	0.21	(0.08)	0.17	(0.11)	0.03	0.17	0.08

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,290	1,217	1,181	3,097	8,785	3,846	3,748	3,686	11,280
Non-cash stock compensation (cost of revenue and operating expenses)	13,292	15,735	17,497	24,780	71,304	27,985	29,068	26,760	83,813
Restructuring and merger charges (gains, losses, and other)	116	6,574	2,502	2,516	11,708	206	397	149	752
Transformation costs (general and administrative)	1,875	–	–	–	1,875	–	–	–	–
Total excluded items from continuing operations	18,573	23,526	21,180	30,393	93,672	32,037	33,213	30,595	95,845

Income from continuing operations before income taxes and excluding items	25,692	38,165	42,988	21,188	128,033	31,233	44,897	49,301	125,431
Income tax expense (2)	6,167	9,036	10,732	3,947	29,882	7,371	10,745	12,421	30,537
Non-GAAP net earnings from continuing operations	19,525	29,129	32,256	17,241	98,151	23,862	34,152	36,880	94,894

Non-GAAP earnings per share from continuing operations
Basic	0.29	0.44	0.49	0.26	1.48	0.36	0.52	0.56	1.43
Diluted	0.29	0.43	0.47	0.25	1.45	0.35	0.51	0.55	1.41

Basic weighted average shares	66,497	66,284	65,961	66,323	66,266	66,621	66,294	65,631	66,182
Diluted weighted average shares	67,388	67,868	67,943	68,471	67,918	68,463	67,309	66,743	67,505


Some totals may not add due to rounding

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME GUIDANCE (1)
(Unaudited)
(Dollars in thousands)
	For the		For the
	quarter ending		year ending
	March 31, 2025		March 31, 2025



GAAP income (loss) from operations	$	(8,000)	$	10,000

Excluded items:
Purchased intangible asset amortization		3,000		14,000
Non-cash stock compensation		26,000		110,000
Restructuring costs		1,000		1,000
Total excluded items		30,000		125,000

Non-GAAP income from operations	$	22,000	$	135,000


(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

APPENDIX A

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

Q3 FISCAL 2025 FINANCIAL RESULTS

EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS

To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.

Our non-GAAP financial measures, including non-GAAP earnings (loss) per share, non-GAAP income (loss) from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:

Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.

Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.

Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for employees whose positions were eliminated, lease and other contract termination charges, and asset impairments. These items, as well as third party expenses associated with business acquisitions in the current year, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.

Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company’s announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business and again during fiscal 2023 in response to macroeconomic conditions, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

Our non-GAAP financial schedules are:

Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.

Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company’s performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.

Free Cash Flow: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow is defined as operating cash flow less capital expenditures. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company’s discretionary spending. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

PDF Available: http://ml.globenewswire.com/Resource/Download/cfac844b-6484-4164-92b1-a991aa0edb1a

The MIL Network –

February 6, 2025

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

Source: GlobeNewswire (MIL-OSI)

Fourth quarter revenue of $235.7 million, up 11% year-over-year; full year revenue of $900.0 million, up 13% year-over-year.
Fourth quarter calculated current billings of $302.2 million, up 11% year-over-year; full year calculated current billings of $969.5 million, up 11% year-over-year.
Full year net cash provided by operating activities of $217.5 million; full year unlevered free cash flow of $237.8 million.

COLUMBIA, Md., Feb. 05, 2025 (GLOBE NEWSWIRE) — Tenable Holdings, Inc. (“Tenable”) (Nasdaq: TENB), the exposure management company, today announced financial results for the quarter and year ended December 31, 2024.

“We are very pleased with the results for the quarter as we delivered better-than-expected CCB, revenue, operating income, EPS and unlevered free cash flow,” said Steve Vintz, Co-CEO and CFO of Tenable. “Our outperformance was driven by strong traction in cloud and Tenable One as customers look to secure cloud and get a holistic view of their environment.”

“We continue to drive incredible value for our customers resulting in a strong quarter for six-figure additions, many of which were Tenable One deals,” said Mark Thurmond, Co-CEO and COO of Tenable. “We are winning marquee, large deals with our exposure management products and are laser focused on continuing to deliver on our customer-driven roadmap.”

Fourth Quarter 2024 Financial Highlights

Revenue was $235.7 million, an 11% increase year-over-year.
Calculated current billings was $302.2 million, an 11% increase year-over-year.
GAAP income from operations was $13.0 million, compared to a loss of $14.3 million in the fourth quarter of 2023.
Non-GAAP income from operations was $59.4 million, compared to $36.1 million in the fourth quarter of 2023.
GAAP net income was $1.9 million, compared to a loss of $21.6 million in the fourth quarter of 2023.
GAAP diluted earnings per share was $0.02, compared to a loss per share of $0.19 in the fourth quarter of 2023.
Non-GAAP net income was $50.7 million, compared to $30.2 million in the fourth quarter of 2023.
Non-GAAP diluted earnings per share was $0.41, compared to $0.25 in the fourth quarter of 2023.
Net cash provided by operating activities was $81.1 million, compared to $38.5 million in the fourth quarter of 2023.
Unlevered free cash flow was $85.7 million, compared to $43.3 million in the fourth quarter of 2023.
Repurchased 1.2 million shares of our common stock for $50.0 million.

Full Year 2024 Financial Highlights

Revenue was $900.0 million, a 13% increase year-over-year.
Calculated current billings was $969.5 million, an 11% increase year-over-year.
GAAP loss from operations was $6.9 million, compared to $52.2 million in 2023.
Non-GAAP income from operations was $184.1 million, compared to $121.0 million in 2023.
GAAP net loss was $36.3 million, compared to $78.3 million in 2023.
GAAP net loss per share was $0.31, compared to $0.68 in 2023.
Non-GAAP net income was $158.6 million, compared to $97.2 million in 2023.
Non-GAAP diluted earnings per share was $1.29, compared to $0.80 in 2023.
Cash and cash equivalents and short-term investments were $577.2 million at December 31, 2024, compared to $474.0 million at December 31, 2023.
Net cash provided by operating activities was $217.5 million, compared to $149.9 million in 2023.
Unlevered free cash flow was $237.8 million, compared to $175.4 million in 2023.
Repurchased 2.3 million shares of our common stock for $100.0 million.

Recent Business Highlights

Added 485 new enterprise platform customers and 135 net new six-figure customers.
Announced our intent to acquire exposure management company Vulcan Cyber Ltd., whose capabilities will augment our industry-leading Exposure Management platform, adding enhanced visibility, extended third-party data flows, superior risk prioritization, and optimized remediation.
Launched Tenable Patch Management, an autonomous patch management solution built to quickly and effectively close vulnerability exposures.
Integrated Tenable Vulnerability Intelligence into Tenable Security Center and enhanced the solution’s risk prioritization and web application scanning features to streamline vulnerability analysis and response.
Published the 2024 Tenable Cloud Risk Report examining the critical risks at play in modern cloud environments. The report reflects findings by the Tenable Cloud Research team based on telemetry from millions of cloud resources across multiple public cloud repositories.

Financial Outlook

Our financial outlook excludes the impact of the potential acquisition of Vulcan Cyber, which we expect to close shortly.

For the first quarter of 2025, we currently expect:

Revenue in the range of $232.0 million to $234.0 million.
Non-GAAP income from operations in the range of $42.0 million to $44.0 million.
Non-GAAP net income in the range of $35.0 million to $37.0 million, assuming interest income of $5.2 million, interest expense of $7.0 million and a provision for income taxes of $3.6 million.
Non-GAAP diluted earnings per share in the range of $0.28 to $0.30.
124.0 million diluted weighted average shares outstanding.

For the year ending December 31, 2025, we currently expect:

Calculated current billings in the range of $1.040 billion to $1.055 billion.
Revenue in the range of $971.0 million to $981.0 million.
Non-GAAP income from operations in the range of $213.0 million to $223.0 million.
Non-GAAP net income in the range of $189.0 million to $199.0 million, assuming interest income of $21.0 million, interest expense of $28.3 million and a provision for income taxes of $13.4 million.
Non-GAAP diluted earnings per share in the range of $1.52 to $1.60.
124.5 million diluted weighted average shares outstanding.
Unlevered free cash flow in the range of $285.0 million to $295.0 million.

Conference Call Information

Tenable will host a conference call today, February 5, 2025, at 4:30 p.m. Eastern Time to discuss its financial results. The conference call can be accessed at 877-407-9716 (U.S.) and 201-493-6779 (international). A live webcast of the event will be available on the Tenable Investor Relations website at https://investors.tenable.com. An archived replay of the live broadcast will be available on the Investor Relations page of the website following the call.

About Tenable

Tenable^® is the exposure management company, exposing and closing the cybersecurity gaps that erode business value, reputation and trust. The company’s AI-powered exposure management platform radically unifies security visibility, insight and action across the attack surface, equipping modern organizations to protect against attacks from IT infrastructure to cloud environments to critical infrastructure and everywhere in between. By protecting enterprises from security exposure, Tenable reduces business risk for approximately 44,000 customers around the globe. Learn more at tenable.com.

Contact Information

Investor Relations
investors@tenable.com

Media Relations
tenablepr@tenable.com

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our platform’s ability to help protect enterprises from security exposure and streamline vulnerability analysis and response, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. These risks and uncertainties are detailed in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and other filings that we make from time to time with the SEC, which are available on the SEC’s website at sec.gov. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements subsequent to the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance the overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. We include these non-GAAP financial measures to present our financial performance using a management view and because we believe that these measures provide an additional comparison of our core financial performance over multiple periods with other companies in our industry.

Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Calculated Current Billings: We define calculated current billings, a non-GAAP financial measure, as total revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings is a key metric to measure our periodic performance. Given that most of our customers pay in advance (including multi-year contracts), but we generally recognize the related revenue ratably over time, we use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value and that the variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another.

Free Cash Flow and Unlevered Free Cash Flow: We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate cash. We define unlevered free cash flow as free cash flow plus cash paid for interest and other financing costs. We believe unlevered free cash flow is useful as a liquidity measure as it measures the cash that is available to invest in our business and meet our current debt obligations and future financing needs. However, given our debt obligations, non-cancelable commitments and other contractual obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.

Non-GAAP Income from Operations and Non-GAAP Operating Margin: We define these non-GAAP financial measures as their respective GAAP measures, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities, and amortization of acquired intangible assets. Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits, and other charges to reorganize business operations. We believe that the exclusion of these expenses provides for a useful comparison of our operating results to prior periods and to our peer companies, which commonly exclude restructuring expenses.

Non-GAAP Net Income and Non-GAAP Earnings Per Share: We define non-GAAP net income as GAAP net income (loss), excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses and amortization of acquired intangible assets, including the applicable tax impacts. In addition, we exclude the tax impact and related costs of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions. We use non-GAAP net income to calculate non-GAAP earnings per share.

Non-GAAP Gross Profit and Non-GAAP Gross Margin: We define non-GAAP gross profit as GAAP gross profit, excluding the effect of stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue.

Non-GAAP Sales and Marketing Expense, Non-GAAP Research and Development Expense and Non-GAAP General and Administrative Expense: We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation, acquisition-related expenses and costs related to intra-entity asset transfers resulting from the internal restructuring of legal entities.

TENABLE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended December 31,						Year Ended December 31,
(in thousands, except per share data)	2024			2023			2024			2023
Revenue	$	235,731		$	213,306		$	900,021		$	798,710
Cost of revenue⁽¹⁾		51,439			48,803			199,668			183,577
Gross profit		184,292			164,503			700,353			615,133
Operating expenses:
Sales and marketing⁽¹⁾		95,348			103,700			395,385			393,450
Research and development⁽¹⁾		44,728			40,083			181,624			153,163
General and administrative⁽¹⁾		31,241			30,567			124,130			116,181
Restructuring		—			4,499			6,070			4,499
Total operating expenses		171,317			178,849			707,209			667,293
Income (loss) from operations		12,975			(14,346	)		(6,856	)		(52,160	)
Interest income		5,738			5,377			23,325			24,700
Interest expense		(7,587	)		(8,131	)		(31,920	)		(31,339	)
Other expense, net		(2,577	)		(609	)		(3,435	)		(8,602	)
Income (loss) before income taxes		8,549			(17,709	)		(18,886	)		(67,401	)
Provision for income taxes		6,681			3,939			17,415			10,883
Net income (loss)	$	1,868		$	(21,648	)	$	(36,301	)	$	(78,284	)

Net earnings (loss) per share:
Basic	$	0.02		$	(0.19	)	$	(0.31	)	$	(0.68	)
Diluted	$	0.02		$	(0.19	)	$	(0.31	)	$	(0.68	)

Weighted-average shares used to compute net earnings (loss) per share:
Basic		119,748			116,717			118,789			115,408
Diluted		123,853			116,717			118,789			115,408

_______________

⁽¹⁾Includes stock-based compensation as follows:

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Cost of revenue	$	3,191	$	2,705	$	12,677	$	11,247
Sales and marketing		15,210		14,700		62,727		61,322
Research and development		12,261		9,354		47,656		37,225
General and administrative		10,052		9,756		40,455		35,533
Total stock-based compensation	$	40,714	$	36,515	$	163,515	$	145,327

TENABLE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (unaudited)

	December 31,
(in thousands, except per share data)		2024			2023
Assets
Current assets:
Cash and cash equivalents	$	328,647		$	237,132
Short-term investments		248,547			236,840
Accounts receivable (net of allowance for doubtful accounts of $525 and $470 at December 31, 2024 and 2023, respectively)		258,734			220,060
Deferred commissions		51,791			49,559
Prepaid expenses and other current assets		53,026			61,882
Total current assets		940,745			805,473
Property and equipment, net		39,265			45,436
Deferred commissions (net of current portion)		67,914			72,394
Operating lease right-of-use assets		45,139			34,835
Acquired intangible assets, net		94,461			107,017
Goodwill		541,292			518,539
Other assets		13,303			23,177
Total assets	$	1,742,119		$	1,606,871

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	19,981		$	16,941
Accrued compensation		55,784			66,492
Deferred revenue		650,372			580,779
Operating lease liabilities		6,801			5,971
Other current liabilities		5,154			5,655
Total current liabilities		738,092			675,838
Deferred revenue (net of current portion)		182,815			169,718
Term loan, net of issuance costs (net of current portion)		356,705			359,281
Operating lease liabilities (net of current portion)		56,224			48,058
Other liabilities		8,329			7,632
Total liabilities		1,342,165			1,260,527
Stockholders’ equity:
Common stock (par value: $0.01; 500,000 shares authorized, 122,371 and 117,504 shares issued at December 31, 2024 and 2023, respectively)		1,224			1,175
Additional paid-in capital		1,374,659			1,185,100
Treasury stock (at cost: 2,673 and 356 shares at December 31, 2024 and 2023, respectively)		(114,911	)		(14,934	)
Accumulated other comprehensive income		318			38
Accumulated deficit		(861,336	)		(825,035	)
Total stockholders’ equity		399,954			346,344
Total liabilities and stockholders’ equity	$	1,742,119		$	1,606,871

TENABLE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Year Ended December 31,
(in thousands)		2024			2023
Cash flows from operating activities:
Net loss	$	(36,301	)	$	(78,284	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		33,209			27,108
Stock-based compensation		163,515			145,327
Net accretion of discounts and amortization of premiums on short-term investments		(7,595	)		(8,323	)
Amortization of debt issuance costs		1,353			1,267
(Gain) loss on other investments		(1,452	)		5,617
Restructuring		4,528			—
Other		6,507			2,179
Changes in operating assets and liabilities:
Accounts receivable		(38,730	)		(30,042	)
Prepaid expenses and other assets		26,170			1,689
Accounts payable, accrued expenses and accrued compensation		(8,257	)		7,071
Deferred revenue		82,581			81,755
Other current and noncurrent liabilities		(8,052	)		(5,509	)
Net cash provided by operating activities		217,476			149,855

Cash flows from investing activities:
Purchases of property and equipment		(4,247	)		(1,704	)
Capitalized software development costs		(6,451	)		(7,052	)
Purchases of short-term investments		(287,797	)		(278,209	)
Sales and maturities of short-term investments		283,964			317,651
Proceeds from other investments		3,512			—
Purchases of other investments		(1,250	)		—
Business combinations, net of cash acquired		(29,162	)		(243,301	)
Net cash used in investing activities		(41,431	)		(212,615	)

Cash flows from financing activities:
Payments on term loan		(3,750	)		(3,750	)
Proceeds from stock issued in connection with the employee stock purchase plan		16,262			16,224
Proceeds from the exercise of stock options		8,064			3,501
Purchase of treasury stock		(99,977	)		(14,934	)
Other financing activities		—			210
Net cash (used in) provided by financing activities		(79,401	)		1,251
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(5,129	)		(2,225	)
Net increase (decrease) in cash and cash equivalents and restricted cash		91,515			(63,734	)
Cash and cash equivalents and restricted cash at beginning of year		237,132			300,866
Cash and cash equivalents and restricted cash at end of year	$	328,647		$	237,132

TENABLE HOLDINGS, INC. REVENUE COMPONENTS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (unaudited)

Revenue	Three Months Ended December 31,				Year Ended December 31,
(in thousands)		2024		2023		2024		2023
Subscription revenue	$	215,932	$	193,880	$	824,659	$	725,013
Perpetual license and maintenance revenue		11,833		12,194		47,774		48,729
Professional services and other revenue		7,966		7,232		27,588		24,968
Revenue⁽¹⁾	$	235,731	$	213,306	$	900,021	$	798,710

_______________

(1) Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 95% and 96% of revenue, respectively, in the three months and year ended December 31, 2024 and 95% of revenue in the three months and year ended December 31, 2023.

Calculated Current Billings	Three Months Ended December 31,						Year Ended December 31,
(in thousands)		2024			2023			2024			2023
Revenue	$	235,731		$	213,306		$	900,021		$	798,710
Deferred revenue (current), end of period		650,372			580,779			650,372			580,779
Deferred revenue (current), beginning of period⁽¹⁾		(583,940	)		(522,449	)		(580,887	)		(506,192	)
Calculated current billings	$	302,163		$	271,636		$	969,506		$	873,297

_______________

(1) Deferred revenue (current), beginning of period for the three months ended December 31, 2023 and years ended December 31, 2024 and 2023 includes $4.1 million, $0.1 million and $4.1 million, respectively, related to acquired deferred revenue.

Remaining Performance Obligations	At December 31,
(in thousands)		2024		2023
Remaining performance obligations, short-term	$	660,647	$	595,053
Remaining performance obligations, long-term		206,879		179,955
Remaining performance obligations	$	867,526	$	775,008

Free Cash Flow and Unlevered Free Cash Flow	Three Months Ended December 31,						Year Ended December 31,
(in thousands)		2024			2023			2024			2023
Net cash provided by operating activities	$	81,119		$	38,505		$	217,476		$	149,855
Purchases of property and equipment		(2,323	)		(405	)		(4,247	)		(1,704	)
Capitalized software development costs		(521	)		(2,345	)		(6,451	)		(7,052	)
Free cash flow		78,275			35,755			206,778			141,099
Cash paid for interest and other financing costs		7,472			7,537			30,977			34,323
Unlevered free cash flow	$	85,747		$	43,292		$	237,755		$	175,422

Free cash flow and unlevered free cash flow for the periods presented were impacted by:

	Three Months Ended December 31,						Year Ended December 31,
(in thousands)		2024			2023			2024			2023
Employee stock purchase plan activity	$	5,267		$	3,584		$	(1,016	)	$	1,077
Acquisition-related expenses		(170	)		(8,506	)		(1,496	)		(9,336	)
Restructuring		—			—			(5,911	)		—
Tax payment on intra-entity asset transfer⁽¹⁾		(1,232	)		—			(1,232	)		—

________________

(1) The tax payment on intra-entity asset transfer includes $0.3 million of interest that is included in cash paid for interest and other financing costs.

Non-GAAP Income from Operations and Non-GAAP Operating Margin	Three Months Ended December 31,						Year Ended December 31,
(dollars in thousands)		2024			2023			2024			2023
Income (loss) from operations	$	12,975		$	(14,346	)	$	(6,856	)	$	(52,160	)
Stock-based compensation		40,714			36,515			163,515			145,327
Acquisition-related expenses		648			4,744			1,932			9,472
Restructuring		—			4,499			6,070			4,499
Amortization of acquired intangible assets		5,014			4,651			19,457			13,859
Non-GAAP income from operations	$	59,351		$	36,063		$	184,118		$	120,997
Operating margin		6	%		(7)	%		(1)	%		(7)	%
Non-GAAP operating margin		25	%		17	%		20	%		15	%

Non-GAAP Net Income and Non-GAAP Earnings Per Share	Three Months Ended December 31,						Year Ended December 31,
(in thousands, except per share data)		2024			2023			2024			2023
Net income (loss)	$	1,868		$	(21,648	)	$	(36,301	)	$	(78,284	)
Stock-based compensation		40,714			36,515			163,515			145,327
Tax impact of stock-based compensation⁽¹⁾		1,219			971			2,845			2,017
Acquisition-related expenses⁽²⁾		648			4,744			1,932			9,472
Restructuring⁽²⁾		—			4,499			6,070			4,499
Amortization of acquired intangible assets⁽³⁾		5,014			4,651			19,457			13,859
Tax impact of acquisitions		(31	)		426			(161	)		265
Tax impact of intra-entity asset transfer⁽⁴⁾		1,232			—			1,232			—
Non-GAAP net income	$	50,664		$	30,158		$	158,589		$	97,155

Net earnings (loss) per share, diluted	$	0.02		$	(0.19	)	$	(0.31	)	$	(0.68	)
Stock-based compensation		0.33			0.31			1.38			1.25
Tax impact of stock-based compensation⁽¹⁾		0.01			0.01			0.03			0.02
Acquisition-related expenses⁽²⁾		—			0.04			0.02			0.08
Restructuring⁽²⁾		—			0.04			0.05			0.04
Amortization of acquired intangible assets⁽³⁾		0.04			0.04			0.16			0.11
Tax impact of acquisitions		—			—			—			—
Tax impact of intra-entity asset transfer⁽⁴⁾		0.01			—			0.01			—
Adjustment to diluted earnings per share⁽⁵⁾		—			—			(0.05	)		(0.02	)
Non-GAAP earnings per share, diluted	$	0.41		$	0.25		$	1.29		$	0.80

Weighted-average shares used to compute GAAP net earnings (loss) per share, diluted		123,853			116,717			118,789			115,408

Weighted-average shares used to compute non-GAAP earnings per share, diluted		123,853			122,023			123,370			120,714

________________

(1) The tax impact of stock-based compensation is based on the tax treatment for the applicable tax jurisdictions.

(2) The tax impact of acquisition-related expenses and restructuring charges are not material.

(3) The tax impact of the amortization of acquired intangible assets is included in the tax impact of acquisitions.

(4) The tax impact of the intra-entity asset transfer is additional tax incurred related to the 2021 internal restructuring of Indegy.

(5) An adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares, when applicable.

Non-GAAP Gross Profit and Non-GAAP Gross Margin	Three Months Ended December 31,						Year Ended December 31,
(dollars in thousands)		2024			2023			2024			2023
Gross profit	$	184,292		$	164,503		$	700,353		$	615,133
Stock-based compensation		3,191			2,705			12,677			11,247
Amortization of acquired intangible assets		5,014			4,651			19,457			13,859
Non-GAAP gross profit	$	192,497		$	171,859		$	732,487		$	640,239
Gross margin		78	%		77	%		78	%		77	%
Non-GAAP gross margin		82	%		81	%		81	%		80	%

Non-GAAP Sales and Marketing Expense	Three Months Ended December 31,						Year Ended December 31,
(dollars in thousands)		2024			2023			2024			2023
Sales and marketing expense	$	95,348		$	103,700		$	395,385		$	393,450
Less: Stock-based compensation		15,210			14,700			62,727			61,322
Less: Acquisition-related expenses		—			512			52			512
Non-GAAP sales and marketing expense	$	80,138		$	88,488		$	332,606		$	331,616
Non-GAAP sales and marketing expense % of revenue		34	%		41	%		37	%		42	%

Non-GAAP Research and Development Expense	Three Months Ended December 31,						Year Ended December 31,
(dollars in thousands)		2024			2023			2024			2023
Research and development expense	$	44,728		$	40,083		$	181,624		$	153,163
Less: Stock-based compensation		12,261			9,354			47,656			37,225
Less: Acquisition-related expenses		—			2,880			(20	)		2,880
Non-GAAP research and development expense	$	32,467		$	27,849		$	133,988		$	113,058
Non-GAAP research and development expense % of revenue		14	%		13	%		15	%		14	%

Non-GAAP General and Administrative Expense	Three Months Ended December 31,						Year Ended December 31,
(dollars in thousands)		2024			2023			2024			2023
General and administrative expense	$	31,241		$	30,567		$	124,130		$	116,181
Less: Stock-based compensation		10,052			9,756			40,455			35,533
Less: Acquisition-related expenses		648			1,352			1,900			6,080
Non-GAAP general and administrative expense	$	20,541		$	19,459		$	81,775		$	74,568
Non-GAAP general and administrative expense % of revenue		9	%		9	%		9	%		9	%

The following adjustments to reconcile forecasted non-GAAP income from operations, non-GAAP net income, non-GAAP earnings per share, free cash flow and unlevered free cash flow are subject to a number of uncertainties and assumptions, each of which are inherently difficult to forecast. As a result, actual adjustments and GAAP results may differ materially.

