Taxation – Page 212 – NewzIntel.com

MIL-OSI Economics: IPAA Supports Hoeven and Pfluger CRA to Block Implementation of Methane Tax

Source: Independent Petroleum Association of America

Headline: IPAA Supports Hoeven and Pfluger CRA to Block Implementation of Methane Tax

Feb 4, 2025 IPAA Supports Hoeven and Pfluger CRA to Block Implementation of Methane Tax

Posted at 16:48h in Press Releases by Jennifer Pett

WASHINGTON – The Independent Petroleum Association of America (IPAA) issued the following statement on bicameral Congressional Review Act legislation introduced by Senator John Hoeven (R-ND) and Congressman August Pfluger (R-TX-11) to block implementation of the Biden Administration’s methane tax.

IPAA President & CEO Jeff Eshelman: “The Independent Petroleum Association of America (IPAA) appreciates and supports Senator Hoeven’s and Congressman Pfluger’s leadership to overturn the EPA’s Waste Emissions Charge (Methane Tax) regulations. The Congressional Review Act (CRA) resolution introduced today will allow Congress to nullify the regulations the Biden Administration established to implement the misguided methane tax. The Biden Administration and Democrats in Congress passed the methane tax to single out and punish the oil and natural gas industry despite its already burdensome EPA regulatory framework. The tax was passed without appropriate understanding of its impact or industry safeguards. IPAA has always opposed the methane tax and believe it is simply a tax designed to hamper American oil and gas production. We encourage Congress to work with the Trump Administration to eliminate this unnecessary tax on American oil and natural gas producers as soon as possible.”

IPAA also supports legislation led by Senator Ted Cruz (R-TX) and Congressman Pfluger to repeal the Methane Tax.

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MIL OSI Economics –

February 5, 2025

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

Source: GlobeNewswire (MIL-OSI)

Fourth-quarter revenue of $912.0 million
Fourth-quarter net income attributable to ChampionX of $82.8 million
Fourth-quarter adjusted EBITDA of $212.3 million
Fourth-quarter income before income taxes margin of 13.0%
Fourth quarter adjusted EBITDA margin of 23.3%
Fourth-quarter cash from operating activities of $207.3 million and free cash flow of $170.1 million

Full-year net income attributable to ChampionX of $320.3 million
Full-year adjusted EBITDA of $784.7 million
Full-year cash from operating activities of $589.7 million and free cash flow of $460.5 million

THE WOODLANDS, Texas, Feb. 04, 2025 (GLOBE NEWSWIRE) — ChampionX Corporation (NASDAQ: CHX) (“ChampionX” or the “Company”) today announced fourth quarter of 2024 and full year 2024 results. For the fourth quarter of 2024, revenue was $912.0 million, net income attributable to ChampionX was $82.8 million, and adjusted EBITDA was $212.3 million. Income before income taxes margin was 13.0%, and adjusted EBITDA margin was 23.3%. Cash provided by operating activities was $207.3 million, and free cash flow was $170.1 million.

CEO Commentary

“2024 was a year in which we continued to demonstrate the unique nature of ChampionX’s cash flow resiliency, driven by the strength of our high-margin operating model and capital-light portfolio of businesses. We delivered robust adjusted EBITDA margin expansion and generated strong free cash flow. Our differentiated performance is the direct result of our employees around the world remaining committed to serving our customers well and living our continuous improvement culture daily. I am thankful and humbled to lead such a remarkably dedicated team,” ChampionX’s President and Chief Executive Officer Sivasankaran “Soma” Somasundaram said.

“During the fourth quarter of 2024, we generated revenue of $912 million, which increased 1% sequentially, driven by seasonal strength in our Production Chemical Technologies business. Sequential growth in Production Chemical Technologies was offset by typical seasonal declines in our Production & Automation Technologies business into the year-end holidays. For the full year 2024, we generated revenue of $3.6 billion, and we grew our North America revenue by 3% year-over-year, driven by particular strength in the Permian basin. We generated net income attributable to ChampionX of $83 million, income before income taxes margin of 13.0%, and delivered adjusted EBITDA of $212 million, representing a 23.3% adjusted EBITDA margin, our highest level as ChampionX, which speaks to the continued productivity and profitability focus of our team. For the full year 2024, we generated net income attributable to ChampionX of $320 million, income before income taxes margin of 12.2%, a 90 basis point increase over the prior year, and delivered adjusted EBITDA of $785 million, representing a 21.6% adjusted EBITDA margin, an increase of 107 basis points year-over-year.

“We once again demonstrated our strong cash flow profile. Cash flow from operating activities was $207 million during the fourth quarter, which represented 250% of net income attributable to ChampionX, and includes a $48 million tax payment deferred from the fourth quarter of 2024 to the first quarter of 2025. We generated robust free cash flow of $170 million during the fourth quarter, converting 80% of our adjusted EBITDA for the period. Cash flow from operating activities was $590 million for the full year 2024, which represented 184% of net income attributable to ChampionX. For the full year 2024, we generated free cash flow of $460 million and achieved 59% adjusted EBITDA to free cash flow conversion. Our balance sheet and financial position remain strong, ending the year with approximately $1.2 billion of liquidity, including $508 million of cash and $675 million of available capacity on our revolving credit facility.

“As we look ahead to 2025, we expect global oil production to grow, and given our differentiated and resilient production-oriented portfolio, we expect another year of positive performance relative to general oil and gas market activity.”

Agreement to be Acquired by SLB

On April 2, 2024, SLB (NYSE: SLB) and ChampionX jointly announced a definitive Agreement and Plan of Merger (the “Merger Agreement”) for SLB to purchase ChampionX in an all-stock transaction. The transaction was unanimously approved by the ChampionX board of directors and the transaction received the approval of the ChampionX stockholders at a special meeting held on June 18, 2024. The transaction is subject to regulatory approvals and other customary closing conditions.

ChampionX may continue to pay its regular quarterly cash dividends with customary record and payment dates, subject to certain limitations under the Merger Agreement. Given the pending acquisition of ChampionX by SLB, ChampionX has discontinued providing quarterly guidance and will not host a conference call or webcast to discuss its fourth quarter and full year 2024 results.

Production Chemical Technologies

Production Chemical Technologies revenue in the fourth quarter of 2024 was $569.7 million, an increase of $10.1 million, or 2%, sequentially, due to seasonally higher volumes in certain international markets and higher volumes in North America.

Segment operating profit was $103.6 million and adjusted segment EBITDA was $133.5 million. Segment operating profit margin was 18.2%, an increase of 259 basis points, sequentially, and adjusted segment EBITDA margin was 23.4%, an increase of 187 basis points, sequentially, in each case due to volumes and product mix.

Production & Automation Technologies

Production & Automation Technologies revenue in the fourth quarter of 2024 was $269.6 million, a decrease of $6.1 million, or 2%, sequentially, due primarily to seasonality in our North American businesses into the year-end holidays.

Revenue from digital products was $62.3 million in the fourth quarter of 2024, an increase of $4.4 million, or 7.5%, compared to $57.9 million in the third quarter of 2024.

Segment operating profit was $39.0 million, and adjusted segment EBITDA was $70.7 million. Segment operating profit margin was 14.5%, an increase of 210 basis points, sequentially, and adjusted segment EBITDA margin was 26.2%, an increase of 100 basis points, sequentially, in each case due to productivity improvements and product mix.

Drilling Technologies

Drilling Technologies revenue in the fourth quarter of 2024 was $51.9 million, an increase of $0.2 million, or flat, sequentially, in-line with flat sequential U.S. rig count activity.

Segment operating profit was $10.7 million, and adjusted segment EBITDA was $12.3 million. Segment operating profit margin was 20.6%, a decrease of 160 basis points, sequentially, and adjusted segment EBITDA margin was 23.7%, a decrease of 112 basis points, sequentially, in each case due to slightly higher operating costs.

Reservoir Chemical Technologies

Reservoir Chemical Technologies revenue in the fourth quarter of 2024 was $21.9 million, an increase of $1.4 million, or 7%, sequentially, due primarily to higher product volumes.

Segment operating profit was $2.3 million, and adjusted segment EBITDA was $3.8 million. Segment operating profit margin was 10.5%, as compared to 8.2% in the prior quarter, and adjusted segment EBITDA margin was 17.1%, an increase of 106 basis points, sequentially, in each case due to higher product volumes.

Other Business Highlights: Production Chemical Technologies and Reservoir Chemical Technologies

Chosen by a Canadian operator to be their sole supply partner for production chemical programs to support longer asset life for the customer’s project.
Awarded SAGD accounts with a Canadian oil sands operator after a well-executed ChampionX pursuit, trial and transition. This success is expected to lead to additional growth opportunities with the customer in 2025.
Achieved growth with a national oil company in Central Asia through technology and alignment to the customer’s key business drivers. Organized technical workshops and reviews leading to the implementation of a paraffin treatment program with the customer.
Secured a new contract for the provision of chemical injection skids for Drag Reducing Agents (“DRA”) as part of a new development in Eastern Africa.
Executed a successful field trial for an innovative AAHI (hydrate inhibitor) with a major operator in Egypt. This strategic initiative is expected to assist the customer with significantly boosting production and enhancing operational efficiency.
Successfully qualified corrosion inhibitors for an existing gas field in Qatar. This achievement marks a significant step in supporting asset integrity assurance and commitment to delivering reliable solutions to the industry.
Qualified a new Kinetic Hydrate Inhibitor for a major gas field operated by a major national oil company in the Middle East region. This innovative solution delivers higher value, efficiency, and a lower total cost of operation.
Instituted notable customer-centric innovations, including the Right Products campaign which delivered 12 new chemistry innovations, the ParaClear^(R) program for paraffin remediation, and the full-time Flowback Team with new product lines and digital tools.
Advanced digital capabilities, including MyAnalytics platform for sales representatives, the Sensor Team for equipment monitoring, and a trial of a Centralized Ordering system to streamline orders.
Delivered on our first RenewIQ+^(R) opportunity, pumping a Reservoir Chemical Technologies chemistry in conjunction with our standard RenewIQ^(R) offering.
Gained significant commercial traction among key customers with Reservoir Chemical Technologies’ new acidizing technology. This innovative system has been evaluated by a major Middle East operator and recognized as one of the top-performing solutions in the market. This milestone underscores our commitment to providing sustainable, high-performance solutions that align with the evolving needs of the industry.

Other Business Highlights: Production & Automation Technologies

Expanded the portfolio of recently acquired RMSpumptools into North America, delivering new solutions to a major oil company in the Permian basin using permanent magnet motor technology. Additional interest and growth with customers are building into 2025.
Introduced the SMARTEN™ Lite rod pump controller, which offers an economical automation solution for marginal, low-producing rod pump wells. This new technology was successfully operating on 60 new wells in Q4 2024, helping operators gain 24/7 surveillance and remote control of their rod pump assets with a low-cost edge computing device that requires minimal hardware and setup.
Continuing to see strong market penetration and interest in Artificial Lift Performance’s Pump Checker software offering. Software license counts have increased by more than 30% since the February 2024 acquisition, with a focused growth on gas lift/plunger lift well applications.
Successfully added well density to a performance-based integrated production optimization (“IPO”) project recently secured with a customer in the Permian basin, and extended the reach of this holistic solution with an additional customer in the Permian. The IPO solution combines artificial lift, chemicals and chemical injection systems with digital automation, controls, data management, and optimization services to drive incremental production with effective cost management for operators.
Deployed a large SOOFIE™ continuous emissions monitoring system for an operator in the Middle East. Based on initial results, the customer plans to deploy additional fixed emissions monitoring systems as well as incorporate the ChampionX Aura™ optical gas imaging camera in the field. Our technology was selected based on its proven capabilities and ChampionX collaboration with the field team to assure a steady stream of high-quality data. The SOOFIE continuous monitoring system provides real-time, 24/7 surveillance of methane and other greenhouse gases at oil and gas facilities and landfills.
Completed installations of ChampionX’s AnX™ coiled rod technology with a Middle East operator. Based on the excellent performance of this corrosion-resistant coiled rod, the customer has ordered product to install in additional wells in 2025. AnX recently won the Gulf Energy Excellence award for Best Production Technology and has demonstrated dramatic run life improvement in highly corrosive applications in multiple geographies around the world.
Successfully completed the initial installations of a full rod pumping solution on a very challenging application in Colombia. The solution brings together both the downhole rods and pump with ChampionX’s rod lift production optimization software. The customer reports that results are exceeding expectations, with production increasing by 35% while reducing operating costs through optimizing resources required to operate the wells.
Expanded production optimization software capabilities with customers in Peru and Argentina. Our XSPOC™ software has been implemented across more than 300 wells in Peru and additional licenses are planned in Q1 2025. In Argentina, a customer implemented the software across three fields. By delivering diagnostic insights and actionable recommendations, XSPOC software enables customers to enhance well performance, increase production, and reduce operating costs.

About Non-GAAP Measures

In addition to financial results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), this news release presents non-GAAP financial measures. Management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted net income attributable to ChampionX and adjusted diluted earnings per share attributable to ChampionX, provide useful information to investors regarding the Company’s financial condition and results of operations because they reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, free cash flow, free cash flow to adjusted EBITDA ratio, and free cash flow to revenue ratio are used by management to measure our ability to generate positive cash flow for debt reduction and to support our strategic objectives. Although management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating ChampionX’s overall financial performance, the foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying financial tables.

About ChampionX

ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. ChampionX’s expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. To learn more about ChampionX, visit our website at www.ChampionX.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to the proposed transaction between SLB and ChampionX, including statements regarding the benefits of the transaction and the anticipated timing of the transaction, and information regarding the businesses of SLB and ChampionX, including expectations regarding outlook and all underlying assumptions, SLB’s and ChampionX’s objectives, plans and strategies, information relating to operating trends in markets where SLB and ChampionX operate, statements that contain projections of results of operations or of financial condition and all other statements other than statements of historical fact that address activities, events or developments that SLB or ChampionX intends, expects, projects, believes or anticipates will or may occur in the future. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. All statements in this communication, other than statements of historical fact, are forward-looking statements that may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” “intends,” “plans,” “seeks,” “targets,” “may,” “can,” “believe,” “predict,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “ambition,” “goal,” “scheduled,” “think,” “could,” “would,” “will,” “see,” “likely,” and other similar expressions or variations, but not all forward-looking statements include such words. These forward-looking statements involve known and unknown risks and uncertainties, and which may cause SLB’s or ChampionX’s actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Factors and risks that may impact future results and performance include, but are not limited to those factors and risks described in Part I, “Item 1. Business”, “Item 1A. Risk Factors”, and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in SLB’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on January 24, 2024 and Part 1, Item 1A, “Risk Factors” in ChampionX’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 6, 2024, and each of their respective, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These include, but are not limited to, and in each case as a possible result of the proposed transaction on each of SLB and ChampionX: the ultimate outcome of the proposed transaction between SLB and ChampionX, including the effect of the announcement of the proposed transaction; the ability to operate the SLB and ChampionX respective businesses, including business disruptions; difficulties in retaining and hiring key personnel and employees; the ability to maintain favorable business relationships with customers, suppliers and other business partners; the terms and timing of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; the anticipated or actual tax treatment of the proposed transaction; the ability to satisfy closing conditions to the completion of the proposed transaction (including the adoption of the merger agreement in respect of the proposed transaction by ChampionX stockholders); other risks related to the completion of the proposed transaction and actions related thereto; the ability of SLB and ChampionX to integrate the business successfully and to achieve anticipated synergies and value creation from the proposed transaction; changes in demand for SLB’s or ChampionX’s products and services; global market, political and economic conditions, including in the countries in which SLB and ChampionX operate; the ability to secure government regulatory approvals on the terms expected, at all or in a timely manner; the extent of growth of the oilfield services market generally, including for chemical solutions in production and midstream operations; the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates, and potential recessionary or depressionary conditions; the impact of shifts in prices or margins of the products that SLB or ChampionX sells or services that SLB or ChampionX provides, including due to a shift towards lower margin products or services; cyber-attacks, information security and data privacy; the impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets; trends in crude oil and natural gas prices, including trends in chemical solutions across the oil and natural gas industries, that may affect the drilling and production activity, profitability and financial stability of SLB’s and ChampionX’s customers and therefore the demand for, and profitability of, their products and services; litigation and regulatory proceedings, including any proceedings that may be instituted against SLB or ChampionX related to the proposed transaction; failure to effectively and timely address energy transitions that could adversely affect the businesses of SLB or ChampionX, results of operations, and cash flows of SLB or ChampionX; and disruptions of SLB’s or ChampionX’s information technology systems.

These risks, as well as other risks related to the proposed transaction, are included in the Form S-4 and proxy statement/prospectus that was filed with the SEC in connection with the proposed transaction. While the list of factors presented here is, and the list of factors presented in the registration statement on Form S-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to SLB’s and ChampionX’s respective periodic reports and other filings with the SEC, including the risk factors identified in SLB’s and ChampionX’s Annual Reports on Form 10-K, respectively, and SLB’s and ChampionX’s subsequent Quarterly Reports on Form 10-Q. The forward-looking statements included in this communication are made only as of the date hereof. Neither SLB nor ChampionX undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

Investor Contact: Byron Pope
byron.pope@championx.com
281-602-0094

Media Contact: John Breed
john.breed@championx.com
281-403-5751

CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

	Three Months Ended									Years Ended
	Dec 31,			Sep 30,			Dec 31,			December 31,
(in thousands, except per share amounts)		2024			2024			2023			2024			2023
Revenue	$	912,037		$	906,533		$	943,555		$	3,633,983		$	3,758,285
Cost of goods and services		600,154			608,764			661,337			2,445,281			2,618,646
Gross profit		311,883			297,769			282,218			1,188,702			1,139,639
Selling, general and administrative expense		184,722			180,501			147,415			720,632			633,032
(Gain) loss on sale-leaseback transaction and disposal group		—			57			—			(29,826	)		12,965
Interest expense, net		12,375			14,137			13,808			55,868			54,562
Foreign currency transaction losses (gains), net		1,697			3,505			14,651			2,490			36,334
Other income, net		(5,026	)		(2,176	)		(7,584	)		(3,337	)		(21,078	)
Income before income taxes		118,115			101,745			113,928			442,875			423,824
Provision for income taxes		33,204			28,078			35,771			115,746			105,105
Net income		84,911			73,667			78,157			327,129			318,719
Net income attributable to noncontrolling interest		2,145			1,659			959			6,863			4,481
Net income attributable to ChampionX	$	82,766		$	72,008		$	77,198		$	320,266		$	314,238

Earnings per share attributable to ChampionX:
Basic	$	0.43		$	0.38		$	0.40		$	1.68		$	1.60
Diluted	$	0.43		$	0.37		$	0.39		$	1.65		$	1.57

Weighted-average shares outstanding:
Basic		190,586			190,496			193,191			190,578			196,083
Diluted		193,487			193,362			196,649			193,643			199,906

CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	December 31,
(in thousands)		2024			2023
Assets
Current Assets:
Cash and cash equivalents	$	507,681		$	288,557
Receivables, net		466,782			534,534
Inventories, net		496,831			521,549
Prepaid expenses and other current assets		92,603			80,777
Total current assets		1,563,897			1,425,417

Property, plant and equipment, net		755,422			773,552
Goodwill		718,944			669,064
Intangible assets, net		258,614			243,553
Other non-current assets		173,375			130,116
Total assets	$	3,470,252		$	3,241,702

Liabilities
Current portion of long-term debt	$	6,203		$	6,203
Accounts payable		455,531			451,680
Other current liabilities		324,138			324,866
Total current liabilities		785,872			782,749

Long-term debt		591,453			594,283
Other long-term liabilities		261,749			203,639
Stockholders’ equity:
ChampionX stockholders’ equity		1,846,437			1,676,622
Noncontrolling interest		(15,259	)		(15,591	)
Total liabilities and equity	$	3,470,252		$	3,241,702

CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	Years Ended December 31,
(in thousands)		2024			2023
Cash flows from operating activities:
Net income	$	327,129		$	318,719
Depreciation and amortization		245,825			235,936
(Gain) loss on sale-leaseback transaction and disposal group		(29,826	)		12,965
Loss on Argentina Blue Chip Swap transaction		7,086			—
Deferred income taxes		(22,873	)		(22,272	)
(Gain) on disposal of fixed assets		(443	)		(1,046	)
Receivables		76,569			70,021
Inventories		(8,924	)		18,753
Accounts payable		(399	)		(53,891	)
Other assets		(15,152	)		20,395
Leased assets		(33,767	)		(51,247	)
Other operating items, net		44,456			(8,062	)
Net cash provided by operating activities		589,681			540,271

Cash flows from investing activities:
Capital expenditures		(141,310	)		(142,324	)
Proceeds from sale of fixed assets		12,113			14,545
Proceeds from sale-leaseback transaction		44,292			—
Purchase of investments		(31,526	)		—
Sale of investments		24,358			—
Acquisitions, net of cash acquired		(123,269	)		—
Net cash used for investing activities		(215,342	)		(127,779	)

Cash flows from financing activities:
Proceeds from long-term debt		—			15,500
Repayment of long-term debt		(6,203	)		(45,176	)
Repurchases of common stock		(49,399	)		(277,575	)
Dividends paid		(70,531	)		(64,980	)
Other		(24,324	)		(934	)
Net cash used for financing activities		(150,457	)		(373,165	)

Effect of exchange rate changes on cash and cash equivalents		(4,758	)		(957	)

Net increase in cash and cash equivalents		219,124			38,370
Cash and cash equivalents at beginning of period		288,557			250,187
Cash and cash equivalents at end of period	$	507,681		$	288,557

CHAMPIONX CORPORATION
BUSINESS SEGMENT DATA
(UNAUDITED)

	Three Months Ended									Years Ended
	Dec 31,			Sep 30,			Dec 31,			December 31,
(in thousands)		2024			2024			2023			2024			2023
Segment revenue:
Production Chemical Technologies	$	569,662		$	559,539		$	634,137		$	2,288,886		$	2,404,377
Production & Automation Technologies		269,568			275,700			241,294			1,042,369			1,003,146
Drilling Technologies		51,942			51,792			46,821			211,828			215,721
Reservoir Chemical Technologies		21,937			20,531			21,402			94,296			96,154
Corporate and other		(1,072	)		(1,029	)		(99	)		(3,396	)		38,887
Total revenue	$	912,037		$	906,533		$	943,555		$	3,633,983		$	3,758,285

Income (loss) before income taxes:
Segment operating profit (loss):
Production Chemical Technologies	$	103,567		$	87,260		$	102,179		$	364,047		$	350,216
Production & Automation Technologies		39,027			34,136			22,110			123,840			118,409
Drilling Technologies		10,703			11,501			8,679			78,469			45,481
Reservoir Chemical Technologies		2,294			1,675			3,907			12,078			10,541
Total segment operating profit		155,591			134,572			136,875			578,434			524,647
Corporate and other		25,101			18,690			9,139			79,691			46,261
Interest expense, net		12,375			14,137			13,808			55,868			54,562
Income before income taxes	$	118,115		$	101,745		$	113,928		$	442,875		$	423,824

Operating profit margin / income (loss) before income taxes margin:
Production Chemical Technologies		18.2	%		15.6	%		16.1	%		15.9	%		14.6	%
Production & Automation Technologies		14.5	%		12.4	%		9.2	%		11.9	%		11.8	%
Drilling Technologies		20.6	%		22.2	%		18.5	%		37.0	%		21.1	%
Reservoir Chemical Technologies		10.5	%		8.2	%		18.3	%		12.8	%		11.0	%
ChampionX Consolidated		13.0	%		11.2	%		12.1	%		12.2	%		11.3	%

Adjusted EBITDA
Production Chemical Technologies	$	133,475		$	120,622		$	139,107		$	489,549		$	506,991
Production & Automation Technologies		70,739			69,604			52,800			259,531			232,672
Drilling Technologies		12,321			12,867			10,361			54,411			51,986
Reservoir Chemical Technologies		3,751			3,292			5,501			18,343			18,498
Corporate and other		(8,021	)		(8,873	)		(9,624	)		(37,112	)		(38,926	)
Adjusted EBITDA	$	212,265		$	197,512		$	198,145		$	784,722		$	771,221

Adjusted EBITDA margin
Production Chemical Technologies		23.4	%		21.6	%		21.9	%		21.4	%		21.1	%
Production & Automation Technologies		26.2	%		25.2	%		21.9	%		24.9	%		23.2	%
Drilling Technologies		23.7	%		24.8	%		22.1	%		25.7	%		24.1	%
Reservoir Chemical Technologies		17.1	%		16.0	%		25.7	%		19.5	%		19.2	%
ChampionX Consolidated		23.3	%		21.8	%		21.0	%		21.6	%		20.5	%

CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

	Three Months Ended									Years Ended
	Dec 31,			Sep 30,			Dec 31,			December 31,
(in thousands)		2024			2024			2023			2024			2023
Net income attributable to ChampionX	$	82,766		$	72,008		$	77,198		$	320,266		$	314,238
Pre-tax adjustments:
(Gain) loss on sale-leaseback transaction and disposal group⁽¹⁾		—			57			—			(29,826	)		12,965
Russia sanctions compliance and impacts⁽²⁾		73			109			160			366			1,209
Restructuring and other related charges		2,704			5,317			2,407			17,657			13,387
Merger transaction costs⁽³⁾		14,434			8,312			—			37,805			245
Acquisition costs and related adjustments⁽⁴⁾		75			753			(6,817	)		2,634			(12,670	)
Intellectual property defense		158			69			638			1,537			1,545
Merger-related indemnification responsibility⁽⁵⁾		100			—			—			100			722
Tulsa, Oklahoma storm damage		—			—			660			305			3,162
Foreign currency transaction losses, net		1,697			3,505			14,651			2,490			36,334
Loss on Argentina Blue Chip Swap transaction		—			—			—			7,086			—
Tax impact of adjustments		(5,565	)		(4,259	)		(2,600	)		(10,480	)		(12,650	)
Adjusted net income attributable to ChampionX		96,442			85,871			86,297			349,940			358,487
Tax impact of adjustments		5,565			4,259			2,600			10,480			12,650
Net income attributable to noncontrolling interest		2,145			1,659			959			6,863			4,481
Depreciation and amortization		62,534			63,508			58,710			245,825			235,936
Provision for income taxes		33,204			28,078			35,771			115,746			105,105
Interest expense, net		12,375			14,137			13,808			55,868			54,562
Adjusted EBITDA	$	212,265		$	197,512		$	198,145		$	784,722		$	771,221

_______________________

(1)	Amounts represents the and the gain on the sale and leaseback of certain buildings and land during 2024. For the year ended December 31, 2023, the loss recorded to properly adjust the carrying value of our Chemical Technologies operations in Russia to the lower of carrying value or fair value less costs to sell .
(2)	Includes charges incurred related to legal and professional fees to comply with, as well as additional foreign currency exchange losses associated with, the sanctions imposed in Russia.
(3)	Includes costs incurred during 2024 in relation to the Merger Agreement with Schlumberger Limited, including third party legal and professional fees.
(4)	Includes costs incurred for the acquisition of businesses and revenue associated with the amortization of a liability established as part of the merger transaction with Ecolab Inc. (“Ecolab”) to acquire the Chemical Technologies business, representing unfavorable terms under the Cross Supply Agreement, as well as costs incurred for the acquisition of businesses. During the fourth quarter of 2023, we recorded a fair value adjustment to contingent consideration on a prior acquisition as well as the settlement of an item pursuant to the tax matters agreement with Ecolab.
(5)	Expense related to the June 3, 2020 merger transaction with Ecolab in which we acquired the Chemical Technologies business.

	Three Months Ended									Years Ended
	Dec 31,			Sep 30,			Dec 31,			December 31,
(in thousands)		2024			2024			2023			2024			2023
Diluted earnings per share attributable to ChampionX	$	0.43		$	0.37		$	0.39		$	1.65		$	1.57
Per share adjustments:
(Gain) loss on sale-leaseback transaction and disposal group		—			—			—			(0.15	)		0.06
Russia sanctions compliance and impacts		—			—			—						—
Restructuring and other related charges		0.01			0.03			0.01			0.09			0.07
Merger transaction costs		0.07			0.04			—			0.20			—
Acquisition costs and related adjustments		—			—			(0.03	)		0.01			(0.06	)
Intellectual property defense		—			—			—			0.01			0.01
Merger-related indemnification responsibility		—			—			—			—			—
Tulsa, Oklahoma storm damage		—			—			0.01			—			0.02
Foreign currency transaction losses		0.01			0.02			0.07			0.01			0.18
Loss on Argentina Blue Chip Swap transaction		—			—			—			0.04			—
Tax impact of adjustments		(0.02	)		(0.02	)		(0.01	)		(0.05	)		(0.06	)
Adjusted diluted earnings per share attributable to ChampionX	$	0.50		$	0.44		$	0.44		$	1.81		$	1.79

CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

	Three Months Ended									Years Ended
	Dec 31,			Sep 30,			Dec 31,			December 31,
(in thousands)		2024			2024			2023			2024			2023
Production Chemical Technologies
Segment operating profit	$	103,567		$	87,260		$	102,179		$	364,047		$	350,216
Non-GAAP adjustments		2,251			7,073			11,194			19,108			51,717
Depreciation and amortization		27,657			26,289			25,734			106,394			105,058
Segment adjusted EBITDA	$	133,475		$	120,622		$	139,107		$	489,549		$	506,991

Production & Automation Technologies
Segment operating profit	$	39,027		$	34,136		$	22,110		$	123,840		$	118,409
Non-GAAP adjustments		75			1,656			1,231			9,807			5,246
Depreciation and amortization		31,637			33,812			29,459			125,884			109,017
Segment adjusted EBITDA	$	70,739		$	69,604		$	52,800		$	259,531		$	232,672

Drilling Technologies
Segment operating profit	$	10,703		$	11,501		$	8,679		$	78,469		$	45,481
Non-GAAP adjustments		306			54			109			(29,523	)		313
Depreciation and amortization		1,312			1,312			1,573			5,465			6,192
Segment adjusted EBITDA	$	12,321		$	12,867		$	10,361		$	54,411		$	51,986

Reservoir Chemical Technologies
Segment operating profit	$	2,294		$	1,675		$	3,907		$	12,078		$	10,541
Non-GAAP adjustments		39			3			4			69			1,486
Depreciation and amortization		1,418			1,614			1,590			6,196			6,471
Segment adjusted EBITDA	$	3,751		$	3,292		$	5,501		$	18,343		$	18,498

Corporate and other
Segment operating profit	$	(37,476	)	$	(32,827	)	$	(22,947	)	$	(135,559	)	$	(100,823	)
Non-GAAP adjustments		16,570			9,336			(839	)		40,693			(1,863	)
Depreciation and amortization		510			481			354			1,886			9,198
Interest expense, net		12,375			14,137			13,808			55,868			54,562
Segment adjusted EBITDA	$	(8,021	)	$	(8,873	)	$	(9,624	)	$	(37,112	)	$	(38,926	)

Free Cash Flow

	Three Months Ended									Years Ended
	Dec 31,			Sep 30,			Dec 31,			December 31,
(in thousands)		2024			2024			2023			2024			2023
Free Cash Flow
Cash provided by operating activities	$	207,250		$	141,298		$	168,953		$	589,681		$	540,271
Less: Capital expenditures, net of proceeds from sale of fixed assets		(37,117	)		(33,248	)		(29,142	)		(129,197	)		(127,779	)
Free cash flow	$	170,133		$	108,050		$	139,811		$	460,484		$	412,492

Cash From Operating Activities to Revenue Ratio
Cash provided by operating activities	$	207,250		$	141,298		$	168,953		$	589,681		$	540,271
Revenue	$	912,037		$	906,533		$	943,555		$	3,633,983		$	3,758,285

Cash from operating activities to revenue ratio		23	%		16	%		18	%		16	%		14	%

Free Cash Flow to Revenue Ratio
Free cash flow	$	170,133		$	108,050		$	139,811		$	460,484		$	412,492
Revenue	$	912,037		$	906,533		$	943,555		$	3,633,983		$	3,758,285

Free cash flow to revenue ratio		19	%		12	%		15	%		13	%		11	%

Free Cash Flow to Adjusted EBITDA Ratio
Free cash flow	$	170,133		$	108,050		$	139,811		$	460,484		$	412,492
Adjusted EBITDA	$	212,265		$	197,512		$	198,145		$	784,722		$	771,221

Free cash flow to adjusted EBITDA ratio		80	%		55	%		71	%		59	%		53	%

The MIL Network –

February 5, 2025

MIL-OSI: Enact Reports Fourth Quarter and Full Year 2024 Results and Announces Quarterly Dividend

Source: GlobeNewswire (MIL-OSI)

GAAP Net Income of $163 million, or $1.05 per diluted share
Adjusted Operating Income of $169 million, or $1.09 per diluted share
Return on Equity of 13.0% and Adjusted Operating Return on Equity of 13.5%
Record Primary insurance in-force of $269 billion, a 2% increase from fourth quarter 2023
PMIERs Sufficiency of 167% or $2,052 million
Book Value Per Share of $32.80 and Book Value Per Share excluding AOCI of $34.16
Returned over $350 million of capital to shareholders in 2024
Announces quarterly cash dividend of $0.185 per common share

RALEIGH, N.C., Feb. 04, 2025 (GLOBE NEWSWIRE) — Enact Holdings, Inc. (Nasdaq: ACT) today announced its fourth quarter and full-year 2024 results.

“Our very strong performance in 2024 underscores the effectiveness of our strategy and the continued successful execution of our priorities,” stated Rohit Gupta, President and CEO of Enact. “In a complex economic environment, we responsibly grew our portfolio, drove operational efficiencies, maintained a strong balance sheet and generated meaningful capital returns to our shareholders. As we look to the future, our proven strategy and disciplined execution position us well to realize the opportunities ahead and to create long-term value for our stakeholders.”

Key Financial Highlights

(In millions, except per share data or otherwise noted)	4Q24	3Q24	4Q23	2024	2023
Net Income (loss)	$163	$181	$157	$688	$666
Diluted Net Income (loss) per share	$1.05	$1.15	$0.98	$4.37	$4.11
Adjusted Operating Income (loss)	$169	$182	$158	$718	$676
Adj. Diluted Operating Income (loss) per share	$1.09	$1.16	$0.98	$4.56	$4.18
NIW ($B)	$13	$14	$10	$51	$53
Primary IIF ($B)	$269	$268	$263
Primary Persistency Rate	82%	83%	86%	83%	85%
Net Premiums Earned	$246	$249	$240	$980	$957
Losses Incurred	$24	$12	$24	$39	$27
Loss Ratio	10%	5%	10%	4%	3%
Operating Expenses	$58	$56	$59	$223	$223
Expense Ratio	24%	22%	25%	23%	23%
Net Investment Income	$63	$61	$56	$241	$207
Net Investment gains (losses)	$(7)	$(1)	$(1)	$(23)	$(14)
Return on Equity	13.0%	14.7%	13.8%	14.3%	15.2%
Adjusted Operating Return on Equity	13.5%	14.8%	13.9%	14.9%	15.5%
PMIERs Sufficiency ($)	$2,052	$2,190	$1,887
PMIERs Sufficiency (%)	167%	173%	161%

Fourth Quarter 2024 Financial and Operating Highlights

Net income was $163 million, or $1.05 per diluted share, compared with $181 million, or $1.15 per diluted share, for the third quarter of 2024 and $157 million, or $0.98 per diluted share, for the fourth quarter of 2023. Adjusted operating income was $169 million, or $1.09 per diluted share, compared with $182 million, or $1.16 per diluted share, for the third quarter of 2024 and $158 million, or $0.98 per diluted share, for the fourth quarter of 2023.
New insurance written (NIW) was approximately $13 billion, down 2% from the third quarter of 2024 primarily from seasonality partially offset by an estimated increase in refinance originations and up 27% from the fourth quarter of 2023 primarily driven by estimated higher originations. NIW for the current quarter was comprised of 96% monthly premium policies and 86% purchase originations.
Primary insurance in-force (IIF) was a record $269 billion, up from $268 billion in the third quarter of 2024 and up 2% from $263 billion in the fourth quarter of 2023.
Persistency remained elevated at 82%, down slightly from 83% in the third quarter of 2024 and down from 86% in the fourth quarter of 2023. The decrease year-over-year was primarily driven by a decline in mortgage rates in September 2024. Approximately 70% of our IIF had mortgage rates below 6%.
Net premiums earned were $246 million, down 1% from $249 million in the third quarter of 2024 and up 2% from $240 million in the fourth quarter of 2023. Net premiums decreased sequentially, primarily driven by higher ceded premiums and increased year over year driven by premium growth from attractive adjacencies and growth in primary insurance in-force, partially offset by higher ceded premiums.
Losses incurred for the fourth quarter of 2024 were $24 million and the loss ratio was 10%, compared to $12 million and 5%, respectively, in the third quarter of 2024 and $24 million and 10%, respectively, in the fourth quarter of 2023. The current quarter reserve release of $56 million from favorable cure performance and loss mitigation activities compares to a reserve release of $65 million and $53 million in the third quarter of 2024 and fourth quarter of 2023, respectively. The sequential increase in losses and the loss ratio were primarily driven by a lower reserve release and new delinquencies are up 1% excluding hurricane-related delinquencies.
Operating expenses in the current quarter were $58 million and the expense ratio was 24%. This compared to $56 million and 22%, respectively, in the third quarter of 2024 and $59 million and 25%, respectively in the fourth quarter of 2023. The sequential increase was driven by incentive-based compensation while the year-over-year decrease was driven in part by the impact of our cost reduction initiatives.
Net investment income was $63 million, up from $61 million in the third quarter of 2024 and $56 million in the fourth quarter of 2023, driven by the continuation of elevated interest rates and higher average invested assets.
Net investment loss in the quarter was $(7) million, as compared to $(1) million sequentially and $(1) million in the same period last year. The current period was primarily driven by the identification of assets that upon selling allow us to recoup losses through higher net investment income.
Annualized return on equity for the fourth quarter of 2024 was 13.0% and annualized adjusted operating return on equity was 13.5%. This compares to third quarter 2024 results of 14.7% and 14.8%, respectively, and to fourth quarter 2023 results of 13.8% and 13.9%, respectively.