Forecasted Non-GAAP Income from Operations	Three Months Ending March 31, 2025						Year Ending December 31, 2025
(in millions)	Low			High			Low		High
Forecasted (loss) income from operations	$	(18.0	)	$	(16.0	)	$	3.0	$	13.0
Forecasted stock-based compensation		55.0			55.0			190.0		190.0
Forecasted amortization of acquired intangible assets		5.0			5.0			20.0		20.0
Forecasted non-GAAP income from operations	$	42.0		$	44.0		$	213.0	$	223.0

Forecasted Non-GAAP Net Income and Non-GAAP Earnings Per Share	Three Months Ending March 31, 2025						Year Ending December 31, 2025
(in millions, except per share data)	Low			High			Low			High
Forecasted net loss⁽¹⁾	$	(26.0	)	$	(24.0	)	$	(26.0	)	$	(16.0	)
Forecasted stock-based compensation		55.0			55.0			190.0			190.0
Forecasted tax impact of stock-based compensation		1.0			1.0			5.0			5.0
Forecasted amortization of acquired intangible assets		5.0			5.0			20.0			20.0
Forecasted non-GAAP net income	$	35.0		$	37.0		$	189.0		$	199.0

Forecasted net loss per share, diluted⁽¹⁾	$	(0.22	)	$	(0.20	)	$	(0.21	)	$	(0.13	)
Forecasted stock-based compensation		0.46			0.46			1.57			1.57
Forecasted tax impact of stock-based compensation		0.01			0.01			0.04			0.04
Forecasted amortization of acquired intangible assets		0.04			0.04			0.16			0.16
Adjustment to diluted earnings per share⁽²⁾		(0.01	)		(0.01	)		(0.04	)		(0.04	)
Forecasted non-GAAP earnings per share, diluted	$	0.28		$	0.30		$	1.52		$	1.60

Forecasted weighted-average shares used to compute GAAP net loss per share, diluted		120.5			120.5			121.0			121.0
Forecasted weighted-average shares used to compute non-GAAP earnings per share, diluted		124.0			124.0			124.5			124.5

________________
(1) The forecasted GAAP net loss assumes income tax expense of $4.6 million and $18.4 million in the three months ending March 31, 2025 and year ending December 31, 2025, respectively.

(2) Adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares.

Forecasted Free Cash Flow and Unlevered Free Cash Flow	Year Ending December 31, 2025
(in millions)	Low			High
Forecasted net cash provided by operating activities	$	278.0		$	288.0
Forecasted purchases of property and equipment		(17.0	)		(17.0	)
Forecasted capitalized software development costs		(3.0	)		(3.0	)
Forecasted free cash flow		258.0			268.0
Forecasted cash paid for interest and other financing costs		27.0			27.0
Forecasted unlevered free cash flow	$	285.0		$	295.0

The MIL Network –

February 6, 2025

MIL-OSI USA: Senators Marshall, Blackburn Introduce Bill to Reduce Excessive Taxation on Social Security Benefits

US Senate News:

Source: United States Senator for Kansas Roger Marshall

Washington, D.C. – U.S. Senators Roger Marshall, M.D. and Marsha Blackburn (R-TN) introduced the Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simple Taxes (RETIREES FIRST) Act. This legislation will lower the tax burden on Social Security benefits for seniors and offset this tax relief by redirecting funds from inefficient non-security discretionary programs, safeguarding the Social Security and Medicare trust funds while prioritizing retirees.
Historically, Social Security benefits were entirely exempt from federal income tax. Current tax exemptions have not been adjusted for inflation, causing “bracket creep” that increasingly taxes middle-income retirees. Today, nearly 56% of retirees pay taxes on their Social Security benefits, compared to less than 10% in 1984. Many retirees rely on Social Security as their primary source of income. The added tax burden on Social Security benefits reduces their quality of life, especially as inflation erodes the value of their benefits.
“After four years of record-high inflation, the current tax on Social Security has been devastating to America’s retirees,” said Senator Marshall. “By cutting taxes on Social Security, this bill will ensure America’s seniors can keep more of their hard-earned money and fix a fundamental flaw in our tax system.”
To read the full text of the bill, click HERE.

MIL OSI USA News –

February 6, 2025
MIL-OSI Asia-Pac: 3rd India-Japan Steel Dialogue Organized to Strengthen Bilateral Cooperation in the Steel Sector

Source: Government of India

Posted On: 05 FEB 2025 6:47PM by PIB Delhi

The 3rd India-Japan Steel Dialogue was successfully held on February 4, 2025, at Vigyan Bhavan, New Delhi, jointly organized by the Ministry of Economy, Trade and Industry (METI), Japan, and the Ministry of Steel, India. The dialogue was co-chaired by Mr. Vinod Kumar Tripathi, Joint Secretary, Ministry of Steel, Government of India, and Mr. Hideyuki Urata, Deputy Director General, METI, Japan, leading the respective delegations from both nations.

During the discussions, both sides exchanged insights on the current economic developments in India and Japan, an overview of the steel sector in both countries, the latest trends in the steel industry, the status of steel trade between the two countries, and the international steel market. The Indian delegation highlighted strategic initiatives by the Government of India to promote ease of doing business, sustained growth in steel demand driven by infrastructure investment, and concrete steps such as the release of the Green Steel Report and the Taxonomy of Green Steel. Additionally, India’s firm resolve to promote research and development in the sector, coupled with demographic advantages, presents significant opportunities for Japanese investors.

The dialogue also provided a platform to share perspectives on key issues, including the European Union’s Carbon Border Adjustment Mechanism (EU CBAM), which has major implications for global steel trade.

The Japanese side shared insights into current economic developments and advancements in the Japanese steel industry. They also provided updates on ongoing capacity-building programs and discussed other issues of mutual interest.

A key highlight of the meeting was the review of progress and future for ongoing capacity-building initiatives aimed at enhancing technology collaboration and skill development. Both sides reaffirmed their commitment to deepening cooperation in areas of mutual interest and identifying pathways to further strengthen strategic relationships in the steel sector. The Japanese delegation assured continued support for investments in newer steel technologies in India. In turn, India reiterated its commitment to ensure ease of doing business for Japanese companies under the framework of the dialogue.

The India-Japan Steel Dialogue serves as an institutional mechanism to enhance bilateral collaboration in steel production, product diversification, and workplace safety. This partnership is guided by the Memorandum of Cooperation (MoC) on the steel sector, signed between the two countries on December 22, 2020. The dialogue underscores the shared vision of India and Japan in fostering innovation, sustainable growth, and resilience in the steel industry.

******

TPJ/NJ

(Release ID: 2100091) Visitor Counter : 43

MIL OSI Asia Pacific News –

February 6, 2025
MIL-OSI Security: U.S. Army Major Sentenced to 70 Months for Smuggling Firearms to Ghana

Source: Office of United States Attorneys

RALEIGH, N.C. – Kojo Owuso Dartey, age 42, of Fort Liberty, was sentenced to 70 months in prison and three years of supervised release for false statements made to an agency of the United States, false declarations before the court, conspiracy, dealing in firearms without a license, delivering firearms without notice to the carrier, smuggling goods from the United States, and illegally exporting firearms without a license. On April 23, 2024, Dartey was found guilty by a jury after trial.

According to court records and evidence presented at trial, Kojo Owusu Dartey, 42, provided a tip that resulted in a 16-defendant marriage fraud scheme between soldiers on Fort Liberty and foreign nationals from Ghana. In preparation for and at the trial of U.S. v. Agyapong held between June 28 and July 2, 2021, Dartey lied to federal law enforcement about his sexual relationship with a defense witness and lied on the stand and under oath about the relationship. During that trial, Dartey purchased seven firearms in the Fort Liberty area and tasked a U.S. Army Staff Sergeant at Fort Campbell, Kentucky, to purchase three firearms there and send them to Dartey in North Carolina. Dartey then hid all the firearms inside blue barrels underneath rice and household goods and with assistance from an Army Chief Warrant Officer smuggled the barrels out of the Port of Baltimore, Maryland, on a container ship to the Port of Tema in Ghana. The Ghana Revenue Authority recovered the firearms and reported the seizure to the DEA attaché in Ghana and the ATF Baltimore Field Division.

Daniel Bubar, Acting U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by Chief U.S. District Judge Richard E. Myers II. The Bureau of Tobacco, Alcohol and Firearms (ATF), Army Criminal Investigation Division (CID), and the U.S. Department of Commerce’s Office of Export Enforcement investigated the case. Assistant U.S. Attorney Gabriel J. Diaz prosecuted the case.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No.5:23-cr-00165-M-RJ-1.

MIL Security OSI –

February 6, 2025
MIL-OSI USA: ICYMI: Governor Newsom cuts red tape to help Los Angeles quickly recover and rebuild

Source: US State of California Governor

Feb 5, 2025

What you need to know: Governor Newsom has taken unprecedented action to cut red tape and remove regulatory barriers to help Los Angeles recover and rebuild quickly – including by suspending CEQA and Coastal Act permitting requirements.

LOS ANGELES — In response to the unprecedented disaster caused by the recent firestorms in Los Angeles, Governor Newsom has taken significant executive action to remove red tape and suspend regulatory barriers, from suspending permitting requirements to fast-tracking cleanup efforts.

“We will not let red tape block people from rebuilding and getting back into their homes. The state is here to assist the Los Angeles community recover, not to hinder their efforts.”

Governor Gavin Newsom

Recovery and rebuilding, faster than ever

Governor Newsom has launched historic recovery and rebuilding efforts, cutting red tape and suspending regulations to help make the recovery process faster than ever before. Moving proactively to remove barriers that would prevent a quick recovery, Governor Newsom began issuing orders and suspending regulations related to rebuilding in the days immediately after the firestorms began.

✂️ Suspending permitting requirements. Governor Newsom waived permitting requirements based on the California Coastal Act and the California Environmental Quality Act on January 12.

🏠 Creating more temporary housing, faster. To help provide necessary shelter for those immediately impacted by the firestorms, the Governor issued an executive order on January 16 to streamline the construction and occupancy of accessory dwelling units, increase availability of trailers and other temporary housing, and suspend fees for mobile home parks.

⚠️Fast-tracking clean-up and recovery. With an eye toward recovery, On January 12, the Governor directed fast action on debris removal work and mitigating the potential for mudslides and flooding in areas burned. Three days later, he signed an executive order to allow expert federal hazmat crews to start cleaning up properties as a key step in getting people back to their properties safely.

📝 Tax and mortgage relief for disaster victims and businesses. On January 11, California postponed the individual tax filing deadline to October 15 for Los Angeles County taxpayers. Additionally, the state extended the January 31, 2025, sales and use tax filing deadline for Los Angeles County taxpayers until April 30 — providing critical tax relief for businesses. Governor Newsom suspended penalties and interest on late property tax payments for a year, effectively extending the state property tax deadline. The Governor also worked with state– and federally-chartered banks that have committed to providing mortgage relief for survivors in certain zip codes.

✔️ Waiving licensing fees for small businesses. The Governor issued an executive order on January 29 to support small businesses and workers, by providing relief to help businesses recover quickly by deferring annual licensing fees and waiving other requirements that may impose barriers to recovery.

❤️ Making it easier for survivors to quickly get help. The Governor fast-tracked more relief for survivors on January 27 by waiving or suspending regulations that could make it more difficult for survivors to access important services, such as child care, education, rental housing, health care, and tax relief.

View all the actions Governor Newsom has taken in response to Los Angeles firestorms

Get help today

For those Californians impacted by the firestorms in Los Angeles, there are resources available.Californians can go to CA.gov/LAfires – a hub for information and resources from state, local and federal government.

Individuals and business owners who sustained losses from wildfires in Los Angeles County can apply for disaster assistance:

If you use a relay service, such as video relay service (VRS), captioned telephone service or others, give FEMA the number for that service.

Recent news

Feb 4, 2025

News What you need to know: People impacted by the recent fires in Los Angeles may be eligible for new food benefits. A family of four with a monthly income up to $3,529 per month may be eligible to receive $975. Los Angeles, California – As part of California’s…

Feb 4, 2025

News SACRAMENTO – Governor Gavin Newsom today announced the following appointments:Mark Tollefson, of Rancho Cordova, has been appointed Chief Deputy Director at the California High-Speed Rail Authority. Tollefson has been Undersecretary of the California State…

Feb 4, 2025

News What you need to know: Governor Gavin Newsom today issued an executive order removing bureaucratic barriers, extending deadlines, and providing critical regulatory relief to help LA fire survivors rebuild, access essential services, and recover more quickly. LOS…

MIL OSI USA News –

February 6, 2025
MIL-OSI: Truxton Continues to Add Talent and Depth to the Team

Source: GlobeNewswire (MIL-OSI)

NASHVILLE, Tenn., Feb. 05, 2025 (GLOBE NEWSWIRE) — Truxton is pleased to announce the addition of several new colleagues over the last two months. Truxton continues to attract some of the nation’s top talent in the finance industry.

“Truxton is always looking for talented professionals who can enhance the way we serve our clients,” said Tom Stumb, CEO and Chairman. “Over the past twenty years, we have been fortunate to build a team of dedicated individuals who are committed to doing the right thing for our clients. We truly believe we have the finest team in the industry.”

Steve Pelmore Jr., CPA joins the Wealth team as Vice President, Tax Strategist and Wealth Advisor. Mr. Pelmore has nearly 20 years of experience in public accounting. Prior to Truxton, he served as a Senior Tax Manager for Blankenship CPA Group and has held various roles with the Internal Revenue Service. Steve is a graduate of the University of Illinois Urbana with a MS in Taxation, a graduate of Tennessee State University with a BBA in Economics and Finance and is a Certified Public Accountant (CPA) and an Enrolled Agent (EA). Prior to his career as a CPA, Steve served as a Captain in the US Army & US Army Reserve, participated in various overseas tours of duty and earned numerous service awards.

“Steve is an accomplished tax professional that brings considerable capabilities to Truxton which will meaningfully benefit our clients,” said Drew Mallory, Senior Managing Director and Chief Fiduciary Officer. “His strong command of income and transfer taxation immediately strengthens our team’s ability to provide strategic tax advice to Ultra High Net Worth families and business owners.”

“We are thrilled that Steve has joined our team. His decades of experience and knowledge and commitment to excellence will serve our clients, colleagues and shareholders well,” remarks Peter Deming, CPA, Senior Wealth and Tax Strategist.

The Truxton Banking team adds Carson Walter as a Credit Analyst. Mr. Walter is a graduate of The Citadel with Master’s of Business Administration and a graduate of Birmingham-Southern College, earning his BS in Business Administration.

Nathan Johnson joins the Finance team as an Accountant after five years working as a finance associate for the Middle Tennessee School of Anesthesia. He earned his Master’s of Business Administration from Regis University and his BBA in Accounting from Southern Adventist University.

Also, Truxton adds Keegan Fornoff as an Office Coordinator. Prior to Truxton, Ms. Fornoff worked in communications and served as an assistant volleyball coach. She is a graduate of Southeast Missouri State University, earning her BS in Psychology, and was a 4-year member of the Division I Women’s Volleyball Team, and later earning her Master’s of Science in Exercise and Sport Psychology at Southern Illinois University Edwardsville.

“We are excited to welcome this exceptional group of professionals,” said Derrick Jones, President of Truxton. “They bring a wealth of talent, experience, and energy, as well as an unwavering dedication to serving sophisticated clients at the highest level. We look forward to the impact they will have on improving client outcomes and driving our business forward.”

About Truxton
Truxton is a premier provider of wealth, banking, and family office services for wealthy individuals, their families, and their business interests. Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs. Founded in 2004 in Nashville, Tennessee, Truxton upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX). For more information, visit truxtontrust.com.

The MIL Network –

February 6, 2025
MIL-OSI USA: Fischer, King Reintroduce Legislation to Help America’s Working Families
US Senate News:
Source: United States Senator for Nebraska Deb Fischer

Today, U.S. Senators Deb Fischer (R-Neb.) and Angus King (I-Maine) reintroduced the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. This bipartisan, bicameral legislation will make the Paid Family and Medical Leave (PFML) Employer Tax Credit permanent, helping companies of all sizes offer PFML plans to their employees.

Senators Fischer and King established the country’s first-ever nationwide PFML policy, which wasincluded in the 2017 Tax Cuts and Jobs Act and implemented in 2018. The Senators’ legislationbuilds on the 2017 law to better serve working families and hourly workers. It also provides additional ways for businesses to qualify for the paid leave tax credit, such as paying for PFML insurance products, and requires greater outreach efforts to raise awareness about the credit.

U.S. Representatives Randy Feenstra (IA-04), Stephanie Bice (OK-05), and Marie Gluesenkamp Perez (WA-03) will introduce identical companion legislation in the House.

“America’s working families drive our economy forward and strengthen our communities. They shouldn’t have to choose between earning a paycheck and caring for their loved ones. That’s why Senator King and I passed the first-ever nationwide paid family leave law. Now, we need to make our legislation permanent and expand access to ensure that even more businesses can provide paid family leave to the workers who keep them running. I’m determined to get this key legislation included in whatever tax package Congress considers this year,” said Senator Fischer.

“I have often said that Maine is one big town with long roads and when a member of our community is hurting, we drop everything to take care of our own. However, no one should have to choose between caring for our families or receiving the next paycheck to put food on the table,” said Senator King. “That’s why I’ve been working with my Republican colleague, Deb Fischer of Nebraska, to introduce the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act which makes the PFML tax credit permanent. When families have access to care, they are able to succeed both at home and in their professional careers. Child care is more than a household priority; child care means business!”

“Paid family and medical leave (PFML) is a lifeline for workers when facing a medical condition or welcoming a newborn into the world. The Tax Cuts and Jobs Act recognized the importance of PFML by helping American small businesses offer these benefits to their employees through the creation of a targeted tax credit specifically for small businesses. However, along with many other policies, this provision expires at the end of the year without action from Congress,” said Congressman Feenstra. “That’s why I introduced legislation to extend and improve this tax credit for our small businesses so that they can provide their workers with up to 12 weeks of PFML without missing a paycheck. As a member of the House Ways and Means Committee, I believe that, by making this policy permanent, we can deliver certainty for our small businesses, keep our workers healthy and employed, and grow our economy and rural communities.”

“The 45S tax credit, first implemented under the Trump administration, has been instrumental in helping many employers expand paid family leave benefits for their workers. However, awareness and uptake of this credit have been lower than we’d like. This legislation, which I’m pleased to introduce alongside my colleagues, will improve the credit, make it more flexible, increase employer awareness, and make the tax credit permanent,” said Congresswoman Bice.

“Taking care of your health, newborn, or family when they’re most in need shouldn’t come at the cost of paying the bills. Strong families mean strong communities and local economies,” said Congresswoman Gluesenkamp Perez. “With the paid family and medical leave tax credit due to expire, our bipartisan legislation will make this successful credit permanent and expand access for Washington-based businesses and newer employees, so more families can feel the benefits.”

Nebraska Stakeholder Support:

“The Nebraska Chamber is committed to making Nebraska the best place to own, operate and grow a business, and this bill brings us one step closer to achieving that. The Paid Family and Medical Leave Tax Credit represents Nebraska business owners’ desire to strengthen the state’s overall workforce. The NE Chamber and businesses across the state appreciate Senator Fischer’s continued leadership on this issue,” said President of the Nebraska Chamber of Commerce Bryan Sloane.

“The Lincoln Chamber of Commerce appreciates Senator Fischer’s leadership in her efforts to empower small businesses to provide paid family and medical leave. Senator Fischer’s continued efforts by way of introducing her Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is a continuation of her commitment to employers, employees, families, and communities. We view this crucial policy initiative as something that should be included in any larger pro-growth tax policy package that might be considered,” said Lincoln Chamber of Commerce President Jason Ball.

“The Greater Omaha Chamber is grateful to Senators Fischer and King for introducing this important legislation. While a broad representation of our membership offers various types of paid leave, incentives will matter to companies and businesses who have greater barriers to offering paid leave, especially our smallest members. This proposed legislation allows us greater opportunities to care holistically for employees the way we strive to, and aligns with the Chamber’s mission,” said Greater Omaha Chamber President and CEO Heath Mello.

“The Nebraska Grocers and all our affiliates thank Senator Fischer for her commitment to businesses, families, and communities. By embracing incentives, rather than imposing burdensome and impractical mandates, this Act recognizes that business owners want to provide flexibility to their most valuable resource – their dedicated employees. The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is genuinely helpful, responsible policymaking which empowers both employers and employees,” said Nebraska Grocery Industry Association Executive Director Ansley Fellers.

Full List of Nebraska Endorsements:

Nebraska Chamber of Commerce, Lincoln Chamber of Commerce, Greater Omaha Chamber of Commerce, Mutual of Omaha, Nebraska Grocery Industry Association, Nebraska Hospitality Association, and Nebraska Retail Federation.

National Stakeholder Support:

“AARP, which advocates for the more than 100 million Americans age 50 and older, is pleased to endorse the bipartisan Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. This legislation will provide consistency and certainty to businesses by making tax credit 45S permanent. In addition, the proposed enhancements to the credit will encourage more employers to provide this important benefit to support working family caregivers with low to moderate incomes,” said AARP Senior Vice President of Government Affairs Bill Sweeney.

“Too many people today face the difficult choice between earning a paycheck and caring for themselves or family member. Senators Fischer and King are offering a bipartisan solution that will go a long way toward helping working families facing this dilemma. The enhanced tax credit will enable more employers—especially small employers— to offer their workers a paid family and medical leave benefit. It also will help more people access this benefit by making it easier for employers to qualify for the credit. Most important, the legislation gives people peace of mind knowing they’ll be protected from economic loss when taking time off from work to care for themselves or a loved one. We applaud Senators Fischer and King for advancing this legislation that offers working Americans the help they want and need,” said American Council of Life Insurers President & CEO David Chavern.

“Over the last year, the AICPA has worked closely with staff from both Senator Fischer and Senator King‘s offices on important legislation that would help families and middle income households by allowing more employers to offer the benefit of paid family and medical leave to their employees by making the tax credit permanent. We applaud Senators Fischer and King for their thoughtful and consistent leadership on this bill and offer our strong support,” said American Institute of Certified Public Accountants Vice President of Tax Policy & Advocacy Melanie Lauridsen.

“Benefits like paid family leave help restaurant operators recruit skilled hospitality professionals. Making the Paid Family, Medical Leave tax credit program pilot permanent would support the growth of the small business operators who are considering or offering PFML. In the current economy, we appreciate Sens. Fisher and King’s efforts to support small business restaurant owners and their employees by continuing this program,” said National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy.

“NFIB thanks Senator Fischer and Senator King for introducing the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. Incentivizing small business owners to offer paid family and medical leave rather than penalizing them for failing to provide a benefit that they cannot afford is a wise policy for the small business owners,” said National Federation of Independent Businesses Vice President Federal Government Relations Jeff Brabant.

“BPC Action is proud to endorse the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act to make permanent and expand the employer tax credit for paid family and medical leave, known as 45S, and applauds Sens. Deb Fischer (R-NE) and Angus King (I-ME) for their bipartisan leadership on this bill. As BPC has found, ‘In an ever-changing economy and tight labor market, paid family and medical leave can importantly encourage workers to stay in the labor force, support household finances, and help businesses compete for workers.’ This bill is critical to helping businesses provide paid leave benefits to more hardworking American families. We urge Congress to take up this proposal, originally enacted as part of the 2017 Tax Cuts and Jobs Act,” said Bipartisan Policy Center President Michele Stockwell.

“We the People send Americans into the halls of government with the opportunity to do the Will of the People, to do good. As such, it is perpetually our hope that our elected officials will execute such Will and enact laws that will serve the People, especially in cases where it is feasible in order to ease the burdens that life sometimes thrusts upon us where loved ones, families and businesses are most affected. The PFML Tax Credit Bill provides a judicious antidote for a malaise that has existed for far too long for so many Americans and businesses. More specifically, the PFML Bill effectively eliminates the decision of having to choose between family and a paycheck. In short, it gives individuals, families and employers the relief and peace of mind that they desperately need. On behalf of the American Caregiver Association, I encourage all those who are willing, to support U.S. Senators Deb Fischer and Senator Angus King and their continuing efforts to make the PFML Tax Credit Bill permanent,” said American Caregiver Association President Vincent S. Pettis.

“At SHRM, we are committed to advancing smart, practical policies that strengthen workplaces, empower HR professionals, and maximize human potential. As employers innovate to provide leave options that support well-being and family care, public policy must keep pace—offering incentives that encourage organizations to expand access to leave while maintaining the flexibility needed to design and sustain these programs. A balanced approach ensures that more workers can benefit from this critical support. At SHRM, we prioritize policy over politics and view this effort as a strong example of bipartisan collaboration and constructive policymaking in Congress,” said Society for Human Resource Management Chief of Staff and Head of Government Affairs Emily M. Dickens, J.D.

“On behalf of our nation’s 2.95 million Asian American Pacific Islander (AAPI) business owners and entrepreneurs, National ACE applauds Senators Fischer and King for their leadership in reintroducing the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. Access to paid family and medical leave is vital for small business owners and their employees, particularly within the AAPI community, where caregiving responsibilities often extend across generations. This bipartisan effort provides much-needed support for entrepreneurs striving to balance business success with the well-being of their workforce. We are proud to support this legislation and look forward to working together to ensure small businesses have the resources they need to thrive,” said National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship President and CEO Chiling Tong.

“The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is essential to help ensure that more small business owners can offer paid family medical leave to their employees. Policies that include support for business owners and working families through programs like paid family leave help address the economic needs of our small businesses and workforce while at the same time making sure small business owners can compete against their larger counterparts. We thank Senators Fischer and King for their bipartisan leadership in introducing this important legislation and applaud the efforts to both expand access to this credit and ensure that the tax credit is permanent,” said National Association of Women Business Owners Board Chair Dr. Janis Shinkawa.

“We are pleased to see the reintroduction of this legislation by Senators Fischer and King and thank them for their leadership on this critical issue. This legislation will encourage employers around the country to offer paid leave to their employees, increasing the number of Americans with paid leave coverage. Paid leave strengthens families and the economy by enabling workers to keep their jobs when they need to care for themselves or a loved one, while helping businesses retain valued employees,” said Sun Life U.S. President Dan Fishbein, M.D.

Full List of National Endorsements:

AARP, Alzheimer’s Impact Movement (AIM), American Council of Life Insurers, American Institute of Certified Public Accountants (AICPA), National Restaurant Association, National Federation of Independent Businesses (NFIB), Bipartisan Policy Center (BPC), American Caregiver Association, Society for Human Resource Management (SHRM), National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship, National Association of Women Business Owners, and Sun Life U.S.

Background:

The Tax Cuts and Jobs Act (TCJA) created a two-year general business tax credit for employers that voluntarily offer up to 12 weeks of PFML to employees. Congress has extended the credit through 2025. The credit also includes an income cap for eligible employees to ensure that it remains targeted to those who need it the most.

Under current law, an employer must meet the following criteria to claim the credit: offer all qualifying employees at least two weeks of PFML, have a written PFML policy in effect, and pay at least 50 percent of an employee’s normal wages while the employee is on PFML. According to the Bureau of Labor Statistics (BLS), only 19 percent of those working for employers with less than 50 employees have access to PFML.

Senators Fischer and King’s legislation builds on the existing credit by making the following changes:

Making the Credit Permanent:
- Provides certainty to businesses taking the leap to offer paid family and medical leave.
Updating the Treatment of Paid Leave Required by State or Local Mandates:
- Allows eligible employers to receive the credit for leave provided in states without PFML mandates or for leave offered in excess of any state or local mandate.
  
  Currently, employers providing PFML under state or local government mandates are ineligible for the credit, meaning that some employers with operations in both non-mandate and mandate states are ineligible for the credit.
Supporting Coverage of PFL Insurance Premiums:
- Allows employers to claim the credit for premiums paid for PFML insurance products that cover qualifying employees. The structure mirrors the current credit, enabling employers to receive up to a 25 percent credit towards yearly premiums, depending on the percentage of wages the insurance plan replaces.
Reducing the Minimum Employment Period Requirement:
- Provides employers the option to offer PFML to employees at six months and better target the credit towards younger workers.
Requiring Greater Outreach and Awareness:
- Requires the Small Business Administration and Internal Revenue Service to conduct targeted outreach, education, and technical assistance to assist in increasing awareness of the credit.
Click here to read a summary of the bill.

Click here to read the text of the bill.
MIL OSI USA News –
February 6, 2025
MIL-OSI Security: Indy Man Sentenced to 3 Years Probation for Manufacturing and Mailing 30,000 Fake IDs

Source: Office of United States Attorneys

INDIANAPOLIS— James Watt, 26, of Indianapolis, has been sentenced to 3 years of probation after pleading guilty to unlawful production of document or authentication feature and money laundering.

According to court documents, between March 13, 2019, and February 16, 2023, James Watt worked for a public website that allowed customers to purchase fake driver’s licenses, paid for mostly by Bitcoin. The website’s tag line boasted “Your #1 Trusted Source for Fake IDs.”

Over the course of four years, Watt manufactured more than 30,000 fraudulent driver’s licenses and other forms of false identification. Customers would upload photos of themselves and an address to which to send the new I.D. Watt then mailed the false identifications via U.S. Postal Service collection boxes throughout Indianapolis, usually late at night to avoid detection.

In exchange for this work, Watt was paid more than 14 Bitcoin. As of January 16, 2025, 14 bitcoin was worth more than $1.3 million.

Although many of the fake IDs were purchased by underage college students, many IDs were purchased by adults far older than 21, implying their use for another nefarious purpose. Identification is needed to board a plane, buy cough medicine, rent a car, open a bank account, apply for government assistance, pick-up a prescription, visit a casino, and purchase a firearm. Through Watt’s help, his customers were able to get fake identifications for all these purposes.

“Watt nearly became a millionaire simply through the manufacturing and mailing of thousands of fake IDs, essentially running a one-man BMV,” said John E. Childress, Acting United States Attorney for the Southern District of Indiana. “While Watt was not the operator of the website, he had a far more critical role, utilizing equipment and skill to manufacture quality fake identifications and brazenly violate the law thousands of times over. I commend the IRS-CI and USPIS for their thorough investigative work leading to today’s outcome.”

“I am proud of our inspectors who work so diligently to protect the mail from being utilized to further illicit activities,” said Acting Inspector in Charge Felicia George. “Thanks to our collaborative investigative efforts with IRS-CI, we were able to identify and take down part of a large-scale operation, while also seizing the proceeds of it from our area of responsibility. I would like to thank the inspectors, agents, and AUSA Eakman for their hard work on this case.”

The U.S. Postal Investigation Service and IRS Criminal Investigation investigated this case. The sentence was imposed by U.S. District Judge James P. Hanlon.

Acting U.S. Attorney Childress thanked Assistant U.S. Attorney Adam Eakman, who prosecuted this case.

###

MIL Security OSI –

February 6, 2025
MIL-OSI Security: U.S. Attorney’s Office Collects More Than $26 Million in Civil and Criminal Actions in Fiscal Year 2024

Source: Office of United States Attorneys

New Haven – Acting U.S. Attorney Marc H. Silverman today announced that the District of Connecticut collected $26,212,307 in criminal and civil actions in Fiscal Year 2024. Of this amount, approximately $14,110,085 was collected in criminal actions and approximately $12,102,222 was collected in civil actions.

The Connecticut U.S. Attorney’s Office also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $20,069 in cases pursued jointly by these offices.

“In the last fiscal year, our dedicated attorneys and staff have helped to recover more than $26 million,” said Acting U.S. Attorney Silverman. “These funds are returned directly to crime victims, used to support victim services, and bolster federal, state, and local law enforcement efforts. Through our criminal prosecutions and civil enforcement actions, we remain steadfast in our commitment to seeking justice, removing illicit profits from wrongdoers, and safeguarding the integrity of crucial government programs.”

Significant criminal recoveries included more than a $1 million in restitution from multiple defendants involved in a bid rigging scheme related to insulation contracts, and the satisfaction of a restitution obligation from a Connecticut business owner who was required to pay more than $2 million in back taxes, interest, and penalties to the IRS. Large civil recoveries included approximately $4.5 million from a network of healthcare companies who are alleged to have submitted false claims to Medicare and Connecticut Medicaid for telehealth psychological care services, and more than $1 million from the operators of Connecticut dental practices who are alleged to have paid patient recruiters to steer Connecticut Medicaid patients to their practice, in violation of federal and state laws.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

Additionally, the Connecticut U.S. Attorney’s Office, working with partner agencies and divisions, collected $5,525,420 in asset forfeiture actions in FY 2024. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

The U.S. Attorney’s Office is charged with enforcing federal criminal laws in Connecticut and representing the federal government in civil litigation. The Office is composed of approximately 68 Assistant U.S. Attorneys and 57 staff members at offices in New Haven, Bridgeport, and Hartford.

MIL Security OSI –

February 6, 2025

MIL-OSI: Bpce: Groupe BPCE Results Q4-24 & 2024

Source: GlobeNewswire (MIL-OSI)

Paris, February 5, 2025

STRONG PERFORMANCES IN 2024

• Excellent performance in Q4-24 •
• Net income (Group share) of €3.5bn in 2024, strong growth of +26% •
• VISION 2030: dynamic implementation of the strategic project •

Q4-24: net banking income at €6bn, up +11% YoY; very good performance achieved by retail banking and the global businesses; net income of €913m, +140% YoY
2024: net banking income of €23.3bn, 5% growth YoY driven by all the business lines; gross operating income up by a strong 18% notably thanks to good cost control; reported net income²of €3.5bn, up by 26% YoY

Very high levels of solvency and liquidity with a CET1 ratio of 15.6%³ and a LCR of 142%⁴ at end-2024

RETAIL BANKING & INSURANCE Sharp 14% growth in revenues in Q4-24 and 4% in 2024 driven in particular by the confirmed rebound in net interest margins and commissions. The Banque Populaire and Caisse d’Epargne retail banking networks enjoyed sustained growth in their customer bases with the addition of 846,000 new clients⁶in 2024

Local & regional financing: €84bn of funding for our clients of individual, professional, corporate, and institutional clients; 1% year-on-year growth in loan outstandings, rising to a total of €724bn at end-December 2024
Deposits & savings⁷up by €5bn year-on-year, reaching a total of €681bn at end-December 2024
Insurance: gross inflows⁸ of €14.9bn in life insurance in 2024. Premiums up 15% in 2024 YoY. The equipment rate⁹for P&C and Personal Protection insurance stood at ~35% at end-December 2024

Financial Solutions & Expertise: net banking income remained stable in Q4-24 and rose by 2% in full-year 2024 vs. a high basis of comparison in 2023. Good performance reported by the Leasing and Consumer Credit activities
Digital & Payments: +5% growth in the number of card transactions at end-December 2024 YoY. Oney net banking income up 8% in full-year 2024

GLOBAL FINANCIAL SERVICES Strong revenue growth, +8% in Q4-24 and full-year 2024; very dynamic business development in Corporate & Investment Banking, net banking income up 5% in Q4-24 year-on-year; very good performance achieved by Asset Management with net banking income up 11% in Q4-24 year-on-year

Corporate & Investment Banking: net banking income of €1.1bn in Q4-24; +19% growth in revenues in Q4-24 YoY for Global Markets, driven by the Fixed-income and Equity segments; net banking income up 2% for Global Finance, driven in particular by Trade Finance activities, and up by 6% for Investment Banking activities in Q4-24
Asset & Wealth Management: Natixis IM’s assets under management up 13% YtD, reaching an all-time high of €1,317bn at end-December 2024; very high net fund inflows of €40bn in full-year 2024, particularly from Fixed-Income expertise; net banking income of €968m in Q4-24, reflecting strong growth of 11% YoY.

Expenses remained stable year-on-year in 2024 and good improvement in the cost/income by 3.5pp

Prudent provisioning policy: cost of risk of €2.1bn in 2024, i.e. 24bps, standing below the announced guidance level; €596 million in Q4-24, down 20% year-on-year

Financial strength: CET1 ratio of 15.6%³at end-December 2024; liquidity reserves of €302bn

VISION 2030 strategic project: fast-paced and dynamic implementation

April 2024: announcement of the project to acquire SGEF, making Groupe BPCE the European leader in equipment leasing; completion of the transaction scheduled for Q1-25.
June 2024: plan to create France’s No. 1 payment processor in partnership with BNP Paribas with a view to becoming one of the top 3 players in Europe.
June 2024: commercial partnerships with two leaders in their respective markets: Leroy Merlin and Verisure
January 2025: announcement of plan to create Europe’s leading asset manager in a joint venture with Generali.
Plans to create a shared technology platform for retail banking activities

¹ See the notes on methodology annexed to this press release ²Group share ³ Ratio estimated at end-December 2024 integrating pro forma the coming impact of SGEF and Nagelmackers acquisitions ⁴Average end-of month LCRs in Q4-24 ⁵ Estimated at end-December 2024 ⁶ 196,100 new active clients over the year ⁷ On-balance sheet savings & deposits within the scope of the Retail Banking & Insurance business unit ⁸ Excluding reinsurance treaty with CNP Assurance ⁹ Scope of the individual clients in the BP and CE retail banking networks

Nicolas Namias, Chairman of the Management Board of BPCE, said: “2024 marked the return of strong performance across all our business lines. Groupe BPCE saw its earnings grow by 26% over the year as a whole and by a total of 140% in the fourth quarter of 2024.

Banques Populaires and Caisses d’Epargne benefited from the confirmed rebound in their net interest margin along with an extremely buoyant level of commercial activity, illustrated by the arrival of 846,000 new clients in 2024. All the business lines serving the retail banking networks – Insurance, Payments, Financial Solutions & Expertise – generated growth both in full-year 2024 and in the 4^thquarter of the year. It also proved to be a remarkable quarter and full-year period for the global business lines managed by Natixis CIB and Natixis IM with, in particular, 19% revenue growth in our capital markets activities in the fourth quarter, and a record-breaking 40 billion euros in net inflows for our asset management activities in the course of the year.

These results testify to the dynamic implementation of our VISION 2030 strategic project. In the space of a year, we announced the planned acquisition of SGEF, making the Group the front-ranking European equipment leasing specialist, an initiative due to be completed early this year; the creation, with BNP Paribas, of the French leader in payment processing, with a view to becoming one of the top 3 players in Europe; plans to create a champion in asset management with Generali that would be No.1 in Europe in terms of revenues and one of the top 10 asset management specialists worldwide. Today, we announce our ambition to create a common technological platform for the Banques Populaires and Caisses d’Epargne by setting up a joint information system. Designed to further enhance the Group’s performance, this project sets out to optimize the service offered to our 35 million clients and to improve the day-to-day lives of our employees and, in the process, support the development of retail banking in France. These projects give concrete expression to our determination to pursue well-balanced development across our three priority growth areas: France, Europe, and the rest of the world.

These extremely exciting prospects for the months ahead will be driven by our staff of employees, who this year demonstrated their tremendous mobilization and enthusiasm during the Olympic & Paralympic Games Paris 2024. We gave expression to our promise to share the Games with as many people as possible in every territorial region of France. This event enabled us to strengthen our ties with our clients both in regional France and around the world, and we will continue to foster these relationships by contributing to the sustainable development of the economies in which we do business, in line with our cooperative values.”

The quarterly financial statements of Groupe BPCE for the period ended December 31, 2024, approved by the Management Board on February 3, 2025, were verified and reviewed by the Supervisory Board, at a meeting chaired by Eric Fougère on February 5, 2025.

In this document, 2023 figures have been restated on a pro-forma basis (see annex for the reconciliation of reported data to pro-forma data).

Groupe BPCE

€m¹	Q4-24	Q4-23	% Change	2024	2023	% Change
Net banking income	6,046	5,462	11%	23,317	22,198	5%
Operating expenses	(4,184)	(4,129)	1%	(16,384)	(16,328)	0%
Gross operating income	1,862	1,332	40%	6,933	5,870	18%
Cost of risk	(596)	(744)	(20)%	(2,061)	(1,731)	19%
Income before tax	1,262	537	135%	4,956	4,182	19%
Income tax	(326)	(159)	106%	(1,357)	(1,340)	1%
Net income – Group share	913	381	140%	3,520	2,804	26%
Exceptional items	(64)	(100)	(35)%	(155)	(122)	28%
Underlying²net income – Group share	977	481	103%	3,675	2,925	26%
Underlying cost to income ratio³	67.8%	74.6%	(6.8)pp	69.4%	72.9%	(3.5)pp

¹ Reported figures as far as “Net income (Group share)” ² “Underlying” means exclusive of exceptional items ³ The underlying cost/income ratio of Groupe BPCE is calculated on the basis of net banking income and operating expenses excluding exceptional items. The calculations are detailed in the annex on pages 18 and 24.

1. Groupe BPCE

Unless specified to the contrary, the financial data and related comments refer to the reported results of the Group and
business lines; changes express differences between Q4-24 and Q4-23 and between full-year 2024 and full-year 2023.

Groupe BPCE’s net banking income rose by 11% to reach 6,046 million euros in Q4-24 thanks to strong commercial activity in all business lines. At the end of December 2024, it stood at 23,317 million euros, up 5%.

Revenues from the Retail Banking & Insurance business unit (RB&I) rose 14% in Q4-24 to 4,064 million euros and stood at 15,397 million euros in full-year 2024, representing growth of 4%. Banques Populaires and Caisses d’Epargne put up a strong commercial performance, attracting more than 846,000 new clients¹ across all markets since the beginning of the year.

Revenues in the Financial Solutions & Expertise business unit, stable in Q4-24 and up 2% in full-year 2024, were driven in particular by the leasing and consumer credit businesses. The Insurance business unit benefited from strong business momentum in life insurance with gross new inflows² of 14.9 billion euros. Business was buoyant for the Digital & Payments business unit with renewed momentum for Oney.

Revenues from the Global Financial Services (GFS) business unit were up 8% in Q4-24 and full-year 2024, reaching a total of 2,055 million euros and 7,947 million euros respectively. Corporate & Investment Banking revenues, buoyed up by strong commercial performance across all its business lines, came to 1,087 million euros in Q4-24, up 5%, and to 4,440 million euros in full-year 2024, up 7%. The net banking income generated by Asset & Wealth Management stood at 968 million euros in Q4-24, up 11%, and reached a total of 3,507 million euros in full-year 2024, up 10%. Assets under management, which rose to their highest level ever thanks to record-breaking fund inflows and positive market and currency effects, rose by 13% in the course of the year to reach 1,317 billion euros.

The net interest margin stood at 7.6 billion euros, up 4% year-on-year, while commission income, which reached 11 billion euros in full-year 2024, was up 7% year-on-year.

In full-year 2024, operating expenses remained stable at 16,384 million euros, rising 1% to 4,184 million euros in Q4-24, benefitting from positive jaws effects over the 2 periods.

The underlying cost/income ratio³ improved by 6.8pp in Q4-24 to 67.8%, and by 3.5pp in full-year 2024 to 69.4%

Gross operating income rose by 40% to 1,862 million euros in Q4-24, and by 18% to 6,933 million euros in full-year 2024.

Groupe BPCE’s cost of risk, which came to -2,061 million euros in 2024, increased by a total of 19% vs. a low basis of comparison in 2023. In Q4-24, it stood at -596 million euros, down 20%.

Performing loans are deemed to be rated ‘Stage 1’ or ‘Stage 2,’ while loans with proven risk are rated ‘Stage 3.’

¹ 196,100 new active clients in full-year 2024 ² Excluding the reinsurance treaty with CNP Assurances³ The underlying cost/income ratio of Groupe BPCE is calculated on the basis of net banking income and operating expenses excluding exceptional items. The calculations are detailed in the annex on page 24

For Groupe BPCE, the amount of provisions for performing loans rated ‘Stage 1’ or ‘Stage 2’ corresponds:

For the quarter, to a reversal of 31 million euros in Q4-24 vs. an allocation of 34 million euros in Q3-24 and vs. an allocation of 145 million euros in Q4-23,
For the 12-month period, a reversal of 177 million euros in 2024 vs. a reversal of 112 million euros in 2023.

Provisions for loan outstandings with proven risk, rated ‘Stage 3,’ correspond:

For the quarter, to an allocation of 627 million euros in Q4-24 vs. an allocation of 488 million euros in Q3-24 and vs. an allocation of 598 million euros in Q4-23,
For the 12-month period, an allocation of 2,238 million euros in 2024 vs. an allocation of 1,843 million euros in 2023.

In Q4-24, the cost of risk for Groupe BPCE stood at 28bps in terms of gross customer outstandings, down 7bps. This figure includes a reversal of 1bp on performing loans (vs. an allocation of 7bps in Q4-23) and an allocation on loan outstandings with proven risk of 29bps vs. an allocation of 28bps in Q4-23.
In Q4-24, the cost of risk remained stable for the Retail Banking & Insurance business unit at 30bps, including a 1bp provision for performing loans (vs. a 5bps allocation to provisions in Q4-23) and a 30bps allocation on loan outstandings with proven risk, as in Q4-23.
The cost of risk for the Corporate & Investment Banking business unit came to 55bps (vs. 37bps in Q4-23), including a 13bps reversal on performing loans (vs. a 16bps provision in Q4-23) and a 67bps provision on loans with proven risk (vs. a 21bps provision in Q4-23).

In 2024, Groupe BPCE’s cost of risk stood at 24bps of gross customer loan outstandings. This figure includes a 2bps reversal of provisions on performing loans (vs. a 1bp reversal in 2023) and a 26bps provision on loans with proven risk (vs. a 22bps provision in 2023).
The cost of risk was 24bps for the Retail Banking & Insurance business unit (21bps in 2023), including a 2bps reversal on performing loans (as in 2023) and a 26bps provision on loans with proven risk (vs. a 23bps provision in 2023).
The cost of risk for the Corporate & Investment Banking business unit came to 40bps (24bps in 2023), including a 6bps reversal on performing loans (vs. a 4bps reversal in 2023) and a 46bps provision on loans with proven risk (vs. a 28bps provision in 2023).

The ratio of non-performing loans to gross loan outstandings stood at 2.5% at December 31, 2024, up 0.1pp compared with end-December 2023.

Reported net income (Group share) came to 913 million euros in Q4-24, up 140%. In full-year 2024, it stood at 3,520 million euros, up 26%.

The impact of exceptional items on net income (Group share) was -64 million euros in Q4-24 vs. -100 million euros in Q4-23 and -155 million euros in full-year 2024 vs. -122 million euros in full-year 2023.

Underlying net income (Group share)¹ rose by 103% to stand at 977 million euros in Q4-24, and grew by 26% to 3,675 million euros in full-year 2024.

1 “Underlying” means exclusive of exceptional items

2. A Group mobilized to decarbonize the economy and committed to making impact accessible to all

Strong commitments in 2024

Climate commitments:

The Group has published new decarbonization ambitions for the 11¹ most highly emissive industrial sectors: Aluminum, Aviation, Commercial real estate, Residential real estate, Agriculture, Automotive, Steel and Cement, and has strengthened its ambitions in the Power Generation and Oil & Gas sectors.

Environmental commitments:

Groupe BPCE has strengthened its commitment by joining act4nature international.

Social commitments by providing financing for players in the social & solidarity-based economy, in social housing and the Public Sector.

Innovative and concrete actions for our clients

The Banques Populaires and Caisses d’Epargne retail banking networks have launched innovations to facilitate home ownership and offer all individual customers energy-efficient renovation solutions to preserve the value of their real-estate assets: for example, by the end of November 2024, over 640 million euros in financing had been granted for energy-efficient home renovation, and the Advice and Sustainable Solutions digital module had received over 5 million unique visitors.
The Group serves the SME and ISE clients of the Banques Populaires and Caisses d’Epargne, as well as local communities by providing locally-based advice and by financing the transition of their business models. It has also strengthened its partnership with the European Investment Bank (EIB) for the innovation and energy transition with over one billion euros in transition and decarbonization financing.
Green revenues in the CIB rose by +14% in 2024 YoY, driven by sustainable finance and renewable energy & new energy activities including tailored-made solutions and dedicated expertise provided by the Green Hub.

Groupe BPCE, a pioneer in sustainable finance, launched 5 green and social bond issues in the course of 2024 for an aggregate value of more than 3.6 billion euros, including the 1^st Social Bond with a profit-sharing coupon for the benefit of the Institut Robert-Debré du Cerveau de l’Enfant (Children’s Brain Development Institute), supported by APHP (Paris Public Hospitals).

¹ Given the insignificant amount of Natixis CIB’s financing dedicated to freight and passenger ships, Groupe BPCE has not published its action plan for this industrial sector

3. Capital, loss-absorbing capacity, liquidity, and funding

3.1 CET1¹ratio

Groupe BPCE’s CET1 ratio at end-December 2024 stood at an estimated 16.2%, unchanged from the previous quarter. It includes the following impacts:

Retained earnings: +21bps,
Net issuance of cooperative shares: +3bps,
Change in risk-weighted assets: – 33bps,
Other changes, including variations in the prudential backstop provision, items included under Other Comprehensive Income, and other adjustments: +4bps.

The Group’s CET1 ratio – presented on a pro-forma basis to reflect the inclusion of the future impacts of the SGEF and Nagelmackers acquisitions (-54bps) – stands at 15.6%,

At end-December 2024, Groupe BPCE held an equity buffer estimated at 18.6 billion euros above the threshold for triggering the maximum distributable amount (MDA) for equity capital, taking account of the prudential requirements laid down by the ECB applicable on January 2, 2025.

3.2 TLAC ratio¹

The Total Loss-Absorbing Capacity (TLAC) stood at an estimated 122.1 billion euros at the end of December 2024. The TLAC ratio, expressed as a percentage of risk-weighted assets, stood at an estimated 26.7%² at the end of December 2024 (without taking account of preferred senior debt for the calculation of this ratio), well above the standard requirements of the Financial Stability Board that were equal to 22.4% at January 2, 2025.

3.3 MREL ratio¹

Expressed as a percentage of risk-weighted assets at December 31, 2024, Groupe BPCE’s subordinated MREL ratio (without taking account of preferred senior debt for the calculation of this ratio) and the total MREL ratio stood at 26.7%² and 34.6%, well above the minimum requirements laid down by the SRB at January 2, 2025 of 22.4%³ and 27.3%³ respectively.

3.4 Leverage ratio¹

At December 31, 2024, the estimated leverage ratio stood at 5.1%, well above the requirement.

3.5 Liquidity reserves at a high level

The LCR (Liquidity Coverage Ratio) for Groupe BPCE is well above the regulatory requirement of 100%, at an average of 142% of month-end LCRs for the 4^th quarter 2024.
Liquidity reserves stood at 302 billion euros at December 2024, representing a coverage ratio of 177% of short-term financial debt (including short-term maturities of medium- to long-term financial debt).

3.6 MLT funding plan: 32% of the 2025 objectives completed as at January 31, 2025

The size of the MLT funding plan, excluding structured private placements and Asset Backed Securities (ABS), has been set at 23 billion euros for 2025. The breakdown per type of debt is as follows:

10 billion euros in TLAC funding: 2.0 billion euros in Tier 2 funding and 8 billion euros in senior non-preferred debt,
3 billion euros senior preferred debt,
10 billion euros in covered bonds.

The target for ABS is 8 billion euros.

At January 31, 2025, Groupe BPCE had raised 7.3 billion euros, excluding structured private placements and ABS (32% of the 23 billion euro funding plan):

5.6 billion euros in TLAC funding: 1.7 billion euros in Tier 2 funding (87% of requirements) and 3.9 billion euros in senior non-preferred debt (49% of requirements),
1.7 billion euros in covered bonds (17% of requirements).

At January 31, 2025, the amount of ABS raised came to a total of 0.7 billion euros, i.e. 8% of the target.