Capital and Liquidity

We returned $354 million to shareholders in 2024 inclusive of quarterly dividends and share repurchases.
During the quarter, we announced two quota share reinsurance agreements with a panel of highly-rated reinsurers that will cede approximately 27% of a portion of expected new insurance written for the 2025 and 2026 book years.
As previously announced, we paid approximately $28 million, or $0.185 per share, dividend in the fourth quarter.
For the full year 2024, we repurchased 7.6 million shares at a weighted average share price of $31.95 for a total of $243 million.
EMICO completed a distribution of approximately $230 million in the fourth quarter that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility.
Enact Holdings, Inc. held $243 million of cash and cash equivalents plus $298 million of invested assets as of December 31, 2024. Combined cash and invested assets increased $98 million from the prior quarter, primarily due to a contribution from EMICO, partially offset by share buybacks and our quarterly dividend.
PMIERs sufficiency was 167% and $2.1 billion above the PMIERs requirements, compared to 173% and $2.2 billion above the PMIERs requirements in the third quarter of 2024.

Recent Events

In January 2025, Fitch Ratings (“Fitch”) upgraded the Insurer Financial Strength rating for EMICO to A from A- and also upgraded Enact’s senior debt rating to BBB. The outlook for both ratings is stable.
Subsequent to quarter end, we announced two excess of loss reinsurance agreements with a panel of highly rated reinsurers that will provide ~$225M and ~$260M of coverage on a portion of expected new insurance written for the 2025 and 2026 book years, respectively.
We repurchased approximately 2.1 million shares at an average price of $34.75 for a total of approximately $74 million in the quarter. Additionally, through January 31, 2024, we repurchased 0.6 million shares at an average price of $32.60 for a total of $19 million. There remains approximately $74 million of our $250 million repurchase authorization.
We announced today that the Board of Directors declared a quarterly dividend of $0.185 per common share, payable on March 14, 2025, to shareholders of record on February 21, 2025.

Conference Call and Financial Supplement Information
This press release, the fourth quarter 2024 financial supplement and earnings presentation are now posted on the Company’s website, https://ir.enactmi.com. Investors are encouraged to review these materials.

Enact will discuss third quarter financial results in a conference call tomorrow, Wednesday, February 5, 2025, at 8:00 a.m. (Eastern). Participants interested in joining the call’s live question and answer session are required to pre-register by clicking here to obtain your dial-in number and unique PIN. It is recommended to join at least 15 minutes in advance, although you may register ahead of the call and dial in at any time during the call. If you wish to join the call but do not plan to ask questions, a live webcast of the event will be available on our website, https://ir.enactmi.com/news-and-events/events.

The webcast will also be archived on the Company’s website for one year.

About Enact
Enact (Nasdaq: ACT), operating principally through its wholly-owned subsidiary Enact Mortgage Insurance Corporation since 1981, is a leading U.S. private mortgage insurance provider committed to helping more people achieve the dream of homeownership. Building on a deep understanding of lenders’ businesses and a legacy of financial strength, we partner with lenders to bring best-in class service, leading underwriting expertise, and extensive risk and capital management to the mortgage process, helping to put more people in homes and keep them there. By empowering customers and their borrowers, Enact seeks to positively impact the lives of those in the communities in which it serves in a sustainable way. Enact is headquartered in Raleigh, North Carolina.

Safe Harbor Statement
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, guidance concerning the future return of capital and the quotations of management. These forward-looking statements are distinguished by use of words such as “will,” “may,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “predict,” “project,” “target,” “could,” “should,” or “intend,” the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. Our forward-looking statements contained herein speak only as of the date of this press release. Factors or events that we cannot predict, including risks related to an economic downturn or a recession in the United States and in other countries around the world; changes in political, business, regulatory, and economic conditions; changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs, including those offered by the Federal Housing Administration; and other factors described in the risk factors contained in our most recent Annual Report on Form 10-K and other filings with the SEC, may cause our actual results to differ from those expressed in forward-looking statements. Although Enact believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, Enact can give no assurance that its expectations will be achieved and it undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

GAAP/Non-GAAP Disclosure Discussion
This communication includes the non-GAAP financial measures entitled “adjusted operating income (loss)”, “adjusted operating income (loss) per share,” and “adjusted operating return on equity.” Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates performance and allocates resources on the basis of adjusted operating income (loss). Enact Holdings, Inc. (the “Company”) defines adjusted operating income (loss) as net income (loss) excluding the after-tax effects of net investment gains (losses), restructuring costs and infrequent or unusual non-operating items, and gain (loss) on the extinguishment of debt. The Company excludes net investment gains (losses), gains (losses) on the extinguishment of debt and infrequent or unusual non-operating items because the Company does not consider them to be related to the operating performance of the Company and other activities. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities or exposure management. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized gains and losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted operating income. In addition, adjusted operating income (loss) per share is derived from adjusted operating income (loss) divided by shares outstanding. Adjusted operating return on equity is calculated as annualized adjusted operating income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity.

While some of these items may be significant components of net income (loss) in accordance with U.S. GAAP, the Company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis and adjusted operating return on equity, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Enact Holdings, Inc.’s common stockholders or net income (loss) available to Enact Holdings, Inc.’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the Company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.

Adjustments to reconcile net income (loss) available to Enact Holdings, Inc.’s common stockholders to adjusted operating income (loss) assume a 21% tax rate.

The tables at the end of this press release provide a reconciliation of net income (loss) to adjusted operating income (loss) and U.S. GAAP return on equity to adjusted operating return on equity for the three months and twelve months ending December 31, 2024 and 2023, as well as for the three months ended September 30, 2024

Exhibit A: Consolidated Statements of Income (amounts in thousands, except per share amounts)

	4Q24		3Q24		4Q23			2024		2023
REVENUES:
Premiums	$245,735		$249,055		$240,101		$980,104		$957,075
Net investment income		62,624		61,056		56,161		240,564		207,369
Net investment gains (losses)		(7,167)		(1,243)		(876)		(22,807)		(14,022)
Other income		584		720		804		3,913		3,264
Total revenues		301,776		309,588		296,190		1,201,774		1,153,686

LOSSES AND EXPENSES:
Losses incurred		23,813		12,164		24,372		38,657		27,165
Acquisition and operating expenses, net of deferrals		55,325		53,091		56,560		213,310		212,491
Amortization of deferred acquisition costs and intangibles		2,522		2,586		2,566		9,659		10,654
Interest expense		12,262		12,290		12,948		51,157		51,867
Loss on debt extinguishment		0		0		0		10,930		0
Total losses and expenses		93,922		80,131		96,446		323,713		302,177

INCOME BEFORE INCOME TAXES		207,854		229,457		199,744		878,061		851,509
Provision for income taxes		45,116		48,788		42,436		189,993		185,998
NET INCOME	$162,738		$180,669		$157,308		$688,068		$665,511

Net investment (gains) losses		7,167		1,243		876		22,807		14,022
Costs associated with reorganization		411		848		408		4,652		(131)
Loss on debt extinguishment		0		0		0		10,930		0
Taxes on adjustments		(1,591)		(439)		(270)		(8,061)		(2,917)
Adjusted Operating Income	$168,725		$182,321		$158,322		$718,396		$676,485

Loss ratio ⁽¹⁾		10%		5%		10%		4%		3%
Expense ratio ⁽²⁾		24%		22%		25%		23%		23%
Earnings Per Share Data:
Net Income per share
Basic	$1.06		$1.16		$0.99		$4.40		$4.14
Diluted	$1.05		$1.15		$0.98		$4.37		$4.11
Adj operating income per share
Basic	$1.10		$1.17		$0.99		$4.60		$4.21
Diluted	$1.09		$1.16		$0.98		$4.56		$4.18
Weighted-average common shares outstanding
Basic		153,537		155,561		159,655		156,277		160,870
Diluted		154,542		157,016		160,895		157,554		161,847

⁽¹⁾ The ratio of losses incurred to net earned premiums.
⁽²⁾ The ratio of acquisition and operating expenses, net of deferrals, and amortization of deferred acquisition costs and intangibles to net earned premiums. Expenses associated with strategic transaction preparations and restructuring costs increased the expense ratio by one percentage point for the three-month period ended December 31, 2024, and zero percentage points for the three-month periods ended September 30, 2024, and December 31, 2023. Expenses associated with strategic transaction preparations and restructuring costs increased the expense ratio by one percentage point for the year ended December 31, 2024 and zero percentage points for the year ended December 31, 2023.

Exhibit B: Consolidated Balance Sheets (amounts in thousands, except per share amounts)

Assets	4Q24		3Q24		4Q23
Investments:
Fixed maturity securities available-for-sale, at fair value	$5,624,773		$5,652,399		$5,266,141
Short term investments		3,367		1,550		20,219
Total investments		5,628,140		5,653,949		5,286,360
Cash and cash equivalents		599,432		673,363		615,683
Accrued investment income		49,595		45,954		41,559
Deferred acquisition costs		23,771		24,160		25,006
Premiums receivable		53,031		48,834		45,070
Other assets		102,549		100,723		88,306
Deferred tax asset		65,013		50,063		88,489
Total assets	$6,521,531		$6,597,046		$6,190,473

Liabilities and Shareholders’ Equity
Liabilities:
Loss reserves	$524,715		$510,401		$518,191
Unearned premiums		114,680		121,382		149,330
Other liabilities		142,990		186,312		145,189
Long-term borrowings		743,050		742,706		745,416
Total liabilities		1,525,435		1,560,801		1,558,126
Equity:
Common stock		1,523		1,544		1,593
Additional paid-in capital		2,076,788		2,145,518		2,310,891
Accumulated other comprehensive income		(207,455)		(101,984)		(230,400)
Retained earnings		3,125,240		2,991,167		2,550,263
Total equity		4,996,096		5,036,245		4,632,347
Total liabilities and equity	$6,521,531		$6,597,046		$6,190,473

Book value per share	$32.80		$32.61		$29.07
Book value per share excluding AOCI	$34.16		$33.27		$30.52

U.S. GAAP ROE ⁽¹⁾		13.0%		14.7%		13.8%
Net investment (gains) losses		0.6%		0.1%		0.1%
Costs associated with reorganization		0.0%		0.1%		0.0%
(Gains) losses on early extinguishment of debt		0.0%		0.0%		0.0%
Taxes on adjustments	(0.1)%			0.0%		0.0%
Adjusted Operating ROE⁽²⁾		13.5%		14.8%		13.9%

Debt to Capital Ratio		13%		13%		14%

⁽¹⁾ Calculated as annualized net income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity
⁽²⁾ Calculated as annualized adjusted operating income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity

This press release was published by a CLEAR® Verified individual.

The MIL Network –

February 5, 2025

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

Source: GlobeNewswire (MIL-OSI)

SANTA CLARA, Calif., Feb. 04, 2025 (GLOBE NEWSWIRE) — AMD (NASDAQ:AMD) today announced financial results for the fourth quarter and full year of 2024. Fourth quarter revenue was a record $7.7 billion, gross margin was 51%, operating income was $871 million, net income was $482 million and diluted earnings per share was $0.29. On a non-GAAP^(*) basis, gross margin was 54%, operating income was a record $2.0 billion, net income was a record $1.8 billion and diluted earnings per share was $1.09.

For the full year 2024, AMD reported record revenue of $25.8 billion, gross margin of 49%, operating income of $1.9 billion, net income of $1.6 billion, and diluted earnings per share of $1.00. On a non-GAAP^(*) basis, gross margin was a record 53%, operating income was $6.1 billion, net income was $5.4 billion and diluted earnings per share was $3.31.

“2024 was a transformative year for AMD as we delivered record annual revenue and strong earnings growth,” said AMD Chair and CEO Dr. Lisa Su. “Data Center segment annual revenue nearly doubled as EPYC processor adoption accelerated and we delivered more than $5 billion of AMD Instinct accelerator revenue. Looking into 2025, we see clear opportunities for continued growth based on the strength of our product portfolio and growing demand for high-performance and adaptive computing.”

“We closed 2024 with a strong fourth quarter, delivering record revenue up 24% year-over-year, and accelerated earnings expansion while investing aggressively in AI and innovation to position us for long-term growth and value creation,” said AMD EVP, CFO and Treasurer Jean Hu.

GAAP Quarterly Financial Results

	Q4 2024	Q4 2023	Y/Y	Q3 2024	Q/Q
Revenue ($M)	$7,658	$6,168	Up 24%	$6,819	Up 12%
Gross profit ($M)	$3,882	$2,911	Up 33%	$3,419	Up 14%
Gross margin	51%	47%	Up 4 ppts	50%	Up 1%
Operating expenses ($M)	$3,022	$2,575	Up 17%	$2,709	Up 12%
Operating income ($M)	$871	$342	Up 155%	$724	Up 20%
Operating margin	11%	6%	Up 5 ppts	11%	Flat
Net income ($M)	$482	$667	Down 28%	$771	Down 37%
Diluted earnings per share	$0.29	$0.41	Down 29%	$0.47	Down 38%

Non-GAAP(*) Quarterly Financial Results

	Q4 2024	Q4 2023	Y/Y	Q3 2024	Q/Q
Revenue ($M)	$7,658	$6,168	Up 24%	$6,819	Up 12%
Gross profit ($M)	$4,140	$3,133	Up 32%	$3,657	Up 13%
Gross margin	54%	51%	Up 3 ppts	54%	Flat
Operating expenses ($M)	$2,125	$1,727	Up 23%	$1,956	Up 9%
Operating income ($M)	$2,026	$1,412	Up 43%	$1,715	Up 18%
Operating margin	26%	23%	Up 3 ppts	25%	Up 1 ppt
Net income ($M)	$1,777	$1,249	Up 42%	$1,504	Up 18%
Diluted earnings per share	$1.09	$0.77	Up 42%	$0.92	Up 18%

Annual Financial Results

	GAAP			Non-GAAP^(*)
	2024	2023	Y/Y	2024	2023	Y/Y
Revenue ($M)	$25,785	$22,680	Up 14%	$25,785	$22,680	Up 14%
Gross profit ($M)	$12,725	$10,460	Up 22%	$13,759	$11,436	Up 20%
Gross margin %	49%	46%	Up 3 ppts	53%	50%	Up 3 ppts
Operating expenses ($M)	$10,873	$10,093	Up 8%	$7,669	$6,616	Up 16%
Operating income ($M)	$1,900	$401	Up 374%	$6,138	$4,854	Up 26%
Operating margin %	7%	2%	Up 5 ppts	24%	21%	Up 3 ppts
Net income ($M)	$1,641	$854	Up 92%	$5,420	$4,302	Up 26%
Diluted earnings per share	$1.00	$0.53	Up 89%	$3.31	$2.65	Up 25%

Segment Summary

Data Center segment revenue in the quarter was a record $3.9 billion, up 69% year-over-year primarily driven by the strong ramp of AMD Instinct™ GPU shipments and growth in AMD EPYC™ CPU sales.
- For 2024, Data Center segment revenue was a record $12.6 billion, an increase of 94% compared to the prior year, driven by growth in both AMD Instinct and EPYC processors.
Client segment revenue in the quarter was a record $2.3 billion, up 58% year-over-year primarily driven by strong demand for AMD Ryzen™ processors.
- For 2024, Client segment revenue was a record $7.1 billion, up 52% compared to the prior year, due to strong demand for AMD Ryzen processors in desktop and mobile.
Gaming segment revenue in the quarter was $563 million, down 59% year-over-year, primarily due to a decrease in semi-custom revenue.
- For 2024, Gaming segment revenue was $2.6 billion, down 58% compared to the prior year, primarily due to a decrease in semi-custom revenue.
Embedded segment revenue in the quarter was $923 million, down 13% year-over-year, as end market demand continues to be mixed.
- For 2024, Embedded segment revenue was $3.6 billion, down 33% from the prior year, primarily due to customers normalizing their inventory levels.

Recent PR Highlights

AMD continues expanding its partnerships to deliver highly performant AI infrastructure at scale:
- IBM announced plans to deploy AMD Instinct MI300X accelerators to power generative AI and HPC applications on IBM Cloud.
- Vultr and AMD announced a strategic collaboration to leverage AMD Instinct MI300X accelerators and AMD ROCm™ open software to power Vultr’s cloud infrastructure for enterprise AI development and deployment.
- Aleph Alpha announced that it will leverage AMD Instinct MI300 Series accelerators and ROCm software to enable its tokenizer-free LLM architecture, a new approach to generative AI that aims to simplify the development of sovereign AI solutions for governments and enterprises.
- Fujitsu and AMD announced a strategic partnership to develop more sustainable computing infrastructure to accelerate open source AI.
- AMD expanded strategic investments to advance the AI ecosystem and solutions, including investments in LiquidAI, Vultr and Absci.

AMD is accelerating its AI software roadmap to deliver a robust open AI stack for the ecosystem:
- AMD released ROCm 6.3 with numerous performance enhancements enabling faster inferencing on AMD Instinct accelerators as well as additional compiler tools and libraries.
- AMD shared an update on its 2025 plans for the ROCm software stack to enable easier adoption of and improved out of box support for both inferencing and training applications.
Dell and AMD announced that AMD Ryzen AI PRO processors will power new Dell Pro notebook and desktop PCs, bringing exceptional battery life, on-device AI, Copilot+ experiences and dependable productivity to enterprise users. For the first time, Dell will offer a full portfolio of commercial PCs based on Ryzen processors, marking a significant milestone in the companies’ collaboration.
AMD expanded its broad consumer and commercial AI PC portfolio:
- New AMD Ryzen AI Max and Ryzen AI Max PRO Series processors deliver workstation-level performance and next-gen AI performance for gaming, content creation and complex AI-accelerated workloads.
- Expanded Ryzen AI 300 and Ryzen AI 300 PRO Series processors bring premium AI capabilities to mainstream and entry-level notebooks, as well as enhanced security, manageability and support for Microsoft Copilot+ experiences tailored for business users.
- Additional Ryzen 200 and Ryzen 200 PRO Series processors offer incredible AI experiences, performance and battery life for everyday users and professionals.
- More than 150 Ryzen AI platforms are expected to be available from leading OEMs this year.
AMD extended its leadership in high performance computing (HPC), enabling the most powerful and many of the most energy efficient supercomputers in the world:
- The El Capitan supercomputer at Lawrence Livermore National Laboratory became the second AMD supercomputer to surpass the exascale barrier, placing #1 on the latest Top500 list.
- The Hunter supercomputer at the High-Performance Computing Center of the University of Stuttgart (HLRS), powered by AMD Instinct MI300A APUs, began service, delivering HPC and AI resources for scientists, researchers, industry and the public sector.
- AMD EPYC processors and AMD Instinct accelerators power many new supercomputing projects and AI deployments, including the Eni HPC 6 system, the University of Paderborn’s latest supercomputer and the Sigma2 AS system which is slated to be the fastest system in Norway.
AMD powers incredible experiences for gamers across a broad range of devices:
- At CES 2025, AMD announced new AMD Ryzen 9000X3D, Ryzen Z2 and Ryzen 9000HX processors, extending its leadership in desktop, mobile and handheld gaming.
- AMD shared the latest version of AMD Software: Adrenalin Edition™, 24.9.1, continuing to enhance gaming experiences with AMD Fluid Motion Frames 2 and AMD HYPR-RX.
AMD continues to deliver leadership compute performance and capabilities at the edge with an expanded portfolio of solutions:
- New AMD Versal™ Gen 2 portfolio with next-generation interface and memory technologies for data-intensive applications in the data center, communications, test and measurement and aerospace and defense markets.
- AMD Versal RF Series adaptive SoCs, combining high-resolution radio frequency data converters, dedicated DSP hard IP, AI engines and programmable logic in a single chip.
- Vodafone and AMD announced they are collaborating on mobile base station silicon chip designs to enable higher-capacity AI and digital services.

Current Outlook

AMD’s outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

For the first quarter of 2025, AMD expects revenue to be approximately $7.1 billion, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 30% and a sequential decline of approximately 7%. Non-GAAP gross margin is expected to be approximately 54%.

AMD Teleconference
AMD will hold a conference call at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter and full year 2024 financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in millions, except per share data) (Unaudited)

	Three Months Ended									Year Ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
GAAP gross profit	$	3,882		$	3,419		$	2,911		$	12,725		$	10,460
GAAP gross margin		51	%		50	%		47	%		49	%		46	%
Stock-based compensation		6			5			6			22			30
Amortization of acquisition-related intangibles		252			233			215			946			942
Acquisition-related and other costs ⁽¹⁾		—			—			1			1			4
Inventory loss at contract manufacturer ⁽²⁾		—			—			—			65			—
Non-GAAP gross profit	$	4,140		$	3,657		$	3,133		$	13,759		$	11,436
*Non-GAAP gross margin*		54	%		54	%		51	%		53	%		50	%

GAAP operating expenses	$	3,022		$	2,709		$	2,575		$	10,873		$	10,093
GAAP operating expenses/revenue %		39	%		40	%		42	%		42	%		45	%
Stock-based compensation		333			346			368			1,385			1,350
Amortization of acquisition-related intangibles		332			352			420			1,448			1,869
Acquisition-related and other costs ⁽¹⁾		46			55			60			185			258
Restructuring charges ⁽³⁾		186			—			—			186			—
Non-GAAP operating expenses	$	2,125		$	1,956		$	1,727		$	7,669		$	6,616
*Non-GAAP operating expenses/revenue %*		28	%		29	%		28	%		30	%		29	%

GAAP operating income	$	871		$	724		$	342		$	1,900		$	401
GAAP operating margin		11	%		11	%		6	%		7	%		2	%
Stock-based compensation		339			351			374			1,407			1,380
Amortization of acquisition-related intangibles		584			585			635			2,394			2,811
Acquisition-related and other costs ⁽¹⁾		46			55			61			186			262
Inventory loss at contract manufacturer ⁽²⁾		—			—			—			65			—
Restructuring charges ⁽³⁾		186			—			—			186			—
Non-GAAP operating income	$	2,026		$	1,715		$	1,412		$	6,138		$	4,854
*Non-GAAP operating margin*		26	%		25	%		23	%		24	%		21	%

	Three Months Ended																		Year Ended
	December 28, 2024						September 28, 2024						December 30, 2023						December 28, 2024						December 30, 2023
GAAP net income / earnings per share	$	482		$	0.29		$	771		$	0.47		$	667		$	0.41		$	1,641		$	1.00		$	854		$	0.53
(Gains) losses on equity investments, net		—			—			(1	)		—			1			—			2			—			(1	)		—
Stock-based compensation		339			0.21			351			0.21			374			0.23			1,407			0.86			1,380			0.85
Equity income in investee		(12	)		(0.01	)		(7	)		—			(6	)		—			(33	)		(0.02	)		(16	)		(0.01	)
Amortization of acquisition-related intangibles		584			0.36			585			0.36			635			0.39			2,394			1.46			2,811			1.73
Acquisition-related and other costs ⁽¹⁾		46			0.03			56			0.03			61			0.04			187			0.11			262			0.16
Inventory loss at contract manufacturer ⁽²⁾		—			—			—			—			—			—			65			0.04			—			—
Restructuring charges ⁽³⁾		186			0.11			—			—			—			—			186			0.11			—			—
Income tax provision		152			0.10			(251	)		(0.15	)		(483	)		(0.30	)		(429	)		(0.25	)		(988	)		(0.61	)
Non-GAAP net income / earnings per share	$	1,777		$	1.09		$	1,504		$	0.92		$	1,249		$	0.77		$	5,420		$	3.31		$	4,302		$	2.65

(1	)	Acquisition-related and other costs primarily include transaction costs, purchase price fair value adjustments for inventory, certain compensation charges, contract termination costs and workforce rebalancing charges.
(2	)	Inventory loss at contract manufacturer is related to an incident at a third-party contract manufacturing facility.
(3	)	Restructuring charges are related to the 2024 Restructuring Plan which comprised of employee severance charges and non-cash asset impairments.

About AMD
For more than 50 years AMD has driven innovation in high-performance computing, graphics and visualization technologies. AMD employees are focused on building leadership high-performance and adaptive products that push the boundaries of what is possible. Billions of people, leading Fortune 500 businesses and cutting-edge scientific research institutions around the world rely on AMD technology daily to improve how they live, work and play. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, LinkedIn and X pages.

Cautionary Statement

This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as, the opportunities for continued growth based on AMD’s product portfolio and growing demand for high-performance and adaptive computing; AMD’s ability to position itself for long-term growth and value creation; the features, functionality, performance, availability, timing and expected benefits of future AMD products; and AMD’s expected first quarter 2025 financial outlook, including revenue and non-GAAP gross margin, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as “would,” “may,” “expects,” “believes,” “plans,” “intends,” “projects” and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this press release are based on current beliefs, assumptions and expectations, speak only as of the date of this press release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and generally beyond AMD’s control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: Intel Corporation’s dominance of the microprocessor market and its aggressive business practices; Nvidia’s dominance in the graphics processing unit market and its aggressive business practices; competitive markets in which AMD’s products are sold; the cyclical nature of the semiconductor industry; market conditions of the industries in which AMD products are sold; AMD’s ability to introduce products on a timely basis with expected features and performance levels; loss of a significant customer; economic and market uncertainty; quarterly and seasonal sales patterns; AMD’s ability to adequately protect its technology or other intellectual property; unfavorable currency exchange rate fluctuations; ability of third party manufacturers to manufacture AMD’s products on a timely basis in sufficient quantities and using competitive technologies; availability of essential equipment, materials, substrates or manufacturing processes; ability to achieve expected manufacturing yields for AMD’s products; AMD’s ability to generate revenue from its semi-custom SoC products; potential security vulnerabilities; potential security incidents including IT outages, data loss, data breaches and cyberattacks; uncertainties involving the ordering and shipment of AMD’s products; AMD’s reliance on third-party intellectual property to design and introduce new products; AMD’s reliance on third-party companies for design, manufacture and supply of motherboards, software, memory and other computer platform components; AMD’s reliance on Microsoft and other software vendors’ support to design and develop software to run on AMD’s products; AMD’s reliance on third-party distributors and add-in-board partners; impact of modification or interruption of AMD’s internal business processes and information systems; compatibility of AMD’s products with some or all industry-standard software and hardware; costs related to defective products; efficiency of AMD’s supply chain; AMD’s ability to rely on third party supply-chain logistics functions; AMD’s ability to effectively control sales of its products on the gray market; long-term impact of climate change on AMD’s business; impact of government actions and regulations such as export regulations, tariffs and trade protection measures; AMD’s ability to realize its deferred tax assets; potential tax liabilities; current and future claims and litigation; impact of environmental laws, conflict minerals related provisions and other laws or regulations; evolving expectations from governments, investors, customers and other stakeholders regarding corporate responsibility matters; issues related to the responsible use of AI; restrictions imposed by agreements governing AMD’s notes, the guarantees of Xilinx’s notes and the revolving credit agreement; impact of acquisitions, joint ventures and/or strategic investments on AMD’s business and AMD’s ability to integrate acquired businesses; our ability to complete the acquisition of ZT Systems;  impact of any impairment of the combined company’s assets; political, legal and economic risks and natural disasters; future impairments of technology license purchases; AMD’s ability to attract and retain qualified personnel; and AMD’s stock price volatility. Investors are urged to review in detail the risks and uncertainties in AMD’s Securities and Exchange Commission filings, including but not limited to AMD’s most recent reports on Forms 10-K and 10-Q.

(*)

In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating expenses/revenue%, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2024, AMD used a non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax non-GAAP adjustments. AMD also provided adjusted EBITDA, free cash flow and free cash flow margin as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables in this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of February 4, 2025, and assumptions and beliefs that involve numerous risks and uncertainties. Adjustments to arrive at the GAAP gross margin outlook typically include stock-based compensation, amortization of acquired intangible assets and acquisition-related and other costs. The timing and impact of such adjustments are dependent on future events that are typically uncertain or outside of AMD’s control, therefore, a reconciliation to equivalent GAAP measures is not practicable at this time. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law.

© 2025 Advanced Micro Devices, Inc. All rights reserved. AMD, the AMD Arrow logo, 3D V-Cache, Alveo, AMD Instinct, EPYC, FidelityFX, Kria, Radeon, Ryzen, Threadripper, Ultrascale+, Versal, Zynq, and combinations thereof, are trademarks of Advanced Micro Devices, Inc.

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages) (Unaudited)

	Three Months Ended									Year Ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Net revenue	$	7,658		$	6,819		$	6,168		$	25,785		$	22,680
Cost of sales		3,524			3,167			3,042			12,114			11,278
Amortization of acquisition-related intangibles		252			233			215			946			942
Total cost of sales		3,776			3,400			3,257			13,060			12,220
Gross profit		3,882			3,419			2,911			12,725			10,460
Gross margin		51	%		50	%		47	%		49	%		46	%
Research and development		1,712			1,636			1,511			6,456			5,872
Marketing, general and administrative		792			721			644			2,783			2,352
Amortization of acquisition-related intangibles		332			352			420			1,448			1,869
Licensing gain		(11	)		(14	)		(6	)		(48	)		(34	)
Restructuring charges		186			—			—			186			—
Operating income		871			724			342			1,900			401
Interest expense		(19	)		(23	)		(27	)		(92	)		(106	)
Other income (expense), net		37			36			49			181			197
Income before income taxes and equity income		889			737			364			1,989			492
Income tax provision (benefit)		419			(27	)		(297	)		381			(346	)
Equity income in investee		12			7			6			33			16
Net income	$	482		$	771		$	667		$	1,641		$	854
Earnings per share
Basic	$	0.30		$	0.48		$	0.41		$	1.01		$	0.53
Diluted	$	0.29		$	0.47		$	0.41		$	1.00		$	0.53
Shares used in per share calculation
Basic		1,623			1,620			1,616			1,620			1,614
Diluted		1,634			1,636			1,628			1,637			1,625

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions)

	December 28, 2024			December 30, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,787		$	3,933
Short-term investments		1,345			1,840
Accounts receivable, net		6,192			4,323
Inventories		5,734			4,351
Receivables from related parties		113			9
Prepaid expenses and other current assets		1,878			2,312
Total current assets		19,049			16,768
Property and equipment, net		1,802			1,589
Operating lease right-of-use assets		623			633
Goodwill		24,839			24,262
Acquisition-related intangibles, net		18,930			21,363
Investment: equity method		149			99
Deferred tax assets		688			366
Other non-current assets		3,146			2,805
Total Assets	$	69,226		$	67,885

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,990		$	2,055
Payables to related parties		476			363
Accrued liabilities		4,260			3,082
Current portion of long-term debt, net		—			751
Other current liabilities		555			438
Total current liabilities		7,281			6,689
Long-term debt, net of current portion		1,721			1,717
Long-term operating lease liabilities		491			535
Deferred tax liabilities		349			1,202
Other long-term liabilities		1,816			1,850

Stockholders’ equity:
Capital stock:
Common stock, par value		17			17
Additional paid-in capital		61,362			59,676
Treasury stock, at cost		(6,106	)		(4,514	)
Retained earnings		2,364			723
Accumulated other comprehensive loss		(69	)		(10	)
Total stockholders’ equity		57,568			55,892
Total Liabilities and Stockholders’ Equity	$	69,226		$	67,885

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions) (Unaudited)

	Three Months Ended						Year Ended
	December 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Cash flows from operating activities:
Net income	$	482		$	667		$	1,641		$	854
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		172			164			671			642
Amortization of acquisition-related intangibles		583			635			2,393			2,811
Stock-based compensation		339			374			1,407			1,384
Amortization of operating lease right-of-use assets		31			25			113			98
Deferred income taxes		(300	)		(219	)		(1,163	)		(1,019	)
Inventory loss at contract manufacturer		—			—			65			—
Other		62			(23	)		12			(54	)
Changes in operating assets and liabilities
Accounts receivable, net		96			(379	)		(1,865	)		(1,339	)
Inventories		(362	)		94			(1,458	)		(580	)
Prepaid expenses and other assets		494			(34	)		343			(383	)
Receivables from and payables to related parties, net		30			29			108			(107	)
Accounts payable		(585	)		(181	)		(109	)		(419	)
Accrued and other liabilities		257			(771	)		883			(221	)
Net cash provided by operating activities		1,299			381			3,041			1,667
Cash flows from investing activities:
Purchases of property and equipment		(208	)		(139	)		(636	)		(546	)
Purchases of short-term investments		(786	)		(410	)		(1,493	)		(3,722	)
Proceeds from maturity of short-term investments		65			770			1,416			2,687
Proceeds from sale of short-term investments		25			52			616			300
Acquisitions, net of cash acquired		—			(117	)		(548	)		(131	)
Related party equity method investment		—			—			(17	)		—
Issuance of loan to related party		(100	)		—			(100	)		—
Purchase of strategic investments		(210	)		(6	)		(341	)		(11	)
Other		—			—			2			—
Net cash provided by (used in) investing activities		(1,214	)		150			(1,101	)		(1,423	)
Cash flows from financing activities:
Repayment of debt		—			—			(750	)		—
Proceeds from sales of common stock through employee equity plans		127			120			279			268
Repurchases of common stock		(256	)		(233	)		(862	)		(985	)
Common stock repurchases for tax withholding on employee equity plans		(42	)		(45	)		(728	)		(427	)
Other		—			(1	)		(1	)		(2	)
Net cash used in financing activities		(171	)		(159	)		(2,062	)		(1,146	)
Net increase (decrease) in cash, cash equivalents and restricted cash		(86	)		372			(122	)		(902	)
Cash, cash equivalents and restricted cash at beginning of period		3,897			3,561			3,933			4,835
Cash, cash equivalents and restricted cash at end of period	$	3,811		$	3,933		$	3,811		$	3,933

ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions) (Unaudited)

	Three Months Ended									Year Ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Segment and Category Information⁽¹⁾
Data Center
Net revenue	$	3,859		$	3,549		$	2,282		$	12,579		$	6,496
Operating income	$	1,157		$	1,041		$	666		$	3,482		$	1,267
Client
Net revenue	$	2,313		$	1,881		$	1,461		$	7,054		$	4,651
Operating income (loss)	$	446		$	276		$	55		$	897		$	(46	)
Gaming
Net revenue	$	563		$	462		$	1,368		$	2,595		$	6,212
Operating income	$	50		$	12		$	224		$	290		$	971
Embedded
Net revenue	$	923		$	927		$	1,057		$	3,557		$	5,321
Operating income	$	362		$	372		$	461		$	1,421		$	2,628
All Other
Net revenue	$	—		$	—		$	—		$	—		$	—
Operating loss	$	(1,144	)	$	(977	)	$	(1,064	)	$	(4,190	)	$	(4,419	)
Total
Net revenue	$	7,658		$	6,819		$	6,168		$	25,785		$	22,680
Operating income	$	871		$	724		$	342		$	1,900		$	401

Other Data
Capital expenditures	$	208		$	132		$	139		$	636		$	546
Adjusted EBITDA ⁽²⁾	$	2,212		$	1,887		$	1,576		$	6,824		$	5,496
Cash, cash equivalents and short-term investments	$	5,132		$	4,544		$	5,773		$	5,132		$	5,773
Free cash flow ⁽³⁾	$	1,091		$	496		$	242		$	2,405		$	1,121
Total assets	$	69,226		$	69,636		$	67,885		$	69,226		$	67,885
Total debt	$	1,721		$	1,720		$	2,468		$	1,721		$	2,468

(1	)	The Data Center segment primarily includes Artificial Intelligence (AI) accelerators, server microprocessors (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), Smart Network Interface Cards (SmartNICs) and Adaptive System-on-Chip (SoC) products for data centers.
		The Client segment primarily includes CPUs, APUs, and chipsets for desktops and notebooks.
		The Gaming segment primarily includes discrete GPUs, and semi-custom SoC products and development services.
		The Embedded segment primarily includes embedded CPUs, GPUs, APUs, FPGAs, System on Modules (SOMs), and Adaptive SoC products.
		From time to time, the Company may also sell or license portions of its IP portfolio.
		All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments, such as amortization of acquisition-related intangible asset, employee stock-based compensation expense, acquisition-related and other costs, inventory loss at contract manufacturer, restructuring charges and licensing gain.