Capital adequacy, Total loss-absorbing capacity – see the note on methodology
¹ Estimated at December 31, 2024 ² Groupe BPCE has chosen to waive the possibility provided by Article 72 Ter (3) of the Capital Requirements Regulation (CRR) to use senior preferred debt to ensure compliance with its TLAC/subordinated MREL requirements. ³ Following reception of MREL’s annual letter for 2024

4. Results of the business lines

4.1 Retail Banking & Insurance

€m¹	Q4-24	% Change	2024	% Change
Net banking income	4,064	14%	15,397	4%
Operating expenses	(2,497)	(0)%	(9,902)	1%
Gross operating income	1,567	45%	5,495	10%
Cost of risk	(556)	(13)%	(1,751)	16%
Income before tax	998	142%	3,807	8%
Exceptional items	(45)	(60)%	(115)	3%
Underlying²income before tax	1,044	98%	3,922	8%
Underlying cost/income ratio³	60.4%	(8.5)pp	63.6%	(2.2)pp

At end-December 2024, loan outstandings rose by 1% to 724 billion euros. Outstanding home loans remained stables at 400 billion euros, while equipment loans rose by 3% during the year to 199 billion euros.

At end-December 2024, on-balance sheet customer deposits & savings totaled 681 billion euros, representing an increase of 5 billion euros year-on-year, with a 5% rise in term accounts and a 3% year-on-year increase in both regulated and unregulated passbook savings accounts.

Net banking income for the Retail Banking & Insurance business unit rose by 14% in Q4-24 to 4,064 million euros, and by 4% in full-year 2024 to 15,397 million euros. In Q4-24, these changes reflect the good level of business activities: in the networks, revenues rose by 17% for the Banque Populaire retail banking network and by 14% for the Caisse d’Épargne network. Net banking income for both networks also recorded growth in full-year 2024, by 4% for the Banque Populaire network and by 3% for the Caisse d’Épargne network.

The Financial Solutions & Expertise business lines continued to benefit from strong sales momentum, particularly in the leasing segment. Revenues remained stable in Q4-24 but saw 2% growth in full-year 2024. In Insurance, premiums⁴ rose by 15% in 2024, driven by both Non-Life Insurance and Life & Personal Protection Insurance. The Digital & Payments business unit reported a 14% increase in revenues in Q4-24 and 7% growth in full-year 2024, driven by card transactions and instant payment operations.

Operating expenses remained tightly managed, stable in Q4-24 at 2,497 million euros, and up by just 1% in full-year 2024 to 9,902 million euros.

The underlying cost/income ratio³ improved by 8.5pp in Q4-24 to 60.4%, and by 2.2pp in full-year 2024 to 63.6%.

The business unit’s gross operating income benefited from a strong positive jaws effect, rising by 45% in Q4-24 to
1,567 million euros and by 10% in full-year 2024 to 5,495 million euros.

The cost of risk amounted to -556 million euros in Q4-24, down 13%, and stood at -1,751 million euros in 2024, up 16%.

For the business unit as a whole, income before tax amounted to 998 million euros in Q4-24, up 142%, and stood at 3,807 million in full-year 2024, up 8%.

Underlying income before tax² amounted to 1,044 million euros in Q4-24, up 98%, and came to 3,922 million euros in full-year 2024, up 8%.

4.1.1 Banque Populaire network
The Banque Populaire retail banking network is comprised of 14 cooperative banks (12 regional Banques Populaires along
with CASDEN Banque Populaire and Crédit Coopératif) and their subsidiaries, Crédit Maritime Mutuel, and the Mutual
Guarantee Companies.

€m¹	Q4-24	% Change	2024	% Change
Net banking income	1,614	17%	6,098	4%
Operating expenses	(980)	1%	(4,047)	2%
Gross operating income	634	56%	2,051	8%
Cost of risk	(266)	(6)%	(814)	25%
Income before tax	352	137%	1,285	(2)%
Exceptional items	(17)	77%	(51)	ns
Underlying²income before tax	369	133%	1,336	2%
Underlying cost/income ratio³	59.7%	(10.2)pp	65.5%	(1.9)pp

Loan outstandings remained stable year-on-year, standing at 301 billion euros at the end of December 2024.
On-balance sheet customer deposits & savings decreased by 2 billion euros year-on-year at the end of December 2024, with term accounts remaining stable during the 12-month period, while both regulated and unregulated passbook savings accounts saw 2% year-on-year growth.

Net banking income came to 6,098 million euros in full-year 2024, up 4% year-on-year. This included 3.2 billion euros in net interest margin^4,5 up 5% year-on-year, and 2.9 billion euros in commissions⁵ (up 3% year-on-year).
In Q4-24, net banking income came to a total of 1,614 million euros, up 17% year-on-year.

Operating expenses rose by a limited 1% in Q4-24 to 980 million euros, and increased by 2% in full-year 2024, to 4,047 million euros.
The underlying cost/income ratio³ consequently saw a 10.2pp improvement in Q4-24, to 59.7%, and a 1.9pp improvement in full-year 2024, to 65.5%.

Gross operating income benefited from positive jaws effects, rising by 56% to 634 million euros in Q4-24 and by 8% to 2,051 million euros in full-year 2024.

The cost of risk stood at -266 million euros in Q4-24, down 6%, and -814 million euros in 2024, up 25%.

Income before tax came to 352 million euros in Q4-24 (+137%) and 1,285 million euros in 2024 (-2%).

Underlying income before tax² amounted to 369 million euros in Q4-24 (+133%) and 1,336 million euros in full-year 2024
(+2%).

¹ Reported figures until “Income before tax” ² “Underlying” means exclusive of exceptional items ³ The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses ⁴ Excluding provisions for home-purchase savings schemes ⁵ Income on regulated savings has been restated to account for the net interest margin and included under commissions

4.1.2 Caisse d’Epargne network
The Caisse d’Epargne retail banking network comprises 15 individual Caisses d’Epargne along with their subsidiaries

€m¹	Q4-24	% Change	2024	% Change
Net banking income	1,616	14%	6,054	3%
Operating expenses	(1,084)	0%	(4,216)	1%
Gross operating income	531	55%	1,838	10%
Cost of risk	(205)	(6)%	(640)	16%
Income before tax	328	161%	1,200	7%
Exceptional items	(27)	171%	(60)	ns
Underlying²income before tax	355	162%	1,260	13%
Underlying cost/income ratio³	65.4%	(9.8)pp	68.7%	(2.7)pp

Loan outstandings rose by 1% year-on-year to 376 billion euros at the end of December 2024.
On-balance sheet customer deposits & savings increased by 5 billion euros year-on-year, with growth in term accounts (+12%) and an increase in regulated and unregulated passbook savings accounts (+3%).

Net banking income rose by 3% to reach 6,054 million euros in full-year 2024, including:

2.6 billion euros in net interest margin^4,5, down 3% year-on-year,
3.4 billion euros in commissions⁵ up 7% year-on-year.

Net banking income came to a total of 1,616 million euros, up 14% year-on-year, in Q4-24 and stood at 6,054 million euros, up 3% year-on-year in full-year 2024.

Operating expenses remained stable at 1,084 million euros in Q4-24, and rose by 1% in full-year 2024 to 4,216 million euros.

The underlying cost/income ratio³ improved by 9.8pp to 65.4% in Q4-24 and by 2.7pp to 68.7% in full-year 2024.

Gross operating income benefited from positive jaws effects in Q4-24 (+55%), rising to 531 million euros, and enjoyed 10% growth in full-year 2024, rising to 1,838 million euros.

The cost of risk came to -205 million euros in Q4-24, down 6%, and to -640 million euros in 2024, up 16%.

Income before tax rose by 161% to 328 million euros in Q4-24, and came to 1,200 million euros in 2024.
(+7%).

Underlying income before tax² amounted to 355 million euros in Q4-24 (+162%) and 1,260 million euros in full-year 2024
(+13%).

4.1.3 Financial Solutions & Expertise

€m¹	Q4-24	% Change	2024	% Change
Net banking income	334	(0)%	1,303	2%
Operating expenses	(169)	1%	(636)	1%
Gross operating income	165	(2)%	667	3%
Cost of risk	(38)	(30)%	(108)	11%
Income before tax	125	11%	555	2%
Exceptional items	0	ns	0	ns
Underlying²income before tax	125	11%	555	1%
Underlying cost/income ratio³	50.7%	1.0pp	48.8%	(0.3)pp

Sales momentum remained strong in services designed for individual customers, particularly in consumer credit, with average loan outstandings (personal loans and revolving credit) up 7% year-on-year, consolidating the Group’s position as France’s leading bank for consumer credit.

The Leasing activity continued to provide robust support to companies with growth in average outstandings (+10% year-on-year) chiefly driven by equipment leasing (+17%). Energéco, a player committed to the renewable energies sector, had an exceptional year with production exceeding, for the first time, one billion transactions arranged.

Despite the unfavorable business environment, the business lines working in the housing and real estate sector demonstrated their resilience with confirmation in Q4-2024 of the positive upturn of activity in personal loan guarantees, leading to an increase in gross written premiums (+2% in Q4-24 year-on-year vs. -40% in the first 9 months of 2024).

Net banking income for the Financial Solutions & Expertise business unit remained stable at 334 million euros in Q4-24, but rose 2% to 1,303 million euros in full-year 2024.

Operating expenses, which stood at 169 million euros in Q4-24 and 636 million euros in full-year 2024, remained tightly managed.

The underlying cost/income ratio³ increased by 1.0pp in Q4-24 to 50.7% and improved by 0.3pp in full-year 2024 to 48.8%.

Gross operating income, which came to 165 million euros in Q4-24, was down 2%; it stood at 667 million euros in full-year 2024, up 3%.

The cost of risk stood at -38 million euros in Q4-24, down 30%, and at -108 million euros in full-year 2024 (+11%).

Income before tax rose by 11% to 125 million euros in Q4-24 and increased by 2% to 555 million euros in full-year 2024.

Underlying income before tax² rose by 11% in Q4-24 and by 1% in full-year 2024, to 125 million euros and 555 million euros respectively.

4.1.4 Insurance¹
The results presented below concern the Insurance business unit held directly by BPCE since March 1, 2022.

€m²	Q4-24	% Change	2024	% Change
Net banking income	171	17%	694	10%
Operating expenses³	(36)	(10)%⁴	(143)	(12)%⁴
Gross operating income	135	28%	550	17%
Income before tax	141	32%	566	19%
Exceptional items	0	ns	0	ns
Underlying⁵income before tax	141	30%	566	17%
Underlying cost/income ratio⁶	21.3%	(5.3)pp	20.7%	(4.1)pp

In Q4-24, premiums⁷ reached 4.8 billion euros, up 12% thanks to the considerable dynamism demonstrated by Life Insurance and Life & Personal Protection insurance. In full-year 2024, premiums⁷ rose by 15% to 18.6 billion euros, with a 16% increase for Life & Personal Protection insurance and a 9% increase for Property & Casualty insurance.

Life insurance assets under management⁷ reached 103 billion euros at the end of December 2024 thanks to record-breaking net inflows in both euro funds and unit-linked products. Since the end of December 2023, life insurance assets have risen by 12%, driven by significant positive inflows in both euro funds and unit-linked products. Gross inflows⁷ in life insurance stood at 14.9 billion euros in 2024. Unit-linked products accounted for 53% of inflows⁷ at the end of December 2024.

In the Property & Casualty segment, the client equipment rate for both networks was approximately 35%⁸ at the end of December 2024, up 0.5pp since the end of December 2023.

Net banking income rose by 17% in Q4-24 to 171 million euros, and rose by 10% to 694 million euros in full-year 2024.

Operating expenses³ fell by 10%⁴ year-on-year in Q4-24 to 36 million euros, and by 12%⁴ in full-year 2024 to 143 million euros.

The underlying cost/income ratio⁶ improved by 5.3pp to stand at 21.3% in Q4-24, and improved by 4.1pp to reach 20.7% in full-year 2024.

Thanks to positive jaws effects in Q4-24 and full-year 2024, EBITDA rose by 28% and 17% respectively.

Income before tax also improved, rising by 32% to 141 million euros in Q4-24 and by 19% to 566 million euros in full-year 2024.

Underlying⁵income before tax came to 141 million euros in Q4-24 (+30%) and to 566 million euros in full-year 2024 (+17%).

¹ BPCE Assurances ² Reported figures until “Income before tax” ³ “Operating expenses” corresponds to “non-attributable expenses” under IFRS 17, i.e. all costs that are not directly attributable to insurance contracts ⁴ At constant method: +7% in Q4-24 YoY and +4% in 2024 YoY ⁵ “Underlying” means exclusive of exceptional items ⁶ The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses ⁷ Excluding reinsurance treaty with CNP Assurance
⁸ Scope: combined individual clients of the BP and CE networks

4.1.5 Digital & Payments

€m¹	Q4-24	% Change	2024	% Change
Net banking income	227	14%	873	7%
o/w Payments	128	10%	491	6%
o/w Oney	99	19%	382	8%
Operating expenses	(173)	1%	(646)	(1)%
o/w Payments	(108)	9%	(394)	3%
o/w Oney	(65)	(10)%	(252)	(7)%
Gross operating income	54	96%	227	39%
Cost of risk	(33)	(52)%	(126)	(26)%
Income before tax	20	ns	97	ns
Exceptional items	(1)	(99)%	(5)	(96)%
Underlying²income before tax	21	ns	102	125%
Underlying cost/income ratio³	76.2%	(3.5)pp	73.9%	(2.1)pp

Digital & AI

At the end of December 2024, 11.8 million customers were active on Banques Populaires and Caisses d’Epargne mobile applications (up 3% vs. end-December 2023).

The “AI for all” in-house generative AI solution was being used by over 26,000 employees at the end of December 2024 (i.e. 25% of all Group employees.)

Thanks to transformative AI, 10 million documents had been verified automatically (+71%) by end-December 2024.

Payments

Net banking income enjoyed 10% growth in Q4-24 and 6% growth in full-year 2024, while operating expenses rose 9% in Q4-24 and 3% in full-year 2024.

The widespread use of Wero (European Payments Initiative) enables all customers to send and receive money via instant account-to-account payments in less than 10 seconds. Wero handles 2 million transactions per month and serves over 2 million active customers.

In the Payment Solutions business, the number of card transactions rose by 5% year-on-year, with continued growth in mobile and instant payments (+54% and +49% year-on-year respectively) and the ongoing rollout of Android POS terminals (multiplied by a factor of 2). The launch of Google Pay has strengthened our range of mobile products.

Oney Bank

Net banking income rose by 8% in 2024 thanks to improved margin rates and the asset repricing effect. Oney maintained its leadership position in the BNPL⁴ segment in France while business was robust in Europe outside France (+19% in volumes year-on-year).

Management expenses remained well under control, falling by 7% in full-year 2024.

The sharp drop in the cost of risk in 2024 (-26% YoY) confirms the positive impact of our action plans.
Net banking income for the Digital & Payments business unit rose by 14% in Q4-24 and by 7% in full-year 2024, to reach 227 million euros and 873 million euros respectively.

The business unit’s operating expenses were up 1% in Q4-24 and down 1% in full-year 2024, to reach 173 million euros and 646 million euros respectively.

This led to a 3.5pp improvement in the underlying cost/income ratio³ to 76.2% in Q4-24 and a 2.1pp improvement to 73.9% in full-year 2024.

Gross operating income, which benefitted from positive jaws effects, rose by 96% in Q4-24 to 54 million euros, and by 39% to 227 million euros in full-year 2024.

The cost of risk fell by 52% in Q4-24 to -33 million euros, and by 26% in full-year 2024 to -126 million euros.

Income before tax amounted to 20 million euros in Q4-24 and 97 million euros full-year 2024.

Underlying²income before tax came to 21 million euros in Q4-24 and 102 million euros in full-year 2024, equal to a sharp rise of 125%.

4.2 Global Financial Services
The GFS business unit includes the Asset & Wealth Management activities and the Corporate & Investment Banking activities of
Natixis.

€m¹	Q4-24	% Change	Constant Fx % change	2024	% Change	Constant Fx % change
Net banking income	2,055	8%	7%	7,947	8%	8%
o/w CIB	1,087	5%	5%	4,440	7%	7%
o/w AWM	968	11%	10%	3,507	10%	10%
Operating expenses	(1,501)	8%	7%	(5,651)	7%	7%
o/w CIB	(738)	5%	5%	(2,889)	8%	8%
o/w AWM	(763)	11%	10%	(2,763)	6%	6%
Gross operating income	553	8%	7%	2,296	10%	10%
Cost of risk	(86)	18%		(268)	73%
Income before tax	479	14%		2,051	4%
Exceptional items	0	ns		0	ns
Underlying²income before tax	479	10%		2,051	3%
Underlying cost/income ratio³	73.1%	0.7pp		71.1%	(0.1)pp

GFS revenues rose by 8% in both Q4-24 and full-year 2024 to respectively 2,055 million euros (+7% at constant exchange rates) and 7,947 million euros (+8% at constant exchange rates). These trends are the result of the robust performance of our global business lines.

In Q4-24, revenues generated by the Corporate & Investment Banking business rose by 5% to 1,087 million euros thanks, in particular, to the strong performance achieved by the Global Markets (+19%) and Global Finance (+2%) activities in full-year 2024. Net banking income for the CIB business in full-year 2024 rose by 7% to 4,440 million euros.

In Q4-24, Asset & Wealth Management revenues rose 10% at constant exchange rates to 968 million euros, chiefly thanks to higher management fees year-on-year. Assets under management rose by 13% since the begging of the year to reach a historic high of 1,317 billion euros, with record inflows and a strong positive market and change effects.

GFS operating expenses increased by 8% in Q4-24 and by 7% in 2024, to respectively 1,501 million euros (+7% at constant exchange rates) and 5,651 million euros (+7% at constant exchange rates). This rise in expenses is in line with revenue growth, leading to positive jaws effects in full-year 2024.

In Q4-24, Corporate & Investment Banking operating expenses rose by 5% in line with revenue growth. Asset & Wealth Management expenses rose by 10% at constant exchange rates in Q4-24.

The underlying cost/income ratio³ was 73.1% in Q4-24 and 71.1% in full-year 2024, up 0.7pp and down 0.1pp respectively.

Gross operating income rose 8% in Q4-24 to 553 million euros (+7% at constant exchange rates); it rose 10% in full-year 2024 to 2,296 million euros (+10% at constant exchange rates).

The cost of risk increased by 18% in Q4-24 and by 73% in full-year 2024, to -86 million euros and -268 million euros respectively.

Income before tax rose by 14% in Q4-24 to 479 million euros, and by 4% in full-year 2024 to 2,051 million euros.

Underlying²income before tax for Q4-24 was 479 million euros, up 10%, and stood at 2,051 million euros in full-year 2024, up 3%.

4.2.1 Corporate & Investment Banking
The Corporate & Investment Banking (CIB) business unit includes the Global markets, Global finance, Investment banking and
M&A activities of Natixis.

€m¹	Q4-24	% Change	2024	% Change
Net banking income	1,087	5%	4,440	7%
Operating expenses	(738)	5%	(2,889)	8%
Gross operating income	349	5%	1,551	3%
Cost of risk	(98)	60%	(282)	78%
Income before tax	262	3%	1,293	(3)%
Exceptional items	0	ns	0	ns
Underlying²income before tax	262	1%	1,293	(4)%
Underlying cost/income ratio³	67.9%	0.2pp	65.1%	1.2pp

Global Markets revenues rose by 19% to 452 million euros in full-year 2024. Revenues generated by the Equity business rose 53% to 96 million euros in Q4-24, driven by a strong performance in the Global Securities Financing activity. FIC-T revenues rose by 14% to 354 million euros in Q4-24, driven by a strong performance in the Credit and Foreign Exchange segments.

Global Finance revenues were up 2%, rising to 466 million euros in Q4-24 thanks to the sustained momentum of Trade Finance activities.

Investment Banking revenues were up 6% to 50 million euros in Q4-24, driven by the Acquisition & Strategic Finance and SECM business lines.
The M&A business lines recorded revenues of 361 million euros in full-year 2024, up 11% year-on-year.
Natixis Partners has acquired a stake in Financière de Courcelles in order to strengthen its position in the French M&A market within the small, mid, and upper mid-cap segments.

Net banking income generated by the Corporate & Investment Banking business unit rose by 5% in Q4-24 and by 7% in full-year 2024, to 1,087 million euros and 4,440 million euros respectively.

Operating expenses, which stood at 738 million euros in Q4-24, reflect 5% growth; expenses rose 8% in full-year 2024 to 2,889 million euros, in line with revenue growth.

The underlying cost/income ratio³ increased by 0.2pp to 67.9% in Q4-24, and by 1.2pp to 65.1% in full-year 2024.

Gross operating income rose by 5% in Q4-24 to 349 million euros, and by 3% in full-year 2024 to 1,551 million euros.

The cost of risk stood at -98 million euros, up 60%, in Q4-24, and at -282 million euros, up 78%, in full-year 2024.

Income before tax was up 3% to 262 million euros in Q4-24, and down 3% to 1,293 million euros in full-year 2024.

Underlying²income before tax was up 1% to 262 million euros in Q4-24, and down 4% to 1,293 million euros in full-year 2024.

4.2.2 Asset & Wealth Management
The business unit includes the Asset & Wealth Management activities of Natixis.

€m¹	Q4-24	% Change	2024	% Change
Net banking income	968	11%	3,507	10%
Operating expenses	(763)	11%	(2,763)	6%
Gross operating income	205	12%	744	27%
Income before tax	217	32%	759	21%
Exceptional items	0	ns	0	ns
Underlying²income before tax	217	24%	759	16%
Underlying cost/income ratio³	78.8%	1.0pp	78.8%	(2.0)pp

In Asset Management, assets under management⁴ reached an all-time high of 1,317 billion euros at the end of December 2024, up 13% since the beginning of the year, with record net inflows and strong positive market and currency effects.

Net inflows into Asset Management⁴ reached 40 billion euros in full-year 2024, chiefly thanks to fixed-income products from Loomis Sayles and DNCA, and to life insurance products. Private asset inflows remained positive on an annual basis.

ESG assets accounted for 40.3% of assets under management at the end of December 2024.

Asset management revenues grew at constant exchange rates by 10% in full-year 2024 but also in Q4-2024, driven by a higher level of average assets under management (+10% in Q4-2024).

In Asset Management⁴ in full-year 2024, the total fee rate (excluding performance fees) stood at 25.2bps (stable) and at 36.8bps excluding insurance asset management (-1.1bp).

Net banking income for the Asset & Wealth Management business unit rose by 11% in Q4-24 to 968 million euros, and by 10% in full-year 2024 to 3,507 million euros.

Operating expenses came to 763 million euros, up 11% in Q4-24, and to 2,763 million euros, up 6% in full-year 2024.

The underlying cost/income ratio³increased by 1.0pp in Q4-24 to 78.8%, and improved by 2.0pp in full-year 2024 to 78.8%.

Gross operating income rose by 12% to 205 million euros in Q4-24, and by 27% to 744 million euros in full-year 2024.

Income before tax came to 217 million euros in Q4-24 (+32%), and to 759 million euros in full-year 2024 (+21%).

Underlying²income before tax rose by 24% to 217 million euros in Q4-24, and by 16% to 759 million euros in full-year 2024.

¹ Reported figures until “Income before tax” ² “Underlying” means exclusive of exceptional items ³ The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses ⁴ Asset management: Europe includes Dynamic Solutions and Vega IM; North America includes WCM IM; excluding Wealth Management

ANNEXES

Notes on methodology

Presentation on the pro-forma quarterly results

The 2023 quarterly series are presented pro forma with changes in standards and organization:
The sectoral reallocation of the results of the private equity activities of the entities BP Développement & CE Développement from Corporate center to RB&I and GFS divisions.
The new management standards adopted by Natixis (including the normative allocation of capital to the business lines) within the GFS division.
The main evolutions impact RB&I, GFS and the Corporate center.
The data for 2023 has been recalculated to obtain a like-for-like basis of comparison.
The quarterly series of Groupe BPCE remain unchanged.
The tables showing the transition from reported 2023 to pro-forma 2023 are presented on annexes.

Exceptional items

Exceptional items and the reconciliation of the reported income statement to the underlying income statement of Groupe BPCE are detailed in the annexes.

Net banking income

Customer net interest income, excluding regulated home savings schemes, is computed on the basis of interest earned from transactions with customers, excluding net interest on centralized savings products (Livret A, Livret Développement Durable, Livret Épargne Logement passbook savings accounts) in addition to changes in provisions for regulated home purchase savings schemes. Net interest on centralized savings is assimilated to commissions.

Operating expenses

Operating expenses correspond to the aggregate total of the “Operating Expenses” (as presented in the second amendment of Group’s universal registration document, note 4.7 appended to the consolidated financial statements of Groupe BPCE) and “Depreciation, amortization and impairment for property, plant and equipment and intangible assets.”

Cost/income ratio

Groupe BPCE’s cost/income ratio is calculated on the basis of net banking income and operating expenses excluding exceptional items. The calculations are detailed in the annexes.
Business line cost/income ratios are calculated on the basis of underlying net banking income and operating expenses.

Cost of risk

The cost of risk is expressed in basis points and measures the level of risk per business line as a percentage of the volume of loan outstandings; it is calculated by comparing net provisions booked with respect to credit risks of the period to gross customer loan outstandings at the beginning of the period.

Loan oustandings and deposits & savings

Restatements regarding transitions from book outstandings to outstandings under management are as follows:
Loan outstandings: the scope of outstandings under management does not include securities classified as customer loans and receivables and other securities classified as financial operations,
Deposits & savings: the scope of outstandings under management does not include debt securities (certificates of deposit and savings bonds).