(2	)	Reconciliation of GAAP Net Income to Adjusted EBITDA

	Three Months Ended									Year Ended
(Millions) (Unaudited)	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
GAAP net income	$	482		$	771		$	667		$	1,641		$	854
Interest expense		19			23			27			92			106
Other (income) expense, net		(37	)		(36	)		(49	)		(181	)		(197	)
Income tax provision (benefit)		419			(27	)		(297	)		381			(346	)
Equity income in investee		(12	)		(7	)		(6	)		(33	)		(16	)
Stock-based compensation		339			351			374			1,407			1,380
Depreciation and amortization		186			171			164			685			642
Amortization of acquisition-related intangibles		584			585			635			2,394			2,811
Inventory loss at contract manufacturer		—			—			—			65			—
Acquisition-related and other costs		46			56			61			187			262
Restructuring charges		186			—			—			186			—
Adjusted EBITDA	$	2,212		$	1,887		$	1,576		$	6,824		$	5,496

The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting GAAP net income for interest expense, other (income) expense, net, income tax provision (benefit), equity income in investee, stock-based compensation, depreciation and amortization expense, amortization of acquisition-related intangibles, inventory loss at contract manufacturer, acquisition-related and other costs, and restructuring charges. The Company calculates and presents Adjusted EBITDA because management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of income or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities that can affect cash flows.

(3

)

Reconciliation of GAAP Net Cash Provided by Operating Activities to Free Cash Flow

	Three Months Ended									Year Ended
(Millions except percentages) (Unaudited)	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
GAAP net cash provided by operating activities	$	1,299		$	628		$	381		$	3,041		$	1,667
Operating cash flow margin %		17	%		9	%		6	%		12	%		7	%
Purchases of property and equipment		(208	)		(132	)		(139	)		(636	)		(546	)
Free cash flow	$	1,091		$	496		$	242		$	2,405		$	1,121
Free cash flow margin %		14	%		7	%		4	%		9	%		5	%

The Company also presents free cash flow as a supplemental Non-GAAP measure of its performance. Free cash flow is determined by adjusting GAAP net cash provided by operating activities for capital expenditures, and free cash flow margin % is free cash flow expressed as a percentage of the Company’s net revenue. The Company calculates and communicates free cash flow in the financial earnings press release because management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities.

Media Contact:
Drew Prairie
AMD Communications
512-602-4425
drew.prairie@amd.com

Investor Contact:
Matt Ramsay
AMD Investor Relations
512-602-0113
matthew.ramsay@amd.com

The MIL Network –

February 5, 2025

MIL-OSI: Mercury Systems Reports Second Quarter Fiscal 2025 Results

Source: GlobeNewswire (MIL-OSI)

Q2 FY25 Bookings of $242.4 million; book-to-bill ratio of 1.09
Record backlog of $1.4 billion; up 6% year-over-year
Q2 FY25 Revenue of $223.1 million; GAAP net loss of $17.6 million; and adjusted EBITDA of $22.0 million
Record Operating Cash Flow of $85.5 million with Free Cash Flow of $81.9 million

ANDOVER, Mass., Feb. 04, 2025 (GLOBE NEWSWIRE) — Mercury Systems, Inc. (NASDAQ: MRCY, www.mrcy.com), reported operating results for the second quarter of fiscal year 2025, ended December 27, 2024.

“We delivered solid results in the second quarter of fiscal 2025 that were once again in line with or ahead of our expectations, and I’m optimistic about our ongoing efforts to improve performance as we move through the fiscal year,” said Bill Ballhaus, Mercury’s Chairman and CEO.

“In the quarter we secured bookings of $242.4 million, for a trailing-twelve-month book-to-bill of 1.12; revenue of $223.1 million, up 13% year-over-year; adjusted EBITDA of $22.0 million and adjusted EBITDA margin of 9.9%, both up substantially year-over-year; and record free cash flow of $81.9 million, up $44.4 million year-over-year. These results reflect continued progress in each of our four priority areas, highlighted by solid execution across our broad portfolio of production and development programs, a record backlog of $1.4 billion, reduced operating expenses enabling increased positive operating leverage, and continued progress on free cash flow drivers, with net working capital down $114.9 million year-over-year.”

Second Quarter Fiscal 2025 Results

Total Company second quarter fiscal 2025 revenues were $223.1 million, compared to $197.5 million in the second quarter of fiscal 2024.

Total bookings for the second quarter of fiscal 2025 were $242.4 million, yielding a book-to-bill ratio of 1.09 for the quarter.

Total Company GAAP net loss and loss per share for the second quarter of fiscal 2025 were $17.6 million, and $0.30, respectively, compared to GAAP net loss and loss per share of $45.6 million, and $0.79, respectively, for the second quarter of fiscal 2024. Adjusted earnings (loss) per share (“adjusted EPS”) was $0.07 per share for the second quarter of fiscal 2025, compared to $(0.42) per share in the second quarter of fiscal 2024.

Second quarter fiscal 2025 adjusted EBITDA for the total Company was $22.0 million, compared to $(21.3) million for the second quarter of fiscal 2024.

Cash flows provided by operating activities in the second quarter of fiscal 2025 were $85.5 million, compared to $45.5 million in the second quarter of fiscal 2024. Free cash flow, defined as cash flows from operating activities less capital expenditures for property and equipment, was $81.9 million for the second quarter of fiscal 2025 and $37.5 million for the second quarter of fiscal 2024.

Backlog

Mercury’s total backlog at December 27, 2024 was $1.4 billion, an approximate $80.0 million increase from a year ago. Of the December 27, 2024 total backlog, $789.9 million represents orders expected to be recognized as revenue within the next 12 months.

Conference Call Information

Management will host a conference call and simultaneous webcast at 5:00 p.m. ET on Tuesday, February 4, 2025, to discuss Mercury’s quarterly financial results, business highlights and outlook. In addition, Company representatives may answer questions concerning business and financial developments and trends, the Company’s view on earnings forecasts, and other business and financial matters affecting the Company, the responses to which may contain information that has not been previously disclosed.

To attend the conference call or webcast, participants should register online at ir.mrcy.com/events-presentations. Participants are requested to register a day in advance or at a minimum 15 minutes before the start of the call. A replay of the webcast will be available two hours after the call and archived on the same web page for six months.

Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides adjusted EBITDA, adjusted income, adjusted earnings per share (“adjusted EPS”) and free cash flow, which are non-GAAP financial measures. Adjusted EBITDA, adjusted income, and adjusted EPS exclude certain non-cash and other specified charges. The Company believes these non-GAAP financial measures are useful to help investors understand its past financial performance and prospects for the future. However, these non-GAAP measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management believes these non-GAAP measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. A reconciliation of GAAP to non-GAAP financial results discussed in this press release is contained in the attached exhibits.

Mercury Systems – Innovation that Matters^®
Mercury Systems is a technology company that delivers mission-critical processing power to the edge, making advanced technologies profoundly more accessible for today’s most challenging aerospace and defense missions. The Mercury Processing Platform allows customers to tap into innovative capabilities from silicon to system scale, turning data into decisions on timelines that matter. Mercury’s products and solutions are deployed in more than 300 programs and across 35 countries, enabling a broad range of applications in mission computing, sensor processing, command and control, and communications. Mercury is headquartered in Andover, Massachusetts, and has 23 locations worldwide. To learn more, visit mrcy.com. (Nasdaq: MRCY)

Investors and others should note that we announce material financial information using our website (www.mrcy.com), SEC filings, press releases, public conference calls, webcasts, and social media, including X (X.com/mrcy) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, we encourage investors and others interested in Mercury to review the information we post on the social media and other communication channels listed on our website.

Forward-Looking Safe Harbor Statement

This press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the Company’s focus on enhanced execution of the Company’s strategic plan under a refreshed Board and leadership team. You can identify these statements by the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government’s interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of the Company’s products, shortages in or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events, changes in tax rates or tax regulations, such as the deductibility of internal research and development, changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, litigation, including the dispute arising with the former CEO over his resignation, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 28, 2024 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

Contact:
Tyler Hojo, CFA, Vice President of Investor Relations
Mercury Systems, Inc.
978-967-3676

Mercury Systems and Innovation That Matters are registered trademarks of Mercury Systems, Inc. Other product and company names mentioned may be trademarks and/or registered trademarks of their respective holders.

MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
	December 27,		June 28,
		2024		2024

Assets
Current assets:
Cash and cash equivalents	$	242,565	$	180,521
Accounts receivable, net		104,491		111,441
Unbilled receivables and costs in excess of billings, net		278,657		304,029
Inventory		344,415		335,300
Prepaid expenses and other current assets		20,556		22,493
Total current assets		990,684		953,784

Property and equipment, net		111,459		110,353
Goodwill		938,093		938,093
Intangible assets, net		226,142		250,512
Operating lease right-of-use assets, net		56,525		60,860
Deferred tax asset		71,712		58,612
Other non-current assets		6,840		6,691
Total assets	$	2,401,455	$	2,378,905

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	64,778	$	81,068
Accrued expenses		40,471		42,926
Accrued compensation		32,015		36,398
Income taxes payable		306		109
Deferred revenues and customer advances		135,963		73,915
Total current liabilities		273,533		234,416

Income taxes payable		7,713		7,713
Long-term debt		591,500		591,500
Operating lease liabilities		57,805		62,584
Other non-current liabilities		10,628		9,917
Total liabilities		941,179		906,130

Shareholders’ equity:
Preferred stock		—		—
Common stock		587		581
Additional paid-in capital		1,266,926		1,242,402
Retained earnings		184,695		219,799
Accumulated other comprehensive income		8,068		9,993
Total shareholders’ equity		1,460,276		1,472,775
Total liabilities and shareholders’ equity	$	2,401,455	$	2,378,905

MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
	Second Quarters Ended						Six Months Ended
	December 27, 2024			December 29, 2023			December 27, 2024			December 29, 2023
Net revenues	$	223,125		$	197,463		$	427,556		$	378,454
Cost of revenues⁽¹⁾		162,299			165,943			314,940			296,407
Gross margin		60,826			31,520			112,616			82,047

Operating expenses:
Selling, general and administrative⁽¹⁾		40,501			44,470			73,654			80,264
Research and development⁽¹⁾		21,368			28,476			39,751			60,348
Amortization of intangible assets		11,154			12,270			22,389			24,817
Restructuring and other charges		40			2			2,300			9,548
Acquisition costs and other related expenses		178			231			355			1,200
Total operating expenses		73,241			85,449			138,449			176,177

Loss from operations		(12,415	)		(53,929	)		(25,833	)		(94,130	)

Interest income		406			29			950			132
Interest expense		(8,430	)		(8,674	)		(17,336	)		(16,537	)
Other expense, net		(3,865	)		(1,148	)		(5,204	)		(2,922	)

Loss before income tax benefit		(24,304	)		(63,722	)		(47,423	)		(113,457	)
Income tax benefit		(6,725	)		(18,141	)		(12,319	)		(31,168	)
Net loss	$	(17,579	)	$	(45,581	)	$	(35,104	)	$	(82,289	)

Basic net loss per share	$	(0.30	)	$	(0.79	)	$	(0.60	)	$	(1.44	)

Diluted net loss per share	$	(0.30	)	$	(0.79	)	$	(0.60	)	$	(1.44	)

Weighted-average shares outstanding:
Basic		58,561			57,424			58,454			57,314
Diluted		58,561			57,424			58,454			57,314

(1) Includes stock-based compensation expense, allocated as follows:
Cost of revenues	$	(167	)	$	4		$	(54	)	$	820
Selling, general and administrative	$	6,317		$	5,742		$	10,928		$	7,503
Research and development	$	1,812		$	1,640		$	3,180		$	3,180

MERCURY SYSTEMS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Second Quarters Ended						Six Months Ended
	December 27, 2024			December 29, 2023			December 27, 2024			December 29, 2023
Cash flows from operating activities:
Net loss	$	(17,579	)	$	(45,581	)	$	(35,104	)	$	(82,289	)
Depreciation and amortization		20,922			22,193			42,142			44,885
Other non-cash items, net		5,083			1,640			10,685			(2,011	)
Cash settlement for termination of interest rate swap		—			—			—			7,403
Changes in operating assets and liabilities		77,036			67,242			53,079			38,438

Net cash provided by operating activities		85,462			45,494			70,802			6,426

Cash flows from investing activities:
Purchases of property and equipment	$	(3,555	)	$	(7,990	)	$	(9,791	)	$	(16,005	)
Other investing activities		1,900			—			1,900			—

Net cash used in investing activities		(1,655	)		(7,990	)		(7,891	)		(16,005	)

Cash flows from financing activities:
Proceeds from employee stock plans		1,492			3,163			1,492			3,163
Borrowings under credit facilities		—			40,000			—			105,000
Payments of deferred financing and offering costs		—			(1,931	)		(2,249	)		(1,931	)
Payments for retirement of common stock		—			(15	)		—			(15	)

Net cash provided by (used in) financing activities		1,492			41,217			(757	)		106,217

Effect of exchange rate changes on cash and cash equivalents		(857	)		556			(110	)		445

Net increase in cash and cash equivalents		84,442			79,277			62,044			97,083

Cash and cash equivalents at beginning of period		158,123			89,369			180,521			71,563

Cash and cash equivalents at end of period	$	242,565		$	168,646		$	242,565		$	168,646

UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands)

Adjusted EBITDA, a non-GAAP measure for reporting financial performance, excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company’s underlying results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. The adjustments to calculate this non-GAAP financial measure, and the basis for such adjustments, are outlined below:

Other non-operating adjustments. The Company records other non-operating adjustments such as gains or losses on foreign currency remeasurement, investments and fixed asset sales or disposals among other adjustments. These adjustments may vary from period to period without any direct correlation to underlying operating performance.

Interest income and expense. The Company receives interest income on investments and incurs interest expense on loans, financing leases and other financing arrangements. These amounts may vary from period to period due to changes in cash and debt balances and interest rates driven by general market conditions or other circumstances which may be outside of the normal course of the Company’s operations.

Income taxes. The Company’s GAAP tax expense can fluctuate materially from period to period due to tax adjustments that are not directly related to underlying operating performance or to the current period of operations.

Depreciation. The Company incurs depreciation expense related to capital assets purchased to support the ongoing operations of the business. These assets are recorded at cost or fair value and are depreciated using the straight-line method over the useful life of the asset. Purchases of such assets may vary significantly from period to period and without any direct correlation to underlying operating performance.

Amortization of intangible assets. The Company incurs amortization of intangible assets primarily as a result of acquired intangible assets such as backlog, customer relationships and completed technologies but also due to licenses, patents and other arrangements. These intangible assets are valued at the time of acquisition or upon receipt of right to use the asset, amortized over the requisite life and generally cannot be changed or influenced by management after acquisition.

Restructuring and other charges. The Company incurs restructuring and other charges in connection with management’s decisions to undertake certain actions to realign operating expenses through workforce reductions and the closure of certain Company facilities, businesses and product lines. The Company’s adjustments reflected in restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete post-acquisition integration activities. Management believes these items are non-routine and may not be indicative of ongoing operating results.

Impairment of long-lived assets. The Company incurs impairment charges of long-lived assets based on events that may or may not be within the control of management. Management believes these items are outside the normal operations of the Company’s business and are not indicative of ongoing operating results.

Acquisition, financing and other third party costs. The Company incurs transaction costs related to acquisition and potential acquisition opportunities, such as legal, accounting, and other third party advisory fees. The Company may also incur third party costs, such as legal, banking, communications, proxy solicitation, and other third party advisory fees in connection with engagements by activist investors or unsolicited acquisition offers. Although the Company may incur such third party costs and other related charges and adjustments, it is not indicative that any transaction will be consummated. Additionally, the Company incurs unused revolver and bank fees associated with maintaining its credit facility as well as non-cash financing expenses associated with obtaining its credit facility. Management believes these items are outside the normal operations of the Company’s business and are not indicative of ongoing operating results.

Fair value adjustments from purchase accounting. As a result of applying purchase accounting rules to acquired assets and liabilities, certain fair value adjustments are recorded in the opening balance sheet of acquired companies. These adjustments are then reflected in the Company’s income statements in periods subsequent to the acquisition. In addition, the impact of any changes to originally recorded contingent consideration amounts are reflected in the income statements in the period of the change. Management believes these items are outside the normal operations of the Company and are not indicative of ongoing operating results.

Litigation and settlement income and expense. The Company periodically receives income and incurs expenses related to pending claims and litigation and associated legal fees and potential case settlements and/or judgments. Although the Company may incur such costs and other related charges and adjustments, it is not indicative of any particular outcome until the matter is fully resolved. Management believes these items are outside the normal operations of the Company’s business, often occur in periods other than the period of activity, and are not indicative of ongoing operating results. The Company periodically receives warranty claims from customers and makes warranty claims towards its vendors and supply chain. Management believes the expenses and gains associated with these recurring warranty items are within the normal operations and operating cycle of the Company’s business. Therefore, management deems no adjustments are necessary unless under extraordinary circumstances.

Stock-based and other non-cash compensation expense. The Company incurs expense related to stock-based compensation included in its GAAP presentation of cost of revenues, selling, general and administrative expense and research and development expense. The Company also incurs non-cash based compensation in the form of pension related expenses and matching contributions to its defined contribution plan. Although stock-based and other non-cash compensation is an expense of the Company and viewed as a form of compensation, these expenses vary in amount from period to period, and are affected by market forces that are difficult to predict and are not within the control of management, such as the market price and volatility of the Company’s shares, risk-free interest rates and the expected term and forfeiture rates of the awards, as well as pension actuarial assumptions. Management believes that exclusion of these expenses allows comparisons of operating results to those of other companies, both public, private or foreign, that disclose non-GAAP financial measures that exclude stock-based compensation and other non-cash compensation.

Mercury uses adjusted EBITDA as an important indicator of the operating performance of its business. Management excludes the above-described items from its internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to the Company’s board of directors, determining a portion of bonus compensation for executive officers and other key employees based on operating performance, evaluating short-term and long-term operating trends in the Company’s operations, and allocating resources to various initiatives and operational requirements. The Company believes that adjusted EBITDA permits a comparative assessment of its operating performance, relative to its performance based on its GAAP results, while isolating the effects of charges that may vary from period to period without direct correlation to underlying operating performance. The Company believes that these non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in its financial and operational decision-making. The Company believes that trends in its adjusted EBITDA are valuable indicators of its operating performance.

Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenses similar to the adjusted EBITDA financial adjustments described above, and investors should not infer from the Company’s presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring.

The following table reconciles the most directly comparable GAAP financial measure to the non-GAAP financial measure.

	Second Quarters Ended						Six Months Ended
	December 27, 2024			December 29, 2023			December 27, 2024			December 29, 2023
Net loss	$	(17,579	)	$	(45,581	)	$	(35,104	)	$	(82,289	)
Other non-operating adjustments, net		2,549			(1,042	)		814			(311	)
Interest expense, net		8,024			8,645			16,386			16,405
Income tax benefit		(6,725	)		(18,141	)		(12,319	)		(31,168	)
Depreciation		9,768			9,923			19,753			20,068
Amortization of intangible assets		11,154			12,270			22,389			24,817
Restructuring and other charges		40			2			2,300			9,548
Impairment of long-lived assets		—			—			—			—
Acquisition, financing and other third party costs		1,109			860			3,440			2,192
Fair value adjustments from purchase accounting		178			178			355			355
Litigation and settlement expense, net		2,087			1,383			3,481			1,886
Stock-based and other non-cash compensation expense		11,424			10,195			21,984			19,146
Adjusted EBITDA	$	22,029		$	(21,308	)	$	43,479		$	(19,351	)

Free cash flow, a non-GAAP measure for reporting cash flow, is defined as cash provided by operating activities less capital expenditures for property and equipment, which includes capitalized software development costs, and, therefore, has not been calculated in accordance with GAAP. Management believes free cash flow provides investors with an important perspective on cash available for investment and acquisitions after making capital investments required to support ongoing business operations and long-term value creation. The Company believes that trends in its free cash flow are valuable indicators of its operating performance and liquidity.

Free cash flow is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenditures similar to the free cash flow financial adjustment described above, and investors should not infer from the Company’s presentation of this non-GAAP financial measure that these expenditures reflect all of the Company’s obligations which require cash.

The following table reconciles the most directly comparable GAAP financial measure to the non-GAAP financial measure.

	Second Quarters Ended						Six Months Ended
	December 27, 2024			December 29, 2023			December 27, 2024			December 29, 2023
Net cash provided by operating activities	$	85,462		$	45,494		$	70,802		$	6,426
Purchases of property and equipment		(3,555	)		(7,990	)		(9,791	)		(16,005	)
Free cash flow	$	81,907		$	37,504		$	61,011		$	(9,579	)

UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(In thousands, except per share data)

Adjusted income and adjusted earnings per share (“adjusted EPS”) are non-GAAP measures for reporting financial performance, exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company’s underlying results and trends and allows for comparability with its peer company index and industry. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. The Company uses these measures along with the corresponding GAAP financial measures to manage the Company’s business and to evaluate its performance compared to prior periods and the marketplace. The Company defines adjusted income as income before other non-operating adjustments, amortization of intangible assets, restructuring and other charges, impairment of long-lived assets, acquisition, financing and other third party costs, fair value adjustments from purchase accounting, litigation and settlement income and expense, and stock-based and other non-cash compensation expense. The impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision⁽¹⁾. Adjusted EPS expresses adjusted income on a per share basis using weighted average diluted shares outstanding.

The following tables reconcile the most directly comparable GAAP financial measures to the non-GAAP financial measures.

	Second Quarters Ended
	December 27, 2024						December 29, 2023
Net loss and loss per share	$	(17,579	)	$	(0.30	)	$	(45,581	)	$	(0.79	)
Other non-operating adjustments, net		2,549						(1,042	)
Amortization of intangible assets		11,154						12,270
Restructuring and other charges		40						2
Impairment of long-lived assets		—						—
Acquisition, financing and other third party costs		1,109						860
Fair value adjustments from purchase accounting		178						178
Litigation and settlement expense, net		2,087						1,383
Stock-based and other non-cash compensation expense		11,424						10,195
Impact to income taxes⁽¹⁾		(7,022	)					(2,446	)
Adjusted income (loss) and adjusted earnings (loss) per share⁽²⁾	$	3,940		$	0.07		$	(24,181	)	$	(0.42	)

Diluted weighted-average shares outstanding					58,843						57,424

(1) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax expense or benefit related to the items.
(2) Adjusted earnings per share is calculated using diluted shares whereas Net loss per share or Adjusted loss per share is calculated using basic shares. There were no impact to the calculation of adjusted earnings per share as a result of this for the second quarters ended December 27, 2024 and December 29, 2023.

	Six Months Ended
	December 27, 2024						December 29, 2023
Net loss and loss per share	$	(35,104	)	$	(0.60	)	$	(82,289	)	$	(1.44	)
Other non-operating adjustments, net		814						(311	)
Amortization of intangible assets		22,389						24,817
Restructuring and other charges		2,300						9,548
Impairment of long-lived assets		—						—
Acquisition, financing and other third party costs		3,440						2,192
Fair value adjustments from purchase accounting		355						355
Litigation and settlement expense, net		3,481						1,886
COVID related expenses		—						—
Stock-based and other non-cash compensation expense		21,984						19,146
Impact to income taxes⁽¹⁾		(13,275	)					(13,204	)
Adjusted income (loss) and adjusted earnings (loss) per share⁽²⁾	$	6,384		$	0.11		$	(37,860	)	$	(0.66	)

Diluted weighted-average shares outstanding					58,752						57,314

(1) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax expense or benefit related to the items.
(2) Adjusted earnings per share is calculated using diluted shares whereas Net loss per share is calculated using basic shares. There were no impact to the calculation of adjusted earnings per share as a result of this for the six months ended December 27, 2024 and December 29, 2023.

The MIL Network –

February 5, 2025

MIL-OSI: H&R Block Reports Fiscal 2025 Second Quarter Results

Source: GlobeNewswire (MIL-OSI)

— Repurchased $190 Million of Shares—

— Reaffirms Full Year Outlook —

KANSAS CITY, Mo., Feb. 04, 2025 (GLOBE NEWSWIRE) — H&R Block, Inc. (NYSE: HRB) (the “Company”) today released financial results¹ for its fiscal 2025 second quarter ended December 31, 2024.

“I am pleased with our performance in the first half of the year,” said Jeff Jones, president and chief executive officer. “We are reaffirming our fiscal 2025 outlook, and are well prepared to deliver this tax season and in the second half of the fiscal year.”

Fiscal 2025 Second Quarter Results and Key Financial Metrics
“We are on track for the year and we are well positioned to deliver strong results,” said Tiffany Mason, chief financial officer. “During the second quarter, we repurchased 3.2 million shares for $190 million, reflecting our confidence in the long-term value of our stock and our commitment to delivering shareholder returns.”

For the second quarter, the Company delivered total revenue of $179.1 million, which was flat to the prior year. Increases in revenue from Wave and international tax preparation were offset by lower interest and fee income on Emerald Advance^® due to a decrease in loan originations.

Total operating expenses of $472.4 million increased by $25.8 million as expected, primarily due to higher tax professional and corporate wages, increased healthcare costs, an increase in occupancy costs and the timing of marketing expenses versus the prior year.

Pretax loss increased by $29.4 million to $312.3 million.

Loss per share from continuing operations² increased to $(1.79) from $(1.33) and adjusted loss per share from continuing operations² increased to $(1.73) from $(1.27), due to a higher net loss and fewer shares outstanding as a result of share repurchases, which are accretive to earnings per share on a full-year basis.

Capital Allocation

The Company reported the following related to its capital structure:

Repurchased and retired 3.2 million shares at an aggregate price of $190.5 million, or $58.65 per share in the second quarter.
The Company has approximately $1.1 billion remaining on its $1.5 billion share repurchase program.

Since 2016, the Company has returned more than $4.4 billion to shareholders in the form of dividends and share repurchases, buying back over 43% of its shares outstanding³.

Fiscal Year 2025 Outlook Reaffirmed

The Company continues to expect:

Revenue to be in the range of $3.69 to $3.75 billion.
EBITDA⁴ to be in the range of $975 million to $1.02 billion.
Effective tax rate to be approximately 13%, resulting in a one-time benefit to EPS of approximately 50 cents.
Adjusted Diluted Earnings Per Share⁴ to be in the range of $5.15 to $5.35.

Conference Call

The Company will host a conference call for analysts and investors to discuss second quarter 2025 results at 4:30 p.m. ET on Tuesday, February 4, 2025. To join live, participants must register at https://register.vevent.com/register/BI06a7e8ddc07544a6853995c1fe75ea2c. Once registered, the participant will receive a dial-in number and unique PIN to access the call. Please join approximately 5 minutes prior to the scheduled start time.

The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and general public. The webcast can be accessed directly at https://edge.media-server.com/mmc/p/qdeqpgfd and will be available for replay 2 hours after the call is concluded and continuing for 90 days.

About H&R Block

H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time, and be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small-business owners thrive with year-round bookkeeping, payroll, advisory, and payment processing solutions. For more information, visit H&R Block News.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled “Non-GAAP Financial Information.”

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “commits,” “seeks,” “estimates,” “projects,” “forecasts,” “targets,” “would,” “will,” “should,” “goal,” “could” or “may” or other similar expressions. Forward-looking statements provide management’s current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management’s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They may also include the expected impact of external events beyond the Company’s control, such as outbreaks of infectious disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate. All forward-looking statements speak only as of the date they are made and reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the Company’s control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled “Risk Factors” and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at https://investors.hrblock.com. In addition, factors that may cause the Company’s actual estimated effective tax rate to differ from estimates include the Company’s actual results from operations compared to current estimates, future discrete items, changes in interpretations and assumptions the Company has made, future actions of the Company, or increases in applicable tax rates in jurisdictions where the Company operates. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

¹ All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
² All per share amounts are based on fully diluted shares at the end of the corresponding period. The Company reports non-GAAP financial measures of performance, including adjusted earnings per share (EPS), earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, free cash flow, and free cash flow yield, which it considers to be useful metrics for management and investors to evaluate and compare the ongoing operating performance of the Company. See “About Non-GAAP Financial Information” below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).
³ Shares outstanding calculated as of April 30, 2016.
⁴ Adjusted Diluted EPS and EBITDA from continuing operations are non-GAAP financial measures. Future period non-GAAP outlook includes adjustments for items not indicative of our core operations, which may include, without limitation, items described in the below section titled “Non-GAAP Financial Information” and in the accompanying tables. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual, or unanticipated charges, expenses or gains, or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP outlook to the most comparable GAAP measures.

For Further Information

Investor Relations:		Colby Brown, (816) 854-4559, colby.brown@hrblock.com
		Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com
Media Relations:		Teri Daley, (816) 854-3787, teri.daley@hrblock.com
		Media Desk, mediadesk@hrblock.com

FINANCIAL RESULTS	(unaudited, in 000s – except per share amounts)
	Three months ended December 31,						Six months ended December 31,
		2024			2023			2024			2023
REVENUES:
U.S. tax preparation and related services:
Assisted tax preparation	$	48,380		$	48,342		$	91,343		$	87,605
Royalties		3,499			5,454			9,351			11,155
DIY tax preparation		13,744			13,111			16,980			16,959
Refund Transfers		637			813			1,497			1,955
Peace of Mind® Extended Service Plan		16,145			17,440			39,242			42,287
Tax Identity Shield®		4,013			4,694			7,922			9,274
Other		11,824			9,592			25,633			20,572
Total U.S. tax preparation and related services		98,242			99,446			191,968			189,807
Financial services:
Emerald Card® and Spruce^SM		10,148			11,700			18,974			20,333
Interest and fee income on Emerald Advance®		12,308			15,235			12,308			15,533
Total financial services		22,456			26,935			31,282			35,866
International		31,811			29,569			96,666			90,134
Wave		26,561			23,133			52,964			47,076
Total revenues	$	179,070		$	179,083		$	372,880		$	362,883
Compensation and benefits:
Field wages		81,565			77,795			149,659			140,230
Other wages		78,731			74,671			156,066			146,769
Benefits and other compensation		38,402			36,063			77,156			71,311
		198,698			188,529			382,881			358,310
Occupancy		104,999			101,194			206,317			200,479
Marketing and advertising		14,863			11,305			24,835			16,786
Depreciation and amortization		29,195			30,107			58,026			60,332
Bad debt		19,416			21,754			22,146			26,552
Other		105,190			93,626			200,297			174,182
Total operating expenses		472,361			446,515			894,502			836,641
Other income (expense), net		2,744			5,922			14,661			15,758
Interest expense on borrowings		(21,752	)		(21,364	)		(37,599	)		(37,234	)
Pretax loss		(312,299	)		(282,874	)		(544,560	)		(495,234	)
Income tax benefit		(69,833	)		(93,758	)		(130,673	)		(143,245	)
Net loss from continuing operations		(242,466	)		(189,116	)		(413,887	)		(351,989	)
Net loss from discontinued operations		(954	)		(639	)		(2,109	)		(1,248	)
Net loss	$	(243,420	)	$	(189,755	)	$	(415,996	)	$	(353,237	)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations	$	(1.79	)	$	(1.33	)	$	(3.02	)	$	(2.44	)
Discontinued operations		(0.01	)		—			(0.01	)		(0.01	)
Consolidated	$	(1.80	)	$	(1.33	)	$	(3.03	)	$	(2.45	)
WEIGHTED AVERAGE DILUTED SHARES		135,563			142,340			137,359			144,307
Adjusted diluted EPS ⁽¹⁾	$	(1.73	)	$	(1.27	)	$	(2.89	)	$	(2.31	)
EBITDA ⁽¹⁾	$	(261,352	)	$	(231,403	)	$	(448,935	)	$	(397,668	)

⁽¹⁾All non-GAAP measures are results from continuing operations. See “Non-GAAP Financial Information” for a reconciliation of non-GAAP measures.

CONSOLIDATED BALANCE SHEETS	(unaudited, in 000s – except per share data)
As of	December 31, 2024			June 30, 2024

ASSETS
Cash and cash equivalents	$	320,051		$	1,053,326
Cash and cash equivalents – restricted		21,473			21,867
Receivables, net		321,171			69,075
Prepaid expenses and other current assets		114,658			95,208
Total current assets		777,353			1,239,476
Property and equipment, net		143,833			131,319
Operating lease right of use assets		389,629			461,986
Intangible assets, net		270,601			264,102
Goodwill		783,286			785,226
Deferred tax assets and income taxes receivable		281,694			271,658
Other noncurrent assets		65,924			65,043
Total assets	$	2,712,320		$	3,218,810
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses	$	136,893		$	155,830
Accrued salaries, wages and payroll taxes		64,993			105,548
Accrued income taxes and reserves for uncertain tax positions		149,255			318,830
Current portion of long-term debt		349,611			—
Operating lease liabilities		170,726			206,070
Deferred revenue and other current liabilities		187,885			191,050
Total current liabilities		1,059,363			977,328
Long-term debt and line of credit borrowings		1,932,545			1,491,095
Deferred tax liabilities and reserves for uncertain tax positions		292,643			291,063
Operating lease liabilities		228,041			265,373
Deferred revenue and other noncurrent liabilities		72,188			103,357
Total liabilities		3,584,780			3,128,216
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, no par, stated value $.01 per share		1,644			1,709
Additional paid-in capital		752,093			762,583
Accumulated other comprehensive loss		(71,762	)		(48,845	)
Retained earnings (deficit)		(908,785	)		12,654
Less treasury shares, at cost		(645,650	)		(637,507	)
Total stockholders’ equity (deficiency)		(872,460	)		90,594
Total liabilities and stockholders’ equity	$	2,712,320		$	3,218,810

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	(unaudited, in 000s)
Six months ended December 31,		2024			2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(415,996	)	$	(353,237	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		58,026			60,331
Provision for credit losses		20,727			21,536
Deferred taxes		(1,531	)		(35,525	)
Stock-based compensation		17,945			17,525
Changes in assets and liabilities, net of acquisitions:
Receivables		(262,348	)		(348,833	)
Prepaid expenses, other current and noncurrent assets		2,588			(7,395	)
Accounts payable, accrued expenses, salaries, wages and payroll taxes		(76,806	)		(58,543	)
Deferred revenue, other current and noncurrent liabilities		(45,170	)		(58,520	)
Income tax receivables, accrued income taxes and income tax reserves		(192,340	)		(180,706	)
Other, net		(733	)		1,201
Net cash used in operating activities		(895,638	)		(942,166	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(49,115	)		(32,708	)
Payments made for business acquisitions, net of cash acquired		(28,017	)		(27,158	)
Franchise loans funded		(17,442	)		(15,491	)
Payments from franchisees		971			2,747
Other, net		6,110			1,565
Net cash used in investing activities		(87,493	)		(71,045	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings		(100,000	)		(25,000	)
Proceeds from line of credit borrowings		890,000			825,000
Dividends paid		(96,960	)		(89,854	)
Repurchase of common stock, including shares surrendered		(436,233	)		(378,709	)
Other, net		1,791			4,011
Net cash provided by financing activities		258,598			335,448
Effects of exchange rate changes on cash		(9,136	)		671
Net decrease in cash and cash equivalents, including restricted balances		(733,669	)		(677,092	)
Cash, cash equivalents and restricted cash, beginning of period		1,075,193			1,015,316
Cash, cash equivalents and restricted cash, end of period	$	341,524		$	338,224
SUPPLEMENTARY CASH FLOW DATA:

Income taxes paid, net (includes payments for purchased investment tax credits)	$	62,290		$	72,160
Interest paid on borrowings		33,412			35,496
Accrued additions to property and equipment		3,798			4,036
New operating right of use assets and related lease liabilities		47,135			70,532
Accrued dividends payable to common shareholders		50,176			45,273

(in 000s)
	Three months ended December 31,						Six months ended December 31,
NON-GAAP FINANCIAL MEASURE – EBITDA		2024			2023			2024			2023

Net loss – as reported	$	(243,420	)	$	(189,755	)	$	(415,996	)	$	(353,237	)
Discontinued operations, net		954			639			2,109			1,248
Net loss from continuing operations – as reported		(242,466	)		(189,116	)		(413,887	)		(351,989	)
Add back:
Income tax benefit		(69,833	)		(93,758	)		(130,673	)		(143,245	)
Interest expense		21,752			21,364			37,599			37,234
Depreciation and amortization		29,195			30,107			58,026			60,332
		(18,886	)		(42,287	)		(35,048	)		(45,679	)
EBITDA from continuing operations	$	(261,352	)	$	(231,403	)	$	(448,935	)	$	(397,668	)

(in 000s, except per share amounts)
	Three months ended December 31,						Six months ended December 31,
NON-GAAP FINANCIAL MEASURE – ADJUSTED EPS		2024			2023			2024			2023

Net loss from continuing operations – as reported	$	(242,466	)	$	(189,116	)	$	(413,887	)	$	(351,989	)
Adjustments:
Amortization of intangibles related to acquisitions (pretax)		10,910			12,269			22,038			24,824
Tax effect of adjustments ⁽¹⁾		(2,539	)		(3,087	)		(5,184	)		(6,022	)
Adjusted net loss from continuing operations	$	(234,095	)	$	(179,934	)	$	(397,033	)	$	(333,187	)
Diluted loss per share from continuing operations – as reported	$	(1.79	)	$	(1.33	)	$	(3.02	)	$	(2.44	)
Adjustments, net of tax		0.06			0.06			0.13			0.13
Adjusted diluted loss per share from continuing operations	$	(1.73	)	$	(1.27	)	$	(2.89	)	$	(2.31	)

⁽¹⁾Tax effect of adjustments is the difference between the tax provision calculated on a GAAP basis and on an adjusted non-GAAP basis.