Capital Adequacy

Common Equity Tier 1 is determined in accordance with the applicable CRR II/CRD IV rules, after deductions.
Additional Tier-1 capital takes account of subordinated debt issues that have become non-eligible and subject to ceilings at the phase-out rate in force.
The leverage ratio is calculated in accordance with the applicable CRR II/CRD V rules. Centralized outstandings of regulated savings are excluded from the leverage exposures as are Central Bank exposures for a limited period of time (pursuant to ECB decision 2021/27 of June 18, 2021).

Total loss-absorbing capacity

The amount of liabilities eligible for inclusion in the numerator used to calculate the Total Loss-Absorbing Capacity (TLAC) ratio is determined by article 92a of CRR. Please note that a quantum of Senior Preferred securities has not been included in our calculation of TLAC.
This amount is consequently comprised of the 4 following items:

Common Equity Tier 1 in accordance with the applicable CRR II/CRD IV rules,
Additional Tier-1 capital in accordance with the applicable CRR II/CRD IV rules,
Tier-2 capital in accordance with the applicable CRR II/CRD IV rules,
Subordinated liabilities not recognized in the capital mentioned above and whose residual maturity is greater than 1 year, namely:
- The share of additional Tier-1 capital instruments not recognized in common equity (i.e. included in the phase-out),
- The share of the prudential discount on Tier-2 capital instruments whose residual maturity is greater than 1 year,
- The nominal amount of Senior Non-Preferred securities maturing in more than 1 year.

Liquidity

Total liquidity reserves comprise the following:

Central bank-eligible assets include: ECB-eligible securities not eligible for the LCR, taken for their ECB valuation (after ECB haircut), securities retained (securitization and covered bonds) that are available and ECB-eligible taken for their ECB valuation (after ECB haircut) and private receivables available and eligible for central bank funding (ECB and the Federal Reserve), net of central bank funding,
LCR eligible assets comprising the Group’s LCR reserve taken for their LCR valuation,
Liquid assets placed with central banks (ECB and the Federal Reserve), net of US Money Market Funds deposits and to which fiduciary money is added.

Short-term funding corresponds to funding with an initial maturity of less than, or equal to, 1 year and the short-term maturities of medium-/long-term debt correspond to debt with an initial maturity date of more than 1 year maturing within the next 12 months.
Customer deposits are subject to the following adjustments:

Addition of security issues placed by the Banque Populaire and Caisse d’Epargne retail banking networks with their customers, and certain operations carried out with counterparties comparable to customer deposits
Withdrawal of short-term deposits held by certain financial customers collected by Natixis in pursuit of its intermediation activities.

Business line indicators – BP & CE networks

Average rate (%) for residential mortgages: the average client rate for residential mortgages corresponds to the weighted average of actuarial rates for committed residential mortgages, excluding ancillary items (application fees, guarantees, creditor insurance). The rates are weighted by the amounts committed (offers made, net of cancellations) over the period under review. The calculation is based on aggregate residential mortgages, excluding zero interest rate loans.

Average rate (%) for consumer loans: the average client rate for consumer loans corresponds to the weighted average of the actuarial rates for committed consumer loans, excluding ancillary items (application fees, guarantees, creditor insurance). The rates are weighted by the amounts committed (offers made net of cancellations) over the period under review. The calculation is based on the scope of amortizable consumer loans, excluding overdraft and revolving loans.

Average rate (%) for equipment loans: the average customer rate for equipment loans is the average of the actuarial rates for equipment loans in each volume-weighted market.

Digital indicators

The number of active customers using mobile apps corresponds to the number of customers who have made at least one visit via one mobile apps over one month.
The number of documents checked automatically corresponds to the number of documents transmitted by customers through their digital spaces or in a physical branch and checked automatically: eligibility for the LEP popular passbook savings account and customer intelligence documents (KYC) for consumer loans, mortgages (digital) and new business relationships (digital and physical branches).

Impact indicators

Financing for energy-efficient home renovation for individual clients: this indicator calculates the aggregate annual production of loans granted to individual customers (natural persons) to finance energy renovation work, expressed in €m:

– Rénovation Energétique (Energy Renovation): consumer credit for environmentally-friendly properties,
– ECO PTZ MPR: consumer credit designed for renovation work eligible for the MaPrimeRenov program (government scheme to support energy-efficient home renovation work) for up to a total of €30,000,
– ECO PTZ: interest-free regulated home improvement loan for up to a total of €50,000

Number of unique visitors to the ‘Advice and Sustainable Solutions’ digital module: this indicator calculates the aggregate annual number of unique visitors who consult the ‘Advice and sustainable solutions’ page on BP and CE mobile applications.

Financing BtoB clients in their transition and decarbonization efforts: this indicator calculates the aggregate annual amount of loans granted to businesses to help finance their transition and decarbonization efforts, expressed in €m. This aggregate total is derived from the sum of BtoB loan amounts (Green loans + Impact loans + Vehicle Leasing + Green Lease with Purchase Option/Long-Term Rental agreements (LOA/LDD Green).

Within the scope of CIB activities, Green revenues are comprised of:

Sustainable Finance (GSH scope)
Renewable & new energies franchises
Activities with clients/assets rated Dark & Medium Green (Green Weighting Factor).

(restated for scope reconciliations).

Reconciliation of 2023 data to pro forma data

Retail banking and Insurance	Q1-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	3,891	(2,496)	1,107	(269)	840
Sectoral reallocation	12	(1)	11	0	11
Pro forma figures	3,903	(2,497)	1,118	(269)	851

Global Financial Services	Q1-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	1,822	(1,303)	590	(146)	432
Sectoral reallocation	0	0	0	0	0
New rules	32	(2)	30	(4)	26
Pro forma figures	1,854	(1,305)	621	(151)	458

Corporate center	Q1-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	102	(788)	(729)	(10)	(739)
Sectoral reallocation	(12)	1	(11)	0	(11)
New rules	(32)	2	(30)	4	(26)
Pro forma figures	57	(785)	(771)	(5)	(776)

Retail banking and Insurance	Q2-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	3,655	(2,459)	952	(224)	729
Sectoral reallocation	(15)	(1)	(15)	(0)	(15)
Pro forma figures	3,640	(2,460)	936	(224)	713

Global Financial Services	Q2-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	1,798	(1,282)	429	(115)	300
Sectoral reallocation	(0)	(0)	(0)	(0)	(0)
New rules	31	(5)	26	(3)	22
Pro forma figures	1,829	(1,287)	455	(118)	322

Corporate center	Q2-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	13	(58)	(44)	(14)	(56)
Sectoral reallocation	15	1	16	0	16
New rules	(31)	5	(26)	3	(22)
Pro forma figures	(3)	(52)	(54)	(10)	(63)

Retail banking and Insurance	Q3-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	3,721	(2,358)	1,072	(268)	799
Sectoral reallocation	(13)	(1)	(14)	0	(14)
Pro forma figures	3,709	(2,359)	1,058	(268)	785

Global Financial Services	Q3-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	1,736	(1,279)	444	(114)	319
Sectoral reallocation	(0)	(0)	(0)	0	(0)
New rules	31	(4)	27	(4)	23
Pro forma figures	1,767	(1,283)	470	(118)	341

Corporate center	Q3-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	(3)	(175)	(176)	(23)	(200)
Sectoral reallocation	13	1	14	0	14
New rules	(31)	4	(27)	4	(23)
Pro forma figures	(21)	(170)	(189)	(19)	(210)

Retail banking and Insurance	Q4-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	3,557	(2,497)	395	(122)	294
Sectoral reallocation	19	(1)	18	(0)	18
Pro forma figures	3,576	(2,499)	413	(122)	312

Global Financial Services	Q4-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	1,874	(1,389)	391	(118)	255
Sectoral reallocation	0	(1)	(0)	(0)	(0)
New rules	33	(4)	29	(3)	26
Pro forma figures	1,908	(1,394)	420	(121)	280

Corporate center	Q4-23
€m	Net banking income	Operating expenses	Income before tax	Income tax	Net income
Reported figures	31	(243)	(249)	81	(168)
Sectoral reallocation	(20)	2	(18)	0	(18)
New rules	(33)	4	(29)	3	(26)
Pro forma figures	(22)	(237)	(296)	84	(211)

Q4-24 & Q4-23 results : reconcialiation of reported data to alternative performance measures

€m		Net banking income	Operating expenses	Cost of risk	Gains or losses on other assets	Income before tax	Net income – Group share
Reported Q4-24 results		6,046	(4,184)	(596)	(35)	1,262	913
Transformation and reorganization costs	Business lines/Corporate center	0	(86)		(1)	(87)	(64)
Disposals	Corporate center				(1)	(1)	(1)
Q4-24 results excluding exceptional items		6,045	(4,098)	(596)	(34)	1,349	977

€m		Net banking income	Operating expenses	Cost of risk	Gains or losses on other assets	Income before tax	Net income – Group share
Pro forma reported Q4-23 results		5,462	(4,129)	(744)	(43)	537	381
Transformation and reorganization costs	Business lines/Corporate center	(5)	(54)	(34)		(93)	(57)
Disposals	Corporate center				(43)	(43)	(43)
Pro forma Q4-23 results excluding exceptional items		5,467	(4,076)	(710)	(0)	672	481

2024 & 2023 results : reconcialiation of reported data to alternative performance measures

€m		Net banking income	Operating expenses	Cost of risk	Gains or losses on other assets	Income before tax	Net income – Group share
Reported 2024 results		23,317	(16,384)	(2,061)	28	4,956	3,520
Transformation and reorganization costs	Business lines/Corporate center	3	(208)		(1)	(206)	(153)
Disposals	Corporate center	0			(3)	(3)	(3)
2024 results excluding exceptional items		23,314	(16,176)	(2,061)	32	5,165	3,675

€m		Net banking income	Operating expenses	Cost of risk	Gains or losses on other assets	Income before tax	Net income – Group share
Pro forma reported 2023 results		22,198	(16,328)	(1,731)	8	4,182	2,804
Transformation and reorganization costs	Business lines/Corporate center	2	(213)	(32)		(242)	(164)
Disposals	Corporate center				(45)	(45)	(44)
Litigations	Business lines/Corporate center	87				87	87
Pro forma 2023 results excluding exceptional items		22,108	(16,115)	(1,699)	53	4,381	2,925

Groupe BPCE : underying cost to income ratio

€m	Net banking income	Operating expenses	Underlying cost income ratio
Q4-24 reported figures	6,046	(4,184)
Impact of exceptional items	0	(86)
Q4-24 underlying figures	6,045	(4,098)	67.8%

€m	Net banking income	Operating expenses	Underlying cost income ratio
Q4-23 Pro forma reported figures	5,462	(4,129)
Impact of exceptional items	(5)	(54)
Q4-23 Pro forma underlying figures	5,467	(4,076)	74.6%

Groupe BPCE : underying cost to income ratio

€m	Net banking income	Operating expenses	Underlying cost income ratio
2024 reported figures	23,317	(16,384)
Impact of exceptional items	3	(208)
2024 underlying figures	23,314	(16,176)	69.4%

€m	Net banking income	Operating expenses	Underlying cost income ratio
2023 Pro forma reported figures	22,198	(16,328)
Impact of exceptional items	89	(213)
2023 Pro forma underlying figures	22,108	(16,115)	72.9%

Groupe BPCE : quarterly income statement per business line

	RETAIL BANKING & INSURANCE		GLOBAL FINANCIAL SERVICES		CORPORATE CENTER		GROUPE BPCE
€m	Q4-24	Q4-23	Q4-24	Q4-23	Q4-24	Q4-23	Q4-24	Q4-23	%
Net banking income	4,064	3,576	2,055	1,908	(73)	(22)	6,046	5,462	11%
Operating expenses	(2,497)	(2,499)	(1,501)	(1,394)	(186)	(237)	(4,184)	(4,129)	1%
Gross operating income	1,567	1,077	553	514	(259)	(259)	1,862	1,332	40%
Cost of risk	(556)	(643)	(86)	(73)	46	(28)	(596)	(744)	(20)%
Income before tax	998	413	479	420	(215)	(296)	1,262	537	x 2
Income tax	(222)	(122)	(124)	(121)	19	84	(326)	(159)	x 2
Non-controlling interests	(5)	21	(18)	(19)	0	1	(23)	3	ns
Net income – Group share	772	312	337	280	(196)	(211)	913	381	x 2

Groupe BPCE : 2024 income statement per business line

	RETAIL BANKING & INSURANCE		GLOBAL FINANCIAL SERVICES		CORPORATE CENTER		GROUPE BPCE
€m	2024	2023	2024	2023	2024	2023	2024	2023	%
Net banking income	15,397	14,828	7,947	7,358	(27)	12	23,317	22,198	5%
Operating expenses	(9,902)	(9,815)	(5,651)	(5,269)	(831)	(1,244)	(16,384)	(16,328)	0%
Gross operating income	5,495	5,013	2,296	2,088	(858)	(1,232)	6,933	5,870	18%
Cost of risk	(1,751)	(1,505)	(268)	(154)	(43)	(72)	(2,061)	(1,731)	19%
Income before tax	3,807	3,526	2,051	1,966	(902)	(1,310)	4,956	4,182	19%
Income tax	(891)	(882)	(534)	(507)	67	49	(1,357)	(1,340)	1%
Non-controlling interests	(14)	18	(66)	(56)	1	1	(79)	(38)	x 2
Net income – Group share	2,902	2,661	1,452	1,402	(834)	(1,260)	3,520	2,804	26%

Groupe BPCE : quarterly series

GROUPE BPCE
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	5,815	5,467	5,455	5,462	5,753	5,626	5,892	6,046
Operating expenses	(4,587)	(3,799)	(3,812)	(4,129)	(4,151)	(4,008)	(4,041)	(4,184)
Gross operating income	1,228	1,667	1,642	1,332	1,602	1,618	1,851	1,862
Cost of risk	(326)	(342)	(319)	(744)	(382)	(560)	(523)	(596)
Income before tax	968	1,337	1,339	537	1,233	1,124	1,336	1,262
Net income – Group share	533	973	917	381	875	806	925	913

Groupe BPCE : Consolidated balance sheet

ASSETS €m	Dec. 31, 2024	Dec. 31, 2023
Cash and amounts due from central banks	133,186	152,669
Financial assets at fair value through profit or loss	230,521	214,582
Hedging derivatives	7,624	8,855
Financial assets at fair value through other comprehensive income	57,166	48,073
Securities at amortized cost	27,021	26,373
Loans and advances to banks and similar at amortized cost	115,862	108,631
Loans and receivables due from customers at amortized cost	851,843	839,457
Revaluation difference on interest rate risk-hedged portfolios	(856)	(2,626)
Financial investments of insurance activities	115,631	103,615
Insurance contracts issued – Assets	1,134	1,124
Reinsurance contracts held – Assets	9,320	9,564
Current tax assets	640	829
Deferred tax assets	4,160	4,575
Accrued income and other assets	16,444	14,611
Non-current assets held for sale	438	–
Investments in accounted for using equity method	2,146	1,616
Investment property	733	717
Property, plant and equipment	6,085	6,023
Intangible assets	1,147	1,110
Goodwill	4,312	4,224
TOTAL ASSETS	1,584,558	1,544,022

LIABILITIES €m	Dec. 31, 2024	Dec. 31, 2023
Amounts due to central banks	1	2
Financial liabilities at fair value through profit or loss	218,963	204,023
Hedging derivatives	14,260	14,973
Debt securities	304,957	292,598
Amounts due to banks and similar	69,953	79,634
Amounts due to customers	723,090	711,658
Revaluation difference on interest rate risk-hedged portfolios, liabilities	14	159
Insurance contracts issued – Liabilities	117,551	106,137
Reinsurance contracts held – Liabilities	119	149
Current tax liabilities	2,206	2,026
Deferred tax liabilities	1,323	1,640
Accrued expenses and other liabilities	20,892	22,492
Liabilities associated with non-current assets held for sale	312	–
Provisions	4,748	4,825
Subordinated debt	18,401	18,801
Shareholders’ equity	87,768	84,905
Equity attributable to equity holders of the parent	87,137	84,351
Non-controlling interests	630	553
TOTAL LIABILITIES	1,584,558	1,544,022

Groupe BPCE : Goodwill

€m	Dec. 31, 2023	Acquisitions	IRFS5 reclassifications	Translation adjustments	Dec. 31, 2024
Retail Banking & Insurance	822	58			879
Asset & Wealth Management	3,257	1	(72)	95	3,280
Corporate & Investment Banking	144			7	151
Total	4,224	58	(72)	102	4,312

Groupe BPCE: Statement of changes in shareholders’ equity

€m	Equity attributable to shareholders’ equity
December 31, 2023	84,407
Restatements¹	(56)
December 31, 2023 restated	84,351
Distributions	(833)
Change in capital (cooperative shares)	90
Impact of acquisitions and disposals on non-controlling interests (minority interests)	(48)
Income	3,520
Changes in gains & losses directly recognized in equity	144
Capital gains and losses reclassified as reserves	(31)
Others	(56)
December 31, 2024	87,137

¹ Opening shareholders’ equity has been adjusted for Funding Valuation Adjustments whose non-material impact on income has not given rise to a change in the latter in the 2024 consolidated financial statements

Retail Banking & Insurance: quarterly income statement

	BANQUE POPULAIRE NETWORK			CAISSE D’EPARGNE NETWORK			FINANCIAL SOLUTIONS & EXPERTISE			INSURANCE			DIGITAL & PAYMENTS				OTHER NETWORK				RETAIL BANKING & INSURANCE
€m	Q4-24	Q4-23	%	Q4-24	Q4-23	%	Q4-24	Q4-23	%	Q4-24	Q4-23	%	Q4-24	Q4-23	%	Q4-24		Q4-23	%	Q4-24		Q4-23	%
Net banking income	1,614	1,382	17%	1,616	1,423	14%	334	335	(0)%	171	146	17%	227	199	14%	101		91	12%	4,064		3,576	14%
Operating expenses	(980)	(975)	1%	(1,084)	(1,081)	0%	(169)	(167)	1%	(36)	(41)	(10)%	(173)	(171)	1%	(53)		(63)	(16)%	(2,497)		(2,499)	(0)%
Gross operating income	634	407	56%	531	343	55%	165	168	(2)%	135	105	28%	54	27	96%	48		28	75%	1,567		1,077	45%
Cost of risk	(266)	(282)	(6)%	(205)	(218)	(6)%	(38)	(54)	(31)%				(33)	(69)	(52)%	(15)		(19)	(23)%	(556)		(643)	(13)%
Income before tax	352	149	x2	328	126	x3	125	112	12%	141	107	32%	20	(89)	ns	33		9	x4	998		413	x2
Income tax	(73)	(45)	62%	(78)	(20)	x4	(33)	(27)	22%	(29)	(25)	16%	0	(2)	ns	(8)		(2)	x4	(222)		(122)	82%
Non-controlling interests	(0)	(6)	(94)%	(1)	(3)	(66)%	0	(0)	ns	0	(1)	ns	(3)	30	ns					(5)		21	ns
Net income – Group share	278	98	x3	248	103	x2	92	85	8%	112	81	39%	16	(61)	ns	25		7	x4	772		312	x2

	BANQUE POPULAIRE NETWORK			CAISSE D’EPARGNE NETWORK			FINANCIAL SOLUTIONS & EXPERTISE			INSURANCE			DIGITAL & PAYMENTS				OTHER NETWORK				RETAIL BANKING & INSURANCE
€m	2024	2023	%	2024	2023	%	2024	2023	%	2024	2023	%	2024	2023	%	2024		2023	%	2024		2023	%
Net banking income	6,098	5,862	4%	6,054	5,858	3%	1,303	1,274	2%	694	633	10%	873	816	7%	375		384	(2)%	15,397		14,828	4,%
Operating expenses	(4,047)	(3,970)	2%	(4,216)	(4,181)	1%	(636)	(630)	1%	(143)	(163)	(12)%	(646)	(652)	(1)%	(213)		(218)	(2)%	(9,902)		(9,815)	1%
Gross operating income	2,051	1,892	8%	1,838	1,677	10%	667	644	3%	550	470	17%	227	164	39%	162		166	(2)%	5,495		5,013	10%
Cost of risk	(814)	(651)	25%	(640)	(553)	16%	(108)	(98)	11%				(126)	(171)	(26)%	(62)		(33)	89%	(1,751)		(1,505)	16%
Income before tax	1,285	1,308	(2)%	1,200	1,125	7%	555	545	2%	566	475	19%	97	(68)	ns	103		140	(26)%	3,807		3,526	8%
Income tax	(307)	(329)	(7)%	(264)	(254)	4%	(146)	(140)	4%	(123)	(99)	24%	(27)	(25)	9%	(24)		(35)	(30)%	(891)		(882)	1%
Non-controlling interests	(9)	(24)	(64)%	(5)	(7)	(24)%	0	(0)	ns	0	(0)	ns	(0)	49	ns					(14)		18	ns
Net income – Group share	970	954	2%	931	864	8%	409	405	1%	443	376	18%	70	(43)	ns	79		106	(25)%	2,902		2,661	9%

Retail Banking & Insurance: 2024 income statement

Retail banking & insurance: quarterly series

RETAIL BANKING & INSURANCE
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	3,903	3,640	3,709	3,576	3,763	3,701	3,869	4,064
Operating expenses	(2,497)	(2,460)	(2,359)	(2,499)	(2,547)	(2,456)	(2,403)	(2,497)
Gross operating income	1,406	1,180	1,350	1,077	1,217	1,245	1,467	1,567
Cost of risk	(308)	(252)	(302)	(643)	(296)	(475)	(423)	(556)
Income before tax	1,118	936	1,058	413	934	831	1,044	998
Net income – Group share	851	713	785	312	709	637	785	772

Retail Banking & Insurance: Banque Populaire and Caisse d’Epargne networks quarterly series

BANQUE POPULAIRE NETWORK
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	1,569	1,442	1,469	1,382	1,489	1,489	1,506	1,614
Operating expenses	(1,018)	(1,015)	(961)	(975)	(1,043)	(1,025)	(999)	(980)
Gross operating income	551	427	508	407	445	464	508	634
Cost of risk	(132)	(110)	(127)	(282)	(125)	(228)	(195)	(266)
Income before tax	434	328	398	149	329	290	315	352
Net income – Group share	332	240	284	98	252	210	230	278

CAISSE D’EPARGNE NETWORK
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	1,537	1,465	1,432	1,423	1,454	1,467	1,517	1,616
Operating expenses	(1,066)	(1,041)	(993)	(1,081)	(1,085)	(1,038)	(1,008)	(1,084)
Gross operating income	470	424	440	343	368	429	509	531
Cost of risk	(136)	(84)	(115)	(218)	(100)	(176)	(159)	(205)
Income before tax	334	340	325	126	270	252	350	328
Net income – Group share	253	256	253	103	208	194	281	248

Retail Banking & Insurance: FSE quarterly series

FINANCIAL SOLUTIONS & EXPERTISE
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	315	306	318	335	327	320	322	334
Operating expenses	(157)	(151)	(154)	(167)	(162)	(154)	(151)	(169)
Gross operating income	158	155	164	168	166	166	171	165
Cost of risk	(6)	(19)	(18)	(54)	(24)	(22)	(24)	(38)
Income before tax	151	136	146	112	141	143	146	125
Net income – Group share	112	102	107	85	104	106	108	92

Retail Banking & Insurance: Insurance quarterly series

INSURANCE
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	180	126	181	146	188	118	217	171
Operating expenses	(43)	(37)	(42)	(41)	(42)	(25)	(40)	(36)
Gross operating income	137	89	139	105	146	93	177	135
Income before tax	139	93	137	107	149	99	177	141
Net income – Group share	109	83	103	81	113	92	126	112

Retail Banking & Insurance: Digital & Payments quarterly series

DIGITAL & PAYMENTS
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	205	203	209	199	215	214	218	227
Operating expenses	(161)	(163)	(157)	(171)	(160)	(159)	(154)	(173)
Gross operating income	44	40	52	27	55	55	64	54
Cost of risk	(32)	(41)	(29)	(69)	(31)	(32)	(30)	(33)
Income before tax	8	(6)	19	(89)	24	22	32	20
Net income – Group share	7	(3)	13	(61)	17	16	21	16

Retail Banking & Insurance: Other network quarterly series

OTHER NETWORK
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	97	97	99	91	91	93	90	101
Operating expenses	(51)	(52)	(52)	(63)	(55)	(55)	(51)	(53)
Gross operating income	46	45	47	28	37	38	39	48
Cost of risk	(2)	2	(14)	(19)	(16)	(17)	(14)	(15)
Income before tax	52	47	33	9	20	25	25	33
Net income – Group share	39	36	25	7	16	19	20	25

Global Financial Services: quarterly income statement per business line

	ASSET AND WEALTH MANAGEMENT		CORPORATE & INVESTMENT BANKING		GLOBAL FINANCIAL SERVICES
€m	Q4-24	Q4-23	Q4-24	Q4-23	Q4-24	Q4-23	%
Net banking income	968	874	1,087	1,034	2,055	1,908	8%
Operating expenses	(763)	(691)	(738)	(703)	(1,501)	(1,394)	8%
Gross operating income	205	183	349	331	553	514	8%
Cost of risk	12	(12)	(98)	(62)	(86)	(73)	18%
Share in net income of associates	0	0	12	4	12	4	x3
Gains or losses on other assets	0	(7)	0	(17)	0	(24)	ns
Income before tax	217	165	262	255	479	420	14%
Net income – Group share	143	105	194	176	337	280	20%

Global Financial Services: 2024 income statement per business line

	ASSET AND WEALTH MANAGEMENT		CORPORATE & INVESTMENT BANKING		GLOBAL FINANCIAL SERVICES
€m	2024	2023	2024	2023	2024	2023	%
Net banking income	3,507	3,192	4,440	4,166	7,947	7,358	8%
Operating expenses	(2,763)	(2,604)	(2,889)	(2,666)	(5,651)	(5,269)	7%
Gross operating income	744	588	1,551	1,500	2,296	2,088	10%
Cost of risk	14	4	(282)	(158)	(268)	(154)	73%
Share in net income of associates	0	0	23	13	23	14	67%
Gains or losses on other assets	0	35	0	(17)	0	18	ns
Income before tax	759	627	1,293	1,338	2,051	1,966	4%
Net income – Group share	500	425	952	977	1,452	1,402	4%

Global Financial Services: quarterly series

GLOBAL FINANCIAL SERVICES
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	1,854	1,829	1,767	1,908	1,933	1,983	1,976	2,055
Operating expenses	(1,305)	(1,287)	(1,283)	(1,394)	(1,368)	(1,366)	(1,415)	(1,501)
Gross operating income	549	542	483	514	564	617	561	553
Cost of risk	27	(91)	(17)	(73)	(58)	(82)	(41)	(86)
Income before tax	621	455	470	420	510	539	525	479
Net income – Group share	458	322	341	280	364	384	366	337

Corporate & Investment Banking: quarterly series

CORPORATE & INVESTMENT BANKING
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	1,074	1,056	1,002	1,034	1,102	1,133	1,118	1,087
Operating expenses	(661)	(651)	(650)	(703)	(706)	(694)	(751)	(738)
Gross operating income	412	405	352	331	396	439	367	349
Cost of risk	21	(90)	(28)	(62)	(54)	(91)	(39)	(98)
Income before tax	437	318	328	255	346	352	333	262
Net income – Group share	321	233	247	176	255	261	242	194

Asset & Wealth Management: quarterly series

ASSET & WEALTH MANAGEMENT
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	781	773	764	874	830	850	858	968
Operating expenses	(644)	(636)	(633)	(691)	(662)	(673)	(664)	(763)
Gross operating income	137	137	131	183	168	178	194	205
Cost of risk	6	(1)	11	(12)	(5)	9	(2)	12
Income before tax	184	136	143	165	163	187	192	217
Net income – Group share	137	89	94	105	109	123	124	143

Corporate center: quarterly series

CORPORATE CENTER
€m	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24	Q2-24	Q3-24	Q4-24
Net banking income	57	(3)	(21)	(22)	57	(58)	46	(73)
Operating expenses	(785)	(52)	(170)	(237)	(236)	(186)	(223)	(186)
Gross operating income	(728)	(55)	(191)	(259)	(179)	(244)	(176)	(259)
Cost of risk	(46)	1	0	(28)	(28)	(2)	(59)	46
Share in income of associates	2	0	1	(9)	3	0	1	5
Gains or losses on other assets	(0)	0	(0)	(0)	(6)	1	3	(8)
Income before tax	(771)	(54)	(189)	(296)	(210)	(245)	(232)	(215)
Net income – Group share	(776)	(63)	(210)	(211)	(198)	(215)	(226)	(196)

DISCLAIMER

This document may contain forward-looking statements and comments relating to the objectives and strategy of Groupe BPCE. By their very nature, these forward-looking statements inherently depend on assumptions, project considerations, objectives and expectations linked to future events, transactions, products and services as well as on suppositions regarding future performance and synergies.