Non-GAAP Financial Information

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, adjusted diluted earnings per share from continuing operations, free cash flow, and free cash flow yield. We also use EBITDA from continuing operations and pretax income from continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

The MIL Network –

February 5, 2025

MIL-OSI: Enphase Energy Reports Financial Results for the Fourth Quarter of 2024

Source: GlobeNewswire (MIL-OSI)

FREMONT, Calif., Feb. 04, 2025 (GLOBE NEWSWIRE) — Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced today financial results for the fourth quarter of 2024, which included the summary below from its President and CEO, Badri Kothandaraman.

We reported quarterly revenue of $382.7 million in the fourth quarter of 2024, along with 53.2% for non-GAAP gross margin. We shipped approximately 2.01 million microinverters, or 878.0 megawatts DC, and 152.4 megawatt hours of IQ^® Batteries.

Financial highlights for the fourth quarter of 2024 are listed below:

Strong U.S. manufacturing: shipped 1.69 million microinverters and 6.7 megawatt hours of IQ Batteries
Quarterly revenue of $382.7 million
GAAP gross margin of 51.8%; non-GAAP gross margin of 53.2% with net IRA benefit
Non-GAAP gross margin of 39.7%, excluding net IRA benefit of 13.5%
GAAP operating income of $54.8 million; non-GAAP operating income of $120.4 million
GAAP net income of $62.2 million; non-GAAP net income of $125.9 million
GAAP diluted earnings per share of $0.45; non-GAAP diluted earnings per share of $0.94
Free cash flow of $159.2 million; ending cash, cash equivalents, restricted cash and marketable securities of $1.72 billion

Our revenue and earnings for the fourth quarter of 2024 are provided below, compared with the prior quarter:

(In thousands, except per share and percentage data)

	GAAP									Non-GAAP
	Q4 2024			Q3 2024			Q4 2023			Q4 2024			Q3 2024			Q4 2023
Revenue	$	382,713		$	380,873		$	302,570		$	382,713		$	380,873		$	302,570
Gross margin		51.8	%		46.8	%		48.5	%		53.2	%		48.1	%		50.3	%
Operating expenses	$	143,489		$	128,383		$	156,893		$	83,322		$	81,612		$	86,551
Operating income (loss)	$	54,804		$	49,788		$	(10,231	)	$	120,434		$	101,411		$	65,587
Net income	$	62,160		$	45,762		$	20,919		$	125,862		$	88,402		$	73,474
Basic EPS	$	0.46		$	0.34		$	0.15		$	0.94		$	0.65		$	0.54
Diluted EPS	$	0.45		$	0.33		$	0.15		$	0.94		$	0.65		$	0.54

Our revenue and earnings for the fiscal year 2024 are provided below, compared with the prior year:

(In thousands, except per share and percentage data)

	GAAP						Non-GAAP
	FY 2024			FY 2023			FY 2024			FY 2023
Revenue	$	1,330,383		$	2,290,786		$	1,330,383		$	2,290,786
Gross margin		47.3	%		46.2	%		48.9	%		47.1	%
Operating expenses	$	551,846		$	612,647		$	329,227		$	382,115
Operating income	$	77,292		$	445,741		$	321,919		$	697,210
Net income	$	102,658		$	438,936		$	321,044		$	613,241
Basic EPS	$	0.76		$	3.22		$	2.37		$	4.50
Diluted EPS	$	0.75		$	3.08		$	2.37		$	4.41

Total revenue for the fourth quarter of 2024 was $382.7 million, compared to $380.9 million in the third quarter of 2024. Our revenue in the United States for the fourth quarter of 2024 increased approximately 6%, compared to the third quarter. The increase in revenue was due to higher microinverter sales. Our revenue in Europe decreased approximately 25% for the fourth quarter of 2024, compared to the third quarter. The decline in revenue was the result of a further softening in European demand.

Our non-GAAP gross margin was 53.2% in the fourth quarter of 2024, compared to 48.1% in the third quarter. Our non-GAAP gross margin, excluding net IRA benefit, was 39.7% in the fourth quarter of 2024, compared to 38.9% in the third quarter.

Our non-GAAP operating expenses were $83.3 million in the fourth quarter of 2024, compared to $81.6 million in the third quarter. The increase was driven by higher R&D expense on new products. Our non-GAAP operating income was $120.4 million in the fourth quarter of 2024, compared to $101.4 million in the third quarter.

We exited the fourth quarter of 2024 with $1.72 billion in cash, cash equivalents, restricted cash and marketable securities and generated $167.3 million in cash flow from operations in the fourth quarter. Our capital expenditures were $8.1 million in the fourth quarter of 2024, compared to $8.5 million in the third quarter of 2024.

In the fourth quarter of 2024, we repurchased 2,883,438 shares of our common stock at an average price of $69.25 per share for a total of approximately $199.7 million. We also spent approximately $5.0 million by withholding shares to cover taxes for employee stock vesting that reduced the diluted shares by 68,532 shares.

We shipped 152.4 megawatt hours of IQ Batteries in the fourth quarter of 2024, compared to 172.9 megawatt hours in the third quarter. More than 10,300 installers worldwide are certified to install our IQ Batteries, compared to more than 9,000 installers worldwide in the third quarter of 2024.

During the fourth quarter of 2024, we shipped approximately 1.69 million microinverters from our contract manufacturing facilities in the United States that we booked for 45X production tax credits. We also expanded our higher domestic content product offerings, and shipped our IQ8HC™ Microinverters, IQ8X™ Microinverters, IQ8P-3P™ Commercial Microinverters, and IQ^® Battery 5Ps, all with higher domestic content than previous models and produced at our contract manufacturing facilities in the United States.

During the fourth quarter of 2024, we made great strides with the IQ^® Meter Collar, fourth-generation IQ Battery, and new IQ^® Combiner products. We launched the IQ^® PowerPack 1500, a 1.5 kWh smart, portable energy system for home, work, and on-the-go use. In Europe, we introduced the IQ^® EV Charger 2, a next-generation smart charger that integrates with our solar and battery systems seamlessly or works as a standalone. In January 2025, we began shipping the IQ^® Battery 5P™ with FlexPhase to Germany, Austria, and Switzerland, delivering reliable backup power for both single- and three-phase installations.

BUSINESS HIGHLIGHTS

On Jan. 30, 2025, Enphase Energy announced that it is expanding in Southeast Asia by entering the solar markets in Vietnam and Malaysia with IQ8P™ Microinverters.

On Jan. 27, 2025, Enphase Energy announced integration with Octopus Energy’s smart tariffs in the UK, such as “Intelligent Octopus Flux” (IO Flux), which can help customers save money on electricity bills.

On Jan. 23, 2025, Enphase Energy announced that its IQ8™ Microinverters for residential and commercial applications, are now in compliance with the Build America, Buy America (BABA) Act.

On Jan. 13, 2025, Enphase Energy announced shipments of its most powerful and versatile battery yet, the IQ Battery 5P with FlexPhase, for customers in Germany, Austria, and Switzerland. With reliable backup power and support for single- and three-phase systems, it offers unmatched flexibility for home energy needs.

On Jan. 9, 2025, Enphase Energy announced that it is expanding into Latin America with IQ8P Microinverters, bringing solar solutions to Colombia, Panama, and Costa Rica for residential and commercial use.

On Jan. 7, 2025, Enphase Energy announced that IQ8 Microinverters were selected for a 2.2 MW solar project at the Belgoprocess radioactive waste facility in Dessel, Belgium.

On Dec. 17, 2024, Enphase Energy announced initial shipments of its most powerful home battery to-date, the IQ Battery 5P, for customers in India.

On Dec. 5 and Dec. 9, 2024, Enphase Energy announced collaborations with two energy providers in the Netherlands, Frank Energie and NextEnergy, to enable participation in the grid imbalance energy marketplace.

On Dec. 3, 2024, Enphase Energy announced the launch of Busbar Power Control software that empowers homeowners to install larger solar and battery systems without costly main electrical panel upgrades.

On Nov. 11, 2024, Enphase Energy announced an AI-powered do-it-yourself (DIY) permitting feature on Solargraf^®, to automate the complex solar permitting process for installers in the USA.

On Nov. 4, 2024, Enphase Energy announced the launch of its most powerful Enphase Energy System to-date, featuring the IQ Battery 5P and IQ8 Microinverters, for customers in Romania.

FIRST QUARTER 2025 FINANCIAL OUTLOOK

For the first quarter of 2025, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

Revenue to be within a range of $340.0 million to $380.0 million, which includes shipments of 150 to 170 megawatt hours of IQ Batteries. The first quarter of 2025 financial outlook includes approximately $50.0 million of safe harbor revenue. We define safe harbor revenue as any sales made to customers who plan to install the inventory over more than one year.
GAAP gross margin to be within a range of 46.0% to 49.0% with net IRA benefit
Non-GAAP gross margin to be within a range of 48.0% to 51.0% with net IRA benefit and 38.0% to 41.0% excluding net IRA benefit. Non-GAAP gross margin excludes stock-based compensation expense and acquisition related amortization
Net IRA benefit to be within a range of $36.0 million to $39.0 million based on estimated shipments of 1,200,000 units of U.S. manufactured microinverters
GAAP operating expenses to be within a range of $143.0 million to $147.0 million
Non-GAAP operating expenses to be within a range of $81.0 million to $85.0 million, excluding $62.0 million estimated for stock-based compensation expense, acquisition related expenses and amortization, restructuring and asset impairment charges

For 2025, GAAP and non-GAAP annualized effective tax rate with IRA benefit, excluding discrete items, is expected to be within a range of 17.0% to 19.0%.

Follow Enphase Online

Use of non-GAAP Financial Measures

Enphase Energy has presented certain non-GAAP financial measures in this press release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. Non-GAAP financial measures presented by Enphase Energy include non-GAAP gross profit, gross margin, operating expenses, income from operations, net income, net income per share (basic and diluted), net IRA benefit, and free cash flow.

These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Enphase Energy’s results of operations as determined in accordance with GAAP. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Enphase Energy uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase Energy believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

As presented in the “Reconciliation of Non-GAAP Financial Measures” tables below, each of the non-GAAP financial measures excludes one or more of the following items for purposes of calculating non-GAAP financial measures to facilitate an evaluation of Enphase Energy’s current operating performance and a comparison to its past operating performance:

Stock-based compensation expense. Enphase Energy excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash in nature. Moreover, the impact of this expense is significantly affected by Enphase Energy’s stock price at the time of an award over which management has limited to no control.

Acquisition related expenses and amortization. This item represents expenses incurred related to Enphase Energy’s business acquisitions, which are non-recurring in nature, and amortization of acquired intangible assets, which is a non-cash expense. Acquisition related expenses and amortization of acquired intangible assets are not reflective of Enphase Energy’s ongoing financial performance.

Restructuring and asset impairment charges. Enphase Energy excludes restructuring and asset impairment charges due to the nature of the expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of fees paid for cash-based severance costs, accelerated stock-based compensation expense and asset write-downs of property and equipment and acquired intangible assets, and other contract termination costs resulting from restructuring initiatives.

Non-cash interest expense. This item consists primarily of amortization of debt issuance costs and accretion of debt discount because these expenses do not represent a cash outflow for Enphase Energy except in the period the financing was secured and such amortization expense is not reflective of Enphase Energy’s ongoing financial performance.

Non-GAAP income tax adjustment. This item represents the amount adjusted to Enphase Energy’s GAAP tax provision or benefit to exclude the income tax effects of GAAP adjustments such as stock-based compensation, amortization of purchased intangibles, and other non-recurring items that are not reflective of Enphase Energy ongoing financial performance.

Non-GAAP net income per share, diluted. Enphase Energy excludes the dilutive effect of in-the-money portion of convertible senior notes as they are covered by convertible note hedge transactions that reduce potential dilution to our common stock upon conversion of the Notes due 2025, Notes due 2026, and Notes due 2028, and includes the dilutive effect of employee’s stock-based awards and the dilutive effect of warrants. Enphase Energy believes these adjustments provide useful supplemental information to the ongoing financial performance.

Net IRA benefit. This item represents the advanced manufacturing production tax credit (AMPTC) from the IRA for manufacturing microinverters in the United States, partially offset by the incremental manufacturing cost incurred in the United States relative to manufacturing in Mexico, India, and China. The AMPTC is accounted for by Enphase Energy as an income-based government grants that reduces cost of revenues in the condensed consolidated statements of operations.

Free cash flow. This item represents net cash flows from operating activities less purchases of property and equipment.

Conference Call Information

Enphase Energy will host a conference call for analysts and investors to discuss its fourth quarter 2024 results and first quarter 2025 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The call is open to the public by dialing (833) 634-5018. A live webcast of the conference call will also be accessible from the “Investor Relations” section of Enphase Energy’s website at https://investor.enphase.com. Following the webcast, an archived version will be available on the website for approximately one year. In addition, an audio replay of the conference call will be available by calling (877) 344-7529; replay access code 3831590, beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to its first quarter of 2025 financial outlook, including revenue, shipments of IQ Batteries by megawatt hours, gross margin with net IRA benefit and excluding net IRA benefit, estimated shipments of U.S. manufactured microinverters, operating expenses, and annualized effective tax rate with IRA benefit; its expectations regarding the expected net IRA benefit; its expectations on the timing and introduction of new products and updates to existing products, including the IQ Meter Collar, fourth-generation IQ Battery, and new IQ Combiner products; its expectations regarding higher domestic content product offerings; and the capabilities, advantages, features, and performance of its technology and products. These forward-looking statements are based on Enphase Energy’s current expectations and inherently involve significant risks and uncertainties. Enphase Energy’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of certain risks and uncertainties including those risks described in more detail in its most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other documents on file with the SEC from time to time and available on the SEC’s website at www.sec.gov. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

A copy of this press release can be found on the investor relations page of Enphase Energy’s website at https://investor.enphase.com.

About Enphase Energy, Inc.

Enphase Energy, a global energy technology company based in Fremont, CA, is the world’s leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own power—and control it all with a smart mobile app. The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped approximately 80.0 million microinverters, and approximately 4.7 million Enphase-based systems have been deployed in more than 160 countries. For more information, visit https://enphase.com/.

©2025 Enphase Energy, Inc. All rights reserved. Enphase Energy, Enphase, the “e” logo, IQ, IQ8, and certain other marks listed at https://enphase.com/trademark-usage-guidelines are trademarks or service marks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

Contact:

Zach Freedman
Enphase Energy, Inc.
Investor Relations
ir@enphaseenergy.com

ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three Months Ended									Year Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net revenues	$	382,713		$	380,873		$	302,570		$	1,330,383		$	2,290,786
Cost of revenues		184,420			202,702			155,908			701,245			1,232,398
Gross profit		198,293			178,171			146,662			629,138			1,058,388
Operating expenses:
Research and development		50,390			47,843			55,291			201,315			227,336
Sales and marketing		51,799			49,671			53,409			206,552			231,792
General and administrative		31,901			30,192			33,379			130,825			137,835
Restructuring and asset impairment charges		9,399			677			14,814			13,154			15,684
Total operating expenses		143,489			128,383			156,893			551,846			612,647
Income (loss) from operations		54,804			49,788			(10,231	)		77,292			445,741
Other income, net
Interest income		18,417			19,977			20,493			77,306			69,728
Interest expense		(2,252	)		(2,237	)		(2,268	)		(8,905	)		(8,839	)
Other income (expense), net		(1,270	)		(16,785	)		4,233			(25,534	)		6,509
Total other income, net		14,895			955			22,458			42,867			67,398
Income before income taxes		69,699			50,743			12,227			120,159			513,139
Income tax (provision) benefit		(7,539	)		(4,981	)		8,692			(17,501	)		(74,203	)
Net income	$	62,160		$	45,762		$	20,919		$	102,658		$	438,936
Net income per share:
Basic	$	0.46		$	0.34		$	0.15		$	0.76		$	3.22
Diluted	$	0.45		$	0.33		$	0.15		$	0.75		$	3.08
Shares used in per share calculation:
Basic		133,815			135,329			136,092			135,167			136,376
Diluted		138,128			139,914			139,205			140,004			143,290

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

	December 31, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	369,110	$	288,748
Restricted cash		95,006		—
Marketable securities		1,253,480		1,406,286
Accounts receivable, net		223,749		445,959
Inventory		165,004		213,595
Prepaid expenses and other assets		220,735		88,930
Total current assets		2,327,084		2,443,518
Property and equipment, net		147,514		168,244
Operating lease, right of use asset, net		24,617		19,887
Intangible assets, net		42,398		68,536
Goodwill		211,571		214,562
Other assets		180,925		215,895
Deferred tax assets, net		315,567		252,370
Total assets	$	3,249,676	$	3,383,012
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	90,032	$	116,164
Accrued liabilities		196,887		261,919
Deferred revenues, current		237,225		118,300
Warranty obligations, current		34,656		36,066
Debt, current		101,291		—
Total current liabilities		660,091		532,449
Long-term liabilities:
Deferred revenues, non-current		341,982		369,172
Warranty obligations, non-current		158,233		153,021
Other liabilities		55,265		51,008
Debt, non-current		1,201,089		1,293,738
Total liabilities		2,416,660		2,399,388
Total stockholders’ equity		833,016		983,624
Total liabilities and stockholders’ equity	$	3,249,676	$	3,383,012

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

	Three Months Ended									Year Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Cash flows from operating activities:
Net income	$	62,160		$	45,762		$	20,919		$	102,658		$	438,936
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		20,665			20,103			20,841			81,389			74,708
Net accretion of discount on marketable securities		(7,490	)		(2,904	)		(2,950	)		(8,599	)		(15,561	)
Provision for doubtful accounts		2,206			2,704			(129	)		6,677			1,153
Asset impairment		4,702			17,568			9,700			28,843			10,603
Non-cash interest expense		2,188			2,173			2,126			8,650			8,380
Net loss (gain) from change in fair value of debt securities		(3,697	)		741			(2,670	)		(1,967	)		(8,078	)
Stock-based compensation		51,830			45,940			55,222			211,360			212,857
Deferred income taxes		(30,675	)		(5,276	)		(5,053	)		(58,319	)		(43,348	)
Changes in operating assets and liabilities:
Accounts receivable		2,684			49,414			105,771			211,640			(12,478	)
Inventory		(6,167	)		17,231			(39,481	)		48,591			(63,887	)
Prepaid expenses and other assets		(16,487	)		(64,149	)		(2,401	)		(134,343	)		(59,777	)
Accounts payable, accrued and other liabilities		(27,396	)		32,088			(139,277	)		(85,536	)		(22,149	)
Warranty obligations		8,657			7,053			221			3,802			57,641
Deferred revenues		104,112			1,690			12,611			98,847			117,780
Net cash provided by operating activities		167,292			170,138			35,450			513,693			696,780
Cash flows from investing activities:
Purchases of property and equipment		(8,064	)		(8,533	)		(20,075	)		(33,604	)		(110,401	)
Purchases of marketable securities		(93,138	)		(319,190	)		(337,757	)		(1,184,649	)		(2,081,431	)
Maturities and sale of marketable securities		351,843			215,241			433,869			1,346,520			1,840,477
Investments in private companies		—			—			—			—			(15,000	)
Net cash provided by (used in) investing activities		250,641			(112,482	)		76,037			128,267			(366,355	)
Cash flows from financing activities:
Partial settlement of convertible notes		—			(5	)		—			(7	)		—
Repurchase of common stock		(199,666	)		(49,794	)		(99,998	)		(391,364	)		(409,998	)
Payment of excise tax on net stock repurchases		(2,773	)		—			—			(2,773	)		—
Proceeds from issuance of common stock under employee equity plans		4,719			14			12,555			12,688			13,870
Payment of withholding taxes related to net share settlement of equity awards		(5,012	)		(6,286	)		(27,546	)		(78,813	)		(120,646	)
Net cash used in financing activities		(202,732	)		(56,071	)		(114,989	)		(460,269	)		(516,774	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(7,410	)		2,638			2,175			(6,323	)		1,853
Net increase (decrease) in cash and cash equivalents and restricted cash		207,791			4,223			(1,327	)		175,368			(184,496	)
Cash and cash equivalents—Beginning of period		256,325			252,102			290,075			288,748			473,244
Cash, cash equivalents and restricted cash—End of period	$	464,116		$	256,325		$	288,748		$	464,116		$	288,748

ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data and percentages)
(Unaudited)

	Three Months Ended									Year Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Gross profit (GAAP)	$	198,293		$	178,171		$	146,662		$	629,138		$	1,058,388
Stock-based compensation		3,678			2,948			3,582			14,538			13,357
Acquisition related amortization		1,784			1,904			1,894			7,469			7,580
Gross profit (Non-GAAP)	$	203,755		$	183,023		$	152,138		$	651,145		$	1,079,325

Gross margin (GAAP)		51.8	%		46.8	%		48.5	%		47.3	%		46.2	%
Stock-based compensation		0.9			0.8			1.2			1.0			0.6
Acquisition related amortization		0.5			0.5			0.6			0.6			0.3
Gross margin (Non-GAAP)		53.2	%		48.1	%		50.3	%		48.9	%		47.1	%

Operating expenses (GAAP)	$	143,489		$	128,383		$	156,893		$	551,846		$	612,647
Stock-based compensation ⁽¹⁾		(47,884	)		(42,992	)		(51,640	)		(196,554	)		(199,500	)
Acquisition related expenses and amortization		(2,884	)		(3,102	)		(3,888	)		(12,911	)		(15,317	)
Restructuring and asset impairment charges ⁽¹⁾		(9,399	)		(677	)		(14,814	)		(13,154	)		(15,715	)
Operating expenses (Non-GAAP)	$	83,322		$	81,612		$	86,551		$	329,227		$	382,115

⁽¹⁾Includes stock-based compensation as follows:
Research and development	$	20,951		$	19,790		$	23,839		$	85,501		$	88,367
Sales and marketing		15,893			14,237			16,472			65,092			65,703
General and administrative		11,041			8,965			11,329			45,962			45,430
Restructuring and asset impairment charges		267			—			—			267			—
Total	$	48,152		$	42,992		$	51,640		$	196,822		$	199,500

Income (loss) from operations (GAAP)	$	54,804		$	49,788		$	(10,231	)	$	77,292		$	445,741
Stock-based compensation		51,563			45,940			55,222			211,093			212,857
Acquisition related expenses and amortization		4,668			5,006			5,782			20,380			22,897
Restructuring and asset impairment charges		9,399			677			14,814			13,154			15,715
Income from operations (Non-GAAP)	$	120,434		$	101,411		$	65,587		$	321,919		$	697,210

Net income (GAAP)	$	62,160		$	45,762		$	20,919		$	102,658		$	438,936
Stock-based compensation		51,563			45,940			55,222			211,093			212,857
Acquisition related expenses and amortization		4,668			5,006			5,782			20,380			22,897
Restructuring and asset impairment charges		9,399			677			14,814			13,154			15,715
Non-cash interest expense		2,188			2,173			2,126			8,650			8,380
Non-GAAP income tax adjustment		(4,116	)		(11,156	)		(25,389	)		(34,891	)		(85,544	)
Net income (Non-GAAP)	$	125,862		$	88,402		$	73,474		$	321,044		$	613,241

Net income per share, basic (GAAP)	$	0.46		$	0.34		$	0.15		$	0.76		$	3.22
Stock-based compensation		0.39			0.34			0.40			1.56			1.56
Acquisition related expenses and amortization		0.03			0.04			0.08			0.15			0.17
Restructuring and asset impairment charges		0.07			0.01			0.11			0.10			0.12
Non-cash interest expense		0.02			0.02			0.02			0.06			0.06
Non-GAAP income tax adjustment		(0.03	)		(0.10	)		(0.22	)		(0.26	)		(0.63	)
Net income per share, basic (Non-GAAP)	$	0.94		$	0.65		$	0.54		$	2.37		$	4.50

Shares used in basic per share calculation GAAP and Non-GAAP		133,815			135,329			136,092			135,167			136,376

Net income per share, diluted (GAAP)	$	0.45		$	0.33		$	0.15		$	0.75		$	3.08
Stock-based compensation		0.39			0.33			0.39			1.56			1.57
Acquisition related expenses and amortization		0.04			0.04			0.08			0.15			0.16
Restructuring and asset impairment charges		0.07			0.01			0.10			0.10			0.11
Non-cash interest expense		0.02			0.02			0.01			0.06			0.06
Non-GAAP income tax adjustment		(0.03	)		(0.08	)		(0.19	)		(0.26	)		(0.57	)
Net income per share, diluted (Non-GAAP) ⁽²⁾	$	0.94		$	0.65		$	0.54		$	2.37		$	4.41

Shares used in diluted per share calculation GAAP		138,128			139,914			139,205			140,004			143,290
Shares used in diluted per share calculation Non-GAAP		134,053			135,839			137,187			135,641			139,214

Income-based government grants (GAAP)	$	68,040		$	46,552		$	32,887		$	157,538		$	53,470
Incremental cost for manufacturing in U.S.		(16,123	)		(11,396	)		(7,112	)		(38,351	)		(11,603	)
Net IRA benefit (Non-GAAP)	$	51,917		$	35,156		$	25,775		$	119,187		$	41,867

Net cash provided by operating activities (GAAP)	$	167,292		$	170,138		$	35,450		$	513,693		$	696,780
Purchases of property and equipment		(8,064	)		(8,533	)		(20,075	)		(33,604	)		(110,401	)
Free cash flow (Non-GAAP)	$	159,228		$	161,605		$	15,375		$	480,089		$	586,379

(2) Calculation of non-GAAP diluted net income per share for the year ended December 31, 2023 excludes convertible Notes due 2023 interest expense, net of tax of less than $0.1 million from non-GAAP net income.

This press release was published by a CLEAR® Verified individual.

The MIL Network –

February 5, 2025

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

Source: GlobeNewswire (MIL-OSI)

Second quarter SaaS revenue of $80.0 million, up 27% year-over-year
Cloud annual recurring revenue (ARR) of $331.1 million, up 29% year-over-year
Trailing twelve months’ cloud net revenue retention rate as of December 31, 2024 was 119%

PALO ALTO, Calif., Feb. 04, 2025 (GLOBE NEWSWIRE) — Intapp, Inc. (NASDAQ: INTA), a leading global provider of AI-powered solutions for professionals at advisory, capital markets, and legal firms, announced financial results for its fiscal second quarter ended December 31, 2024. Intapp also provided its outlook for the third quarter and the full fiscal year 2025.

“I’m pleased to share that once again we’ve achieved strong quarterly results which are supported by the addition of new clients and expanded client relationships,” said John Hall, CEO of Intapp. “Our second quarter results are indicative of our ability to continually drive AI, cloud adoption, and modernization across the industries we serve.”

Second Quarter of Fiscal Year 2025 Financial Highlights

SaaS revenue was $80.0 million, a 27% year-over-year increase compared to the second quarter of fiscal year 2024.
Total revenue was $121.2 million, a 17% year-over-year increase compared to the second quarter of fiscal year 2024.
Cloud ARR was $331.1 million as of December 31, 2024, a 29% year-over-year increase compared to Cloud ARR as of December 31, 2023. Cloud ARR represented 76% of total ARR as of December 31, 2024, compared to 70% as of December 31, 2023.
Total ARR was $437.1 million as of December 31, 2024, a 20% year-over-year increase compared to total ARR as of December 31, 2023.
GAAP operating loss was $(10.2) million, compared to a GAAP operating loss of $(11.1) million in the second quarter of fiscal year 2024.
Non-GAAP operating income was $18.9 million, compared to a non-GAAP operating income of $7.6 million in the second quarter of fiscal year 2024.
GAAP net loss was $(10.2) million, compared to a GAAP net loss of $(9.2) million in the second quarter of fiscal year 2024.
Non-GAAP net income was $17.4 million, compared to a non-GAAP net income of $8.8 million in the second quarter of fiscal year 2024.
GAAP net loss per share was $(0.13), compared to a GAAP net loss per share of $(0.13) in the second quarter of fiscal year 2024.
Non-GAAP diluted net income per share was $0.21, compared to a non-GAAP diluted net income per share of $0.11 in the second quarter of fiscal year 2024.
Cash and cash equivalents were $285.6 million as of December 31, 2024, compared to $208.4 million as of June 30, 2024.
For the six months ended December 31, 2024, net cash provided by operating activities was $49.7 million, compared to net cash provided by operating activities of $23.6 million for the six months ended December 31, 2023.

Business Highlights

As of December 31, 2024, we served more than 2,650 clients, 728 of which each had contracts greater than $100,000 of ARR.
We upsold and cross-sold our existing clients such that our trailing twelve months’ cloud net revenue retention rate as of December 31, 2024 was 119%.
We continued to add new clients and expand existing accounts including accounting firm Milsted Langdon and consulting firm Alvarez & Marsal.
We were named to Forbes’ America’s Most Successful Mid-Cap Companies listing for 2024.
Intapp DealCloud won bronze in the Enterprise Product of the Year – Software category at the 2024 Best in Biz Awards.

Third Quarter and Full Fiscal Year 2025 Outlook

	Fiscal 2025 Outlook
	Third Quarter	Fiscal Year
	(in millions, except per share data)
SaaS revenue	$84.0 – $85.0	$328.8 – $332.8
Total revenue	$128.3 – $129.3	$498.5 – $502.5
Non-GAAP operating income	$18.5 – $19.5	$70.2 – $74.2
Non-GAAP diluted net income per share	$0.21 – $0.23	$0.83 – $0.87

The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

The information presented in this press release includes non-GAAP financial measures such as “non-GAAP operating income,” “non-GAAP net income,” and “non-GAAP diluted net income per share.” Refer to “Non-GAAP Financial Measures and Other Metrics” for a discussion of these measures and the financial tables below for reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

The guidance regarding non-GAAP operating income excludes known pre-tax charges related to estimated stock-based compensation of $23.4 million for the third quarter of fiscal year 2025 and $90.6 million for fiscal year 2025 and amortization of intangible assets of $2.7 million for the third quarter of fiscal year 2025 and $11.2 million for fiscal year 2025. The guidance regarding non-GAAP diluted net income per share excludes known pre-tax charges related to estimated stock-based compensation of $0.28 per share for the third quarter of fiscal year 2025 and $1.08 per share for fiscal year 2025 and amortization of intangible assets of $0.03 per share for the third quarter of fiscal year 2025 and $0.13 per share for fiscal year 2025. The Company has not included a quantitative reconciliation of its guidance for non-GAAP operating income and non-GAAP diluted net income per share to their most directly comparable GAAP financial measures, other than stock-based compensation and amortization of intangible assets, because certain of these reconciling items, including change in fair value of contingent consideration, transaction costs, restructuring and other costs and income tax effect of non-GAAP adjustments, could be highly variable and cannot be reasonably predicted without unreasonable effort. This is due to the inherent difficulty of forecasting the timing of certain events that have not yet occurred and are out of the Company’s control and the amounts of associated reconciling items. Please note that the unavailable reconciling items could significantly impact the Company’s GAAP operating results.

Corporate Presentation

A supplemental financial presentation and other information will be accessible through Intapp’s investor relations website at https://investors.intapp.com/.

Webcast
Intapp will host a conference call for analysts and investors on Tuesday, February 4, 2025, beginning at 2:00 p.m. PT (5:00 p.m. ET). The call will be webcast live via the “Investors” section of the Intapp company website at https://investors.intapp.com/. A replay of the call will be available through the Intapp website for 90 days.

About Intapp

Intapp software helps professionals unlock their teams’ knowledge, relationships, and operational insights to increase value for their firms. Using the power of Applied AI, we make firm and market intelligence easy to find, understand, and use. With Intapp’s portfolio of vertical SaaS solutions, professionals can apply their collective expertise to make smarter decisions, manage risk, and increase competitive advantage. The world’s top firms — across accounting, consulting, investment banking, legal, private capital, and real assets — trust Intapp’s industry-specific platform and solutions to modernize and drive new growth.

Forward-Looking Statements

This press release contains express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the third quarter and full fiscal year 2025, growth strategy, business plans and market position. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “would,” “should,” “could,” “can,” “predict,” “potential,” “target,” “explore,” “continue,” “expand,” “outlook” or the negative of these terms, and similar expressions intended to identify forward-looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including: our ability to continue our growth at or near historical rates; our future financial performance and ability to be profitable; the effect of global events on the U.S. and global economies, our business, our employees, our results of operations, our financial condition, demand for our products, sales and implementation cycles, and the health of our clients’ and partners’ businesses; our ability to prevent and respond to data breaches, unauthorized access to client data or other disruptions of our solutions; our ability to effectively manage U.S. and global market and economic conditions, including inflationary pressures, economic and market downturns and volatility in the financial services industry, particularly adverse to our targeted industries; the length and variability of our sales cycle; our ability to attract and retain clients; our ability to attract and retain talent; our ability to compete in highly competitive markets, including AI products; our ability to manage additional complexity, burdens, and volatility in connection with our international sales and operations; the successful assimilation or integration of the businesses, technologies, services, products, personnel or operations of acquired companies; our ability to incur indebtedness in the future and the effect of conditions in credit markets; the sufficiency of our cash and cash equivalents to meet our liquidity needs; and our ability to maintain, protect, and enhance our intellectual property rights. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and any subsequent public filings. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.

Presentation Changes Related to SaaS and License Revenue

Effective July 1, 2024, the Company adjusted the classification of support services related to subscription license to be included within “license” on the unaudited condensed consolidated statements of operations. Prior to July 1, 2024, support services related to subscription license were included in a line item entitled “SaaS and Support.” Accordingly, effective July 1, 2024, SaaS revenues include subscription fees from clients accessing our SaaS solutions, premium support services related to SaaS, and updates, if any, to the subscribed service during the subscription term. There was no change to the Company’s revenue recognition policy, except for the change in classification noted herein.

The presentation of cost of revenues has been conformed to reflect the changes related to the presentation of revenues. Such reclassifications related to the presentation of revenues and cost of revenues did not affect total revenues, operating income, or net income.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP diluted net income per share. These non-GAAP measures exclude the impact of stock-based compensation, amortization of intangible assets, change in fair value of contingent consideration, transaction costs, restructuring and other costs and the income tax effect of non-GAAP adjustments. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Free cash flow is a non-GAAP financial measure, and a supplemental liquidity measure that management uses to evaluate our core operating business and our ability to meet our current and future financing and investing needs. It consists of net cash provided by operating activities less cash paid for purchases of property and equipment. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Other metrics include total ARR, Cloud ARR and Cloud net revenue retention rate. Total ARR represents the annualized recurring value of all active SaaS and on-premise subscription license contracts at the end of a reporting period. Cloud ARR is the portion of the annualized recurring value of our active SaaS contracts at the end of a reporting period. Contracts with a term other than one year are annualized by taking the committed contract value for the current period divided by number of days in that period, then multiplying by 365. Cloud net revenue retention rate is the portion of our net revenue retention rate, which represents the net revenue retention of our SaaS contracts. We calculate Cloud net revenue retention by starting with the Cloud ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period Cloud ARR. We then calculate the Cloud ARR from these same clients as of the current fiscal period, or current period Cloud ARR. We then divide the current period Cloud ARR by the prior period Cloud ARR to calculate the Cloud net revenue retention.

We believe these non-GAAP financial measures and metrics provide useful information to investors as they are used by management to manage the business, make planning decisions, evaluate our performance, and allocate resources and provide useful information regarding certain financial and business trends relating to our financial condition and results of operations. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Guidance for non-GAAP financial measures excludes stock-based compensation expense, amortization of intangible assets, change in fair value of contingent consideration, transaction costs, restructuring and other costs and the income tax effect of non-GAAP adjustments. Non-GAAP diluted net income per share is calculated by dividing non-GAAP net income by the estimated diluted weighted average shares outstanding for the period.

Investor Contact
David Trone
Senior Vice President, Investor Relations
Intapp, Inc.
ir@intapp.com

Media Contact
Ali Robinson
Global Media Relations Director
Intapp, Inc.
press@intapp.com


INTAPP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data and percentages)

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
Revenues
SaaS	$	79,976		$	63,117		$	156,852		$	122,030
License		28,017			28,135			56,509			56,186
Professional services		13,216			12,681			26,653			27,292
Total revenues		121,209			103,933			240,014			205,508
Cost of revenues
SaaS		16,292			12,810			31,610			25,521
License		1,630			1,606			3,382			3,308
Professional services		14,549			16,353			29,413			33,513
Total cost of revenues		32,471			30,769			64,405			62,342
Gross profit		88,738			73,164			175,609			143,166
Gross margin		73.2	%		70.4	%		73.2	%		69.7	%
Operating expenses:
Research and development		33,325			27,981			65,752			56,477
Sales and marketing		40,791			35,269			78,551			69,688
General and administrative		24,808			20,996			48,746			42,048
Total operating expenses		98,924			84,246			193,049			168,213
Operating loss		(10,186	)		(11,082	)		(17,440	)		(25,047	)
Interest and other income (expense), net		(202	)		2,057			3,220			1,114
Net loss before income taxes		(10,388	)		(9,025	)		(14,220	)		(23,933	)
Income tax benefit (expense)		171			(188	)		(517	)		(601	)
Net loss	$	(10,217	)	$	(9,213	)	$	(14,737	)	$	(24,534	)
Net loss per share, basic and diluted	$	(0.13	)	$	(0.13	)	$	(0.19	)	$	(0.35	)
Weighted-average shares used to compute net loss per share, basic and diluted		78,118			70,521			76,861			69,729


INTAPP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)

	December 31, 2024			June 30, 2024
Assets
Current assets:
Cash and cash equivalents	$	285,631		$	208,370
Restricted cash		200			200
Accounts receivable, net		87,596			95,103
Unbilled receivables, net		13,786			13,300
Other receivables, net		4,412			2,743
Prepaid expenses		11,284			9,031
Deferred commissions, current		14,232			13,907
Total current assets		417,141			342,654
Property and equipment, net		20,172			18,944
Operating lease right-of-use assets		18,426			21,382
Goodwill		285,907			285,969
Intangible assets, net		34,351			40,293
Deferred commissions, noncurrent		18,335			18,495
Other assets		6,255			5,262
Total assets	$	800,587		$	732,999
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	16,631		$	13,348
Accrued compensation		35,045			42,066
Accrued expenses		7,266			12,040
Deferred revenue, net		234,962			218,923
Other current liabilities		12,243			14,270
Total current liabilities		306,147			300,647
Deferred tax liabilities		1,255			1,336
Deferred revenue, noncurrent		3,033			3,563
Operating lease liabilities, noncurrent		17,409			19,605
Other liabilities		4,353			4,610
Total liabilities		332,197			329,761
Stockholders’ equity:
Common stock		79			75
Additional paid-in capital		971,631			891,681
Accumulated other comprehensive loss		(1,401	)		(1,336	)
Accumulated deficit		(501,919	)		(487,182	)
Total stockholders’ equity		468,390			403,238
Total liabilities and stockholders’ equity	$	800,587		$	732,999


INTAPP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands)

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
Cash Flows from Operating Activities:
Net loss	$	(10,217	)	$	(9,213	)	$	(14,737	)	$	(24,534	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		4,372			3,975			8,839			7,984
Amortization of operating lease right-of-use assets		1,278			1,152			2,558			2,282
Accounts receivable allowances		273			803			823			1,228
Stock-based compensation		25,411			16,508			45,400			35,265
Change in fair value of contingent consideration		—			(784	)		(1,004	)		(2,215	)
Deferred income taxes		(26	)		(104	)		(74	)		(217	)
Other		38			39			76			77
Changes in operating assets and liabilities:
Accounts receivable		(23,742	)		(10,902	)		6,465			12,570
Unbilled receivables, current		(1,009	)		(1,888	)		(486	)		(5,774	)
Prepaid expenses and other assets		(2,433	)		(446	)		(5,001	)		(1,788	)
Deferred commissions		(1,832	)		(1,189	)		(165	)		(1,068	)
Accounts payable and accrued liabilities		185			9,760			(7,875	)		(1,517	)
Deferred revenue, net		32,784			4,615			15,509			4,837
Operating lease liabilities		(1,344	)		(768	)		(2,675	)		(2,339	)
Other liabilities		1,501			477			2,032			(1,144	)
Net cash provided by operating activities		25,239			12,035			49,685			23,647
Cash Flows from Investing Activities:
Purchases of property and equipment		(62	)		(213	)		(416	)		(1,354	)
Capitalized internal-use software costs		(1,915	)		(1,592	)		(3,449	)		(3,453	)
Business combinations, net of cash acquired		—			—			(897	)		—
Net cash used in investing activities		(1,977	)		(1,805	)		(4,762	)		(4,807	)
Cash Flows from Financing Activities:
Payments for deferred offering costs		—			(148	)		—			(781	)
Proceeds from stock option exercises		9,666			15,612			32,584			17,936
Proceeds from employee stock purchase plan		1,970			1,725			1,970			1,725
Payments of deferred contingent consideration and holdback associated with acquisitions		(1,023	)		(2,551	)		(2,410	)		(2,551	)
Net cash provided by financing activities		10,613			14,638			32,144			16,329
Effect of foreign currency exchange rate changes on cash and cash equivalents		(2,091	)		(58	)		194			203
Net increase in cash, cash equivalents and restricted cash		31,784			24,810			77,261			35,372
Cash, cash equivalents and restricted cash – beginning of period		254,047			141,747			208,570			131,185
Cash, cash equivalents and restricted cash – end of period	$	285,831		$	166,557		$	285,831		$	166,557

INTAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except per share data and percentages)

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:

Non-GAAP Gross Profit

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
GAAP gross profit	$	88,738		$	73,164		$	175,609		$	143,166
Adjusted to exclude the following:
Stock-based compensation		2,702			2,018			4,934			3,892
Amortization of intangible assets		1,509			1,055			3,080			2,110
Restructuring and other costs		53			—			62			—
Non-GAAP gross profit	$	93,002		$	76,237		$	183,685		$	149,168
Non-GAAP gross margin		76.7	%		73.4	%		76.5	%		72.6	%

Non-GAAP Operating Expenses

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
GAAP research and development	$	33,325		$	27,981		$	65,752		$	56,477
Stock-based compensation		(6,800	)		(4,468	)		(11,424	)		(9,114	)
Restructuring and other costs		(113	)		—			(162	)		—
Non-GAAP research and development	$	26,412		$	23,513		$	54,166		$	47,363


GAAP sales and marketing	$	40,791		$	35,269		$	78,551		$	69,688
Stock-based compensation		(7,232	)		(4,888	)		(12,970	)		(10,227	)
Amortization of intangible assets		(1,268	)		(1,396	)		(2,536	)		(2,883	)
Non-GAAP sales and marketing	$	32,291		$	28,985		$	63,045		$	56,578


GAAP general and administrative	$	24,808		$	20,996		$	48,746		$	42,048
Stock-based compensation		(8,677	)		(5,134	)		(16,072	)		(12,032	)
Amortization of intangible assets		(163	)		(163	)		(326	)		(326	)
Change in fair value of contingent consideration		—			784			1,004			2,215
Transaction costs ⁽¹⁾		(530	)		(350	)		(664	)		(678	)
Restructuring and other costs		(64	)		—			(236	)		—
Non-GAAP general and administrative	$	15,374		$	16,133		$	32,452		$	31,227

Non-GAAP Operating Income

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
GAAP operating loss	$	(10,186	)	$	(11,082	)	$	(17,440	)	$	(25,047	)
Adjusted to exclude the following:
Stock-based compensation		25,411			16,508			45,400			35,265
Amortization of intangible assets		2,940			2,614			5,942			5,319
Change in fair value of contingent consideration		—			(784	)		(1,004	)		(2,215	)
Transaction costs ⁽¹⁾		530			350			664			678
Restructuring and other costs		230			—			460			—
Non-GAAP operating income	$	18,925		$	7,606		$	34,022		$	14,000

Non-GAAP Net Income

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
GAAP net loss	$	(10,217	)	$	(9,213	)	$	(14,737	)	$	(24,534	)
Adjusted to exclude the following:
Stock-based compensation		25,411			16,508			45,400			35,265
Amortization of intangible assets		2,940			2,614			5,942			5,319
Change in fair value of contingent consideration		—			(784	)		(1,004	)		(2,215	)
Transaction costs ⁽¹⁾		530			350			664			678
Restructuring and other costs		230			—			460			—
Income tax effect of non-GAAP adjustments		(1,489	)		(710	)		(2,513	)		(1,125	)
Non-GAAP net income	$	17,405		$	8,765		$	34,212		$	13,388

GAAP net loss per share, basic and diluted	$	(0.13	)	$	(0.13	)	$	(0.19	)	$	(0.35	)
Non-GAAP net income per share, diluted	$	0.21		$	0.11		$	0.41		$	0.17

Weighted-average shares used to compute GAAP net loss per share, basic and diluted		78,118			70,521			76,861			69,729
Weighted-average shares used to compute non-GAAP net income per share, diluted		83,910			80,285			82,724			79,926

Free Cash Flow

	Three Months Ended December 31,						Six Months Ended December 31,
	2024			2023			2024			2023
Net cash provided by operating activities	$	25,239		$	12,035		$	49,685		$	23,647
Adjusted for the following cash outlay:
Purchases of property and equipment		(62	)		(213	)		(416	)		(1,354	)
Free cash flow ⁽²⁾	$	25,177		$	11,822		$	49,269		$	22,293

(1) Consists of acquisition-related transaction costs, costs related to a legal settlement incurred in connection with an acquisition and costs related to certain non-capitalized offering-related expenses.

(2) Beginning with the second quarter ended December 31, 2023, we have excluded capitalized internal-use software costs and cash paid for interest from the calculation of our free cash flow, which we believe better aligns with industry standard. Our free cash flow for prior period presented were recast to conform to the updated methodology and are reflected herein for comparison purposes.

The MIL Network –

February 5, 2025

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

Source: GlobeNewswire (MIL-OSI)

Annual recurring revenues grew 18% year-over-year
SaaS ARR as a percentage of total ARR was approximately 53%
Year-to-date cash from operations generated $115.2 million vs. $59.4 million last year
Year-to-date free cash flow generated $108.5 million vs. $54.3 million last year

NEW YORK, Feb. 04, 2025 (GLOBE NEWSWIRE) — Varonis Systems, Inc. (Nasdaq: VRNS), a leader in data security, today announced financial results for the fourth quarter and full-year ended December 31, 2024.

Yaki Faitelson, Varonis CEO, said, “We are excited by the approximately 50% increase in ARR from new customers, which was driven by the simplicity of SaaS and MDDR as well as customer interest in utilizing Generative AI raising awareness for our solution. We look forward to continuing our momentum and completing our SaaS transition in 2025, which will unlock many more benefits as we capture our massive opportunity.”

Guy Melamed, Varonis CFO & COO, added, “For the first time in company history, SaaS represents a majority of ARR as we finished the fourth quarter with 53% of total company ARR coming from SaaS. This demand positions the company for another year of strong ARR growth and continued improvement in free cash flow generation, while we make strategic investments aimed at supporting our goal of returning to more than 20% ARR growth.”

Financial Summary for the Fourth Quarter Ended December 31, 2024

Total revenues were $158.5 million, compared with $154.1 million in the fourth quarter of 2023.
SaaS revenues were $72.2 million, compared with $23.0 million in the fourth quarter of 2023.
Term license subscription revenues were $66.8 million, compared with $106.2 million in the fourth quarter of 2023.
Maintenance and services revenues were $19.5 million, compared with $24.9 million in the fourth quarter of 2023.
GAAP operating loss was ($17.6) million, compared to GAAP operating loss of ($5.2) million in the fourth quarter of 2023.
Non-GAAP operating income was $15.3 million, compared to non-GAAP operating income of $27.2 million in the fourth quarter of 2023.

Financial Summary for the Year Ended December 31, 2024

Total revenues were $551.0 million, compared with $499.2 million in 2023.
SaaS revenues were $208.8 million, compared with $44.4 million in 2023.
Term license subscription revenues were $254.2 million, compared with $356.5 million in 2023.
Maintenance and services revenues were $87.9 million, compared with $98.3 million in 2023.
GAAP operating loss was ($117.7) million, compared to GAAP operating loss of ($117.2) million in 2023.
Non-GAAP operating income was $15.9 million, compared to non-GAAP operating income of $28.7 million in 2023.

The tables at the end of this press release include a reconciliation of GAAP operating income (loss) to non-GAAP operating income (loss) and GAAP net income (loss) to non-GAAP net income (loss) for the three and twelve months ended December 31, 2024 and 2023. An explanation of these measures is included below under the heading “Non-GAAP Financial Measures and Key Performance Indicators.”

Key Performance Indicators and Recent Business Highlights

Annual recurring revenues, or ARR, was $641.9 million as of the end of the fourth quarter, up 18% year-over-year.
As of December 31, 2024, the Company had $1.2 billion in cash and cash equivalents, short-term deposits and short-term and long-term marketable securities.
During the twelve months ended December 31, 2024, the Company generated $115.2 million of cash from operations, compared to $59.4 million generated in the prior year period.
During the twelve months ended December 31, 2024, the Company generated $108.5 million of free cash flow, compared to $54.3 million generated in the prior year period.
Announced expansion of IaaS security coverage to Google Cloud, bringing the company’s proven data-centric approach to Google Cloud storage and data warehouses.
Expanded coverage to discover and classify critical data, remove exposures, and detect threats on the Databricks Data Intelligence Platform.
Broadened coverage to continuously discover and classify data and resolve issues related to data risk and overexposure within ServiceNow.

An explanation of ARR is included below under the heading “Non-GAAP Financial Measures and Key Performance Indicators.” In addition, the tables at the end of this press release include a reconciliation of net cash provided by operating activities to non-GAAP free cash flow. An explanation of this measure is also included below under the heading “Non-GAAP Financial Measures and Key Performance Indicators.”

Financial Outlook

For the first quarter of 2025, the Company expects:

Revenues of $130.0 million to $135.0 million, or year-over-year growth of 14% to 18%.
Non-GAAP operating loss of ($14.0) million to ($11.0) million.
Non-GAAP net loss per diluted share in the range of ($0.06) to ($0.04), based on 113.6 million diluted shares outstanding.

For full year 2025, the Company expects:

ARR of $737.0 million to $745.0 million, or year-over-year growth of 15% to 16%.
Net cash provided by operating activities of $132.0 million to $139.0 million.
Free cash flow of $120.0 million to $125.0 million.
Revenues of $610.0 million to $625.0 million, or year-over-year growth of 11% to 13%.
Non-GAAP operating income of $0.5 million to $10.5 million.
Non-GAAP net income per diluted share in the range of $0.13 to $0.17, based on 137.5 million diluted shares outstanding.

Actual results may differ materially from the Company’s Financial Outlook as a result of, among other things, the factors described below under “Forward-Looking Statements”.

Conference Call and Webcast
Varonis will host a conference call today, Tuesday, February 4, 2025, at 4:30 p.m. Eastern Time, to discuss the Company’s fourth quarter 2024 and full-year 2024 financial results. To access this call, dial 877-425-9470 (domestic) or 201-389-0878 (international). The passcode is 13750890. A replay of this conference call will be available through February 11, 2025 at 844-512-2921 (domestic) or 412-317-6671 (international). The replay passcode is 13750890. A live webcast of this conference call will be available on the “Investors” page of the Company’s website (www.varonis.com), and a replay will be archived on the website as well.

Non-GAAP Financial Measures and Key Performance Indicators
Varonis believes that the use of non-GAAP operating income (loss) and non-GAAP net income (loss) is helpful to our investors. These measures, which the Company refers to as our non-GAAP financial measures, are not prepared in accordance with GAAP.

Non-GAAP operating income (loss) is calculated as operating income (loss) excluding (i) stock-based compensation expense, (ii) payroll tax expense related to stock-based compensation, and (iii) amortization of acquired intangible assets and acquisition-related expenses.

Non-GAAP net income (loss) is calculated as net income (loss) excluding (i) stock-based compensation expense, (ii) payroll tax expense related to stock-based compensation, (iii) amortization of acquired intangible assets and acquisition-related expenses, (iv) foreign exchange gains (losses) which include exchange rate differences on lease contracts as a result of the implementation of ASC 842 and (v) amortization of debt issuance costs.

The Company believes that the exclusion of these expenses provides a more meaningful comparison of our operational performance from period to period and offers investors and management greater visibility to the underlying performance of our business. Specifically:

Stock-based compensation expenses utilize varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expenses;
Payroll taxes are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, factors which may vary from period to period;
Acquired intangible assets are valued at the time of acquisition and are amortized over an estimated useful life after the acquisition, and acquisition-related expenses are unrelated to current operations and neither are comparable to the prior period nor predictive of future results;
The Company incurs foreign exchange gains or losses from the revaluation of its significant operating lease liabilities in foreign currencies as well as other assets and liabilities denominated in non-U.S. dollars, which may vary from period to period; and
Amortization of debt issuance costs, which relate to the Company’s convertible senior notes issued in 2020 and 2024, are a non-cash item.

Free cash flow is calculated as net cash provided by or used in operating activities less purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash provided by or used in our operations that, after the investments in property and equipment, can be used for strategic initiatives.

Each of our non-GAAP financial measures is an important tool for financial and operational decision making and for evaluating our own operating results over different periods of time. The non-GAAP financial measures do not represent our financial performance under U.S. GAAP and should not be considered as alternatives to operating income (loss) or net income (loss) or any other performance measures derived in accordance with GAAP. Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, and exclude expenses that may have a material impact on our reported financial results. Further, stock-based compensation expense and payroll tax expense related to stock-based compensation have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of the compensation provided to our employees. Also, the amortization of intangible assets are expected recurring expenses over the estimated useful life of the underlying intangible asset and acquisition-related expenses will be incurred to the extent acquisitions are made in the future. Additionally, foreign exchange rates may fluctuate from one period to another, and the Company does not estimate movements in foreign currencies. Finally, the amortization of debt issuance costs are expected recurring expenses until the maturity of the senior notes in 2029.

The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Varonis urges investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measures to evaluate our business.

A reconciliation for non-GAAP operating income (loss) and non-GAAP net income (loss) referred to in our “Financial Outlook” is not provided because, as forward-looking statements, such reconciliation is not available without unreasonable effort due to the high variability, complexity, and difficulty of estimating certain items such as charges to stock-based compensation expense and currency fluctuations which could have an impact on our consolidated results. The Company believes the information provided is useful to investors because it can be considered in the context of the Company’s historical disclosures of this measure.

ARR is a key performance indicator defined as the annualized value of active SaaS contracts, term-based subscription license contracts, and maintenance contracts in effect at the end of that period. SaaS contracts, term-based subscription license contracts, and maintenance contracts are annualized by dividing the total contract value by the number of days in the term and multiplying the result by 365. The annualized value of contracts is a legal and contractual determination made by assessing the contractual terms with our customers. The annualized value of maintenance contracts is not determined by reference to historical revenues, deferred revenues or any other GAAP financial measure over any period. ARR is not a forecast of future revenues, which can be impacted by contract start and end dates and renewal rates.

Forward-Looking Statements

This press release contains, and statements made during the above referenced conference call will contain, “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including regarding the Company’s growth rate and its expectations regarding future revenues, operating income or loss or earnings or loss per share. These statements are not guarantees of future performance but are based on management’s expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: the impact of potential information technology, cybersecurity or data security breaches; risks associated with anticipated growth in Varonis’ addressable market; general economic and industry conditions, such as foreign currency exchange rate fluctuations and expenditure trends for data and cybersecurity solutions; Varonis’ ability to predict the timing and rate of subscription renewals and their impact on the Company’s future revenues and operating results; risks associated with international operations; the impact of global conflicts on the budgets of our clients and on economic conditions generally; competitive factors, including increased sales cycle time, changes in the competitive environment, pricing changes and increased competition; the risk that Varonis may not be able to attract or retain employees, including sales personnel and engineers; Varonis’ ability to build and expand its direct sales efforts and reseller distribution channels; risks associated with the closing of large transactions, including Varonis’ ability to close large transactions consistently on a quarterly basis; new product introductions and Varonis’ ability to develop and deliver innovative products; Varonis’ ability to provide high-quality service and support offerings; the expansion of cloud-delivered services; and risks associated with our convertible notes and capped-call transactions. These and other important risk factors are described more fully in Varonis’ reports and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof, and Varonis undertakes no duty to update or revise this information, whether as a result of new information, new developments or otherwise, except as required by law.

About Varonis

Varonis (Nasdaq: VRNS) is a leader in data security, fighting a different battle than conventional cybersecurity companies. Our cloud-native Data Security Platform continuously discovers and classifies critical data, removes exposures, and detects advanced threats with AI-powered automation.

Thousands of organizations worldwide trust Varonis to defend their data wherever it lives — across SaaS, IaaS, and hybrid cloud environments. Customers use Varonis to automate a wide range of security outcomes, including data security posture management (DSPM), data classification, data access governance (DAG), data detection and response (DDR), data loss prevention (DLP), and insider risk management.

Varonis protects data first, not last. Learn more at www.varonis.com.

Investor Relations Contact:
Tim Perz
Varonis Systems, Inc.
646-640-2112
investors@varonis.com

News Media Contact:
Rachel Hunt
Varonis Systems, Inc.
877-292-8767 (ext. 1598)
pr@varonis.com

Varonis Systems, Inc.
Consolidated Statements of Operations
(in thousands, except for share and per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
	Unaudited						Unaudited
Revenues:
Term license subscriptions	$	66,781		$	106,184		$	254,241		$	356,490
SaaS		72,206			22,980			208,781			44,417
Maintenance and services		19,527			24,935			87,928			98,253
Total revenues		158,514			154,099			550,950			499,160

Cost of revenues		26,055			19,347			93,847			71,751

Gross profit		132,459			134,752			457,103			427,409

Operating expenses:
Research and development		50,546			48,144			196,765			183,838
Sales and marketing		76,123			70,569			288,769			277,893
General and administrative		23,342			21,283			89,220			82,901
Total operating expenses		150,011			139,996			574,754			544,632

Operating loss		(17,552	)		(5,244	)		(117,651	)		(117,223	)
Financial income, net		7,605			5,433			34,644			30,305

Income (loss) before income taxes		(9,947	)		189			(83,007	)		(86,918	)
Income taxes		(3,047	)		(1,087	)		(12,758	)		(13,998	)

Net loss	$	(12,994	)	$	(898	)	$	(95,765	)	$	(100,916	)

Net loss per share of common stock, basic and diluted	$	(0.12	)	$	(0.01	)	$	(0.86	)	$	(0.92	)

Weighted average number of shares used in computing net loss per share of common stock, basic and diluted		112,488,376			109,007,859			111,660,541			109,141,894

*Stock-based compensation expense for the* *three* *and* *twelve months ended* *December 31, 2024* *and* *2023* *is included in the Consolidated Statements of Operations as follows (in thousands):*

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
	Unaudited				Unaudited
Cost of revenues	$	1,175	$	1,275	$	5,192	$	7,221
Research and development		10,709		11,199		41,766		48,679
Sales and marketing		10,509		10,186		41,494		48,047
General and administrative		10,176		8,983		38,230		35,872
	$	32,569	$	31,643	$	126,682	$	139,819

*Payroll tax expense related to stock-based compensation for the* *three* *and* *twelve months ended* *December 31, 2024* *and* *2023* *is included in the Consolidated Statements of Operations as follows (in thousands):*

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
	Unaudited				Unaudited
Cost of revenues	$	6	$	20	$	637	$	405
Research and development		38		133		604		365
Sales and marketing		146		152		3,196		1,972
General and administrative		16		32		1,181		518
	$	206	$	337	$	5,618	$	3,260

*Amortization of acquired intangibles and acquisition-related expenses for the* *three* *and* *twelve months ended* *December 31, 2024* *and* *2023* *is included in the Consolidated Statements of Operations as follows (in thousands):*

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
	Unaudited				Unaudited
Cost of revenues	$	119	$	381	$	1,263	$	1,525
Research and development		—		128		—		1,363
Sales and marketing		—		—		—		—
General and administrative		—		—		—		—
	$	119	$	509	$	1,263	$	2,888

Varonis Systems, Inc.
Consolidated Balance Sheets
(in thousands)

	December 31, 2024			December 31, 2023
	Unaudited
Assets
Current assets:
Cash and cash equivalents	$	185,585		$	230,740
Marketable securities		343,383			253,175
Short-term deposits		39,450			49,800
Trade receivables, net		192,832			169,116
Prepaid expenses and other short-term assets		116,824			64,326
Total current assets		878,074			767,157
Long-term assets:
Long-term marketable securities		658,896			211,063
Operating lease right-of-use assets		45,593			51,838
Property and equipment, net		30,795			33,964
Intangible assets, net		—			1,263
Goodwill		23,135			23,135
Other assets		27,782			15,490
Total long-term assets		786,201			336,753
Total assets	$	1,664,275		$	1,103,910

Liabilities and stockholders’ equity
Current liabilities:
Trade payables	$	4,313		$	672
Accrued expenses and other short-term liabilities		164,930			125,057
Convertible senior notes, net		250,529			—
Deferred revenues		290,113			181,049
Total current liabilities		709,885			306,778
Long-term liabilities:
Convertible senior notes, net		450,243			250,477
Operating lease liabilities		42,789			51,313
Deferred revenues		2,211			886
Other liabilities		3,491			4,808
Total long-term liabilities		498,734			307,484

Stockholders’ equity:
Share capital
Common stock		113			109
Accumulated other comprehensive income (loss)		2,676			(8,649	)
Additional paid-in capital		1,193,022			1,142,578
Accumulated deficit		(740,155	)		(644,390	)
Total stockholders’ equity		455,656			489,648
Total liabilities and stockholders’ equity	$	1,664,275		$	1,103,910

Varonis Systems, Inc.
Consolidated Statements of Cash Flows
(in thousands)

	Twelve Months Ended December 31,
	2024			2023
	Unaudited
Cash flows from operating activities:
Net loss	$	(95,765	)	$	(100,916	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		11,126			11,703
Stock-based compensation		126,682			139,819
Amortization of deferred commissions		54,392			53,072
Non-cash operating lease costs		9,526			9,468
Amortization of debt issuance costs		2,144			1,514
Amortization of premium and accretion of discount on marketable securities, net		(12,690	)		(9,354	)
Acquired in-process research and development		6,653			—

Changes in assets and liabilities:
Trade receivables		(23,716	)		(33,137	)
Prepaid expenses and other short-term assets		(35,332	)		(21,459	)
Deferred commissions		(59,820	)		(53,505	)
Other long-term assets		347			(577	)
Trade payables		3,641			(2,290	)
Accrued expenses and other short-term liabilities		17,317			(5,278	)
Deferred revenues		110,389			69,882
Other long-term liabilities		306			474
Net cash provided by operating activities		115,200			59,416

Cash flows from investing activities:
Proceeds from maturities of marketable securities		308,840			301,350
Proceeds from sales of marketable securities		111,552			—
Investment in marketable securities		(949,841	)		(517,948	)
Proceeds from short-term and long-term deposits		34,795			214,444
Investment in short-term and long-term deposits		(24,254	)		(135,823	)
Purchase of in-process research and development		(6,653	)		—
Purchases of property and equipment		(6,694	)		(5,099	)
Net cash used in investing activities		(532,255	)		(143,076	)

Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs		449,635			—
Purchases of capped calls		(55,522	)		—
Proceeds from employee stock plans		16,082			11,537
Taxes paid related to net share settlement of equity awards		(38,295	)		(21,415	)
Repurchase of common stock		—			(43,522	)
Net cash provided by (used in) financing activities		371,900			(53,400	)
Decrease in cash and cash equivalents		(45,155	)		(137,060	)
Cash and cash equivalents at beginning of period		230,740			367,800
Cash and cash equivalents at end of period	$	185,585		$	230,740

Varonis Systems, Inc.
Reconciliation of GAAP Measures to non-GAAP
(in thousands, except share and per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
	Unaudited						Unaudited
Reconciliation to non-GAAP operating income:

GAAP operating loss	$	(17,552	)	$	(5,244	)	$	(117,651	)	$	(117,223	)

Add back:
Stock-based compensation expense		32,569			31,643			126,682			139,819
Payroll tax expenses related to stock-based compensation		206			337			5,618			3,260
Amortization of acquired intangible assets and acquisition-related expenses		119			509			1,263			2,888
Non-GAAP operating income	$	15,342		$	27,245		$	15,912		$	28,744

Reconciliation to non-GAAP net income:

GAAP net loss	$	(12,994	)	$	(898	)	$	(95,765	)	$	(100,916	)

Add back:
Stock-based compensation expense		32,569			31,643			126,682			139,819
Payroll tax expenses related to stock-based compensation		206			337			5,618			3,260
Amortization of acquired intangible assets and acquisition-related expenses		119			509			1,263			2,888
Foreign exchange rate differences, net		3,129			2,290			827			(916	)
Amortization of debt issuance costs		880			381			2,144			1,514
Non-GAAP net income	$	23,909		$	34,262		$	40,769		$	45,649

GAAP weighted average number of shares used in computing net loss per share of common stock – basic and diluted		112,488,376			109,007,859			111,660,541			109,141,894
Non-GAAP weighted average number of shares used in computing net income per share of common stock – basic		112,488,376			109,007,859			111,660,541			109,141,894
Non-GAAP weighted average number of shares used in computing net income per share of common stock – diluted		135,097,388			126,061,869			130,278,825			126,585,777

GAAP net loss per share of common stock – basic and diluted	$	(0.12	)	$	(0.01	)	$	(0.86	)	$	(0.92	)
Non-GAAP net income per share of common stock – basic	$	0.21		$	0.31		$	0.37		$	0.42
Non-GAAP net income per share of common stock – diluted	$	0.18		$	0.27		$	0.31		$	0.36

Varonis Systems, Inc.
Reconciliation of GAAP Measures to non-GAAP
(in millions)

	Twelve Months Ended December 31,
	2024			2023
	Unaudited
Reconciliation to non-GAAP free cash flow:
Net cash provided by operating activities	$	115.2		$	59.4
Purchases of property and equipment		(6.7	)		(5.1	)
Free cash flow	$	108.5		$	54.3

Varonis Systems, Inc.
Reconciliation of GAAP Measures to non-GAAP
(in millions)

	Twelve Months Ended December 31, 2025
	Low			High
Reconciliation to non-GAAP free cash flow:
Net cash provided by operating activities	$	132.0		$	139.0
Purchases of property and equipment		(12.0	)		(14.0	)
Free cash flow	$	120.0		$	125.0

The MIL Network –

February 5, 2025

MIL-OSI USA: Tuberville, Hoeven Introduce CRA to Repeal Methane Tax Rule

US Senate News:

Source: United States Senator Tommy Tuberville (Alabama)

WASHINGTON – Today, U.S. Senator Tommy Tuberville (R-AL) joined U.S. Senator John Hoeven (R-ND) in introducing a resolution under the Congressional Review Act (CRA) to repeal a rule proposed by the Environmental Protection Agency (EPA) included in Democrats’ Inflation Reduction Act that creates a new tax on natural gas production. The tax would increase our dependence on foreign nations for energy and cause higher energy costs for consumers. Last month, Senator Tuberville also joined U.S. Senator Ted Cruz in reintroducing legislation to repeal the Natural Gas Tax.

“For the last four years, Americans have felt the impacts of Bidenflation from the gas pump to the grocery store,” said Senator Tuberville. “Democrats have shut down our offshore drilling and made us reliant on foreign adversaries for our energy without considering the impact that it has on Americans’ daily lives. The last thing hardworking Americans need right now are more taxes and higher prices. I look forward to seeing this disastrous methane tax overturned and working with President Trump to make America energy independent once again.

Full text of the resolution can be read here.

Also joining Senators Tuberville and Hoeven in introducing the resolution are U.S. Senators Roger Marshall (R-KS), Mike Lee (R-UT), James Lankford (R-OK), Steve Daines (R-MT), Kevin Cramer (R-ND), Katie Britt (R-AL), Shelley Moore Capito (R-WV), Cynthia Lummis (R-WY), James Risch (R-ID), Rick Scott (R-FL), Ted Cruz (R-TX), Rand Paul (R-KY), Mike Crapo (R-ID), Jim Justice (R-WV), John Kennedy (R-LA), Cindy Hyde-Smith (R-MS), Mike Rounds (R-SD), Tim Sheehy (R-MT), Thom Tillis (R-NC), Markwayne Mullin (R-OK), Roger Wicker (R-MS), Pete Ricketts (R-NE) and John Barrasso (R-WY).

BACKGROUND:

For the last four years, Senator Tuberville has helped introduce numerous pieces of legislation pushing back against the Biden administration’s war on American energy, citing the impacts rising energy costs would have on hardworking Americans and Alabamians that work in the Gulf of America’s energy industry. Senator Tuberville has also been vocal about how increased energy costs cut into farmers’ bottom lines and the need to bring down energy costs so that we can preserve our small family farms.

MORE:

Tuberville, Cruz Introduce Legislation Eliminating Natural Gas Tax, Bolstering American Energy Security

Tuberville, Cruz Introduce Legislation to Repeal Biden’s Natural Gas Tax for Unleashing American Energy

ICYMI: Tuberville in Fox News: How Congress Can Reverse Biden’s Radical Energy Agenda

Tuberville Blasts Biden Administration For Playing Politics With U.S. Energy

Tuberville Applauds NOAA Decision Rejecting Biden Administration’s Rule Threatening Gulf’s Energy Sector

Tuberville Continues to Fight Biden Administration’s Rule Threatening Gulf’s Energy Sector

Tuberville Sponsors Legislation to Prevent Administration From Shutting Down Offshore Energy Development

ICYMI: Tuberville and NOIA President Sound Alarm on Biden Rule Proposal Threatening Gulf’s Energy Sector

Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, HELP, and Aging Committees.

MIL OSI USA News –

February 5, 2025

MIL-OSI USA: February 4th, 2025 Heinrich Announces Appropriations Committee Assignments for 119th Congress

US Senate News:

Source: United States Senator for New Mexico Martin Heinrich

Heinrich named Ranking Member of the Senate Appropriations Subcommittee on the Legislative Branch

WASHINGTON — Today, U.S. Senator Martin Heinrich (D-N.M.) announced his assignments on the Senate Appropriations Committee for the 119th Congress. Heinrich’s positions on the Appropriations Committee allow him to directly advocate for and deliver investments that improve New Mexicans’ safety, well-being, and quality of life.