No guarantee can be given that such objectives will be realized; they are subject to inherent risks and uncertainties and are based on assumptions relating to the Group, its subsidiaries and associates and the business development thereof; trends in the sector; future acquisitions and investments; macroeconomic conditions and conditions in the Group’s principal local markets; competition and regulation. Occurrence of such events is not certain, and outcomes may prove different from current expectations, significantly affecting expected results. Actual results may differ significantly from those anticipated or implied by the forward-looking statements. Groupe BPCE shall in no event have any obligation to publish modifications or updates of such objectives.

Information in this presentation relating to parties other than Groupe BPCE or taken from external sources has not been subject to independent verification; the Group makes no statement or commitment with respect to this third-party information and makes no warranty as to the accuracy, fairness, precision or completeness of the information or opinions contained in this press release. Neither Groupe BPCE nor its representatives shall be held liable for any errors or omissions or for any harm that may result from the use of this presentation or of its contents or any related material, or of any document or information referred to in this presentation.

The financial information presented in this document relating to the fiscal period ended December 31, 2024 has been drawn up in compliance with IFRS standards, as adopted in the European Union.
This financial information is not the equivalent of summary financial statements for an interim period as defined by IAS 34 “Interim Financial Reporting”.

Preparation of the financial information requires Management to make estimates and assumptions in certain areas regarding uncertain future events.

These estimates are based on the judgment of the individuals preparing this financial information and the information available at the date of the balance sheet. Actual future results may differ from these estimates. For further information, see chapter 5, part 5.1, note 2.3 “Use of estimates and judgments” of the Universal Registration Document 2023 filed with the Autorité des Marchés Financiers, the French financial markets authority.
With respect to the financial information of Groupe BPCE for the quarter ended December 31, 2024, and in view of the context mentioned above, attention should be drawn to the fact that the estimated increase in credit risk and the calculation of expected credit losses (IFRS 9 provisions) are largely based on assumptions that depend on the macroeconomic context.

Significant factors liable to cause actual results to differ from those anticipated in the projections are related to the banking and financial environment in which Groupe BPCE operates, which exposes it to a multitude of risks. These potential risks liable to affect Groupe BPCE’s financial results are detailed in the “Risk factors & risk management” chapter of the latest amendment to the 2023 Universal Registration Document filed with the Autorité des Marchés Financiers.

Investors are advised to consider the uncertainties and risk factors liable to affect the Group’s operations when examining the information contained in the projection elements.

The financial results contained in this presentation have not been reviewed by the statutory auditors. The quarterly financial information of Groupe BPCE for the period ended December 31, 2024, approved by the Management Board at a meeting convened on February 3, 2025, were verified and reviewed by the Supervisory Board at a meeting convened on February 5, 2025.

The sum of the values shown in the tables and analyses may differ slightly from the total reported owing to rounding effects.

About Groupe BPCE
Groupe BPCE is the second-largest banking group in France. Through its 100,000 staff, the group serves 35 million customers – individuals, professionals, companies, investors and local government bodies – around the world. It operates in the retail banking and insurance fields in France via its two major networks, Banque Populaire and Caisse d’Epargne, along with Banque Palatine and Oney. It also pursues its activities worldwide with the wholesale banking expertise of Natixis Corporate & Investment Banking and with the asset & wealth management services provided by Natixis Investment Managers.
The Group’s financial strength is recognized by four financial rating agencies: Moody’s (A1, stable outlook), Standard & Poor’s (A+, stable outlook), Fitch (A+, stable outlook) and R&I (A+, stable outlook).

groupebpce.com

Attachment

Groupe BPCE_PR_Results_Q4-24 & 2024_FV

The MIL Network –

February 6, 2025

MIL-OSI: SOITEC REPORTS FY’25 THIRD QUARTER REVENUE

Source: GlobeNewswire (MIL-OSI)

SOITEC REPORTS FY’25 THIRD QUARTER REVENUE

Reaching €226m, Q3’25 revenue was almost stable vs. Q2’25 and down 10% at constant exchange rates and perimeter compared with Q3’24
9M’25 revenue reached €564m, down 12% on a reported basis and decreased by 13% at constant exchange rates and perimeter vs. 9M’24
FY’25 guidance revised: revenue expected to decrease by high single digit year-on-year at constant exchange rates and perimeter (compared to flat previously), and EBITDA¹margin²expected between 32% and 34% (compared to around 35% previously)
Given the current lack of visibility on end markets, Soitec expects at this stage quite limited growth for FY’26

Bernin (Grenoble), France, February 5^th, 2025 – Soitec (Euronext Paris), a world leader in designing and manufacturing innovative semiconductor materials, today announced consolidated revenue of 226 million Euros for the third quarter of FY’25 (ended December 29^th, 2024), down 6% on a reported basis compared to the third quarter of FY’24. This reflects a 10% decline at constant exchange rates and perimeter, a positive currency impact of 5% and a negative scope effect³ of 1%.

Pierre Barnabé, Soitec’s CEO, commented: “After a very strong sequential rebound in the second quarter, we maintained the third-quarter revenue at a fairly similar level. The good performance of the Mobile Communications division was driven by sustained momentum in POI, and a seasonal tailwind in RF-SOI sales. Despite seasonal restocking in the second half of the fiscal year, the customers continue to optimize RF-SOI inventory levels based on seasonality and market conditions, which will keep driving fluctuations over the next few quarters. At the same time, we are strengthening our position as a leader, notably with the introduction of new innovative 300mm products. The Automotive and Industrial division continues to be impacted by a weak automotive market. In Edge & Cloud AI, the momentum remains strong, supported by significant investments in cloud infrastructure across the industry to accelerate AI computing power, as well as increasing demand at the edge for lower energy consumption and processing costs.

Due to worsening conditions in the Automotive and Consumer markets, a couple of customers have requested to put some delivery requests on hold. As a consequence, we are adjusting our guidance for fiscal year 2025, with annual revenue expected to decrease by high single digit year-on-year. We are managing our EBITDA margin to be between 32% and 34%.

With the lack of visibility on our end markets for now, it is also too early to provide specific guidance for fiscal year 2026. Given current market conditions, we expect at this stage quite limited growth for fiscal year 2026.

Our fundamentals remain solid and will allow us to accelerate as end markets recover. We continue to enhance our technology leadership, to strengthen our SOI positioning with both existing and new customers, and to deploy our expansion into compound semiconductors with the acceleration of POI volumes and a fifth customer in qualification on SmartSiC^TM.”

Third quarter FY’25 consolidated revenue (unaudited)

	Q3’25	Q3’24	*Q3’25/Q3’24*


(Euros millions)			*change reported*	*chg. at const. exch. rates & perimeter*

Mobile Communications	154	130	*+18%*	*+11%*
Automotive & Industrial	25	44	*-43%*	*-47%*
Edge & Cloud AI	47	65	*-28%*	*-30%*

Revenue	226	240	*-6%*	*-10%*

Q3’25 revenue reached 226 million Euros. After the sharp sequential increase achieved in Q2’25, it was up 4% versus Q2’25 on a reported basis (down 2% at constant exchange rates and perimeter). Compared to Q3’24, it was down 10% at constant exchange rates and perimeter.

Q3’25 revenue reflected an improved performance in Mobile Communications and a weaker performance in Automotive & Industrial as well as in Edge & Cloud AI which was due to a different phasing in Imager-SOI wafer sales.

Mobile Communications

Mobile Communications revenue reached 154 million Euros in Q3’25, up 11% at constant exchange rates and perimeter compared to Q3’24. In the context of a healthier smartphone market and inventory situation, Mobile Communications revenue continued to recover in Q3’25 after the sharp rebound already experienced in Q2’25.

As expected, growth in RF-SOI wafer sales has resumed. Q3’25 sales were significantly higher than in Q2’25, and also higher than in Q3’24. While reflecting different situations, inventories in the overall supply chain now seem to progressively normalize. Soitec is confident that growth in RF-SOI wafer sales will continue in Q4’25. Soitec continues to reinforce its strong customer intimacy, leveraging state-of-the-art Innovation capabilities to develop leading-edge products, as evidenced by the announcement of its commitment to provide GlobalFoundries with its latest generation of RF-SOI 300mm wafers to support GF’s most advanced 9SW platform.

Sales of POI (Piezoelectric-on-Insulator) wafers dedicated to RF filters continue to grow quarter after quarter, as the adoption of Surface Acoustic Wave (SAW) filters on POI is accelerating with ten active customers in production, and more than ten in qualification. Q3’25 POI wafer sales were significantly higher than in Q2’25 and Q3’24. Soitec is engaged with all leading US fabless companies.

Sales of FD-SOI wafers, the only solution for fully integrated 5G mmWave system-on-chip, have made further progress in Q3’25, showing an increase from Q2’25 as well as growth compared to Q3’24.

Automotive & Industrial

Automotive & Industrial revenue reached 25 million Euros in Q3’25, lower than in Q2’25 and down 47% at constant exchange rates and perimeter compared Q3’24, reflecting the ongoing difficulties of the automotive market.

Power-SOI wafer sales reached a particularly low level in Q3’25, as the ongoing weakness of the automotive market is leading to some inventory adjustments at customer level. Power-SOI remains a key component for gate drivers, in vehicle networking and in Battery Management ICs.

Conversely, FD-SOI wafers recorded a better level of sales in Q3’25 than in Q3’24. Automotive FD-SOI continue to be mostly driven by adoption for microcontrollers, radar and wireless connectivity, delivering on superior performance and power efficiency.

Further SmartSiC^TM samples and prototypes were delivered during Q3’25, paving the way for new qualifications. Soitec has engaged with a fifth customer in a qualification process. The current weakness of the automotive market and the longer than initially anticipated customers’ qualification cycles confirm a delay in the expected wafer production ramp-up, as stated earlier this year.

Edge & Cloud AI

Edge & Cloud AI revenue reached 47 million Euros in Q3’25, down 30% at constant exchange rates and perimeter compared to Q3’24. Performance was however contrasted from one product to another.

Demand in Photonics-SOI wafers continue to benefit from a very positive momentum driven by high investments in Cloud infrastructure. Sales of Photonics-SOI were much stronger in Q3’25 than in Q2’25, and significantly higher than in Q3’24. This reflects the need for more powerful and more energy-efficient data centers to support the exponential growth of AI-related computing power capabilities. Photonics-SOI has become a standard technology platform for high-speed and high bandwidth optical interconnections in data centers, adopted in pluggable optical transceivers, and used for the development of Co-Packaged Optics.

Sales of FD-SOI wafers remained as strong as in Q2’25 but were lower than in Q3’24. FD-SOI technology is a key enabler for AI-driven consumer and industrial IoT applications due to its unique power efficiency, performance, thermal management and reliability advantages.

Sales of Imager-SOI wafers for 3D imaging applications are down year-on-year, reflecting the phase out of this product.

First nine months FY’25 consolidated revenue (unaudited)

	9M’25	9M’24	*9M’25/9M’24*

(Euros millions)			*change reported*	*chg. at const. exch. rates & perimeter*

Mobile Communications	326	388	*-16%*	*-18%*
Automotive & Industrial	84	119	*-29%*	*-31%*
Edge & Cloud AI	154	133	*+15%*	*+16%*

Revenue	564	641	*-12%*	*-13%*

Consolidated revenue reached 564 million Euros in 9M’25, down 13% at constant exchange rates and perimeter compared to 641 million Euros in 9M’24.

Overall, the decrease in Soitec’s 9M’25 revenue essentially reflects lower volumes in both RF-SOI and Power-SOI wafers, partly offset by strong performances in POI, Photonics-SOI and Imager-SOI wafers.

Mobile Communications revenue reached 326 million Euros in 9M’25 (58% of total revenue), down 18% at constant exchange rates and perimeter compared to 9M’24, with significant improvement quarter after quarter over FY’25.

Automotive & Industrial revenue amounted to 84 million Euros in 9M’25 (15% of total revenue), down 31% at constant exchange rates and perimeter compared to 9M’24, reflecting the current weakness of the automotive market.

Edge & Cloud AI revenue reached 154 million Euros in 9M’25 (27% of total revenue), up 16% at constant exchange rates and perimeter compared to 9M’24, supported by strong growth of photonics SOI products.

FY’25 outlook

Soitec expects FY’25 revenue to be down high single digit year on year, at constant exchange rates and perimeter (compared to flat revenue previously) as a couple of customers requested to put some deliveries on hold on the back of worsening conditions in the Automotive and Consumer markets. This implies strong sequential growth in Q4’25, primarily driven by the continued recovery in RF-SOI wafer sales supported by some seasonal restocking. Additionally, Soitec will continue to benefit from strong demand for Photonics-SOI products and the growing adoption of POI.

Soitec is managing FY’25 EBITDA¹margin² to be between 32% and 34%.

FY’26 outlook

With the lack of visibility on our end markets for now, it is too early to provide specific guidance for fiscal year 2026. Given current market conditions, Soitec expects at this stage quite limited growth for fiscal year 2026.

Q3’25 key events

Divestment of Dolphin Design’s main businesses

Dolphin Design’s mixed-signal IP activities have been acquired on November 5^th, 2024, by Jolt Capital, a private equity firm specializing in European deeptech investments. Dolphin Design’s ASIC activities were sold to NanoXplore, a major player in SoC and FPGA semiconductor design, on December 30^th, 2024.

Dolphin Design, acquired by Soitec in 2018, has long been at the forefront of delivering cutting-edge semiconductor design solutions in mixed-signal IP and ASICs.The sale of Dolphin Design’s two main business activities will support Soitec’s focus on strategic development and growth opportunities in its core advanced semiconductor materials business.

Following these operations, Dolphin Design revenue will no longer be reported from Q4’25 onwards, and will have no impact on Soitec financial statements from FY’26.

Appointment of Frédéric Lissalde as Chairman of the Board

During the meeting of the Board of Directors held on November 20^th, 2024, upon recommendation of the Compensation and Nominations Committee, Frédéric Lissalde, who has been Director since the Annual General Meeting held on July 23^rd, 2024, was appointed as Chairman of the Board of Directors as of March 1^st, 2025, for the remainder of his term of office as Director.

Soitec to collaborate with GlobalFoundries in the production of high-performance RF-SOI semiconductors

On December 4^th, 2024, Soitec announced its commitment to deliver 300mm RF-SOI substrates to GlobalFoundries (GF) for the production of GF’s leading RF-SOI technology platforms, including the company’s most advanced RF solution, 9SW. Building on the longstanding relationship between the two companies, this commitment will ensure the supply of advanced RF-SOI engineered substrates required for 5G, 5G-Advanced, Wi-Fi, and other smart mobile device Radio Frequency Front-End (RFFE) modules. To support advanced connectivity, GF’s 9SW RF-SOI platform with its superior switching, low-noise amplifiers (LNA) and logic processing capabilities offers significant advantages and value for premium smartphones by delivering enhanced RF performance, improved power efficiency and scalability. These features are critical for ensuring a superior user experience in high-end devices.

Soitec continues its collaboration with MIT’s Microsystems Technology Laboratories, thereby strengthening its presence in the United States

On December 12^th, 2024, Soitec announced the continuation of its research collaboration with the Microsystems Technology Laboratories (MTL) of the Massachusetts Institute of Technology (MIT). This agreement covers research in innovative semiconductor materials for diverse applications, including mobile communications, power devices, sensors and quantum computing. Soitec is thereby further solidifying its presence in the North American semiconductor sector, intensifying its efforts amidst favorable industrial and regulatory dynamics supporting semiconductor development.

# # #

Analysts conference call to be held in English on Thursday 6^thFebruary at 8:00 am CET.

To listen this conference call, the audiocast is available live and in replay at the following address: https://channel.royalcast.com/soitec/#!/soitec/20250206_1

# # #

Agenda

FY’25 results are due to be published on May 27^th, 2025, after market close.

# # #

Disclaimer

This document is provided by Soitec (the “Company”) for information purposes only.

The Company’s business operations and financial position are described in the Company’s 2023-2024 Universal Registration Document (which notably includes the Annual Financial Report) which was filed on June 5^th, 2024, with the French stock market authority (Autorité des Marchés Financiers, or AMF) under number D.24-0462, as well as in the Company’s 2024-2025 half-year financial report released on November 20^th, 2024. The French versions of the 2023-2024 Universal Registration Document and the 2024-2025 half-year financial report, together with English courtesy translations for information purposes of both documents, are available for consultation on the Company’s website (www.soitec.com), in the section Company – Investors – Financial Reports.

Your attention is drawn to the risk factors described in Chapter 2.1 (Risk factors and controls mechanism) of the Company’s 2023-2024 Universal Registration Document.

This document contains summary information and should be read in conjunction with the 2023-2024 Universal Registration Document and the 2024-2025 half-year financial report.

This document contains certain forward-looking statements. These forward-looking statements relate to the Company’s future prospects, developments and strategy and are based on analyses of earnings forecasts and estimates of amounts not yet determinable. By their nature, forward-looking statements are subject to a variety of risks and uncertainties as they relate to future events and are dependent on circumstances that may or may not materialize in the future. Forward-looking statements are not a guarantee of the Company’s future performance. The occurrence of any of the risks described in Chapter 2.1 (Risk factors and controls mechanism) of the 2023-2024 Universal Registration Document may have an impact on these forward-looking statements.

The Company’s actual financial position, results and cash flows, as well as the trends in the sector in which the Company operates may differ materially from those contained in this document. Furthermore, even if the Company’s financial position, results, cash-flows and the developments in the sector in which the Company operates were to conform to the forward-looking statements contained in this document, such elements cannot be construed as a reliable indication of the Company’s future results or developments.

The Company does not undertake any obligation to update or make any correction to any forward-looking statement in order to reflect an event or circumstance that may occur after the date of this document.

This document does not constitute or form part of an offer or a solicitation to purchase, subscribe for, or sell the Company’s securities in any country whatsoever. This document, or any part thereof, shall not form the basis of, or be relied upon in connection with, any contract, commitment or investment decision.

Notably, this document does not constitute an offer or solicitation to purchase, subscribe for or to sell securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from the registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Company’s shares have not been and will not be registered under the Securities Act. Neither the Company nor any other person intends to conduct a public offering of the Company’s securities in the United States.

# # #

About Soitec

Soitec (Euronext – Tech Leaders), a world leader in innovative semiconductor materials, has been developing cutting-edge products delivering both technological performance and energy efficiency for over 30 years. From its global headquarters in France, Soitec is expanding internationally with its unique solutions, and generated sales of 1 billion Euros in fiscal year 2023-2024. Soitec occupies a key position in the semiconductor value chain, serving three main strategic markets: Mobile Communications, Automotive and Industrial, and Edge & Cloud AI (previously Smart Devices). The company relies on the talent and diversity of its 2,300 employees, representing 50 different nationalities, working at its sites in Europe, the United States and Asia. Soitec has registered over 4,000 patents.

Soitec, SmartSiC™ and Smart Cut™ are registered trademarks of Soitec.

For more information: https://www.soitec.com/en/ and follow us on X: @Soitec_Official

# # #

Appendix

Consolidated revenue per quarter (Q3’25 unaudited)

Quarterly revenue	Q1’24	Q2’24	Q3’24	Q4’24	Q1’25	Q2’25	Q3’25	9M’24	*9M’25*
(Euros millions)

Mobile Communications	89	169	130	222	48	124	154	388	*326*
Automotive & Industrial	37	38	44	44	26	33	25	119	84
Edge & Cloud AI	31	37	65	70	46	61	47	133	*154*

Revenue	157	245	240	337	121	217	226	641	*564*

Change in quarterly revenue	Q1’25/Q1’24		Q2’25/Q2’24		Q3’25/Q3’24		*9M’25/9M’24*
	Reported change	Organic change¹	Reported change	Organic change¹	Reported change	Organic change¹	Reported change	Organic change¹
(vs. previous year)

Mobile Communications	-45%	*-46%*	-27%	*-25%*	+18%	*+11%*	-16%	*-18%*
Automotive & Industrial	-29%	*-31%*	-13%	*-11%*	-43%	*-47%*	-29%	*-31%*
Edge & Cloud AI	+49%	*+47%*	+62%	*+66%*	-28%	*-30%*	+15%	*+16%*

Revenue	-23%	*-24%*	-11%	*-9%*	-6%	*-10%*	-12%	*-13%*

At constant exchange rates and comparable scope of consolidation (there was no scope effect in Q1’25 and Q2’25 vs. Q1’24 and Q2’24 – in Q3’25 Soitec sold Dolphin Design’s mixed signal IP activities on November 5^th, 2024)

# # #

¹ The EBITDA represents operating income (EBIT) before depreciation, amortization, impairment of non-current assets, non-cash items relating to share-based payments, provisions for impairment of current assets and for contingencies and expenses, and disposals gains and losses. This alternative indicator of performance is a non-IFRS quantitative measure used to measure the company’s ability to generate cash from its operating activities. EBITDA is not defined by an IFRS standard and must not be considered an alternative to any other financial indicator

² EBITDA margin = EBITDA from continuing operations / Revenue

³ The scope effect is related to the divestment of Dolphin Design’s mixed signal IP activities which was completed on November 5^th, 2024

Attachment

Soitec Q3’25 revenue VUK 05 02 25_Published

The MIL Network –

February 6, 2025

MIL-OSI Security: Rochester Woman Pleads Guilty to Wire Fraud, Money Laundering in Feeding Our Future Scheme

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

MINNEAPOLIS – A Rochester woman pleaded guilty for her role in the $250 million fraud scheme that exploited a federally funded child nutrition program during the COVID-19 pandemic, announced Acting U.S. Attorney Lisa D. Kirkpatrick.

According to court documents, from approximately December 2020 through January 2022, Ayan Jama, 45, knowingly participated in a scheme to defraud a federal child nutrition program designed to provide free meals to children in need. Rather than feed children, the defendants took advantage of the COVID-19 pandemic—and the resulting program changes—to enrich themselves by fraudulently misappropriating millions of dollars in federal child nutrition program funds.

According to court documents, Jama was one of the principals of Brava Rochester in Rochester, Minnesota. In September 2020, Jama’s Brava Restaurant and Aimee Bock applied for enrollment in the Federal Child Nutrition Program under the sponsorship of Bock’s non-profit, Feeding Our Future. A co-conspirator enrolled Brava Restaurant in the Federal Child Nutrition Program after the co-conspirator first prepared application paperwork at the direction of Salim Said, the co-owner of Safari Restaurant in Minneapolis, which was another business involved in the scheme to defraud the food program.

From late 2020 through 2021, Jama and other conspirators claimed Brava Restaurant was serving approximately 2,000 to 3,000 daily breakfasts and lunches to children, for which they fraudulently claimed and received millions of dollars in federal child nutrition program funds. To accomplish his scheme, Jama and her co-conspirators submitted fake attendance rosters purporting to list the names of children who purportedly received their food at sites. These rosters were fraudulent in that the names on them were fake or did not correctly reflect the number of children that were fed.