“As a member of the Senate Appropriations Committee, I have delivered hundreds of millions of dollars in investments to New Mexico, helping to lower costs for working families, grow local economies, and create jobs New Mexicans can build their families around. Our appropriations bills are essential to New Mexico’s economy. They support our local law enforcement, fire departments, hospitals, schools, newborns, elders and veterans, and help keep communities safe across New Mexico.

“I will stand up to anybody who tries to prevent investments I’ve secured from reaching New Mexicans. The Constitution is clear: the president cannot override, delay, or rescind Congress’s funding laws. Donald Trump’s attacks on federal funding for our state cannot stand.”

Heinrich has been assigned to the following Senate Appropriations Subcommittees:

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Subcommittee
Energy and Water Development Subcommittee
Interior, Environment, and Related Agencies Subcommittee
Military Construction, Veterans Affairs, and Related Agencies Subcommittee
Legislative Branch Subcommittee

Heinrich will be Ranking Member of the Senate Appropriations Subcommittee on the Legislative Branch, which oversees the funding of:

Joint Committee on Taxation
Joint Economic Committee
Congressional Budget Office
Government Accountability Office
Architect of the Capitol
Books for the Blind and Physically Handicapped (Library of Congress)
Botanic Garden (Architect of the Capitol)
Capitol Police
Congressional Research Service (Library of Congress)
Copyright Office (Library of Congress)
Government Publishing Office
House of Representatives
John C. Stennis Center for Public Service, Training, and Development
Joint Congressional Committee on Inaugural Ceremonies
Library of Congress
Office of Compliance
Office of Congressional Accessibility Services
Office of the Attending Physician
Open World Leadership Center Trust Fund
Senate

This will be Heinrich’s third Congress serving on the U.S. Senate Committee on Appropriations.

Heinrich’s Committee assignments for the 119^th Congress:

In the 119th Congress, Heinrich is serving as Ranking Member for the Senate Energy and Natural Resources (ENR) Committee. The ENR Committee plays a critical role in setting national energy policies and managing our nation’s public lands within the U.S. Department of the Interior and the U.S. Forest Service. The Committee also oversees the U.S. Department of Energy and has jurisdiction over U.S. territories and nuclear waste policy.

Heinrich will continue to serve on the U.S. Senate Appropriations Committee, the U.S. Senate Select Committee on Intelligence, and the U.S. Congress Joint Economic Committee.

Heinrich will also serve as Co-Chair of the Senate Artificial Intelligence (AI) Caucus, the Senate Fusion Energy Caucus, the Bicameral Electrification Caucus, the International Conservation Caucus, and the Senate Outdoor Recreation Caucus. Heinrich will serve as a member of the Congressional Sportsmen’s Caucus, Senate Democratic Hispanic Task Force, National Service Congressional Caucus, Congressional Dietary Supplement Caucus, and the Congressional Directed Energy Caucus.

MIL OSI USA News –

February 5, 2025

MIL-OSI Asia-Pac: Ministry of Coal Issued Vesting Orders for 7 Coal Mines Under Commercial Coal Mine Auctions

Source: Government of India (2)

Posted On: 04 FEB 2025 9:49PM by PIB Delhi

The Nominated Authority, Ministry of Coal has issued the Vesting Orders for 7 Coal Mines under commercial coal mine auctions today. The Coal Mine Development and Production Agreements (CMDPA) for these mines were signed on December 05,2024.

The mines for which vesting orders has been signed are Gawa (East), Gare Palma IV/5, Marwatola South, New Patrapara South, Sarai East (South), Bartap(Revised) and Kerendari BC North Coal Mines. 5 mines are partially explored coal mines, and 2 mines are fully explored coal mines. The PRC(Peak Rated Capacity) of these coal mines are ~ 13.10 MTPA and is having ~3,308 MT of Geological Reserves. These mines are expected to generate an Annual Revenue of ~Rs. 1,327 crores calculated on the basis of PRC and will attract Capital Investment of ~Rs. 1,965 crores. It will provide employment to ~17,500 people both directly and indirectly.

With the vesting of these coal mines, vesting/ allocation orders have been issued for 107 coal mines under commercial coal mine auction with cumulative PRC of ~246.60 MTPA. This will result in generating Annual Revenue of ~Rs. 34,000 crores and will generate employment for ~3,33,000 people both directly and indirectly.

*****

Shuhaib T

(Release ID: 2099889) Visitor Counter : 86

MIL OSI Asia Pacific News –

February 5, 2025

MIL-OSI: GAMCO Investors, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2024

Source: GlobeNewswire (MIL-OSI)

Quarter End AUM of $31.7 billion
Operating Margin of 32.3% for the Fourth Quarter and 31.0% for 2024
Fourth Quarter Earnings of $0.70 per Share versus $0.66 per Share in the Fourth Quarter of 2023
2024 Earnings of $2.65 per Share versus $2.38 per Share for 2023
$182.8 million in Cash, Cash Equivalents, Seed Capital, and Investments and No Debt
Board Authorizes 100% Increase of the Regular Quarterly Dividend
Repurchased 1.3 million Shares, or 3% of Outstanding Shares, During the Fourth Quarter of 2024 and Increased Buyback Authorization to 1.5 Million Shares

GREENWICH, Conn., Feb. 04, 2025 (GLOBE NEWSWIRE) — GAMCO Investors, Inc. (“Gabelli”) (OTCQX: GAMI) today reported its operating results for the quarter ended December 31, 2024.

Financial Highlights

(In thousands, except percentages and per share data)
	Three Months Ended
	December 31, 2024			December 31, 2023
U.S. GAAP
Revenue	$	59,262		$	57,313
Expenses		40,109			41,517
Operating income		19,153			15,796
Non-operating income		3,452			6,199
Net income		16,797			16,560
Diluted earnings per share	$	0.70		$	0.66
Operating margin		32.3	%		27.6	%

Giving Back to Society – $80 million since IPO

Since our initial public offering in February 1999, our firm’s combined charitable donations total approximately $80 million, including $48 million through the shareholder designated charitable contribution program. Based on the program created by Warren Buffett at Berkshire Hathaway, our corporate charitable giving is unique in that the recipients of Gabelli’s charitable contributions are chosen directly by our shareholders, rather than by our corporate officers. Since its inception in 2013, Gabelli shareholders have designated charitable gifts to approximately 350 charitable organizations.

On August 6, 2024, Gabelli’s board of directors authorized the creation of a private foundation, headquartered in Reno, Nevada, to continue our charitable giving program with an initial contribution of $5 million.

Revenue

(In thousands)	Three Months Ended
	December 31, 2024			December 31, 2023
Investment advisory and incentive fees
Funds	$	40,441		$	37,748
Institutional and Private Wealth Management		15,057			13,712
SICAV		4	(a)		1,541	(a)
Total	$	55,502		$	53,001
Distribution fees and other income		3,760			4,312
Total revenue	$	59,262		$	57,313

(a) Reflects change in reporting methodology. See AUM table.

The year over year increase in Funds revenues was primarily the result of higher average assets under management. The increase in Institutional and Private Wealth Management revenues was primarily the result of higher beginning of the quarter equity assets under management, which are generally used to calculate the revenues. The decrease in SICAV revenues reflects a change in the agreement for the merger arbitrage SICAV, an open-end fund available to non-U.S. shareholders, which became effective in December 2023. The change better aligns the financial arrangements with the services rendered by each party in managing the fund and did not have a material impact on the financial results. The decrease in distribution fees and other income was primarily the result of a decrease in equity mutual funds AUM that pay distribution fees.

Expenses

(In thousands)	Three Months Ended
	December 31, 2024		December 31, 2023
Compensation	$	26,593	$	27,316
Management fee		2,512		2,444
Distribution costs		5,634		5,848
Other operating expenses		5,370		5,909
Total expenses	$	40,109	$	41,517

The lower compensation expense in the fourth quarter of 2024 reflected $2.9 million of waived compensation partially offset by increased fixed compensation of $1.4 million and increased variable compensation of $0.8 million.
The $0.1 million increase in management fee is attributable to the higher pre-management fee income of $0.7 million; and,
Other operating expenses this quarter were lower versus the fourth quarter of 2023 reflecting the change in the agreement for the merger arbitrage SICAV beginning in December 2023.

Operating Margin

The operating margin, which represents the ratio of operating income to revenue, was 32.3% for the fourth quarter of 2024 compared with 27.6% for the fourth quarter of 2023.

Non-Operating Income

(In thousands)	Three Months Ended
	December 31, 2024			December 31, 2023
Gain from investments, net	$	644		$	3,529
Interest and dividend income		3,090			2,951
Interest expense (a)		(282	)		(281	)
Total non-operating income	$	3,452		$	6,199

(a) Related to GAAP accounting of finance lease.

Non-operating income decreased $2.7 million for the quarter, reflecting the lower mark-to-market net gains on our investment portfolio for the quarter slightly offset by an increase in interest and dividend income.

Other Financial Highlights

The effective income tax rate for the fourth quarter of 2024 was 25.7% versus 24.7% for the fourth quarter of 2023.

Cash, cash equivalents, and investments were $182.8 million with no debt at December 31, 2024.

Assets Under Management

(In millions)	As of
	December 31, 2024		September 30, 2024		December 31, 2023

Mutual Funds	$	8,078	$	8,440	$	7,973
Closed-end Funds		7,344		7,459		7,097
Institutional & PWM (a) (b)		10,700		10,984		10,738
SICAV (c)		9		9		631
Total Equities		26,131		26,892		26,439

100% U.S. Treasury Money Market Fund		5,552		5,268		4,615
Institutional & PWM Fixed Income		32		32		32
Total Treasuries & Fixed Income		5,584		5,300		4,647
Total Assets Under Management	$	31,715	$	32,192	$	31,086

(a) Includes $242, $278, and $370 of AUM subadvised for Teton Advisors, Inc. at December 31, 2024, September 30,
2024, and December 31, 2023, respectively.
(b) Includes $237, $212, and $227 of 100% U.S. Treasury Money Market Fund AUM at December 31, 2024,
September 30, 2024, and December 31, 2023, respectively.
(c) Includes $0, $0, and $620 of the SICAV AUM subadvised by Associated Capital Group, Inc. at December 31, 2024,
September 30, 2024, and December 31, 2023, respectively.

Assets under management on December 31, 2024 were $31.7 billion, a decrease of 1.6% from the $32.2 billion on September 30, 2024. The quarter’s decrease consisted of net market depreciation of $0.2 billion, net outflows of $0.2 billion, and distributions, net of reinvestments, of $0.1 billion.

Mutual Funds

Assets under management in Mutual Funds on December 31, 2024 were $8.1 billion, a decrease of 4.3% from the $8.4 billion at September 30, 2024. The quarterly change was attributed to:

Distributions, net of reinvestment, of $27 million;
Net outflows of $209 million; and
Net market depreciation of $126 million.

Closed-end Funds

Assets under management in Closed-end Funds on December 31, 2024 were $7.3 billion, a decrease of 1.5% from the $7.5 billion on September 30, 2024. The quarterly change was comprised of:

Distributions, net of reinvestment, of $129 million;
Net inflows of $169 million, including the issuance of $150 million preferred shares, the issuance of $62 million common shares less the redemption of $30 million of preferred shares, and the repurchase of $13 million of common stock ; and
Net market depreciation of $155 million.

Institutional & PWM

Assets under management in Institutional & PWM on December 31, 2024 were $10.7 billion, a decrease of 0.9% from the $10.8 billion on December 31, 2023. The quarterly change was due to:

Net outflows of $345 million; and
Net market appreciation of $61 million.

SICAV

Assets under management were $9 million in the GAMCO All Cap Value sleeve and the GAMCO Convertible Securities sleeve on December 31, 2024 versus $11 million in those sleeves at December 31, 2023.

100% U.S. Treasury Money Market Fund

Assets under management in our 100% U.S. Treasury Money Market Fund (GABXX) on December 31, 2024 were $5.6 billion, up from $5.3 billion at September 30, 2024.

The Gabelli Growth Fund – Up 35.8% For 2024

The Growth team of Howard Ward, CFA, and John Belton, CFA, commented on The Gabelli Growth Fund’s 2024 performance:

“The environment remained favorable for growth stocks in 2024, underpinned by a resilient economy and the start of a Federal Reserve interest rate cutting cycle. Earnings growth accelerated for many US companies, aided by healthy consumer spending trends, robust technology investments, and continued cost discipline. Artificial Intelligence (AI) remained a key stock market theme, as capital expenditure plans across the hyperscale cloud computing group reached astronomical levels, and given a host of new AI-centric business models which have started to take shape. To date, this technology appears to be making some of the strongest companies, stronger, and to that end we maintained positions in many of the largest AI beneficiaries including NVIDIA, Microsoft, Amazon, Alphabet and Meta Platforms. This group remains a cornerstone of our portfolio, and as of year-end more than half of the portfolio’s assets are invested across the Technology Sector as a whole. Outside of the Megacap Tech group, top performers to performance this year included Eli Lilly (boosted by continued success across an industry-leading incretin drug portfolio), ServiceNow (which is an early leader in AI software commercialization) and Intuitive Surgical.”

The Gabelli Gold Fund – Up 15.2% For 2024

Portfolio manager Caesar Bryan commented on The Gabelli Gold Fund’s 2024 performance:

“Gold performed strongly for the second consecutive year largely driven by overseas central bank purchases. However, gold equities underperformed the gold price. Recently the rise in the gold price has not been fully reflected in the profit margins of gold mining companies. This has largely been due to cost pressures emanating from a variety of sources, exacerbated by covid. But we believe the market may be too pessimistic concerning both cost pressures which are diminishing and enhanced revenues from a higher gold price. Gold equities are inexpensive relative to their history and on an absolute basis. But a catalyst is needed to alter investor perception. This could be gold backed ETFs adding ounces reflecting a recovery in investor interest in the sector, a decline in other asset markets which may highlight gold as a portfolio diversifier, increased takeover activity or simply continued strength in the gold price. Some of our smaller gold producers such as Lundin Gold and Wesdome Gold Mines, had stellar returns. Among our larger producers Kinross and Agnico Eagle contributed significantly to performance. We continue to favor mid capitalization gold producers with good assets that trade at a big discount to some of the larger producers.”

The Gabelli Small Cap Growth Fund

We utilize our own in-house team of over 40 industry equity analysts and portfolio managers to analyze the stocks in the fund, using our bottom-up research-intensive process and, more importantly, our accumulated and compounded knowledge of selected industry sectors. We use GAPIC – gather, array, project, interpret, and communicate data daily. We have consistently applied our Private Market Value with a Catalyst approach to help generate our long-term returns since the inception of the fund in 1991.

ETFs

In 2024, Gabelli Growth Innovators (NYSE: GGRW), managed by Howard Ward and John Belton, generated a 41.8% total return, the Gabelli Financial Services Opportunities ETF (NYSE: GABF), led by Macrae Sykes, produced a 44.6% total return, and the Gabelli Commercial Aerospace & Defense ETF (NYSE: GCAD), managed by Lieutenant Colonel G. Anthony (Tony) Bancroft, USMCR returned 22.2%. The firm launched its first active ETF, the Gabelli Love Our Planet & People ETF (NYSE: LOPP) in January 2021 to extend the tax benefits of owning exchange traded funds to our investors. Since the initial launch, the Gabelli platform has steadily grown the differentiated suite of ETFs. We are pleased with the client adoption progress and excited about this growth area of the market and positioning of these unique funds supported by our investment team. To accelerate the growth of these funds, each of the funds (with the exception of GGRW) has fee and expense waivers on the first $25 million of assets, whereas LOPP has a fee and expense waiver for the first $100 million of assets under management.

Assets Under Administration

(In millions)	As of
	December 31, 2024		September 30, 2024		December 31, 2023

Teton-Keeley Funds (a)	$	809	$	883	$	964
SICAV		408		431		–
Total Assets Under Administration	$	1,217	$	1,314	$	964

(a) Includes $242, $278 and $370 of AUM subadvised for Teton Advisors, Inc. at
December 31, 2024, September 30, 2024 and December 31, 2023, respectively.

AUA on December 31, 2024 were $1.2 billion, a slight decline from the $1.3 billion at September 30, 2024.

Return to Shareholders

During the fourth quarter of 2024, Gabelli returned to shareholders $86 million in the form of a special dividend of $2.00 per share totaling $50.5 million that was declared in the third quarter of 2024, the repurchase of 1,304,358 shares for $34.4 million at an average investment of $26.37 per share, and a regular quarterly dividend of $0.04 per share totaling $1.0 million. From January 1, 2025 to February 4, 2025, the Company has repurchased 12,971 shares at an average price of $23.95 per share for an aggregate purchase price of approximately $0.3 million. On February 4, 2025, the board of directors increased the buyback authorization to 1.5 million shares.

On February 4, 2025, Gabelli’s board of directors declared a regular quarterly dividend of $0.08 per share, an increase of 100%, which is payable on March 25, 2025 to class A and class B shareholders of record on March 11, 2025.

Balance Sheet Information

As of December 31, 2024, cash, cash equivalents, and U.S Treasury Bills were $116.5 million and investments were $66.3 million, compared with cash, cash equivalents, and U.S. Treasury Bills of $160.8 million and investments of $44.1 million as of December 31, 2023. As of December 31, 2024, stockholders’ equity was $136.6 million compared to $181.0 million as of December 31, 2023. The decline in stockholders’ equity resulted from the payment of $59.5 million in dividends, $49.3 million of stock buybacks, offset partially by $64.4 million in net income.

Symposiums/Conferences

On November 4^th and 5^th, we hosted the 48^th Annual Automotive Aftermarket Symposium at the Encore at Wynn in Las Vegas. The symposium featured presentations from senior management of leading automotive and trucking companies, with a lineup that enabled investors to understand everchanging dynamics within the automotive industry.
On November 15^th, we hosted the 6^th Annual Healthcare Symposium in connection with Columbia Business School.
On December 5^th, we hosted the 2^nd Section 852(b)(6) Conference.
In addition to the above, we hosted the following during 2024:
- 34^th Pump, Valve & Water Systems Symposium
- 30^th Aerospace & Defense Symposium
- 18^th Omaha Research Trip
- 16^th Media & Entertainment Symposium
- 15^th Specialty Chemicals Symposium
- 10^th Waste & Environmental Services Conference
- 2^nd PFAS Symposium

We are hosting the following symposiums and conferences in 2025:

About Gabelli

Gabelli is best known for its research-driven value approach to equity investing (known as PMV with a Catalyst^TM). Gabelli conducts its investment advisory business principally through two subsidiaries: Gabelli Funds, LLC (24 open-end funds, 14 closed-end funds, 5 actively managed ETFs, and a SICAV) and GAMCO Asset Management Inc. (approximately 1,400 institutional and private wealth separate accounts). Gabelli serves a broad client base including institutions, intermediaries, offshore investors, private wealth, and direct retail investors. In recent years, Gabelli has successfully integrated new teams of RIAs by providing attractive compensation arrangements and extensive research capabilities. As we stated in the past, Gabelli continues to look for new acquisitions / lift-outs and will pay finder’s fees for successful opportunities.

Gabelli offers a wide range of solutions for clients across Value and Growth Equity, Convertibles, actively managed ETFs, sector-focused strategies including Gold and Utilities, Merger Arbitrage, Fixed Income, and 100% U.S. Treasury Money Market.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy, and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that may cause our actual results to differ from our expectations include risks associated with the duration and scope of the ongoing coronavirus pandemic resulting in volatile market conditions, a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, and a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Annual Report and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.

Gabelli Funds, LLC is a registered investment adviser with the Securities and Exchange Commission and is a wholly owned subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

Investors should carefully consider the investment objectives, risks, charges and expenses of the fund before investing. The prospectus, which contains more complete information about this and other matters, should be read carefully before investing. To obtain a prospectus, please call 800 GABELLI or visit www.gabelli.com
Fitch rating drivers include: credit quality, interest rate risk, liquid assets, maturity profiles, and the capabilities of the investment advisor

Active Transparent Exchange-Traded Funds
GABELLI FINANCIAL SERVICES OPPORTUNITIES: GABF

IMPORTANT DISCLOSURES

Shares of this ETF are bought and sold at market prices (not NAV) and are not individually redeemed from the fund.
Buying or selling ETF shares may require additional fees such as brokerage commissions, which will reduce returns.
These traditional risks may be even greater in challenging or uncertain market conditions.
Financial service companies operate in heavily regulated industries, which are subject to change. The underlying securities are subject to credit and interest rate sensitivity risk, which could affect earnings. Additionally, since financial services firms are correlated to GDP, a decline in the economic environment could impact profitability.

Active Exchange-Traded Funds
GABELI LOVE OUR PLANET & PEOPLE: LOPP
GABELLI GROWTH INNOVATORS: GGRW
GABELLI COMMERCIAL AEROSPACE & DEFENSE: GCAD

IMPORTANT DISCLOSURES
These ETFs are different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. These ETFs do not. This may create additional risks for your investment. For example:
• You may have to pay more money to trade the ETFs’ shares. These ETFs will provide less information to traders, who tend to charge more for trades when they have less information.
• The price you pay to buy ETF shares on an exchange may not match the value of an ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for these ETFs compared to other ETFs because they provide less information to traders.
• These additional risks may be even greater in challenging or uncertain market conditions.
• The differences between these ETFs and other ETFs may also have advantages. By keeping certain information about the ETFs undisclosed, these ETFs may face less risk that other traders can predict or copy its investment strategy. This may improve the ETFs’ performance. If other traders are able to copy or predict the ETFs’ investment strategies, however, this may hurt the ETFs’ performance. For additional information regarding the unique attributes and risks of these ETFs, see the ActiveShares prospectus/registration statement.

You should consider the ETFs’ investment objectives, risks, charges and expenses carefully before you invest. The ETFs’ Prospectus is available from G.distributors, LLC, a registered broker-dealer and FINRA member firm, and contains this and other information about the ETFs, and should be read carefully before investing.

GABF
Financial services companies operate in heavily regulated industries, which are subject to change. The underlying securities are subject to credit and interest rate sensitivity risk, which could impact earnings. Additionally, since financial services firms are correlated to GDP, a decline in the economic environment could impact profitability.

GGRW
Securities of growth companies may be more volatile since such companies usually invest a high portion of earnings in their business, and they may lack the dividends of value stocks that can cushion stock prices in a falling market.

GCAD
Government aerospace regulation and spending policies can significantly affect the aerospace industry because many companies involved in the aerospace industry rely to a large extent on U.S. (and other) Government demand for their products and services.

LOPP
The application of the Adviser’s socially responsible criteria will affect the Fund’s exposure to certain issuers, industries, sectors, regions, and countries, and may impact the relative financial performance of the Fund.

Money Market Fund
Investment in the fund is neither guaranteed nor insured by the Federal Deposit Insurance Corporation or any government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. You could lose money by investing in the fund.

Growth
Securities of growth companies may be more volatile since such companies usually invest a high portion of earnings in their business, and they may lack the dividends of value stocks that can cushion stock prices in a falling market.

As of December 31, 2024, GAMI and affiliates owned less than one percent of all stocks mentioned in the Growth Fund.

Gold
Investments related to gold and other precious metals and minerals are considered speculative and are affected by a variety of worldwide economic, financial, and political factors. Investing in foreign securities involves risks not ordinarily associated with investment in domestic issues. Funds concentrating in specific sectors may experience greater fluctuations in value than funds that are more diversified. Not FDIC Insured. Not Bank Guaranteed. May Lose Value.

As of December 31, 2024, GAMI and affiliates owned less than one percent of all stocks mentioned in the Gold Fund.

Small Cap
Small capitalization stocks are subject to significant price fluctuations and business risks. The stocks of smaller companies may trade less frequently and experience more abrupt price movements than stocks of larger companies; therefore, investing in this sector involves special challenges.

Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end.

GAMCO Investors, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
	Three Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023
Revenue:
Investment advisory and incentive fees	$	55,502		$	53,829		$	53,001
Distribution fees and other income		3,760			3,717			4,312
Total revenue		59,262			57,546			57,313
Expenses:
Compensation		26,593			22,566			27,316
Management fee		2,512			2,517			2,444
Distribution costs		5,634			6,033			5,848
Other operating expenses		5,370			4,801			5,909
Total expenses		40,109			35,917			41,517
Operating income		19,153			21,629			15,796
Non-operating income:
Gain from investments, net		644			3,370			3,529
Interest and dividend income		3,090			2,947			2,951
Interest expense		(282	)		(290	)		(281	)
Charitable giving contribution		–			(5,000	)		–
Total non-operating income		3,452			1,027			6,199
Income before provision for income taxes		22,605			22,656			21,995
Provision for income taxes		5,808			5,822			5,435
Net income	$	16,797		$	16,834		$	16,560

Earnings per share attributable to common
stockholders:
Basic	$	0.70		$	0.69		$	0.66
Diluted	$	0.70		$	0.69		$	0.66

Weighted average shares outstanding:
Basic		23,971			24,263			25,038
Diluted		23,971			24,263			25,038

Shares outstanding		22,930			24,235			24,906

GAMCO Investors, Inc. and Subsidiaries
Condensed Consolidated Statements of Financial Condition (Unaudited)
(in thousands)

	December 31,		December 31,
	2024		2023
Assets
Cash and cash equivalents	$	17,254	$	61,801
Short-term investments in U.S. Treasury Bills		99,216		99,025
Investments in securities		36,855		19,998
Seed capital investments		29,452		24,044
Receivable from brokers		3,103		4,562
Other receivables		21,246		21,178
Deferred tax asset and income tax receivable		7,553		8,927
Other assets		9,509		9,896
Total assets	$	224,188	$	249,431

Liabilities and stockholders’ equity
Income taxes payable	$	196	$	17
Compensation payable		38,489		23,399
Accrued expenses and other liabilities		48,929		45,036
Total liabilities		87,614		68,452

Stockholders’ equity		136,574		180,979
Total liabilities and stockholders’ equity	$	224,188	$	249,431

Shares outstanding		22,930		24,906

GAMCO Investors, Inc. and Subsidiaries
Assets Under Management
By investment vehicle
(in millions)
		Three Months Ended									% Changed From
		December 31,			September 30,			December 31,			September 30,		December 31,
		2024			2024			2023			2024		2023
Equities:
Mutual Funds
Beginning of period assets		$	8,440		$	8,035		$	7,546
	Inflows		211			175			153
	Outflows		(420	)		(415	)		(451	)
	Net inflows (outflows)		(209	)		(240	)		(298	)
	Market appreciation (depreciation)		(126	)		652			744
	Fund distributions, net of reinvestment		(27	)		(7	)		(19	)
	Total increase (decrease)		(362	)		405			427
Assets under management, end of period		$	8,078		$	8,440		$	7,973		-4.3	%	1.3	%
Percentage of total assets under management			25.5	%		26.2	%		25.6	%
Average assets under management		$	8,447		$	8,177		$	7,593		3.3	%	11.2	%

Closed-end Funds
Beginning of period assets		$	7,459		$	7,052		$	6,727
	Inflows		212			25			16
	Outflows		(43	)		(32	)		(63	)
	Net inflows (outflows)		169			(7	)		(47	)
	Market appreciation (depreciation)		(155	)		540			544
	Fund distributions, net of reinvestment		(129	)		(126	)		(127	)
	Total increase (decrease)		(115	)		407			370
Assets under management, end of period			7,344		$	7,459		$	7,097		-1.5	%	3.5	%
Percentage of total assets under management			23.2	%		23.2	%		22.8	%
Average assets under management		$	7,610		$	7,260		$	6,785		4.8	%	12.2	%

Institutional & PWM
Beginning of period assets		$	10,984		$	10,436		$	10,034
	Inflows		62			87			63
	Outflows		(407	)		(373	)		(371	)
	Net inflows (outflows)		(345	)		(286	)		(308	)
	Market appreciation (depreciation)		61			834			1,012
	Total increase (decrease)		(284	)		548			704
Assets under management, end of period		$	10,700		$	10,984		$	10,738		-2.6	%	-0.4	%
Percentage of total assets under management			33.7	%		34.1	%		34.5	%
Average assets under management		$	11,085		$	10,905		$	10,005		1.7	%	10.8	%

SICAV
Beginning of period assets		$	9		$	9		$	622
	Inflows		–			–			82
	Outflows		–			–			(110	)
	Net inflows (outflows)		–			–			(28	)
	Market appreciation (depreciation)		–			–			37
	Total increase (decrease)		–			–			9
Assets under management, end of period		$	9		$	9		$	631		0.0	%	-98.6	%
Percentage of total assets under management			0.0	%		0.0	%		2.0	%
Average assets under management		$	9		$	9		$	628		0.0	%	-98.6	%

Total Equities
Beginning of period assets		$	26,892		$	25,532		$	24,929
	Inflows		485			287			314
	Outflows		(870	)		(820	)		(995	)
	Net inflows (outflows)		(385	)		(533	)		(681	)
	Market appreciation (depreciation)		(220	)		2,026			2,337
	Fund distributions, net of reinvestment		(156	)		(133	)		(146	)
	Reclassification to AUA		–			–			–
	Total increase (decrease)		(761	)		1,360			1,510
Assets under management, end of period		$	26,131		$	26,892		$	26,439		-2.8	%	-1.2	%
Percentage of total assets under management			82.4	%		83.5	%		85.1	%
Average assets under management		$	27,151		$	26,351		$	25,011		3.0	%	8.6	%


GAMCO Investors, Inc. and Subsidiaries
Assets Under Management
By investment vehicle – continued
(in millions)
		Three Months Ended									% Changed From
		December 31,			September 30,			December 31,			September 30,		December 31,
		2024			2024			2023			2024		2023
Fixed Income:
100% U.S. Treasury fund
Beginning of period assets		$	5,268		$	5,159		$	4,217
	Inflows		1,656			1,245			1,424
	Outflows		(1,440	)		(1,205	)		(1,088	)
	Net inflows (outflows)		216			40			336
	Market appreciation (depreciation)		68			69			62
	Total increase (decrease)		284			109			398
Assets under management, end of period		$	5,552		$	5,268		$	4,615		5.4	%	20.3	%
Percentage of total assets under management			17.5	%		16.4	%		14.8	%
Average assets under management		$	5,415		$	5,246		$	4,418		3.2	%	22.6	%

Institutional & PWM Fixed Income
Beginning of period assets		$	32		$	32		$	32
	Inflows		–			–			–
	Outflows		–			–			–
	Net inflows (outflows)		–			–			–
	Market appreciation (depreciation)		–			–			–
	Total increase (decrease)		–			–			–
Assets under management, end of period		$	32		$	32		$	32		0.0	%	0.0	%
Percentage of total assets under management			0.1	%		0.1	%		0.1	%
Average assets under management		$	32		$	32		$	32		0.0	%	0.0	%

Total Treasuries & Fixed Income
Beginning of period assets		$	5,300		$	5,191		$	4,249
	Inflows		1,656			1,245			1,424
	Outflows		(1,440	)		(1,205	)		(1,088	)
	Net inflows (outflows)		216			40			336
	Market appreciation (depreciation)		68			69			62
	Total increase (decrease)		284			109			398
Assets under management, end of period		$	5,584		$	5,300		$	4,647		5.4	%	20.2	%
Percentage of total assets under management			17.6	%		16.5	%		14.9	%
Average assets under management		$	5,447		$	5,278		$	4,450		3.2	%	22.4	%

Total AUM
Beginning of period assets		$	32,192		$	30,723		$	29,178
	Inflows		2,141			1,532			1,738
	Outflows		(2,310	)		(2,025	)		(2,083	)
	Net inflows (outflows)		(169	)		(493	)		(345	)
	Market appreciation (depreciation)		(152	)		2,095			2,399
	Fund distributions, net of reinvestment		(156	)		(133	)		(146	)
	Reclassification to AUA		–			–			–
	Total increase (decrease)		(477	)		1,469			1,908
Assets under management, end of period		$	31,715		$	32,192		$	31,086		-1.5	%	2.0	%
Average assets under management		$	32,598		$	31,629		$	29,461		3.1	%	10.6	%

GAMCO Investors, Inc. and Subsidiaries
Assets Under Management
By investment vehicle
(in millions)
		Twelve Months Ended
		December 31,			December 31,
		2024			2023			% Change
Equities:
Mutual Funds
Beginning of period assets		$	7,973		$	8,140
	Inflows		751			711
	Outflows		(1,626	)		(1,616	)
	Net inflows (outflows)		(875	)		(905	)
	Market appreciation (depreciation)		1,023			772
	Fund distributions, net of reinvestment		(43	)		(34	)
	Total increase (decrease)		105			(167	)
Assets under management, end of period		$	8,078		$	7,973		1.3	%
Percentage of total assets under management			25.5	%		25.6	%
Average assets under management		$	8,173		$	8,035		1.7	%

Closed-end Funds
Beginning of period assets		$	7,097		$	7,046
	Inflows		281			41
	Outflows		(226	)		(130	)
	Net inflows (outflows)		55			(89	)
	Market appreciation (depreciation)		700			654
	Fund distributions, net of reinvestment		(508	)		(514	)
	Total increase (decrease)		247			51
Assets under management, end of period		$	7,344		$	7,097		3.5	%
Percentage of total assets under management			23.2	%		22.8	%
Average assets under management		$	7,274		$	7,058		3.1	%

Institutional & PWM
Beginning of period assets		$	10,738		$	10,714
	Inflows		340			241
	Outflows		(1,701	)		(1,739	)
	Net inflows (outflows)		(1,361	)		(1,498	)
	Market appreciation (depreciation)		1,323			1,522
	Total increase (decrease)		(38	)		24
Assets under management, end of period		$	10,700		$	10,738		-0.4	%
Percentage of total assets under management			33.7	%		34.5	%
Average assets under management		$	10,891		$	10,670		2.1	%

SICAV
Beginning of period assets		$	631		$	867
	Inflows		–			357
	Outflows		(2	)		(624	)
	Net inflows (outflows)		(2	)		(267	)
	Market appreciation (depreciation)		–			31
	Reclassification to AUA		(620	)		–
	Total increase (decrease)		(622	)		(236	)
Assets under management, end of period		$	9		$	631		-98.6	%
Percentage of total assets under management			0.0	%		2.0	%
Average assets under management		$	9		$	694		-98.7	%

Total Equities
Beginning of period assets		$	26,439		$	26,767
	Inflows		1,372			1,350
	Outflows		(3,555	)		(4,109	)
	Net inflows (outflows)		(2,183	)		(2,759	)
	Market appreciation (depreciation)		3,046			2,979
	Fund distributions, net of reinvestment		(551	)		(548	)
	Reclassification to AUA		(620	)		–
	Total increase (decrease)		(308	)		(328	)
Assets under management, end of period		$	26,131		$	26,439		-1.2	%
Percentage of total assets under management			82.4	%		85.1	%
Average assets under management		$	26,347		$	26,457		-0.4	%


GAMCO Investors, Inc. and Subsidiaries
Assets Under Management
By investment vehicle – continued
(in millions)
		Twelve Months Ended
		December 31,			December 31,
		2024			2023			% Change
Fixed Income:
100% U.S. Treasury fund
Beginning of period assets		$	4,615		$	2,462
	Inflows		5,796			5,498
	Outflows		(5,122	)		(3,536	)
	Net inflows (outflows)		674			1,962
	Market appreciation (depreciation)		263			191
	Total increase (decrease)		937			2,153
Assets under management, end of period		$	5,552		$	4,615		20.3	%
Percentage of total assets under management			17.5	%		14.8	%
Average assets under management		$	5,140		$	3,823		34.4	%

Institutional & PWM Fixed Income
Beginning of period assets		$	32		$	32
	Inflows		–			–
	Outflows		–			–
	Net inflows (outflows)		–			–
	Market appreciation (depreciation)		–			–
	Total increase (decrease)		–			–
Assets under management, end of period		$	32		$	32		0.0	%
Percentage of total assets under management			0.1	%		0.1	%
Average assets under management		$	32		$	32		0.0	%

Total Treasuries & Fixed Income
Beginning of period assets		$	4,647		$	2,494
	Inflows		5,796			5,498
	Outflows		(5,122	)		(3,536	)
	Net inflows (outflows)		674			1,962
	Market appreciation (depreciation)		263			191
	Total increase (decrease)		937			2,153
Assets under management, end of period		$	5,584		$	4,647		20.2	%
Percentage of total assets under management			17.6	%		14.9	%
Average assets under management		$	5,172		$	3,855		34.2	%

Total AUM
Beginning of period assets		$	31,086		$	29,261
	Inflows		7,168			6,848
	Outflows		(8,677	)		(7,645	)
	Net inflows (outflows)		(1,509	)		(797	)
	Market appreciation (depreciation)		3,309			3,170
	Fund distributions, net of reinvestment		(551	)		(548	)
	Reclassification to AUA		(620	)		–
	Total increase (decrease)		629			1,825
Assets under management, end of period		$	31,715		$	31,086		2.0	%
Average assets under management		$	31,519		$	30,312		4.0	%

Contact:	Kieran Caterina
	Chief Accounting Officer
	(914) 921-5149

	For further information please visit
	www.gabelli.com

Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/67be43da-4ba8-4a8b-adfc-6568958b2c5f
https://www.globenewswire.com/NewsRoom/AttachmentNg/184b5374-0f9b-4bf5-a782-689155142d7e

The MIL Network –

February 5, 2025

MIL-OSI USA: Kennedy, Hoeven introduce resolution to block Biden-era fee on American energy

US Senate News:

Source: United States Senator John Kennedy (Louisiana)

WASHINGTON – Sen. John Kennedy (R-La.) today joined Sen. John Hoeven (R-N.D.) and 23 other senators in introducing a joint resolution under the Congressional Review Act to overturn the Biden administration’s proposed Environmental Protection Agency (EPA) rule to implement a fee on methane emissions.

“Americans want our country to ‘drill, baby, drill’ to lower their energy costs. To restore American energy dominance, we need to beat back the anti-energy policies and taxes the Biden administration shackled us with,” said Kennedy.

The EPA’s proposed methane fee would effectively create a new tax on key parts of the American oil and gas business, including both onshore and offshore natural gas production and liquefied natural gas import, export and storage.

“When it comes to bringing down prices and making America energy secure again, we have our work cut out for us. The Biden-Harris administration imposed countless policies like the Natural Gas Tax that drive up the cost of production and limit the ability to fully utilize our nation’s abundant energy resources, and it will take real time and effort to undo the effects of their Green New Deal agenda. Through efforts like this CRA resolution, we are working to get our nation back on the right track, providing needed regulatory and tax relief to deliver real cost savings to American energy producers and consumers,” said Hoeven.

The Congressional Review Act allows Congress to overturn certain federal agency regulations and actions through a joint resolution of disapproval. If both houses of Congress approve such a joint resolution and the president signs it, or if Congress successfully overrides a presidential veto, the regulation at issue becomes invalid.

Rep. August Pfluger (R-Texas) introduced the resolution in the House.

“As part of his war on energy, former President Biden took radical steps to end fossil fuels during his administration which hurt the hardworking energy producers in my district who have worked diligently to increase production while fueling our allies abroad. Biden’s burdensome natural gas tax has handicapped technological innovation, reduced supplies of affordable energy, and increased both costs and emissions. With President Trump back in office, it is time to restore American energy dominance—which is why I am proud to lead this CRA to rescind this ill-conceived natural gas tax,” said Pfluger.

Sens. Shelley Moore Capito (R-W.Va.), Mike Lee (R-Utah), James Lankford (R-Okla.), Katie Britt (R-Ala.), Steve Daines (R-Mont.), Roger Marshall (R-Kan.), Kevin Cramer (R-N.D.), Cynthia Lummis (R-Wyo.), Jim Risch (R-Idaho), Rick Scott (R-Fla.), Ted Cruz (R-Texas), Rand Paul (R-Ky.), Mike Crapo (R-Idaho), Jim Justice (R-W.Va.), Tommy Tuberville (R-Ala.), Cindy Hyde-Smith (R-Miss.), Mike Rounds (R-S.D.), Tim Sheehy (R-Mont.), Thom Tillis (R-N.C.), Markwayne Mullin (R-Okla.), Roger Wicker (R-Miss.), Pete Ricketts (R-Neb.) and John Barrasso (R-Wyo.) cosponsored the resolution.

Text of the resolution is available here.

MIL OSI USA News –

February 5, 2025

MIL-OSI USA: Hoeven, Pfluger Continue Efforts to Block Biden’s Natural Gas Tax, Alleviate Burden on U.S. Domestic Energy Production

US Senate News:

Source: United States Senator for North Dakota John Hoeven

02.04.25

WASHINGTON – Senator John Hoeven (R-N.D.) and Congressman August Pfluger (R-Texas) today reintroduced their bicameral Congressional Review Act (CRA) resolution of disapproval to block implementation of the Biden administration’s Natural Gas Tax, which was passed as part of the Inflation Reduction Act, Democrats’ reckless tax-and-spend legislation in 2022.

“When it comes to bringing down prices and making America energy secure again, we have our work cut out for us. The Biden-Harris administration imposed countless policies like the Natural Gas Tax that drive up the cost of production and limit the ability to fully utilize our nation’s abundant energy resources, and it will take real time and effort to undo the effects of their Green New Deal agenda,” said Senator Hoeven, a member of the Senate Energy and Natural Resources Committee. “Through efforts like this CRA resolution, we are working to get our nation back on the right track, providing needed regulatory and tax relief to deliver real cost savings to American energy producers and consumers.”

“As part of his war on energy, former President Biden took radical steps to end fossil fuels during his administration which hurt the hardworking energy producers in my district who have worked diligently to increase production while fueling our allies abroad,” said Rep. Pfluger, a member of the House Energy and Commerce Committee. “Biden’s burdensome natural gas tax has handicapped technological innovation, reduced supplies of affordable energy, and increased both costs and emissions. With President Trump back in office, it is time to restore American energy dominance – which is why I am proud to lead this CRA to rescind this ill-conceived natural gas tax.”

This legislation comes as part of Hoeven’s broader efforts in the new Congress and with the Trump administration to unlock America’s energy potential and rescind the wide array of costly taxes and regulations imposed under President Biden. Among other priorities, Hoeven is working to:

Improve access to taxpayer-owned energy resources.
Streamline the approval process for energy development and the construction of infrastructure needed to get energy to market.
Reduce the cost of production, fight inflation and bring down prices for American consumers.

The Hoeven-Pfluger bill is cosponsored by Senators Shelley Moore Capito (R-W.Va.), Mike Lee (R-Utah), James Lankford (R-Okla.), Katie Britt (R-Ala.), Steve Daines (R-Mont.), Roger Marshall (R-Kan.), Kevin Cramer (R-N.D.), Cynthia Lummis (R-Wyo.), James Risch (R-Idaho), Rick Scott (R-Fla.), Ted Cruz (R-Texas), Rand Paul (R-Ky.), Mike Crapo (R-Idaho), Jim Justice (R-W.Va.), Tommy Tuberville (R-Ala.), John Kennedy (R-La.), Cindy Hyde-Smith (R-Miss.), Mike Rounds (R-S.D.), Tim Sheehy (R-Mont.), Thom Tillis (R-N.C.), Markwayne Mullin (R-Okla.), Roger Wicker (R-Miss.), John Ricketts (R-Neb.) and John Barrasso (R-Wyo.). The full text of the legislation can be found here.

MIL OSI USA News –

February 5, 2025

MIL-OSI: UAB “Atsinaujinančios energetikos investicijos” publishes its factsheet for the fourth quarter of 2024

Source: GlobeNewswire (MIL-OSI)

UAB “Atsinaujinančios energetikos investicijos” (the Company) publishes its factsheet, providing information about the Company’s investment portfolio, key events, business strategy, operating segments, and financial indicators as of 31 December 2024.

2024 Q4 KEY EVENTS

Total aggregated FY 2024 Revenue and YTD EBITDA amounted to 6,420 kEUR and 4,155 kEUR, respectively. Wind parks managed under UAB “Žaliosios investicijos” produced 14% less than envisioned with a captured price 32% less than projected. This is driven by low winds during 2024 and lower than estimated electricity prices.
In December 2024, Investment Company divested 65.5 MW operating Solar PV portfolio in Poland (Energy Solar Projekty sp.z o.o).
The decline in Fund’s NAV was driven by a drop in the valuation of two remaining solar PV portfolios in Poland. This reduction is attributed to a 30% decrease in electricity price forecasts and a higher WACC, driven by incomplete construction. Conversely, value gains were recorded from UAB “Žaliosios investicijos “ and Zala Elektriba SIA, due to secured construction permits. Remaining projects are valued using the asset method, with real value gains expected upon obtaining building permits.

Solar development in Poland:

The construction of 67.8 MW total capacity PV Energy Projects sp.z o.o portfolio nears completion. As of reporting period, 44.8 MW are operational. 5 projects (1 MW each) are planned to be energized in Q1 2025. The anticipated COD for the entire park is set for September 2025.
The PL SUN sp.z o.o. portfolio, with a total capacity of 114.7 MW, is divided into two phases. The construction works of the first phase (66.6 MW) were largely finalized in 2024 Q2. 26.4 MW were energized in Q4. The remaining 40.2 MW are scheduled to be energized by 2025 Q2. The second phase (48.1 MW) commenced construction in October 2024. Module and inverter supply agreements as well as Balance of System and technical advisory contracts are signed. Modules were delivered to 5 sites (total capacity of 31 MW). Mounting structure construction and modules mounting works have been started in 4 sites (total capacity of 25.42 MW).

Wind Projects:

Energy Production license for the Anykščiai wind farm was obtained in August 2024, for Jonava and Rokiškis wind farms the license obtainal is schduled for Q2 2025.
The 112 MW wind farm developed under Zala Elektriba SIA is scheduled to reach RtB in Q1 2025.

Hybrid Projects:

Design works of a hybrid project managed by UAB “KNT Holding” and hybrid project managed by UAB “Ekoelektra” is underway to develop detailed equipment and technology specifications. Finalizing necessary agreements for project infrastructure.

Contact person for further information:

Grėtė Bukauskaitė

Manager of the Investment Company

grete.bukauskaite@lordslb.lt

www.lordslb.lt/AEI_green_bonds

Attachment

AEI Investor report 2024Q4 – EN

The MIL Network –

February 5, 2025

MIL-OSI Security: LaPorte Brothers Sentenced to Prison

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

SOUTH BEND – Raymond Calvin Smith, 27 years old, and Bruce Milik Smith, 25 years old, brothers from LaPorte, Indiana, were sentenced by United States District Court Judge Cristal C. Brisco after pleading guilty to federal felony charges, announced Acting United States Attorney Tina L. Nommay.

Raymond Smith was sentenced to 70 months in prison and 2 years of supervised release. Bruce Smith was sentenced to 39 months in prison and 2 years of supervised release. The two brothers were ordered to pay $723,832.64 in restitution to the victims of their offense. Raymond Smith was also ordered to pay $162,928.62 in restitution to the IRS.

According to documents in the case, from about January 2021 to December 2021, the Smith brothers operated an elaborate fraud scheme using Indiana mobile sports wagering applications. Using personal information of victims, such as bank account numbers and passwords, they set up dozens of accounts in victims’ names on at least 8 different sports wagering applications. Using sports wagering applications, they funneled money from victims’ bank accounts to themselves. With the personal information of approximately 60 victims, the Smith brothers stole a total of $723,832.64, and unsuccessfully attempted to steal an additional $930,782.00. Both Smith brothers pled guilty to the mail fraud scheme while Raymond Smith also pled guilty to evading taxes on the proceeds he received in 2021.

This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division, the United States Postal Inspection Service, and the Indiana Gaming Commission. The case was prosecuted by Assistant United States Attorney Luke N. Reilander.

MIL Security OSI –

February 5, 2025

MIL-OSI Security: Former Owner of ‘Timepiece Gentleman’ Luxury Watch Consignment Store in Beverly Hills Sentenced to Nearly Six Years in Federal Prison

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

LOS ANGELES – A Los Angeles man who ran a Beverly Hills luxury watch consignment business and was known as “The Timepiece Gentleman” was sentenced today to 70 months in federal prison for swindling dozens of his customers of out a total of at least $5.6 million.

Anthony Farrer, 36, formerly of downtown Los Angeles, was sentenced by United States District Judge Josephine L. Staton.

Farrer pleaded guilty in October 2024 to one count of wire fraud and one count of mail fraud. He has been in federal custody since November 2023.

“This defendant stole millions of dollars from customers who trusted him and then used his ill-gotten gains to fund his exorbitant lifestyle,” said Acting United States Attorney Joseph T. McNally. “The sentence imposed today sends a message that those who defraud the public will be held accountable.”

“The so-called ‘Timepiece Gentleman” was actually a con-man whose time living lavishly ran out when the high-end watch owners he victimized brought his crimes to the attention of law enforcement,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field. “This successful prosecution is the result of a joint collaboration among local and federal partners working together in order to bring Mr. Farrer to justice.”

“Mr. Farrer exploited his clients’ trust for personal gain,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Instead of making good on his business promises, Mr. Farrer swindled his clients out of money and property to fund his own extravagant expenditures, and now he’ll suffer the consequences. IRS-CI is committed to protecting clients and consumers from this sort of dubious behavior, and we are proud to have been a partner in this investigation.”

From November 2022 to November 2023, Farrer used his business – also called “The Timepiece Gentlemen” – to connect purchasers and sellers of high-end watches. In a typical consignment sale, a client would ship a watch to The Timepiece Gentleman and Farrer would take possession of the watch, agreeing to display it at his Beverly Hills store and through online and social media marketing. The items involved in this case included luxury watches by Rolex, Richard Mille, and Patek Phillipe, among others.

Once the watch was sold, Farrer was supposed to remit the sales proceeds back to the client, minus a consignment fee, which typically was approximately 5% of the sales price. If the watch did not sell within a specific time or for a specified price, Farrer was to return the watch to the client.

But instead of remitting watch sales proceeds – or the unsold watches themselves – back to the clients, Farrer sold the client watches and kept the proceeds for himself. He also used client watches – without the client’s knowledge or permission – as collateral for loans that he took out from lenders.

When a client asked about the status of a watch on consignment sale, Farrer lied and said that the watch had not yet been sold. In fact, Farrer already had sold the watch or otherwise disposed of it, keeping the funds for his own personal benefit.

In addition to his consignment sale business, Farrer also purported to purchase watches on behalf of his clients. Typically, a client sent funds to Farrer, often by wire transfers to his bank accounts or through payment processors such as Zelle, for the purpose of Farrer locating and buying a specified watch on the client’s behalf.

But Farrer took the clients’ money and used it for other purposes, including to fund his lavish lifestyle such as buying or leasing luxury automobiles, apartments, and other luxury goods.

When a client who had sent him money asked Farrer about the status of a watch purchase, Farrer often sent another watch to the client to tide the client over or lull them into a false sense of security regarding the status of the purchase. Like a Ponzi scheme, the other watch Farrer sent to the client often belonged to other clients who had themselves sent him that watch for a consignment sale. These clients were unaware Farrer was using their watches for that purpose, rather than attempting to sell the watches on behalf of the clients.

In total, Farrer fraudulently obtained money and property belonging to more than 40 victims and caused total losses of at least $5,691,005. Farrer also will be subject to a restitution order for payment owed to victims in amounts to be determined later.

The FBI, IRS Criminal Investigation, and the Beverly Hills Police Department investigated this matter.

Assistant United States Attorney Joshua O. Mausner of the Violent and Organized Crime Section prosecuted this case.

MIL Security OSI –

February 5, 2025

MIL-OSI Security: Operation against international drug trafficking network

Source: Eurojust

French and Spanish authorities, with the support of Eurojust and Europol, have stopped an illegal drug delivery into France arriving from Spain. The drug seizure is part of an operation against an international trafficking network active in the two countries. Authorities arrested 24 members of the network, including the two leaders, and seized over 150 kg of drugs with a market value of EUR 2.5 million.

The French criminal group set up import routes to transport drugs into France from their headquarters in Spain. Using vehicles with hidden compartments, the group was able to avoid detection and transport multiple types of synthetic drugs and cannabis into France. By frequently changing the routes used, the group further ensured that they remained undetected.

French authorities started investigating the network together with their partners in Spain in June 2024. They soon located the head of the network in Southern Spain and investigated the criminal activities such as drug trafficking and money laundering. A takedown of the network was planned, with the preparation of European Investigation Orders and European Arrest Warrants taking place at Eurojust.

Europol supported the investigation by providing analytical expertise to map out the syndicate’s structure, identify key players and track smuggling routes. Europol also coordinated intelligence sharing and funded the deployment of French officers to Spain to facilitate cross-border cooperation. On the action day, Europol deployed experts to France and Spain to ensure real-time information exchange between the involved law enforcement authorities.

On 28 January, actions to take down the group took place simultaneously in Spain and France. Authorities caught a drug convoy arriving in France in the early morning. Over 120 kg of drugs were intercepted from the delivery. The three drivers and the head of the network in France were arrested on the spot. During searches in France, money, drugs and weapons were seized, and 13 suspects were put in police custody and 9 in preventive custody. In Spain, the two leaders of the criminal group were arrested, and cash and drugs were seized during house searches. The leaders are now awaiting extradition to France. The members of the criminal group who were involved in drug trafficking and money laundering could face up to 30 years in prison.

The following authorities carried out the operations:

France: JIRS Rennes (interregional specialised jurisdiction); Gendarmerie Nationale (SR Rennes)
Spain: Public Prosecution Office Antidrug; Central Investigative Court num 2 at Audiencia Nacional; National Police (Policía Nacional – UDYCO Málaga)

MIL Security OSI –

February 5, 2025

MIL-OSI United Kingdom: Council takes steps towards a firm financial footing

Source: City of Derby

Derby City Council will take the next step towards putting its finances on a firm footing when two reports go to Cabinet next week.

Budget proposals for 2025/26 have been refreshed since they went to public consultation, with money being put back into services and more going back into reserves. This is due to an additional £8.6 million of resources, over and above that which was assumed at the time of the budget report being issued for consultation following the Government’s finance settlement.

The Medium Term Financial Plan (MTFP), which will go to Cabinet on Wednesday 12 February, also sets out a plan to replenish the Council’s reserves over the next three years to bring them back to a healthy and sustainable level.

Nationally, the local government financial settlement put more money into social care, introduced a new recovery grant which favoured areas like Derby with high deprivation and a low Council Tax base, and gave a boost to areas in need of investment such as support for children with Special Educational Needs and Disabilities (SEND). The new Government has also said it’s committed to multi-year funding settlements but has not yet confirmed when this will happen.

For Derby City Council, this has meant an increase in core spending power by £22.6 million, which is an above average increase for the local government sector, along with continued investment into social care, a new prevention grant of £2 million to support children’s social care reform, and the recovery grant which resulted in £6.7 million for the city.

Some of the new things that have been added to the budget proposals as a result include:

Additional provision for areas where demand continues to grow, such as homelessness
Investment into SEND services, including two SEND officers
£250,000 for Cultural Recovery, to support partners in the cultural industries facing significant financial challenges
And additional £200,000 for the Council Tax hardship fund, to support households experiencing financial hardship
An extra £100,000 to support the Market Hall in its first year of re-opening
A neighbourhood manager, covering the city centre, to co-ordinate safety, vibrancy & partnership work.
Investment into waste minimisation
Additional capital investment for a new depot at Stores Road.

Councillor Kathy Kozlowski, Cabinet Member for Governance and Finance, said:

“After years of lobbying, the new Government is listening to councils and promising much-needed reform. We welcome the additional funding, which help us get on a stable footing for the future so we can continue to provide the services that our citizens need and want.

“While it is assumed in our funding settlement that Council Tax will increase in line with previous years, which is 4.99%, we’re committed to investing into services that matter the most to our residents, protecting the most vulnerable and putting the Council on the way to financial sustainability.

“We’re listening to the public about what they want in their city, and our proposed budget for 2025/2026 will prioritise tidier streets and green spaces, help our city centre feel safer and become more vibrant, and support children and adults who need our care.”

An update on the Council’s position at the end of Quarter 3 also goes to Cabinet on 12 February.

The pressure on the revenue budget is now at £6.37 million, a fall of £2.59 million since halfway through the financial year. Mitigation continues to reduce this figure even more by the end of March, to limit the use of reserves as much as possible.

All the savings identified for 2024/25 financial year are expected to be achieved by the end of financial year, leaving £117,000 of unachieved savings from the previous year to be carried over to next year.

Pressures remain in some services, such as homelessness, due to continued demand. People’s services, the Council department which looks after social care for adults and children, has a forecast overspend of £5.31m by the end of the year. However this is partly offset by an underspend by an underspend of £3.41 million in children’s services, which is due to the success of strategies developed in recent years to manage demand starting to see results.

MIL OSI United Kingdom –

February 5, 2025

MIL-OSI Economics: IMF Executive Board Concludes 2024 Article IV Consultation with Grenada

Source: International Monetary Fund

February 4, 2025

Washington, DC: On January 24, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation^[1] with Grenada.

Through end-June 2024, Grenada’s economy was experiencing sustained strong growth supported by buoyant tourism, moderating inflation, and a narrowing current account deficit. A surge in Citizenship-by-Investment (CBI) revenue supported a strong improvement in the fiscal position and reduction in public debt. The financial system remained stable. On July 1, Hurricane Beryl caused damage in excess of 16 percent of GDP on the Grenadian islands of Carriacou and Petite Martinique, as well as in the northern parishes of the main island. The authorities responded swiftly with a package of fiscal measures, including suspension of fiscal rules to permit temporary deficit spending in support of the recovery and reconstruction.

Grenada’s near-term economic growth is projected to remain resilient at 3.9 percent in 2025, buoyed by limited hurricane damages to tourism infrastructure and the authorities’ large recovery and reconstruction spending. Sizable government savings and triggering of disaster-contingent instruments create fiscal space for these spending needs. Assuming a subsequent timely return to the fiscal rules, public debt is projected to continue falling and reach the debt target of 60 percent of GDP by 2030.

Over the medium-term GDP growth is projected to slow given the tourism sector operates near its peak-season capacity. Key downside risks include the threat of further natural disasters, potential shocks to tourism demand, and the uncertain scale of future CBI inflows, while the domestic non-bank financial system faces rising vulnerabilities from the continued rapid expansion of credit unions and the rising costs of property insurance. Prospective hotel developments and public investment projects represent upside risks to the medium-term growth outlook.

Executive Board Assessment^[2]

Executive Directors agreed with the thrust of the staff appraisal. They welcomed Grenada’s robust economic performance in 2023 and the first half of 2024, buoyed by strong tourism. Directors also commended the authorities’ swift and prudently tailored response to Hurricane Beryl, which supported disaster-relief and helped mitigate the impact on economic growth. Noting that the medium-term outlook remains subject to risks from natural disasters, uncertain Citizenship-by-Investment (CBI) flows, and other external shocks, they encouraged the authorities to exercise continued fiscal prudence and to pursue structural reforms to boost long-term growth and enhance resilience, while leveraging Fund technical assistance.

Directors welcomed Grenada’s commitment to fiscal prudence and debt sustainability and emphasized the importance of a timely return to the suspended fiscal rules. In that context, they noted the need for continued expenditure prioritization and revenue mobilization to create fiscal space for future investment needs, including for climate resilience. Further strengthening public investment management and budget planning processes would also be important. Directors also saw merit in developing a more uniform framework for managing all CBI resources and encouraged continued progress in resolving outstanding official arrears.

Directors welcomed the banking system’s resilience despite repeated shocks. They emphasized the need for vigilance and strengthened oversight in the rapidly expanding credit union sector. Directors encouraged strengthening data collection and regional collaboration in the property insurance sector, given rising premiums. They also agreed that further enhancements in the AML/CFT frameworks are essential, including to safeguard correspondent banking relationships.

Directors commended the authorities’ implementation of Grenada’s Disaster Resilience Strategy including investments in a risk-layering framework of disaster-contingency insurance and financing instruments. Moving forward and noting the risk of future natural disasters, they emphasized the importance of further advancing the energy transition and investment in disaster resilient infrastructure, with support from private financing.

Directors also encouraged sustained structural reform efforts to foster long-term growth, including investing in active labor market policies and continuing efforts to support off-season and niche tourism. Addressing data gaps is also important.

It is expected that the next Article IV Consultation with Grenada will be held on the standard 12-month consultation cycle.

Table 1. Grenada: Selected Social and Economic Indicators, 2019–29


Rank in UNDP Human Development Index			73		Infant mortality rate per ‘000 births (2021)						14.4
out of 189 countries (2021)					Adult illiteracy rate in percent (2014)						1
Life expectancy at birth in years (2021)			75		Poverty rate in percent of population (2019)						25
GDP per capita in US$ (2021)			10,449
Population in millions (2021)			0.13		Unemployment rate (2021 Q2)						11.1

	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029
					Est.			Proj.
National income and prices
GDP at constant prices	0.7	-13.8	4.7	7.3	4.7	3.6	3.9	3.3	2.7	2.7	2.7
GDP deflator	3.3	-0.3	2.8	2.2	2.7	1.4	1.4	2.0	2.0	2.0	2.0
Consumer prices, end of period	0.1	-0.8	1.9	2.9	2.2	1.2	1.9	2.0	2.0	2.0	2.0

Money and credit, end of period
Credit to private sector	1.4	3.1	3.8	2.1	3.8	3.8	4.2	4.4	4.6	4.5	4.5
Broad money (M2)	2.9	9.1	8.5	9.9	1.4	3.7	5.2	5.4	4.8	4.8	4.8

Central government balances (accrual)
Revenue and grants	26.6	28.1	31.5	32.7	36.9	44.1	30.5	29.3	29.2	28.9	28.8
Expenditure	21.6	32.7	31.2	31.8	28.9	39.5	39.4	33.1	29.6	29.2	28.9
o.w. Capital expenditure	2.6	9.6	8.6	10.2	9.3	11.7	12.2	8.7	6.2	5.8	5.6
Primary balance	6.8	-2.6	2.1	2.6	9.5	8.0	-5.1	-1.2	1.5	1.5	1.5
Overall balance	5.0	-4.5	0.3	1.0	8.0	4.7	-8.9	-3.8	-0.4	-0.3	-0.1

Central government debt (incl. guaranteed) 1/	58.5	71.4	70.0	62.8	60.5	59.3	58.1	53.9	53.2	51.4	49.6
Domestic	14.6	16.2	15.3	12.8	11.3	11.1	9.7	7.8	7.1	6.9	7.0
External	44.0	55.2	54.7	50.0	49.2	48.2	48.5	46.1	46.0	44.5	42.6
Public debt (incl. debt of SOEs and SBs)	62.7	89.5	86.6	78.8	75.2	73.3	71.4	66.5	65.2	62.9	60.6

Savings-Investment balance	-10.4	-16.1	-14.5	-11.0	-9.1	-13.1	-13.8	-10.6	-9.9	-9.1	-9.1
Savings	14.6	16.3	15.6	18.0	30.8	28.3	18.1	17.8	15.8	15.3	14.9
Investment	24.9	32.4	30.1	29.1	39.9	41.5	31.9	28.4	25.7	24.5	24.0

External Sector
Gross international reserves (millions of dollars)	234.1	290.9	324.2	352.6	389.1	435.1	364.5	364.8	390.3	405.6	424.6
(in months of imports)	5.2	5.6	4.9	5.0	4.8	5.2	4.3	4.2	4.3	4.3	4.3
Current account balance, o/w:	-10.4	-16.1	-14.5	-11.0	-9.1	-13.1	-13.8	-10.6	-9.9	-9.1	-9.1
Exports of goods and services	54.6	41.1	47.9	57.8	62.8	63.8	62.5	62.8	63.0	62.6	62.3
Imports of goods and services	55.8	52.2	55.4	64.3	63.7	69.9	68.5	65.6	65.0	63.8	63.4
External debt (gross)	64.7	92.5	94.8	90.0	86.9	85.4	85.4	82.6	82.3	80.5	78.4

Sources: Ministry of Finance; Eastern Caribbean Central Bank; United Nations, Human Development Report; World Bank WDI; and IMF staff estimates and projections.
1/ Includes the impact of the debt restructuring agreement for the 2025 bonds.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Meera Louis

Phone: +1 202 623-7100Email: MEDIA@IMF.org

MIL OSI Economics –

February 5, 2025

MIL-OSI Security: New York City Resident Sentenced to Six Years of Prison for Role in Interstate Methamphetamine Trafficking Operation

Source: Office of United States Attorneys

JOHNSTOWN, Pa. – A resident of Queens, New York, was sentenced in federal court to six years of imprisonment on his conviction for violating federal narcotics laws related to a six-month Title III wiretap investigation into drug trafficking in and around Blair, Cambria, Centre, and Clearfield counties of Pennsylvania, Acting United States Attorney Troy Rivetti announced today.

United States District Judge Stephanie L. Haines imposed the sentence on Timothy Paz, 32, on January 21, 2025, also ordering that Paz serve three years of supervised release following his incarceration.

According to information presented to the Court, Paz was a courier who transported approximately seven pounds of methamphetamine from the New York City area to Altoona, Pennsylvania, on behalf of a large-scale narcotics supplier. Paz also transported large amounts of United States currency representing payment for the methamphetamine from an Altoona-based narcotics distributor to the supplier.

Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.

Acting United States Attorney Rivetti commended the Drug Enforcement Administration, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Homeland Security Investigations, Internal Revenue Service, Pittsburgh Bureau of Police, and Pennsylvania State Police for the investigation leading to the successful prosecution of Paz.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

MIL Security OSI –

February 5, 2025

MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Grenada

Source: IMF – News in Russian

February 4, 2025

Washington, DC: On January 24, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation^[1] with Grenada.

Through end-June 2024, Grenada’s economy was experiencing sustained strong growth supported by buoyant tourism, moderating inflation, and a narrowing current account deficit. A surge in Citizenship-by-Investment (CBI) revenue supported a strong improvement in the fiscal position and reduction in public debt. The financial system remained stable. On July 1, Hurricane Beryl caused damage in excess of 16 percent of GDP on the Grenadian islands of Carriacou and Petite Martinique, as well as in the northern parishes of the main island. The authorities responded swiftly with a package of fiscal measures, including suspension of fiscal rules to permit temporary deficit spending in support of the recovery and reconstruction.

Grenada’s near-term economic growth is projected to remain resilient at 3.9 percent in 2025, buoyed by limited hurricane damages to tourism infrastructure and the authorities’ large recovery and reconstruction spending. Sizable government savings and triggering of disaster-contingent instruments create fiscal space for these spending needs. Assuming a subsequent timely return to the fiscal rules, public debt is projected to continue falling and reach the debt target of 60 percent of GDP by 2030.

Over the medium-term GDP growth is projected to slow given the tourism sector operates near its peak-season capacity. Key downside risks include the threat of further natural disasters, potential shocks to tourism demand, and the uncertain scale of future CBI inflows, while the domestic non-bank financial system faces rising vulnerabilities from the continued rapid expansion of credit unions and the rising costs of property insurance. Prospective hotel developments and public investment projects represent upside risks to the medium-term growth outlook.

Executive Board Assessment^[2]

Executive Directors agreed with the thrust of the staff appraisal. They welcomed Grenada’s robust economic performance in 2023 and the first half of 2024, buoyed by strong tourism. Directors also commended the authorities’ swift and prudently tailored response to Hurricane Beryl, which supported disaster-relief and helped mitigate the impact on economic growth. Noting that the medium-term outlook remains subject to risks from natural disasters, uncertain Citizenship-by-Investment (CBI) flows, and other external shocks, they encouraged the authorities to exercise continued fiscal prudence and to pursue structural reforms to boost long-term growth and enhance resilience, while leveraging Fund technical assistance.

Directors welcomed Grenada’s commitment to fiscal prudence and debt sustainability and emphasized the importance of a timely return to the suspended fiscal rules. In that context, they noted the need for continued expenditure prioritization and revenue mobilization to create fiscal space for future investment needs, including for climate resilience. Further strengthening public investment management and budget planning processes would also be important. Directors also saw merit in developing a more uniform framework for managing all CBI resources and encouraged continued progress in resolving outstanding official arrears.

Directors welcomed the banking system’s resilience despite repeated shocks. They emphasized the need for vigilance and strengthened oversight in the rapidly expanding credit union sector. Directors encouraged strengthening data collection and regional collaboration in the property insurance sector, given rising premiums. They also agreed that further enhancements in the AML/CFT frameworks are essential, including to safeguard correspondent banking relationships.

Directors commended the authorities’ implementation of Grenada’s Disaster Resilience Strategy including investments in a risk-layering framework of disaster-contingency insurance and financing instruments. Moving forward and noting the risk of future natural disasters, they emphasized the importance of further advancing the energy transition and investment in disaster resilient infrastructure, with support from private financing.

Directors also encouraged sustained structural reform efforts to foster long-term growth, including investing in active labor market policies and continuing efforts to support off-season and niche tourism. Addressing data gaps is also important.

It is expected that the next Article IV Consultation with Grenada will be held on the standard 12-month consultation cycle.

Table 1. Grenada: Selected Social and Economic Indicators, 2019–29


Rank in UNDP Human Development Index			73		Infant mortality rate per ‘000 births (2021)						14.4
out of 189 countries (2021)					Adult illiteracy rate in percent (2014)						1
Life expectancy at birth in years (2021)			75		Poverty rate in percent of population (2019)						25
GDP per capita in US$ (2021)			10,449
Population in millions (2021)			0.13		Unemployment rate (2021 Q2)						11.1

	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029
					Est.			Proj.
National income and prices
GDP at constant prices	0.7	-13.8	4.7	7.3	4.7	3.6	3.9	3.3	2.7	2.7	2.7
GDP deflator	3.3	-0.3	2.8	2.2	2.7	1.4	1.4	2.0	2.0	2.0	2.0
Consumer prices, end of period	0.1	-0.8	1.9	2.9	2.2	1.2	1.9	2.0	2.0	2.0	2.0

Money and credit, end of period
Credit to private sector	1.4	3.1	3.8	2.1	3.8	3.8	4.2	4.4	4.6	4.5	4.5
Broad money (M2)	2.9	9.1	8.5	9.9	1.4	3.7	5.2	5.4	4.8	4.8	4.8

Central government balances (accrual)
Revenue and grants	26.6	28.1	31.5	32.7	36.9	44.1	30.5	29.3	29.2	28.9	28.8
Expenditure	21.6	32.7	31.2	31.8	28.9	39.5	39.4	33.1	29.6	29.2	28.9
o.w. Capital expenditure	2.6	9.6	8.6	10.2	9.3	11.7	12.2	8.7	6.2	5.8	5.6
Primary balance	6.8	-2.6	2.1	2.6	9.5	8.0	-5.1	-1.2	1.5	1.5	1.5
Overall balance	5.0	-4.5	0.3	1.0	8.0	4.7	-8.9	-3.8	-0.4	-0.3	-0.1

Central government debt (incl. guaranteed) 1/	58.5	71.4	70.0	62.8	60.5	59.3	58.1	53.9	53.2	51.4	49.6
Domestic	14.6	16.2	15.3	12.8	11.3	11.1	9.7	7.8	7.1	6.9	7.0
External	44.0	55.2	54.7	50.0	49.2	48.2	48.5	46.1	46.0	44.5	42.6
Public debt (incl. debt of SOEs and SBs)	62.7	89.5	86.6	78.8	75.2	73.3	71.4	66.5	65.2	62.9	60.6

Savings-Investment balance	-10.4	-16.1	-14.5	-11.0	-9.1	-13.1	-13.8	-10.6	-9.9	-9.1	-9.1
Savings	14.6	16.3	15.6	18.0	30.8	28.3	18.1	17.8	15.8	15.3	14.9
Investment	24.9	32.4	30.1	29.1	39.9	41.5	31.9	28.4	25.7	24.5	24.0

External Sector
Gross international reserves (millions of dollars)	234.1	290.9	324.2	352.6	389.1	435.1	364.5	364.8	390.3	405.6	424.6
(in months of imports)	5.2	5.6	4.9	5.0	4.8	5.2	4.3	4.2	4.3	4.3	4.3
Current account balance, o/w:	-10.4	-16.1	-14.5	-11.0	-9.1	-13.1	-13.8	-10.6	-9.9	-9.1	-9.1
Exports of goods and services	54.6	41.1	47.9	57.8	62.8	63.8	62.5	62.8	63.0	62.6	62.3
Imports of goods and services	55.8	52.2	55.4	64.3	63.7	69.9	68.5	65.6	65.0	63.8	63.4
External debt (gross)	64.7	92.5	94.8	90.0	86.9	85.4	85.4	82.6	82.3	80.5	78.4

Sources: Ministry of Finance; Eastern Caribbean Central Bank; United Nations, Human Development Report; World Bank WDI; and IMF staff estimates and projections.
1/ Includes the impact of the debt restructuring agreement for the 2025 bonds.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Meera Louis

Phone: +1 202 623-7100Email: MEDIA@IMF.org

https://www.imf.org/en/News/Articles/2025/02/03/pr25026-grenada-imf-executive-board-concludes-2024-article-iv-consultation

MIL OSI

MIL OSI Russia News –

February 5, 2025

MIL-OSI: First Financial Corporation Reports 2024 Results

Source: GlobeNewswire (MIL-OSI)

TERRE HAUTE, Ind., Feb. 04, 2025 (GLOBE NEWSWIRE) — First Financial Corporation (NASDAQ:THFF) today announced results for the fourth quarter of 2024.