According to her plea agreement entered today, Jama claimed Brava Restaurant had served more than 1.7 million meals in Rochester as part of the Federal Child Nutrition Program in a little over one year, a number substantially higher than the actual number of meals served. Based on these fraudulent claims, Feeding Our Future paid out over $5.3 million in federal child nutrition program reimbursements for meals purportedly served to children by the defendant and her co-conspirators. Jama knew her receipt of such funds was fraudulent because she and other conspirators intentionally submitted inflated meal counts. Jama’s Brava Restaurant ultimately received $4.3 million directly from Feeding Our Future and over $900,000 from Safari Restaurant, co-owned by Salim Said.

As part of their scheme, Jama and her conspirators coordinated the establishment of shell companies through which they received and dispersed funds from the federal child nutrition program. Specifically, on January 7, 2021, Salim Said paid to register six different shell companies with the state of Minnesota for Jama and others. For Jama, Salim Said paid to register East Africa LLC. In 2021, Jama deposited at least $407,070 in misappropriated Federal Child Nutrition Program funds into her East Africa LLC bank accounts.

Jama used the federal child nutrition funds to pay for personal expenditures unrelated to feeding children, including $254,041 to purchase a home located in Rochester, Minnesota, $168,000 to purchase a home located in Columbus, Ohio, and $356,795 to purchase property on the Mediterranean Coast in Alanya, Turkey.

Jama pleaded guilty last Friday in U.S. District Court before Chief Judge Patrick J. Schiltz to one count of wire fraud and one count of money laundering. Her sentencing hearing will be scheduled at a later date.

The case is the result of an investigation by the FBI, IRS – Criminal Investigations, and the U.S. Postal Inspection Service.

Assistant U.S. Attorneys Matthew S. Ebert, Joseph H. Thompson, and Harry M. Jacobs are prosecuting the case. Assistant U.S. Attorney Craig Baune is handling the seizure and forfeiture of assets.

MIL Security OSI –

February 6, 2025
MIL-OSI Security: Principal Deputy Assistant Attorney General Benjamin C. Mizer Delivers Remarks at Press Conference Announcing Criminal and Civil Actions Related to Unlawful Advertising and Sale of Dietary Supplements

Source: United States Attorneys General 13

Remarks as prepared for delivery

Good afternoon.

We are here today to explain critical steps the federal government is taking to stem the tide of unlawful dietary supplements being sold to consumers nationwide.

Almost every day, news sources on the Internet, television and in print feature stories about the dangers of dietary supplements: A supplement is laced with an undeclared pharmaceutical ingredient. A study is released about adverse health consequences of a so-called natural remedy. An athlete or member of the military falls ill after taking an untested energy product. These stories arise across the country all too often.

Consumers turn to supplements when they want to lose weight, get an edge in athletic performance, or improve their overall well-being. From California to Maine, consumers ingest pills, powders and liquids every day, not knowing whether they are wasting money or whether they may end up harming, rather than helping, themselves. Unfortunately, many of these products are not what they purport to be or cannot do what the distributors claim they can do. In some instances, consumers might be choosing supplements over other, proven therapies for serious conditions under the mistaken belief that these products can help.

I am honored to be joined at the podium today by my colleagues from the Federal Trade Commission (FTC), the Food and Drug Administration (FDA), the U.S. Postal Inspection Service (USPIS), the Department of Defense (DoD), and the U.S. Anti-Doping Agency (USADA). Today we are announcing a sweep of actions targeting unlawful dietary supplement makers and marketers. Over the past year, we have pursued civil and criminal cases against more than 100 makers and marketers of dietary supplements and similar products.

A centerpiece of the sweep announced today is the indictment of USPlabs, relating to widely popular workout and weight loss supplements. Bestselling dietary supplements, with names like Jack3d, OxyElite Pro, and OxyElite Pro “New Formula” and “Advanced Formula,” raked in hundreds of millions of dollars in sales.

As alleged in the indictment unsealed today, the defendants were on a perpetual search for the next miracle ingredient. That search generally focused on Chinese chemical manufacturers. When they found an ingredient that they believed was promising – and knowing full well how the market for dietary supplements operated – they doctored packaging, labeling, and other paperwork to defraud others about what the product was. Much of the alleged fraud focused on the defendants’ claims that their products were made from natural plant extracts. In truth, as one defendant put it, “lol stuff is completely 100 % synthethic [sic]”.

These fraudulent claims ensured that the synthetic chemicals entered the United States, got on store shelves, and were purchased by consumers. As alleged in the indictment, the defendants falsified paperwork to stay off the radar of regulatory agencies – when the products crossed the border and as they circulated in commerce. They made misrepresentations to convince well-known retailers, who had concerns about untested synthetic chemicals, to sell their products. They falsified labeling and marketing materials to convince consumers, who prized natural ingredients, to buy their products. All of these people – regulators, retailers and consumers – trusted that the defendants were telling the truth about their products. All of these people were deceived.

This deception put lives at risk. The indictment describes the safety testing – or, more accurately, the lack of safety testing – that the defendants undertook before hawking these factory-made stimulants. For instance, the indictment alleges that the defendants sometimes tested the ingredients on themselves and sold the ones that made them feel good. With one product, the defendants allegedly recognized that the substance could potentially cause “liver toxicity.” Yet without conducting a single test to determine whether that substance was safe, they went ahead and sold it, working from the baseless assumption that they weren’t using enough of the substance in their products to cause problems.

But there were problems. There was an outbreak of liver injuries allegedly associated with the OxyElite Pro New Formula. Consumers experienced jaundice; several needed transplants to save their lives. How did the defendants respond? As the indictment alleges, they promised the FDA and the public that they would stop distributing the product at issue. They didn’t. Instead, they undertook a surreptitious, all-hands-on-deck effort to sell as much of the product as they could.

We are here today, in part, to take an important step in holding USPlabs accountable for its actions. The indictment unsealed today charges USPlabs in Texas, four of its executives, and one of its consultants with a series of crimes associated with the sale of dietary supplements. Charged with these defendants is S.K. Laboratories based in Southern California, which manufactured many of USPlabs’ products, and one of S.K. Laboratories’ executives. As noted, this is just a step. All of the defendants will have their day in court. Whatever the outcome, I am confident that the dedicated men and women – from the Department of Justice and the special agents from the FDA and IRS Criminal Investigation – who have worked so hard to bring us to this point will ensure that justice is served.

The allegations against USPlabs and its operators should serve as a wake-up call to the supplement industry. The unmistakable message is that the Department of Justice and its partners will be vigilant when it comes to the health and safety of the American public. Fighting illegal activity in the dietary supplement industry is a high priority on our consumer protection agenda.

The USPlabs case is only one of the many cases brought as part of the sweep announced today. Over the past year, law enforcement and regulatory officials have focused efforts on many additional products that cause high levels of concern among health officials nationwide.

Many of the cases we have brought relate to products that misrepresent the ingredients they contain.

We have also brought cases involving products that make unsupported claims about their effects. In numerous matters, the defendants are selling products online through websites and touting their products to consumers for the cure, treatment, or prevention of diseases ranging from cancer to Alzheimer’s disease to herpes. Making these disease cure claims defines these products as drugs under the law. And even though they were warned by the FDA – and in some cases, through joint letters with the FTC – to stop making such claims, a number of the individuals and companies at issue continued to make these claims and promote their products as treatments or cures for diseases. Yet these drugs lack substantial evidence of safety and effectiveness. They are also being sold without adequate directions for their use. Selling them in interstate commerce in these circumstances is illegal.

The government is taking a multi-faceted approach to combat the problem of unlawful dietary supplements. In addition to criminal actions, we are using civil and administrative tools to safeguard consumers from harmful products. As part of this sweep, the Department of Justice brought a dozen civil injunctive actions (including five in the last week) under the Food, Drug, and Cosmetic Act, and in some cases, using the civil mail fraud injunction statute, seeking to stop the defendant entities and individuals from violating the law. In these cases we are asking the courts to order the defendants to stop their illegal conduct and to put in place processes and procedures to prevent them from violating the law in the future. Our partner agencies, including the FTC, FDA, USPIS, DoD and USADA, are taking other measures both to enforce the law and to educate the public.

As I mentioned, I stand here in partnership with other agencies with whom we have joined forces to address this problem. Through enforcement and education, each agency is performing its own mission to protect consumers or service members or athletes from dangerous, ineffective products. You will hear more from my colleagues about the actions their agencies are taking. Together, through cooperation and teamwork, we can multiply the impact of our efforts. These actions will not put an end to this widespread problem. But they will go some distance toward bringing change to the industry.

We are not here to criticize the entire supplement marketplace. Not every supplement contains an undisclosed ingredient. Not every label lies about what is contained in the bottle. Not every claim about dietary supplements is unsupported by scientific evidence.

But consumers must be on guard before taking dietary supplements. Oftentimes, it may be difficult or impossible to tell the conditions under which the supplements are manufactured, and it is challenging to sort through real scientific substantiation for a product as compared to unsupported hype.

How can consumers perform their own due diligence?

Talk to your health care provider. At physical exams, ask a physician whether the bottle seen on store shelves or on the Internet could cause you harm, or whether it is worth the money you are spending to buy it.

Consult the public education materials provided by the FTC, FDA, DoD and USADA. The FDA’s website, for example, includes tips for making informed decisions and evaluating dietary supplements, and the FTC’s website also has a wealth of information.

The Department of Defense and USADA have developed extraordinary tools, including a cell phone app, to help consumers make informed choices about supplements.

This is only the beginning. Thanks to the partnerships we have built, our efforts in this area will continue. We will keep investigating violators and we will use all available tools at our disposal to advance our enforcement goals and to protect consumers.

MIL Security OSI –

February 6, 2025
MIL-OSI Security: Attorney General Loretta E. Lynch Delivers Remarks at Press Conference Announcing Law Enforcement Action Related to FIFA

Source: United States Attorneys General 13

Remarks as prepared for delivery

Good afternoon, and thank you all for being here. I know for many of you, the horrific events of San Bernardino are at the top of your mind. I do want to take a moment before we begin to address yesterday’s shooting. The FBI has a leadership role in the investigation, working in conjunction with state and local law enforcement, as well as the ATF and U.S. Marshals Service. And as this investigation unfolds, we intend to provide any and all assistance necessary to local authorities and to the people of San Bernardino who have been so profoundly affected by this unspeakable crime.

As I said this morning, I know that I stand with all Americans when I say that my thoughts and prayers – and those of my colleagues at every level of the Department of Justice – are with the families and loved ones of the victims, and with the brave public safety officials who put themselves in harm’s way in order to save others.

I am joined today by U.S. Attorney [Robert] Capers of the Eastern District of New York, Director [James] Comey of the FBI and Chief of Investigation [Richard] Weber of the IRS’s Criminal Investigation Division. Six months ago, the Department of Justice announced a 47-count indictment charging 14 defendants with pervasive and long-running conspiracies in the world of organized soccer. We alleged that the defendants – including high-ranking FIFA officials; leaders of governing bodies under the FIFA umbrella; and sports marketing executives – had corrupted the business of worldwide soccer to serve their interests and enrich themselves. We stated our determination to end these practices; to root out corruption; and to bring wrongdoers to justice. And we pledged to work with our partners around the world to hold additional co-conspirators and corrupt individuals accountable.

Today, we are announcing a superseding indictment, which includes new charges against new defendants, as well as additional arrests and guilty pleas in connection with our ongoing investigation. A federal grand jury in Brooklyn has returned a 92-count superseding indictment, which includes charges against 16 new defendants, all of whom are current or former soccer officials. These defendants include the sitting presidents of two of FIFA’s six continental soccer confederations – CONCACAF, which covers North and Central America and the Caribbean, and CONMEBOL, which covers South America. Both of these defendants, Alfredo Hawit of Honduras and Juan Ángel Napout of Paraguay, are also FIFA vice presidents and members of its executive committee. In addition, the superseding indictment charges high-ranking officials of other soccer governing bodies, including current and former presidents of national soccer federations in Central and South America. Each of the 16 new defendants is charged with racketeering conspiracy and other crimes in connection with their sustained abuse of their positions for financial gain.

Earlier today, Swiss authorities arrested two of the new defendants, Alfredo Hawit and Juan Angel Napout, as they gathered to attend FIFA meetings in Zurich. We are now working to extradite those defendants to the United States, just as we are working to secure the arrest and extradition of additional defendants residing in other countries.

In addition to naming new defendants, the superseding indictment also expands the bribery and corruption charges set forth in the original indictment unsealed last May. In the original indictment, we alleged that between 1991 and the present, two generations of soccer officials conspired to solicit and receive well over $200 million, often through an alliance with sports marketing executives who sought to obtain lucrative contracts and shut out competitors through the systematic payment of bribes and kickbacks. We also alleged bribes and kickbacks in connection with the sponsorship of the Brazilian soccer federation by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.

The new charges highlight corruption schemes principally involving soccer officials in Central and South America and sports-marketing companies based in South America and the United States. Consistent with the intergenerational nature of the corruption schemes, they involve payments relating to tournaments that have already been played, as well as matches scheduled into the next decade – including multiple cycles of FIFA World Cup qualifiers and international friendly matches involving six Central American member associations; a bribery scheme relating to the sale of broadcasting rights implicating nearly all of the top CONMEBOL officials; and an Argentinian sports marketing company’s scheme to bribe Central American soccer officials. Not content to hijack the world’s most popular sport for decades of ill-gotten gains, these defendants, as alleged, sought to institutionalize their corruption to ensure that it lived on, not for the good of the game but for their own personal aggrandizement and gain.

The roles of several of the defendants in these schemes illustrate the depth as well as the persistence of the alleged corruption. The defendant Héctor Trujillo currently serves as a judge on the Constitutional Court of Guatemala, purportedly dispensing justice by day while allegedly soliciting bribes and selling his influence within FIFA. Another, Alfredo Hawit, ascended to the position of CONCACAF president that was left open when we charged his predecessor with corruption in May – and then, as alleged, assumed the mantle of those same corrupt practices. The defendant Ariel Alvarado is a member of FIFA’s Disciplinary Committee, entrusted with stamping out the corrupt behavior in which he is now alleged to be involved.

The betrayal of trust set forth here is outrageous. The scale of corruption alleged herein is unconscionable. And the message from this announcement should be clear to every culpable individual who remains in the shadows, hoping to evade our investigation: You will not wait us out. You will not escape our focus.

Many have already heeded that warning. Today, I can report that eight additional defendants have agreed to plead guilty for their involvement in the corruption schemes we have outlined. After the initial charges were filed in May, these eight defendants came forward and accepted responsibility for their criminal conduct. Five of them were not named in the original indictment. As I have stated before, anyone who seeks to live in the past and to return soccer to its old ways is on the wrong side of progress, and does a disservice to the integrity of this beautiful sport. The Department of Justice is committed to ending the rampant corruption we have described amidst the leadership of international soccer – not only because of the scale of the schemes alleged earlier and today, or the brazenness and breadth of the operation required to sustain such corruption, but also because of the affront to international principles that this behavior represents.

After all, global sports like soccer exemplify, in FIFA’s own words, “unifying, educational, cultural and humanitarian values.” They are one of the primary ways we teach our children about character, about fair play and about teamwork. International tournaments promote understanding between nations, and embody an acknowledgement of our common humanity – something that is desperately important, particularly in these times of global challenge. That’s why this investigation does more than address corruption in a worldwide sports organization. It also reaffirms the ideals that have always guided our society – and, most importantly, our young people – toward the fair and just future they deserve. This Department of Justice intends to uphold those values – throughout this ongoing investigation, and always.

I want to thank our international partners – particularly the Swiss authorities – for the close cooperation and invaluable assistance they continue to provide. They have been instrumental in bringing these wrongdoers to justice and helping to restore the integrity of a vital athletic tradition. Today’s action also relied on the tireless work of federal investigators and prosecutors in the U.S. Attorney’s Office for the Eastern District of New York, in the FBI’s New York Field Office and in the Los Angeles Field Office of the IRS’s Criminal Investigation Division. I am so grateful to all of the agents, analysts and attorneys who continue to devote their time and their talents to this important investigation.

At this time, I’d like to introduce U.S. Attorney Capers, who has done an outstanding job leading this effort since his appointment in October, and who will provide additional details on today’s announcement.

MIL Security OSI –

February 6, 2025
MIL-OSI Security: Principal Deputy Associate Attorney General Bill Baer Delivers Remarks Highlighting Elder Justice at the State Of Financial Fraud in America Event
Source: United States Attorneys General 13

Remarks as prepared for delivery

Thank you Robert for that kind introduction and for your leadership and dedication as CEO of Financial Industry Regulatory Authority (FINRA). And thank you to the Stanford Center on Longevity and the FINRA Investor Education Foundation, for hosting this conference and for the great work that you do. It is an honor to join with the many people in this audience who dedicate their lives to combatting financial fraud and protecting elderly Americans. This is a noble and enduring effort.

As many people here know, financial fraud targeted at the elderly is a serious problem. At the beginning of 2011, the first Baby Boomers reached the age of 65. I reached that milestone myself just last year. Indeed, 10,000 Americans turn 65 every day, and the percentage of Americas over 65 is growing. 5.8 percent of this group experiences identity theft in a given year. I had that ugly experience just last month. 13.8 percent experiences consumer fraud in a given year. 4.5 percent of people over 50 experience financial fraud in a five-year period. While there are varying accounts about how much the overall financial loss is, it is well into the billions of dollars.

Statistics aside, we are here together because we know all too well that this is a problem that takes a personal toll. Almost all of us know someone who has been the victim of financial fraud. And while it affects people of all ages, it can be especially devastating for elderly people, many of whom are dependent on their savings and are concerned about their own mental decline or other people’s perception of their mental decline.

I recently saw letters written by the victims of a set of schemes that we took action against. One described having sent “hundreds of checks” for a company’s “great offers” and tried to explain to the fraudster that “due to bad eyes, [he] has to use magnifying glasses to read” and had “been caught paying many times for th[e] very same offer.” Another, believing that the con men would send him a promised gift, tried to explain that he had sent his prior payments by money order and was now enclosing cash, “all [he] can send.” Another explained that when she gets the vast inheritance she’d been promised, she would use it to help her family, the homeless and needy children.

The nature and scope of elder fraud varies tremendously. At the Department of Justice, we see small, family based schemes, such as caregivers tricking elderly victims out of their savings or abusing powers of attorney. We see institutional schemes, such as nursing homes that provide unnecessary services or bill for services never provided. And we see global fraud networks that are—quite literally—organized crime. These schemes involve networks of businesses with careful divisions of labor. They target millions of Americans, maintain lists of victims, and, once someone has been duped, target those people again and again. One recent victim wrote a letter explaining: “Each day I keep getting more and more offers and it’s almost impossible for me to keep up with them.”

Large and diverse problems like this require broad based solutions. We at the Department of Justice know we can’t solve this problem alone. Coordination is essential not only with our federal partners, but with local, state and international authorities. And public and private partnerships are key to our understanding of the scope of the problem and to the lasting success of any solution.

Research into basic questions, such as why are elderly people vulnerable, and how can we detect fraud and abuse, is critical to attacking the problem. The FINRA Foundation and Stanford Center on Longevity launched the Financial Fraud Research Center five years ago. As some of your ongoing research has demonstrated, there is a natural decline in cognition as people age, especially ability to think fast and process new information. The elderly are sometimes lonely or otherwise socially isolated. Some are uncomfortable with technology. Many have pools of relatively liquid retirement assets. Some are dependent on caregivers. All of these factors make the elderly particularly susceptible to certain schemes.

There is much more to learn. The Department of Justice has invested in partnerships to help us all better understand the causes and risk factors associated with elder financial exploitation. For example, just a few weeks ago, we announced an award of nearly $800,000 to the Urban Institute and the University of Southern California to develop and test prevention programs that will address elder abuse, neglect and financial exploitation. To enhance our understanding of financial exploitation by conservators and guardians, last year our Office for Victims of Crime funded a project to search for innovative, evidence-based programs and practices that successfully detect and remedy conservator fraud. And people like you are furthering our understanding. This conference is highlighting emerging research on susceptibility to fraud and fraud prevention.

Beyond efforts to understand how and why elder fraud occurs, continuing dedication to enforcement is required to stop it. This is not a partisan issue. We have seen Democratic and Republican administrations alike express a shared commitment to using all tools in the Department of Justice’s enforcement arsenal. Back in the 1990s, under Attorney General Reno, the Department of Justice created the Elder Justice Initiative to centralize information, facilitate training, and coordinate within the Department and across the federal government. During the Bush Administration, the Department of Justice initiated an elder mistreatment research grant program, funding cutting edge research on elder abuse and financial exploitation that continues today.

During this Administration, Congress created the Elder Justice Coordinating Council as part of the Affordable Care Act to facilitate interagency cooperation at the highest of levels. At the Department of Justice, we formed the Attorney General’s Advisory Committee’s Elder Justice Working Group, which is comprised of U.S. Attorneys from across the country who are dedicated to improving our information sharing on financial scams targeting the elderly. And just this year, we created ten regional Elder Justice Task Forces that operate throughout the country, partnering with state and local law enforcement and prosecutors to enhance our collective response to elder financial fraud and abuse.

Our Elder Justice Initiative has also been assisting with community capacity building. This includes supporting the training of local law enforcement and prosecutors. And to enhance civil legal aid to seniors, in June 2016, the Department of Justice, in collaboration with the Corporation for National and Community Service, launched the Elder Justice AmeriCorps, the first-ever army of lawyers and paralegals to help elderly victims of abuse and exploitation. The program will support 300 AmeriCorps members throughout the country and is expected to reach over 8,000 older adults over the next two years.

A multi-faceted problem requires coordination between different federal agencies; it demands a whole of government approach. Mail is involved; we must coordinate with the Postal Inspection Service. Money is involved; we must coordinate with the Treasury Department. People target the elderly; we must coordinate with agencies that serve the elderly, such as the Social Security Administration.

And more and more, we are seeing schemes that are highly complex and global. Stopping these schemes require extensive cooperation—not just with state and local authorities, but also across the federal government and with our international counterparts. For example, the Department of Justice’s Consumer Protection Branch co-chairs the International Mass-Marketing Fraud Working Group, a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States.

We can point to meaningful progress. In the past several years, we have successfully shut down several international lottery scams where con men and women have contacted elderly victims in the United States, told the victims they won cash and prizes, and persuaded them to send thousands of dollars in fees to release the money. Of course, the victims never received cash or prizes in return. In a series of cases, perpetrators made calls from Jamaica using Voice Over Internet Protocol technology that made it appear as if the calls were coming from the United States. They convinced victims to send money to middlemen in South Florida and North Carolina, who forwarded the money to Jamaica. We have had great success breaking up these networks through joint efforts between Jamaican law enforcement and U.S. agencies including the Postal Inspection Service, Department of Homeland Security, U.S. Marshals Service, Federal Trade Commission and Internal Revenue Service. Since 2009, the Department of Justice has prosecuted or is prosecuting over 100 individuals linked to such lottery schemes, and has convicted and sentenced over 40 defendants.

We have had similar success going after global “psychic schemes.” Con men and women send letters purportedly written by “world-renowned psychics” stating that they had a vision revealing that the recipient has the opportunity to obtain great wealth. The letters appear personalized, refer to the recipient by name, and often contain portions that appear handwritten. The solicitations urge victims to purchase products and services that will ensure this good fortune. Investigations by the Department of Justice and Postal Inspection Service, among others, revealed the complexity of these schemes. Not only were there the fraudsters themselves, but there were separate companies performing different roles, such as processing victim payments and maintaining databases of consumers who responded to solicitations. In a two-week period, one company in the United States processed as much as $500,000 in payments for just one psychic scheme. We have discovered similar companies in Quebec, Hong Kong, Switzerland and France.

Perhaps the most significant example of cooperation to date were our wide-ranging enforcement actions taken in September of this year to dismantle a global network of mass mailing schemes targeting elderly and vulnerable victims. The schemes involved a network with components in Canada, France, India, the Netherlands, Singapore, Switzerland, Turkey and the United States. The network included an India-based printer that manufactured solicitations and arranged for bulk shipment to U.S. victims; a mailer in Switzerland; list brokers in the United States who bought and sold lists of victims so that once victims had fallen prey, others could target them; a “caging” service in the Netherlands that collected money; and a Canadian payment processor that, for more than 20 years, helped dozens of international fraudsters gain access to U.S. banks and take money from Americans. Stopping this network involved coordination between the Department of Justice, Department of Treasury, Postal Inspection Service, Federal Trade Commission, Iowa Attorney General’s office and counterparts in other countries. Just to give you a sample of the coordinated actions, on Sept. 22, 2016:
- The Treasury Department’s Office of Foreign Assets Control blocked assets from the Canadian payment processor and a network of individuals and entities across 18 countries.
- The Justice Department filed criminal charges and a civil injunction against a Turkish mass mailer.
- The Justice Department brought a series of civil actions to shut down companies based in the United States, India, Switzerland and Singapore. These companies were responsible for mailing millions of multi-piece solicitations to potential victims throughout the United States.
- The Justice Department entered into a consent decree with two Dutch “caging” businesses that collected and forward money. Our efforts were coordinated with Dutch authorities who executed search warrants on the businesses and took control of the Dutch post office boxes used to receive victims’ funds.
- The Federal Trade Commission filed a case against a related mass-mailer, printer, and list broker.
- The Iowa Attorney General negotiated a compliance agreement with two firms that brokered victim lists.
Of course, what matters even more than going after these schemes is preventing people from falling prey in the first place. Here too, federal agencies are working in cooperation and dedicated to the effort. The Department of Justice has distributed educational materials about these kinds of scams, the U.S. Postal Inspection Service has developed an electronic press kit for media outlets, my former colleagues at the Federal Trade Commission operate a “Pass It On” campaign that encourages people to share information about frauds that affect older Americans, the Social Security Administration is educating beneficiaries through its network of over 1,200 field offices nationwide, and the Consumer Financial Protection Bureau has produced a mail fraud alert placemat in coordination with Meals on Wheels America to distribute to seniors nationwide. Similarly, private organizations that work in the area of elder justice and consumer protection are doing their part. For example, AARP will be posting information through its Fraud Watch Network. And the Consumers Union, the policy arm of Consumer Reports, is alerting consumers about a variety of elder scams.

Going forward, the Department of Justice will continue to work with private, local, state, federal and global partners. And we urge all of you to tell us where the Department can do more. The federal government’s work on behalf of the elderly began long before this Administration, and it will continue long after. I expect that my successors, and my successors’ successors, will share our commitment to making sure our parents, grandparents and friends age with grace and dignity. And I look forward to all of you, who have worked so hard in this area, working with the next Administration to combat financial fraud and protect elderly Americans. Thank you again for having me here today.

MIL Security OSI –
February 6, 2025
MIL-OSI Security: Acting Attorney General Matthew Whitaker Delivers Remarks to the Department of Justice Rural and Tribal Elder Justice Summit
Source: United States Attorneys General 13

Remarks as prepared for delivery

Thank you, Marc for that kind introduction and thank you for your leadership as United States Attorney for the Southern District of Iowa. I think you’ll agree with me that it’s one of the best jobs in the world.

This is a distinguished crowd. Thank you to:
- Iowa Attorney General Tom Miller
- Six U.S. Attorneys: Bryan Schroder, Trent Shores, Ron Parsons, Andrew Murray, Pete Deegan, and Marc Krickbaum
- the head of our Office of Justice Programs and former U.S. Attorney for Northern Iowa, Matt Dummermuth,
- Katie Sullivan, the head of our Office on Violence Against Women,
- Darlene Hutchinson, the Director of our Office for Victims of Crime,
- Assistant Agriculture Secretary Anne Hazlett,
- Assistant Secretary Lance Robertson of HHS,
- SEC Regional Director Joel Levin,
- Postal Inspector Guy Cottrell,
- Acting Commissioner of the Social Security Administration Nancy Berryhill,
- Director Deborah Cox Roush of Senior Corps, and
- A special thanks to all those who made this event possible, especially Toni Bacon, Andy Mao, Kate Peterson, and their teams at the Elder Justice Initiative and the Office for Victims of Crime.
Thank you all for being here for this summit. I think this turnout shows how important these issues are to the Department of Justice and to the Trump administration.

It’s good to be home. Des Moines is my home. This is where I played football, where I practiced law, where I prosecuted criminals as a United States Attorney, and it’s where I’m raising my family.

Iowa shaped my values.

One of those Iowa values is that we respect our elders. We recognize the debt that we owe to our parents and grandparents.

Many seniors in Iowa and across America spent their whole lives working, saving, and sacrificing so that they could enjoy a secure and peaceful retirement. And under President Trump their 401(k)s are looking good.

But criminals can try to take it all away with one phone call, one letter, or even one email.

Each year, an estimated $3 billion are stolen or defrauded from millions of American seniors. Through so-called grandparent scams, fake prizes or even outright extortion, criminals target our seniors to rob them of their hard-earned savings and their peace of mind.

And it appears as though this threat is only growing. The Senate Aging Committee’s Fraud Hotline received twice as many reports in 2016 as it received in 2015.

These fraud schemes can happen to anyone. And so I hope that no one will feel ashamed to come forward and report if they’ve been a victim. Some of my family members here in Iowa have received these phone calls. Some of you have, too.

At the Department of Justice, we acknowledge that rural areas are especially vulnerable to these crimes.

In tightly knit communities like the one I grew up in, people are generous and they develop a sense of trust with one another.

Criminals look at that and they see dollar signs.

Oftentimes local law enforcement in rural communities have to cover large areas of land with only a small number of officers. They don’t have the time or the resources to investigate fraud schemes that are often national or even international in scope.

Fortunately, the Department of Justice has their backs. As President Donald Trump has said, this administration supports state and local law enforcement 100 percent.

In this administration, we are well aware that 85 percent of law enforcement officers in this country serve at the state and local levels. We know that we can’t achieve our goals without them.

Over the past year we have taken historic new action to support our state and local partners and to keep our seniors safe.

This year our U.S. Attorneys’ offices have each designated an elder justice coordinator to help prevent crime by educating seniors about scams and other threats. Over just nine months, our elder justice coordinators participated in nearly 200 training, outreach, and coordination meetings attended by approximately 7,000 people.

Our elder justice coordinators are also customizing our strategy to protect seniors in their district and coordinating our prosecutions with state and local partners. That will help us complete more cases and secure more convictions.

In February, the Department conducted the largest elder fraud enforcement action in American history. We charged more than 200 defendants with fraud against elderly Americans and we brought civil actions against dozens more. The defendants in these cases allegedly stole from more than one million American seniors of more than half a billion dollars.

Just a few weeks ago, the Department extended a deferred prosecution agreement with a financial services company in Dallas. This company allegedly knew about criminals using their services for money laundering, but didn’t do anything about it. Some of their employees even took part in the schemes—including grandparent scams and fake prize scams targeting the elderly. In exchange for avoiding prosecution, the company is forfeiting $125 million which the Department will provide to the victims. The company has also agreed to implement anti-money laundering protections to prevent these crimes from ever happening again.

There are a lot of other cases that we could talk about—but I’ll just mention two right here in Iowa.

This year, a total of 33 defendants in Dubuque—11 at the federal level and 22 at the local level—have been convicted for a grandparent scam against a total of 285 American seniors. The defendants defrauding more than $750,000 and then wiring it to their co-conspirators in the Dominican Republic. Now they’ve been held accountable.

At the federal level, these cases were prosecuted by AUSA Tony Morfitt of our Elder Justice Task Force—Tony, great job.

In August, a jury convicted a man from outside of Des Moines for convincing elderly Iowans to sell off their investments and buy insurance from him. Instead of buying the insurance as promised, the defendant used most of the funds for personal expenses like remodeling his house and buying two new Harley Davidsons. I’m pleased to report that that house and those motorcycles have now been forfeited.

This case was investigated by the FBI and prosecuted by Adam Kerndt and Mikaela Shotwell. Great work.

These are important accomplishments. We have increased the resources dedicated to these cases and we have increased our effectiveness in prosecuting them.

But there is more to do. And so today I am announcing our next steps.

First of all, we are improving training for our U.S. Attorneys’ offices.

Earlier this year the Department’s Elder Justice Initiative published its Elder Abuse Guide for Law Enforcement or EAGLE. EAGLE contains helpful information for prosecutors, including overviews of state and local law as well as best practices for evidence collection, interviewing older adults, and for documenting elder abuse. EAGLE is free and available right now to every law enforcement officer in the country.

Today I am announcing that the next edition of our Journal of Justice Policy and the Law—formerly known as the USA Bulletin—will focus on Elder Justice. It will also be the longest bulletin we’ve ever published since we started it back in 1953. These bulletins are public, and so they can be used by state and local prosecutors as well as our U.S. Attorneys’ offices. That will provide the knowledge and insights of some of the top experts on elder justice to the prosecutors who are on the front lines.

Second, we are investing in services for seniors who have been victimized by criminals.

I am announcing today that over the next 11 months, our Office for Victims of Crime will provide nearly $18 million to help seniors who are victims of crime. These funds can be used for priorities like legal services, telephone hotlines, and housing for seniors who have lost their homes—which is something that happens all too often. We are using these OVC funds for a wider variety of services for seniors than ever before.

And finally, we are continuing to enforce the law aggressively and forcefully.

On October 1st, the Department began our Money Mule Initiative, which is a coordinated effort against the transnational criminal organizations who are defrauding our seniors.

We are hitting the fraudsters where it hurts—in the wallet.

Our prosecutors have found that fraudsters avoid using banks to launder the money they take from their victims. Instead, they launder it through so-called money mules—Americans who collect the money and then send it overseas.

Oftentimes these are co-conspirators—as in the Dubuque case that I mentioned a moment ago. But sometimes they are simply good people who have been tricked into thinking that they are doing charity work or working for a legitimate business.

Working with our Postal Inspectors, FBI agents, and other law enforcement partners, we have identified a number of these money mules across America. We have even been able to determine which ones have been tricked into this work and which ones are knowing and willful conspirators.

In the first case, we knock on their door and we explain to them what’s really going on. We ask them to sign a letter acknowledging that it’s wrong and promising to stop. That in itself is shutting off large quantities of money for the fraudsters.

And in the second case—when we determine that they are part of a conspiracy—we are filing civil actions and taking them to court.

Since October 1, we’ve taken action to stop 400 money mules across 65 districts. These involve everything from grandparent scams to romance scams, fake lotteries, IRS imposters, and fake tech support schemes.

The FBI and our Postal Inspectors have interviewed 300 money mules and sent 300 warning letters. We’ve charged 10 defendants and filed 25 civil actions. We’ve executed search warrants across America, including here in the Southern District of Iowa.

These are impressive numbers.

Our goal is to reduce crime and protect America’s seniors. And we have good reasons to believe that our work with our law enforcement partners is reducing crime and having a real impact on the seniors of this country.

The Postal Inspection Service has estimated that payments by mass mail fraud victims to foreign post office boxes has dropped by 94 percent since 2016—from 150,000 per month to approximately 10,000 per month now.

There are many causes for that, but that is a remarkable achievement—and I want to thank everyone who has played a role in our efforts.

We are going to keep up this pace.

We are going to continue to provide our prosecutors and our state and local partners with the resources that they need. And we’re going to keep putting fraudsters in jail.

I want to thank each of you again for your contribution to this effort. Each of us has a role to play—and certainly not just those of us in government. All of us can be on the lookout for fraud schemes and report suspected criminal activity.

If we do that—and if we remain vigilant—then we can ensure that every senior has the safety and peace of mind that they deserve.

MIL Security OSI –
February 6, 2025
MIL-OSI Security: Assistant Attorney General Makan Delrahim Remarks at the American Bar Association Antitrust Section Fall Forum

Source: United States Attorneys General 13

“November Rain”: Antitrust Enforcement on Behalf of American Consumers and Taxpayers

Good morning, and thank you for the kind introduction. I’d like to thank the American Bar Association for your invitation to this year’s Fall Forum and Deb Garza for her leadership of the Section this year.

I find it hard to believe it’s been only a little more than a year since I was confirmed as AAG and spoke at last year’s Fall Forum. Over the past year, the Antitrust Division has been hard at work on behalf of American consumers. We made a number of significant enforcement actions this week, but before I turn to those, I’d like to update you on a few recent changes in the Front Office.

First, Michael Murray recently joined us from the Deputy Attorney General’s office, where he served as Associate Deputy Attorney General. Mike now will be a Deputy Assistant Attorney General in the Front Office, where he will be overseeing our Appellate Section and our 4A damage actions on behalf of the American taxpayer. Mike has significant appellate experience, including as a law clerk for Justice Anthony Kennedy.

In addition, our new acting Deputy Assistant Attorney General for Economics is Jeff Wilder. Jeff received his Ph.D. from MIT and has distinguished himself as an outstanding economist serving as one of the leaders in the Division’s Economic Analysis Group, and we’re happy to have him join us in the Front Office.

Some of you may remember that at last year’s Fall Forum, I spoke about antitrust and deregulation. In those remarks, I focused on remedies, including our preference for structural remedies and our emphasis on making consent decrees more enforceable. I also discussed our commitment to the view that antitrust enforcement is law enforcement, not industrial regulation, and that the Antitrust Division should strive to accomplish its law enforcement mission in the most efficient and effective way possible. The Division has stood by those principles.

More recently, in a speech at Georgetown, I announced several improvements to the merger review process. We are making good on those changes as well. Today, we posted a model timing agreement and a model voluntary request letter on our website. Those documents increase transparency and predictability and will help merging businesses and their counsel know what to expect as part of the merger review process. We’ve also begun tracking the duration of merger reviews more carefully, so that we can monitor our performance and factors affecting it. You will recall our goal is to resolve investigations within six months of filing, provided that the parties cooperate and comply with our document and data requests during the entire process.

I would like to focus the remainder of my remarks today on four important settlements in the last week that reflect the Antitrust Division’s commitment to vigilant and effective antitrust enforcement.

As some of you may have seen, the Division announced just yesterday a set of global settlements with three South Korean companies. Those unprecedented settlements resolve criminal charges and civil claims arising from a bid-rigging conspiracy that targeted fuel supply contracts to U.S. military bases in South Korea. They are the result of tremendous hard work in parallel criminal and civil investigations by the Antitrust Division’s Washington Criminal I Section, the Transportation, Energy, and Agriculture Section, and the Fraud Section of the Civil Division. We were assisted ably by our partners at the FBI and the Defense Criminal Investigative Service.

The United States currently maintains numerous military bases in South Korea, housing American soldiers, marines, airmen, and sailors in the region. These military bases need fuel for various purposes, and two Department of Defense agencies, the Defense Logistics Agency (DLA) and Army and Air Force Exchange Service (AAFES), contract with South Korean companies to supply fuel to the numerous U.S. military bases throughout South Korea.

Our investigation, which is ongoing, revealed that SK Energy, GS Caltex, Hanjin Transportation, along with other co-conspirators, rigged bids and fixed prices for fuel supply contracts issued by the U.S. military in South Korea for over a decade. They cheated the Military and American taxpayers out of precious limited resources. As a result of the conspiracy, the Department of Defense paid substantially more for fuel supply services. Although the immediate victim here was the U.S. military, the American taxpayer, you and me, ultimately footed the bill.

The three companies agreed yesterday to plead guilty to criminal charges under Section 1 of the Sherman Act, and they will pay at least $82 million in criminal fines for their involvement in the conspiracy. Importantly, the three defendants have also agreed to cooperate with the ongoing criminal investigation of the conduct.

Robert Jackson, who is one of my legal heroes, recognized that bid rigging is particularly harmful to government purchasers. When he served as Assistant Attorney General in charge of the Antitrust Division, Jackson broadly denounced arrangements that “compel purchasers to pay a price based on calculation, not competition,” and specifically emphasized that “[w]hatever the effect of this on private buyers, it completely destroys the mechanism set up by federal, state, and municipal governments to keep favoritism and corruption out of public buying.”

The harm Jackson recognized still exists today, and these settlements serve as an important reminder that the Justice Department and its law enforcement partners will investigate aggressively and prosecute without hesitation companies who cheat the United States government and the American taxpayer.

We did not stop there. We are committed to using all authorities Congress has granted to us to remedy antitrust injuries to the American taxpayer. Those tools include the authority conferred in Section 4A of the Clayton Act. Section 4A is an important but underused enforcement tool that allows the government to recover treble damages for antitrust violations when the government itself is the victim.

To that end, the Division established a parallel civil enforcement team, led by Kathy O’Neill and a group of capable litigators from the Transportation, Energy, and Agriculture Section to pursue parallel civil actions for damages. We negotiated separate civil resolutions with each of the three defendants on behalf of American taxpayers. We also worked alongside our partners in the Civil Division’s Fraud Section, who pursued charges against the defendants under the False Claims Act for making false statements to the government in connection with their conspiracy.

To resolve both the civil antitrust and the False Claims Act violations, these three defendants have agreed to pay an additional $154 million in total. They also have agreed to cooperate fully with the Division’s ongoing civil investigation and to implement effective antitrust compliance programs.

These historic cases mark the first significant settlements under Section 4A in many years. In fact, as far as we can tell based on our records, they are the largest settlements the government has ever recovered since the enactment of Section 4A.

Let me take a step back to review the history of Section 4A.

When Congress enacted the Sherman Act in 1890 and the Clayton Act in 1914, neither statute contained a provision specifically allowing the government to recover damages it suffered as a result of an antitrust violation. In 1939, the United States, led by Assistant Attorney General Thurman Arnold, brought its first-ever antitrust suit for damages on its own behalf.   The government claimed authority to do so under Section 7 of the Sherman Act, which was the predecessor of Section 4 of the Clayton Act. As most of you know, Section 4 permits “any person” injured by an antitrust violation to recover the damages they suffered.

In that pioneering case, United States v. Cooper, the government alleged that eighteen defendants had “collusively fixed” bids that were “identical to the penny on eighty-two different sizes of tires” sold to the United States. The defendants successfully moved to dismiss the action on the question of whether the government is a “person” entitled to bring an action for damages under the statute. The Second Circuit affirmed, and the Supreme Court ultimately held that the United States is not a “person” entitled to sue.

In 1955, Congress amended the Clayton Act in response to the Court’s ruling in Cooper by adding Section 4A. As originally enacted, Section 4A allowed the government to recover only single damages, so that the government could recover damages where it was the victim of an antitrust violation.

At first, the Division used Section 4A aggressively, filing numerous cases for damages throughout the 1960s and 1970s. In the 1980s, however, the government brought only four cases under Section 4A—a remarkable decline from the prior two decades. Some attributed this drop, in part, to the Supreme Court’s Illinois Brick decision in 1978, because many of the cases brought in the ‘60s and ‘70s involved claims by the United States as an indirect purchaser. The government, however, increasingly purchases goods and services directly.

The next milestone came in 1990, when Congress amended the Clayton Act again to allow the government to seek treble damages in Section 4A cases.

Since 1990, a span of nearly thirty years, only three Section 4A cases have been filed. In 1991, the Division recovered $250,000 from two companies for rigging bids to purchase surplus gunpowder. In 1994, the Division filed suit against two defense contractors for entering into a “teaming” arrangement that eliminated competition in supplying the Department of Defense with cluster bombs. In that case, the Division recovered $4 million on behalf of American taxpayers and obtained an $8 million discount on the bid price. In 2012, the Division challenged collusion between two companies bidding on four natural gas leases at auctions run by the Bureau of Land Management. The Division recovered $275,000 from each company.

The American Taxpayer deserves to see a revitalization of the government’s Section 4A authority. This week’s settlements are only the first in that direction. Going forward, the Division will exercise 4A authority to seek compensation for taxpayers when the government has been the victim of an antitrust violation. We hope that these efforts will also deter future violations.

In light of our policy of seeking damages under Section 4A where available, I would like to address how parallel criminal and civil enforcement will proceed going forward.

First, the Division’s new focus on Section 4A enforcement will not require any changes to the Division’s leniency policy. The Division offers strong incentives to come forward to report criminal antitrust violations in exchange for leniency, and those incentives do not change when the government is harmed by the violation.

The Antitrust Criminal Penalty Enhancement and Reform Act of 2004, better known as ACPERA, created another valuable incentive for leniency applications. Under ACPERA’s detrebling provision, those who successfully qualify for leniency will be subject only to single damages in follow-on civil suits, rather than treble damages. In addition, those who successfully qualify for leniency are not subject to joint and several liability.

This detrebling incentive will apply to any Section 4A claims brought by the government. We will also follow the underlying requirements for ACPERA in Section 4A cases: companies will need to cooperate with the civil team, as they would with any private plaintiff, in order to reap the detrebling benefits.

The bottom line is that the Division’s enforcement of Section 4A will increase the incentive for co-conspirators in cartel cases to come forward.

Separately, I should note that global resolutions like the ones announced yesterday should serve the interests of the parties as well. Cooperating companies subject to penalties under multiple statutes can gain certainty and finality. Employees, customers, and investors can resolve the problem and move on. This is consistent with the Department’s broader policies on coordination of corporate penalties.

Next, as we pursue Section 4A damages going forward, global resolutions of criminal and civil antitrust liability will help maintain a consistent policy on how to calculate civil damages. Yesterday’s settlements underscore this point. They provide that SK Energy, GS Caltex, and Hanjin each will pay an amount calculated to exceed the overcharge paid by the government. At the same time, the amount reflects both the value of the cooperation commitments each defendant made as a condition of settlement and the cost savings the Division realized by avoiding extended litigation.

As a general matter, if the government is required to litigate claims it brings under Section 4A, the government will seek treble damages. In addition, we anticipate that earlier cooperators will benefit by paying a lower multiple of damages, because the value of their cooperation is higher earlier in our investigation.

I will turn now to another significant settlement the Division filed this week, one which resolves a complaint against six broadcast television companies alleging that they engaged in widespread, unlawful sharing of non-public, competitively sensitive information. Along with the complaint, the Division filed proposed final judgments requiring the companies to cease such conduct and to undergo rigorous compliance and reporting measures for the next seven years.

We uncovered this conduct during our investigation into Sinclair Broadcasting Group’s proposed acquisition of Tribune Media Company, which has since been abandoned.

As we allege in the complaint, the defendants agreed in local broadcasting markets throughout the United States to exchange revenue pacing information and other competitively sensitive information. “Pacing” compares a broadcast station’s revenues booked for a certain time period to the revenues booked in the same point in the previous year. Pacing indicates how each station is performing versus the rest of the market and provides insight into each station’s remaining spot advertising for the period.

We discovered that the defendants had been exchanging pacing information either directly between stations or corporate headquarters, or indirectly through national representatives that help local stations sell advertisements to national advertisers. By exchanging this information, the broadcasters were better able to anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices, which in turn helped inform the stations’ own pricing strategies and negotiations with advertisers. As a result, the information exchanges harmed the competitive price-setting process.

We have not heard any legitimate pro-competitive justification for this conduct. We are therefore pleased that these companies recognized that a protracted investigation and litigation would serve no purpose, and we welcome their cooperation as our investigation continues. We also want to remind businesses, as well as the antitrust practitioners that advise them, that agreements between competitors to exchange competitively sensitive information can violate the antitrust laws and lead to a civil enforcement action even if the conduct does not amount to the type of hard core cartel conduct that the Antitrust Division prosecutes criminally.

Finally, this morning we announced the third significant enforcement resolution this week—a settlement with Atrium Health, formerly known as Carolinas Healthcare System. We were joined in the settlement by the North Carolina Attorney General’s Office, and we thank them for their partnership in this action. The settlement resolves over two years of civil antitrust litigation challenging the hospital system’s use of anticompetitive steering restrictions in its contracts with major health insurers. These steering restrictions prevented health insurers from promoting innovative health plans and more cost-effective healthcare providers.

Atrium is the dominant hospital system in the Charlotte, North Carolina metropolitan area. It used its market power to limit major health insurers’ ability to introduce plans designed to encourage consumers to choose cost-effective healthcare providers. Specifically, Atrium would agree to participate in a broad network plan only if the insurer would commit not to introduce other plans that would steer patients away from Atrium. The steering restrictions also deliberately constrained insurers from providing consumers with transparency into the comparative cost and quality of their healthcare alternatives.

Because the steering restrictions were in place, insurers could not introduce more innovative health insurance plans that create financial incentives for patients to use lower-cost healthcare services. Needless to say, competition for patients encourages healthcare providers to reduce costs, lower prices, and increase quality. These steering restrictions inhibited competition among healthcare providers to provide higher quality, lower-cost services.

The resolution prevents Atrium from enforcing the steering restrictions in its contracts with major health insurers. If approved by the Court, it will restore competition between healthcare providers in Charlotte, North Carolina.

I would like to make a broader point about the Division’s settlements this week. The consent decrees in all three cases, like all other decrees the Division has entered into the past 13 months, include specific new provisions designed to improve their enforceability.

These provisions (i) address the burden of proof in a civil contempt action by providing that the preponderance standard will apply; (ii) make defendants responsible for reimbursing the government for all costs it incurs in connection with enforcing the decree; (iii) allow the United States to seek a one-time extension of the term of the decree in the event of a violation, or to terminate the decree early if continuation is no longer necessary or in the public interest. Another provision addresses interpretation of the decree by stating that courts can enforce any provisions that are stated specifically and in reasonable detail, whether or not they are clear and unambiguous on their face.

The Division serves as a guardian of American consumers, and we act in the public’s trust. When the Division enters into a consent decree to resolve charges of anticompetitive conduct, we will hold parties’ feet to the fire and enforce the decrees.

Finally, last Friday, three defendants pled guilty to conspiring to rig bids and allocate the market in auctions of foreclosed properties in Palm Beach County, Florida. This case is unlike the Division’s prior foreclosure auction prosecutions because the auction occurred online rather than in-person, and the collusion occurred primarily by text message rather than in-person. It is a good illustration of the fact that while defendants may use new platforms and technologies to commit antitrust crimes, the Division too is evolving and stands ready to prosecute these crimes in the digital age.

The conspiracy took place in the aftermath of the financial crisis, which affected the housing market nationwide and the Florida real estate market in particular. Defendants and their affiliated business entities were the largest buyers of foreclosed properties in Palm Beach County. Together, the commerce affected by the defendants’ collusion was $25 million.

The Division began an investigation into possible collusion in online foreclosure auctions in Palm Beach County, Florida after receiving an anonymous citizen complaint that included a link to a YouTube video detailing the collusion.

Co-conspirators texted each other to coordinate their bidding and facilitate the conspiracy to obtain foreclosed homes at suppressed prices. Most commonly, bidders would agree to stop bidding or to refrain from bidding at their co-conspirators’ request. In some instances, they lowered bids for each other’s benefit.

After learning of the investigation, one of the defendants used and encouraged other co-conspirators to use a text messaging application to continue colluding. He believed that law enforcement would be unable to read or trace any messages sent through the application.

The three defendants were indicted by a grand jury in November 2017. Since then, all three have pleaded guilty.

I will conclude by taking this opportunity to highlight the outstanding attorneys and economists at the Antitrust Division. They are the core of executing the Division’s mission and work tirelessly in their commitment to protect competition and consumers.

It has been a busy year at the Antitrust Division. We have been working hard on behalf of America’s consumers and taxpayers, and look forward to continuing our efforts on their behalf in the year to come.

Thank you.

MIL Security OSI –

February 6, 2025

Category: Taxation

“We will not let red tape block people from rebuilding and getting back into their homes. The state is here to assist the Los Angeles community recover, not to hinder their efforts.”

Recovery and rebuilding, faster than ever

Get help today

Recent news