Net income was $16.2 million compared to $12.4 million reported for the same period of 2023;
Diluted net income per common share of $1.37 compared to $1.06 for the same period of 2023;
Return on average assets was 1.18% compared to 1.05% for the three months ended December 31, 2023;
Credit loss provision was $2.0 million compared to provision of $2.5 million for the fourth quarter 2023; and
Pre-tax, pre-provision net income was $22.3 million compared to $16.6 million for the same period in 2023.¹

The Corporation further reported results for the year ended December 31, 2024:

Net income was $47.3 million compared to $60.7 million reported for the same period of 2023;
Diluted net income per common share of $4.00 compared to $5.08 for the same period of 2023;
Return on average assets was 0.92% compared to 1.26% for the twelve months ended December 31, 2023;
Credit loss provision was $16.2 million compared to provision of $7.3 million for the twelve months ended December 31, 2023; and
Pre-tax, pre-provision net income was $73.4 million compared to $79.7 million for the same period in 2023.¹

______________________________
¹Non-GAAP financial measure that Management believes is useful for investors and management to understand pre-tax profitability before giving effect to credit loss expense and to provide additional perspective on the Corporation’s performance over time as well as comparison to the Corporation’s peers and evaluating the financial results of the Corporation – please refer to the Non GAAP reconciliations contained in this release.

Average Total Loans

Average total loans for the fourth quarter of 2024 were $3.79 billion versus $3.13 billion for the comparable period in 2023, an increase of $657 million or 20.98%. On a linked quarter basis, average loans increased $84.7 million or 2.29% from $3.71 billion as of September 30, 2024. Increases in average loans year-over-year were mostly a result of the acquisition of SimplyBank on July 1, 2024.

Total Loans Outstanding

Total loans outstanding as of December 31, 2024, were $3.84 billion compared to $3.17 billion as of December 31, 2023, an increase of $669 million or 21.13%. On a linked quarter basis, total loans increased $122 million or 3.28% from $3.72 billion as of September 30, 2024. The year-over-year increase was impacted by the $467 million in loans acquired in the SimplyBank acquisition. Organic growth was primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans.

Norman D. Lowery, President and Chief Executive Officer, commented “We experienced another sound quarter of loan growth and record net interest income. During the quarter our net interest margin expanded, and we expect continued improvement in coming quarters.”

Average Total Deposits

Average total deposits for the quarter ended December 31, 2024, were $4.76 billion versus $4.05 billion as of December 31, 2023, an increase of $706 million or 17.44%. Increases in average deposits year-over-year were mostly a result of the acquisition of SimplyBank. On a linked quarter basis, average deposits increased $52 million, or 1.10% from $4.71 billion as of September 30, 2024.

Total Deposits

Total deposits were $4.72 billion as of December 31, 2024, compared to $4.09 billion as of December 31, 2023, a $629 million increase, or 15.37%. On a linked quarter basis, total deposits increased $1.4 million, or 0.03%. $622 million in deposits were acquired in the SimplyBank acquisition. Non-interest bearing deposits were $859.0 million, and time deposits were $749.4 million as of December 31, 2024, compared to $750.3 million and $515.7 million, respectively for the same period of 2023.

Shareholders’ Equity

Shareholders’ equity at December 31, 2024, was $549.0 million compared to $528.0 million on December 31, 2023. During the last twelve months, the Corporation has not repurchased any shares of its common stock. 518,860 shares remain available for repurchase under the current repurchase authorization. The Corporation paid a $0.45 per share quarterly dividend in October and declared a $0.51 quarterly dividend, which was paid on January 15, 2025.

Book Value Per Share

Book Value per share was $46.36 as of December 31, 2024, compared to $44.76 as of December 31, 2023, an increase of $1.60 per share, or 3.57%. Tangible Book Value per share was $36.10 as of December 31, 2024, compared to $36.91 as of December 31, 2023.

Tangible Common Equity to Tangible Asset Ratio

The Corporation’s tangible common equity to tangible asset ratio was 7.86% at December 31, 2024, compared to 9.15% at December 31, 2023.

Net Interest Income

Net interest income for the fourth quarter of 2024 was a record $49.6 million, compared to $39.6 million reported for the same period of 2023, an increase of $10.0 million, or 25.29%.

Net Interest Margin

The net interest margin for the quarter ended December 31, 2024, was 3.94% compared to the 3.63% reported at December 31, 2023. On a linked quarterly basis, the net interest margin increased 16 basis points from 3.78% at September 30, 2024.

Nonperforming Loans

Nonperforming loans as of December 31, 2024, were $13.3 million versus $24.6 million as of December 31, 2023. The ratio of nonperforming loans to total loans and leases was 0.35% as of December 31, 2024, versus 0.78% as of December 31, 2023. The decrease in nonperforming loans is due to a commercial relationship that was downgraded in fourth quarter 2023 and subsequently resolved in 2024.

Credit Loss Provision

The provision for credit losses for the three months ended December 31, 2024, was $2.0 million, compared to $2.5 million for the fourth quarter 2023.

Net Charge-Offs

Fourth quarter net charge-offs were $1.4 million compared to $1.8 million in the same period of 2023.

Allowance for Credit Losses

The Corporation’s allowance for credit losses as of December 31, 2024, was $46.7 million compared to $39.8 million as of December 31, 2023. The allowance for credit losses as a percent of total loans was 1.22% as of December 31, 2024, compared to 1.26% as of December 31, 2023. On a linked quarter basis, the allowance for credit losses as a percent of total loans decreased 2 basis points from 1.24% as of September 30, 2024. The Corporation recorded $8.5 million in allowance for the acquisition of SimplyBank, which included $3 million to record purchased credit deteriorated (“PCD”) reserves.

Non-Interest Income

Non-interest income for the three months ended December 31, 2024 and 2023 was $12.2 million and $11.2 million, respectively.

Non-Interest Expense

Non-interest expense for the three months ended December 31, 2024, was $39.8 million compared to $34.2 million in 2023. This includes an overall increase in operating expenses as a result of the acquisition.

Efficiency Ratio

The Corporation’s efficiency ratio was 62.98% for the quarter ending December 31, 2024, versus 65.62% for the same period in 2023.

Income Taxes

Income tax expense for the three months ended December 31, 2024, was $3.8 million versus $1.7 million for the same period in 2023. The effective tax rate for 2024 was 17.28% compared to 16.31% for 2023.

About First Financial Corporation

First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A., which is the fifth oldest national bank in the United States, operating 83 banking centers in Illinois, Indiana, Kentucky, Tennessee, and Georgia. Additional information is available at www.first-online.bank.

Investor Contact:
Rodger A. McHargue
Chief Financial Officer
P: 812-238-6334
E: rmchargue@first-online.com



	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2024		2024		2023		2024		2023
END OF PERIOD BALANCES
Assets	$	5,560,348	$	5,483,351	$	4,851,146	$	5,560,348	$	4,851,146
Deposits	$	4,718,914	$	4,717,489	$	4,090,068	$	4,718,914	$	4,090,068
Loans, including net deferred loan costs	$	3,837,141	$	3,715,235	$	3,167,821	$	3,837,141	$	3,167,821
Allowance for Credit Losses	$	46,732	$	46,169	$	39,767	$	46,732	$	39,767
Total Equity	$	549,041	$	565,951	$	527,976	$	549,041	$	527,976
Tangible Common Equity ^(a)	$	427,470	$	446,786	$	435,405	$	427,470	$	435,405

AVERAGE BALANCES
Total Assets	$	5,516,036	$	5,483,572	$	4,725,297	$	5,154,320	$	4,802,448
Earning Assets	$	5,196,352	$	5,165,520	$	4,485,766	$	4,871,293	$	4,564,135
Investments	$	1,311,415	$	1,342,037	$	1,279,821	$	1,310,263	$	1,358,661
Loans	$	3,790,515	$	3,705,779	$	3,133,267	$	3,468,534	$	3,111,784
Total Deposits	$	4,757,438	$	4,705,614	$	4,050,968	$	4,405,679	$	4,106,132
Interest-Bearing Deposits	$	3,925,740	$	4,403,454	$	3,291,931	$	3,767,259	$	3,304,816
Interest-Bearing Liabilities	$	134,553	$	157,227	$	206,778	$	166,377	$	199,551
Total Equity	$	556,330	$	546,912	$	463,004	$	535,963	$	486,572

INCOME STATEMENT DATA
Net Interest Income	$	49,602	$	47,170	$	39,590	$	174,986	$	167,262
Net Interest Income Fully Tax Equivalent ^(b)	$	50,985	$	48,630	$	40,942	$	180,586	$	172,716
Provision for Credit Losses	$	2,000	$	9,400	$	2,495	$	16,166	$	7,295
Non-interest Income	$	12,213	$	11,223	$	11,247	$	42,772	$	42,702
Non-interest Expense	$	39,801	$	38,564	$	34,244	$	144,438	$	130,176
Net Income	$	16,241	$	8,741	$	12,420	$	47,275	$	60,672

PER SHARE DATA
Basic and Diluted Net Income Per Common Share	$	1.37	$	0.74	$	1.06	$	4.00	$	5.08
Cash Dividends Declared Per Common Share	$	0.51	$	0.45	$	0.45	$	1.86	$	0.99
Book Value Per Common Share	$	46.36	$	47.93	$	44.76	$	46.36	$	44.76
Tangible Book Value Per Common Share ^(c)	$	36.77	$	36.22	$	31.47	$	36.10	$	36.91
Basic Weighted Average Common Shares Outstanding		11,824		11,808		11,772		11,812		11,937

______________________________
(a)   Tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholder’s equity.
(b)   Net interest income fully tax equivalent is a non-GAAP financial measure derived from GAAP-based amounts. We calculate net interest income fully tax equivalent by adding back the tax equivalent factor of tax exempt income to net interest income. We calculate the tax equivalent factor of tax exempt income by dividing tax exempt income by the net of tax rate of 75%.
(c)   Tangible book value per common share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the factor by dividing average tangible common equity by average shares outstanding. We calculate average tangible common equity by excluding average intangible assets from average shareholder’s equity.


Key Ratios	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2024		2024		2023		2024		2023
Return on average assets	1.18	%	0.64	%	1.05	%	0.92	%	1.26	%
Return on average common shareholder’s equity	11.68	%	6.39	%	10.73	%	8.82	%	12.47	%
Efficiency ratio	62.98	%	64.43	%	65.62	%	64.67	%	60.43	%
Average equity to average assets	10.09	%	9.97	%	9.80	%	10.40	%	10.13	%
Net interest margin ^(a)	3.94	%	3.78	%	3.63	%	3.71	%	3.78	%
Net charge-offs to average loans and leases	0.15	%	0.49	%	0.22	%	0.35	%	0.23	%
Credit loss reserve to loans and leases	1.22	%	1.24	%	1.26	%	1.22	%	1.26	%
Credit loss reserve to nonperforming loans	351.37	%	326.65	%	161.94	%	351.37	%	161.94	%
Nonperforming loans to loans and leases	0.35	%	0.38	%	0.78	%	0.35	%	0.78	%
Tier 1 leverage	10.38	%	10.25	%	12.14	%	10.38	%	12.14	%
Risk-based capital – Tier 1	12.43	%	13.63	%	14.76	%	12.43	%	14.76	%

______________________________
(a) Net interest margin is calculated on a tax equivalent basis.


Asset Quality	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2024		2024		2023		2024		2023
Accruing loans and leases past due 30-89 days	$	22,486	$	16,391	$	20,168	$	22,486	$	20,168
Accruing loans and leases past due 90 days or more	$	1,821	$	1,517	$	960	$	1,821	$	960
Nonaccrual loans and leases	$	11,479	$	12,617	$	23,596	$	11,479	$	23,596
Other real estate owned	$	523	$	169	$	107	$	523	$	107
Nonperforming loans and other real estate owned	$	13,823	$	14,303	$	24,663	$	13,823	$	24,663
Total nonperforming assets	$	16,719	$	17,179	$	27,665	$	16,719	$	27,665
Gross charge-offs	$	3,070	$	6,936	$	3,976	$	19,289	$	15,496
Recoveries	$	1,633	$	2,365	$	2,213	$	7,082	$	8,188
Net charge-offs/(recoveries)	$	1,437	$	4,571	$	1,763	$	12,207	$	7,308


Non-GAAP Reconciliations	Three Months Ended December 31,
	2024		2023
($in thousands, except EPS)
Income before Income Taxes	$	20,014	$	14,098
Provision for credit losses		2,000		2,495
Provision for unfunded commitments		300		—
Pre-tax, Pre-provision Income	$	22,314	$	16,593


Non-GAAP Reconciliations	Year Ended December 31,
	2024		2023
($ in thousands, except EPS)
Income before Income Taxes	$	57,154	$	72,493
Provision for credit losses		16,166		7,295
Provision for unfunded commitments		100		(100	)
Pre-tax, Pre-provision Income	$	73,420	$	79,688


CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except per share data)

	December 31,			December 31,
	2024			2023
	(unaudited)
ASSETS
Cash and due from banks	$	93,526		$	76,759
Federal funds sold		820			282
Securities available-for-sale		1,195,990			1,259,137
Loans:
Commercial		2,196,351			1,817,526
Residential		967,386			695,788
Consumer		668,058			646,758
		3,831,795			3,160,072
(Less) plus:
Net deferred loan costs		5,346			7,749
Allowance for credit losses		(46,732	)		(39,767	)
		3,790,409			3,128,054
Restricted stock		17,555			15,364
Accrued interest receivable		26,934			24,877
Premises and equipment, net		81,508			67,286
Bank-owned life insurance		128,766			114,122
Goodwill		100,026			86,985
Other intangible assets		21,545			5,586
Other real estate owned		523			107
Other assets		102,746			72,587
TOTAL ASSETS	$	5,560,348		$	4,851,146

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing	$	859,014		$	750,335
Interest-bearing:
Certificates of deposit exceeding the FDIC insurance limits		144,982			92,921
Other interest-bearing deposits		3,714,918			3,246,812
		4,718,914			4,090,068
Short-term borrowings		187,057			67,221
FHLB advances		28,120			108,577
Other liabilities		77,216			57,304
TOTAL LIABILITIES		5,011,307			4,323,170

Shareholders’ equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-16,165,023 in 2024 and 16,137,220 in 2023
Outstanding shares-11,842,539 in 2024 and 11,795,024 in 2023		2,018			2,014
Additional paid-in capital		145,927			144,152
Retained earnings		687,366			663,726
Accumulated other comprehensive income/(loss)		(132,285	)		(127,087	)
Less: Treasury shares at cost-4,322,484 in 2024 and 4,342,196 in 2023		(153,985	)		(154,829	)
TOTAL SHAREHOLDERS’ EQUITY		549,041			527,976
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,560,348		$	4,851,146


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Dollar amounts in thousands, except per share data)

	Year Ended
	December 31,
	2024			2023			2022
	(unaudited)
INTEREST INCOME:
Loans, including related fees	$	226,262		$	189,641		$	146,295
Securities:
Taxable		24,237			24,643			21,014
Tax-exempt		10,533			10,573			9,974
Other		3,710			3,540			6,018
TOTAL INTEREST INCOME		264,742			228,397			183,301
INTEREST EXPENSE:
Deposits		81,071			51,694			16,743
Short-term borrowings		4,284			5,370			1,243
Other borrowings		4,401			4,071			273
TOTAL INTEREST EXPENSE		89,756			61,135			18,259
NET INTEREST INCOME		174,986			167,262			165,042
Provision for credit losses		16,166			7,295			(2,025	)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		158,820			159,967			167,067
NON-INTEREST INCOME:
Trust and financial services		5,468			5,155			5,155
Service charges and fees on deposit accounts		29,653			28,079			27,540
Other service charges and fees		999			801			665
Securities gains (losses), net		103			(1	)		3
Interchange income		655			676			559
Loan servicing fees		1,259			1,176			1,554
Gain on sales of mortgage loans		1,153			966			1,994
Other		3,482			5,850			9,246
TOTAL NON-INTEREST INCOME		42,772			42,702			46,716
NON-INTEREST EXPENSE:
Salaries and employee benefits		74,555			68,525			65,555
Occupancy expense		9,616			9,351			9,764
Equipment expense		17,612			14,020			12,391
FDIC Expense		2,788			2,907			2,327
Other		39,867			35,373			35,986
TOTAL NON-INTEREST EXPENSE		144,438			130,176			126,023
INCOME BEFORE INCOME TAXES		57,154			72,493			87,760
Provision for income taxes		9,879			11,821			16,651
NET INCOME		47,275			60,672			71,109
OTHER COMPREHENSIVE INCOME (LOSS)
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes		(9,807	)		10,896			(144,570	)
Change in funded status of post retirement benefits, net of taxes		4,609			1,991			7,022
COMPREHENSIVE INCOME (LOSS)	$	42,077		$	73,559		$	(66,439	)
PER SHARE DATA
Basic and Diluted Earnings per Share	$	4.00		$	5.08		$	5.82
Weighted average number of shares outstanding (in thousands)		11,812			11,937			12,211

The MIL Network –

February 5, 2025

MIL-OSI United Kingdom: New council-owned company takes on delivery of vital services

Source: City of Canterbury

Home » Latest News » New council-owned company takes on delivery of vital services

A brand-new local authority trading company (Latco) began its work delivering the administration of revenues and benefits and customer services for three east Kent district councils on Monday (3 February).

PartnershipOne is owned by Canterbury City Council, Dover District Council and Thanet District Council and has taken over from Civica which took a strategic decision to no longer operate in the world of business processing outsourcing (BPO).

Civica itself took on the administration and collection of Council Tax, Business Rates and corporate debts, the administration of Housing Benefit and Council Tax support and over-the-phone, online and face-to-face customer services from East Kent Services, a shared service, in 2018.

Mark Emery, Chief Executive Officer of the new company, said: “Partnership One is a brand-new organisation created to harness the very best of what the public and private sectors have to offer by expertly combining the public service ethos with a huge dose of commercial nous and best practice.

“The team joining the company has a 15-year track record of delivering award-winning specialist public services to a set of stakeholders with varying, sometimes conflicting, needs and will deliver an outstanding service to our customers by taking full advantage of the skills, experience and dedication of our staff.

“It’s a cliche to say our people are at the heart of everything we deliver but, in this case, it is indisputably true.

“Our teams put their customers first and their customer satisfaction scores prove it.

“Finally, we’re ambitious, aspirational and determined to be the best in class, the example others will want to follow. We’ll prove that too.”

The complex project to move to a Latco began in early 2024 and has been supported by Interim East Kent Services Transition Manager Jasvir Chohan who has coordinated a range of workstreams undertaken by officers at the three councils working with the Civica team including HR and payroll, finance, legal, information governance, communications and IT.

PartnershipOne’s directors will be Canterbury City Council’s Head of Corporate Governance Matthew Archer, Dover District Council’s Head of Finance Helen Lamb, Thanet District Council’s Head of Property Andreea Plant and Mr Emery.

Published: 4 February 2025

MIL OSI United Kingdom –

February 5, 2025

MIL-OSI: Rate Unveils Comprehensive Financing Solutions for Small Business Owners and Independent Property Investors

Source: GlobeNewswire (MIL-OSI)

CHICAGO, Feb. 04, 2025 (GLOBE NEWSWIRE) — Rate, a leading financial services provider in the mortgage industry, proudly announces the launch of a comprehensive suite of investment property financing solutions for independent and small business owners. These offerings are designed to support buyers as both aspiring and established real estate investors with industry-leading pricing and rapid access to capital.

Trends in property investment reveal significant growth and involvement among taxpayers and small investors over the last few years. According to CoreLogic, after a dip in the first half of 2024 as mortgage rates and home prices remained elevated, the quarterly U.S. home investor share grew by 2% and is expected is expected to remain steady in 2025, at around 25% of all home sales.

The long term growth is echoed in the IRS data, showing that the number of taxpayers claiming rental income has been increasing at an annual rate of 7.6% since 2006, reaching 16.8 million individuals. Among these investors, 47% are small-scale, owning 3-9 properties, while 36% are medium-scale, with portfolios of 10-99 properties. Furthermore, rental income is derived from 17.7 million properties, highlighting the substantial scale of the rental property market. Rate is committed to serving everyday Americans and small business owners, who are emerging as a rising percentage of those making these purchases and being at the forefront of this trend.

Rate’s full suite of products is designed for everyday Americans seeking to own investment properties and achieve financial independence. Whether it’s their first or their twentieth investment, borrowers will benefit from a one-stop shop and state-of-the-industry tools for all their financing needs. Options for 1-4 unit properties include the industry-leading MaxInvest and DSCR (Debt Service Coverage Ratio) programs. Beyond Residential financing the company is best known for, Rate can arrange financing for Residential/Commercial which includes apartment buildings, mixed use, storage facilities, and even strip malls and warehouses.

Today’s announcement follows the company’s earlier launch of its first Residential Mortgage-Backed Securities (RMBS) deal of 2024 as the first non-bank lender to re-enter the securitization space for jumbo loans since the pandemic. Both products reflect the company’s commitment to delivering products and solutions that support a broad array of homebuying ambitions and profiles.

“Our commitment to helping everyday Americans achieve their goals is unwavering. We continue to find new and better ways to serve small business owners and real people trying to support their families,” said Victor Ciardelli, CEO of Rate. “We offer the best tools in the industry, a streamlined tech-enabled process with fast access to cash and minimal paperwork, making real estate investment accessible to everyone.”

“The investment property mortgage industry is traditionally serviced by Fannie, Freddie, small and hard money lenders, leading to limited liquidity and tech advancement, and a disjointed high-cost process,” said Kate Amor, EVP and Head of Enterprise Products for Rate.

Focus on Small Business Owners
Rate recognizes that small business owners often face unique challenges when seeking financing for investment properties. Traditional lenders overlook this group, focusing instead on first-time homebuyers or large commercial clients. Rate aims to fill this gap by providing custom solutions that address the specific needs of small business owners and individual investors.

“Our goal is to support Main Street America—normal Americans who want to achieve financial security through real estate investment,” added Amor. “These are not the institutional investors taking housing supply, but everyday people and small business owners looking to build a better future for their families. We are committed to providing them with the tools and resources they need to succeed.”

Market Context:
The real estate investment market has been underserved, often relying on small lenders and hard money lending. Rate’s new suite of solutions aims to bridge this gap by providing sophisticated, tech-forward, and accessible financing options. With expansive guidelines and a focus on speed and convenience, Rate is set to redefine the market for real estate investors.

“Recent agency loan-level pricing adjustments have made it extremely difficult to find rate and pricing scenarios that make sense for these small investors, particularly when Fed rate cuts haven’t lowered mortgage rates as many hoped,” said Jeremy Collett, Chief Capital Markets Officer for Rate. “We’re using our strong product development acumen to find new ways to offer competitive rates for our everyday real estate investor customers and their unique business needs.”

About Rate:
Rate Companies is a leader in mortgage lending and digital financial services. Headquartered in Chicago, Rate is the #2 retail mortgage lender in the U.S., with over 850 branches across all 50 states and Washington D.C. Since its launch in 2000, Rate has helped more than 2 million homeowners with home purchase loans and refinances. The company has cemented itself as an industry leader by introducing innovative technology, offering low rates, and delivering unparalleled customer service. Honors and awards include Best Mortgage Lender for First-Time Homebuyers by NerdWallet for 2023; HousingWire’s Tech100 award for the company’s industry-leading FlashClose℠ digital mortgage platform in 2020, MyAccount in 2022, and Language Access Program in 2023; No. 2 ranking in Scotsman Guide’s 2022 list of Top Retail Mortgage Lenders; the most Scotsman Guide Top Originators for 11 consecutive years; Chicago Agent Magazine’s Lender of the Year for seven consecutive years; and Chicago Tribune’s Top Workplaces list for seven straight years. Visit [rate. com](https://www.rate.com) for more information.

Media Contacts:
Kendall Allen Rockwell
Broadsheet Communications
For Rate
kendall@broadsheetcomms.com

The MIL Network –

February 5, 2025

MIL-OSI: Morris State Bancshares Announces Solid Earnings in 2024, Declares Special Dividend, and Increases Quarterly Dividend

Source: GlobeNewswire (MIL-OSI)

DUBLIN, Ga., Feb. 04, 2025 (GLOBE NEWSWIRE) — Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today reported its financial results for the quarter and year ended December 31, 2024. Year over year and quarter by quarter comparisons are included herewith.

On January 29, 2025, the Company’s Board of Directors announced a 30.43% increase in its quarterly cash dividend, raising it to $0.12 per common share—an increase of $0.028 per share over the quarterly dividend of $0.092 paid in each of the prior quarters last year¹. This dividend will be payable on or about March 14, 2025, to all shareholders of record as of February 15, 2025. In addition to this increase, the Board also approved a one-time special dividend of $0.15 per common share. This special dividend will be payable on or about March 21, 2025, to all shareholders of record as of February 15, 2025.

“We are extremely pleased with the Company’s strong financial performance in 2024, achieving net earnings of $21.8 million. As the Federal Reserve pivoted during the year and decreased interest rates for the first time since March of 2020, our team effectively managed our net interest margin, closing the year at 4.06%—an increase of 8 basis points from the prior year end,” said Spence Mullis, Chairman and CEO. “At the bank level, we achieved a 1.68% return on average assets and a 12.74% return on average equity, closing the year with a leverage ratio of 12.84%, placing us in the top 10% of our FDIC peer group* in terms of capital strength. As mentioned in our third-quarter earnings release, given our strong capital position at both the bank and holding company and solid cash position at the holding company, we have the ability and plan to retire the remaining $15.0 million in subordinated debt when the window for retirement opens in July 2025. With our robust capital levels and strong earnings performance, we are well-positioned to capitalize on strategic opportunities and drive continued organic growth within our existing footprint while continuing to grow value for our shareholders through earnings and dividends.”

Following is a summary of the quarterly and annual highlights:

Fourth Quarter 2024 Highlights

Net income for the fourth quarter of 2024 was $6.1 million, compared to $5.4 million for the third quarter of 2024 and $5.9 million for the fourth quarter of 2023.
Diluted earnings per share for the fourth quarter of 2024 was $0.52, compared to $0.51 for the third quarter of 2024 and $0.56 for the fourth quarter of 2023.
Earnings before taxes for the fourth quarter of 2024 was $6.6 million, compared to $5.7 million for the third quarter of 2024 and $5.5 million for the fourth quarter of 2023.
Net loans in the fourth quarter of 2024 totaled $1.10 billion, versus $1.05 billion in the third quarter of 2024 and $1.06 billion at year end 2023.
Average cost of funds for the fourth quarter of 2024 was 206 basis points, compared to 218 basis points for the third quarter of 2024 and 192 basis points for the fourth quarter of 2023.
Return on average assets (annualized) at the bank level for the fourth quarter of 2024 was 1.79%, compared to 1.65% for the third quarter of 2024 and 1.84% for the fourth quarter of 2023.

Full Year 2024 Highlights

Total assets remained level at $1.49 billion at December 31, 2024, compared to $1.44 billion at December 31, 2023.
Earnings before income taxes totaled $23.0 million at December 31, 2024 compared to $21.5 million at December 31, 2023.
Full year net income of $21.8 million in 2024, compared to $19.3 million in 2023.
Return on average assets at the bank level of 1.68% for the full year 2024, compared to 1.55% for 2023.
Diluted earnings per share of $2.72 in 2024, compared to $1.83 in 2023.
Total shareholders’ equity increased 9.81% or $17.5 million to $195.6 million at December 31, 2024, compared to $178.1 million at December 31, 2023.
Tangible book value per share of $17.45 at December 31, 2024, compared to $15.79 at December 31, 2023.
Net loans grew $52.1 million, or 4.96%, during 2024.
The Bank’s asset quality remains solid, ending the year with nonperforming assets to total loans and other real estate of 0.41%, past due and nonaccrual loans of 0.72% and net charge offs to average loans of 0.04% for 2024.
Bank-level efficiency ratio net of tax credit amortization expense was 53.30% in 2024, compared to 52.99% in 2023.

*as defined in the FDIC’s Uniform Bank Performance Report

Forward-looking Statements

Certain statements contained in this release may not be based on historical facts and are forward-looking statements. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “plan,” “will,” “would,” “could” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including, among others, the business and economic conditions; risks related to the integration of acquired businesses and any future acquisitions; changes in management personnel; interest rate risk; ability to execute on planned expansion and organic growth; credit risk and concentrations associated with the Company’s loan portfolio; asset quality and loan charge-offs; inaccuracy of the assumptions and estimates management of the Company makes in establishing reserves for probable loan losses and other estimates; lack of liquidity; impairment of investment securities, goodwill or other intangible assets; the Company’s risk management strategies; increased competition; system failures or failures to prevent breaches of our network security; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes; and increases in capital requirements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.

¹ Per share amounts for March 31, 2024 and previous quarters have been adjusted to reflect the April 22, 2024 4-for-1 stock dividend.

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets
December 31, 2024 and 2023


		December 31,			December 31,
			2024			2023		Change			% Change
		(Unaudited)			(Unaudited)
	ASSETS

	Cash and due from banks	$	53,898,138		$	51,060,389		$	2,837,749		5.56	%
	Federal funds sold		42,064,131			17,268,446			24,795,685		143.59	%
	Total cash and cash equivalents		95,962,269			68,328,835			27,633,434		40.44	%

	Interest-bearing time deposits in other banks		100,000			100,000			—		0.00	%
	Securities available for sale, at fair value		9,726,716			7,875,780			1,850,936		0.00	%
	Securities held to maturity, at cost		215,836,502			240,205,635			(24,369,133	)	-10.15	%
	Federal Home Loan Bank stock, restricted, at cost		1,032,800			1,029,600			3,200		0.31	%

	Loans, net of unearned income		1,116,074,659			1,063,772,222			52,302,437		4.92	%
	Less-allowance for loan losses		(14,488,525	)		(14,291,923	)		(196,602	)	1.38	%
	Loans, net		1,101,586,134			1,049,480,299			52,105,835		4.96	%

	Bank premises and equipment, net		12,780,014			13,188,353			(408,339	)	-3.10	%
	ROU assets for operating lease, net		776,979			1,126,156			(349,177	)	-31.01	%
	Goodwill		9,361,704			9,361,704			—		0.00	%
	Intangible assets, net		1,338,964			1,679,989			(341,025	)	-20.30	%
	Other real estate and foreclosed assets		21,898			3,611,235			(3,589,337	)	-99.39	%
	Accrued interest receivable		7,278,258			6,424,090			854,168		13.30	%
	Cash surrender value of life insurance		15,128,762			14,711,623			417,139		2.84	%
	Other assets		22,674,658			25,321,092			(2,646,434	)	-10.45	%
	Total Assets	$	1,493,605,658		$	1,442,444,391		$	51,161,267		3.55	%


	LIABILITIES AND SHAREHOLDERS’ EQUITY

	Deposits:
	Non-interest bearing	$	325,534,335		$	316,224,444		$	9,309,891		2.94	%
	Interest bearing		939,354,005			909,976,336			29,377,669		3.23	%
			1,264,888,340			1,226,200,780			38,687,560		3.16	%

	Other borrowed funds		19,019,372			27,151,283			(8,131,911	)	-29.95	%
	Lease liability for operating lease		776,979			1,126,156			(349,177	)	-31.01	%
	Accrued interest payable		2,111,093			1,059,226			1,051,867		99.31	%
	Accrued expenses and other liabilities		11,206,717			8,773,430			2,433,287		27.73	%

	Total liabilities		1,298,002,501			1,264,310,875			33,691,626		2.66	%

	Shareholders’ Equity:
	Common stock		10,688,723			10,645,508			43,215		0.41	%
	Paid in capital surplus		34,936,059			33,711,561			1,224,498		3.63	%
	Retained earnings		130,111,050			115,232,196			14,878,854		12.91	%
	Current year earnings		21,804,345			19,332,489			2,471,856		12.79	%
	Accumulated other comprehensive income (loss)		1,422,709			1,968,846			(546,137	)	-27.74	%
	Treasury Stock, at cost 95,498 shares		(3,359,729	)		(2,757,084	)		(602,645	)	21.86	%
	Total shareholders’ equity		195,603,157			178,133,516			17,469,641		9.81	%

	Total Liabilities and Shareholders’ Equity	$	1,493,605,658		$	1,442,444,391			51,161,267		3.55	%

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Income
For the Years Ended December 31, 2024 and 2023


		December 31,		December 31,
			2024		2023	Change			% Change
		(Unaudited)		(Unaudited)
	Interest and Dividend Income:
	Interest and fees on loans	$	72,453,630	$	62,157,217	$	10,296,413		16.57	%
	Interest income on securities		7,368,157		8,196,152		(827,995	)	-10.10	%
	Income on federal funds sold		851,717		627,235		224,482		35.79	%
	Income on time deposits held in other banks		1,699,224		1,214,072		485,152		39.96	%
	Other interest and dividend income		183,239		255,689		(72,450	)	-28.34	%
	Total interest and dividend income		82,555,967		72,450,365		10,105,602		13.95	%

	Interest Expense:
	Deposits		25,981,731		18,599,664		7,382,067		39.69	%
	Interest on other borrowed funds		1,548,980		2,148,019		(599,039	)	-27.89	%
	Interest on federal funds purchased		296		842		(546	)	-64.85	%
	Total interest expense		27,531,007		20,748,525		6,782,482		32.69	%

	Net interest income before provision for loan losses		55,024,960		51,701,840		3,323,120		6.43	%
	Less-provision for loan losses		556,913		450,475		106,438		23.63	%
	Net interest income after provision for loan losses		54,468,047		51,251,365		3,216,682		6.28	%

	Noninterest Income:
	Service charges on deposit accounts		2,164,988		2,143,550		21,438		1.00	%
	Other service charges, commissions and fees		1,553,493		1,589,747		(36,254	)	-2.28	%
	Gain on sales of foreclosed assets		—		—		—		0.00	%
	Gain on sales and calls of securities		182		—		182		0.00	%
	Gain on sale of loans		—		—		—		—
	Increase in CSV of life insurance		417,139		378,079		39,060		10.33	%
	Other income		644,868		606,754		38,114		6.28	%
	Total noninterest income		4,780,670		4,718,130		62,540		1.33	%

	Noninterest Expense:
	Salaries and employee benefits		19,050,416		17,414,685		1,635,731		9.39	%
	Occupancy and equipment expenses, net		2,223,832		2,250,663		(26,831	)	-1.19	%
	(Gain) Loss on sales of foreclosed assets and other real estate		9,681		321,783		(312,102	)	0.00	%
	Loss on sales of premises and equipment		—		54,269		(54,269	)	-100.00	%
	Tax credit amortization expense		2,920,825		2,733,248		187,577		6.86	%
	Other expenses		12,040,179		11,713,425		326,754		2.79	%
	Total noninterest expense		36,244,933		34,488,073		1,756,860		5.09	%

	Income Before Income Taxes		23,003,784		21,481,422		1,522,362		7.09	%
	Provision for income taxes		1,199,439		2,148,933		(949,494	)	-44.18	%

	Net Income	$	21,804,345	$	19,332,489		2,471,856		12.79	%


	Earnings per common share:
	Basic	$	2.72	$	1.83		0.89		48.63	%
	Diluted	$	2.72	$	1.83		0.89		48.63	%


	Per share amounts for December 31, 2023 has been adjusted to reflect the April 22, 2024 4-for-1 stock dividend.

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

Selected Financial Information


		Year Ending						Quarter Ended
		December 31,			December 31,				December 31,			September 30,			June 30,			March 31,			December 31,
			2024			2023				2024			2024			2024			2024			2023
	(Dollars in thousand, except per share data)	(Unaudited)			(Unaudited)				(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

	Per Share Data
	Basic Earnings per Common Share	$	2.72		$	1.83			$	0.52		$	0.51		$	0.50		$	0.46		$	0.56
	Diluted Earnings per Common Share		2.72			1.83				0.52			0.51			0.50			0.46			0.56
	Dividends per Common Share		0.368			0.352				0.092			0.092			0.092			0.092			0.088
	Book Value per Common Share		18.46			16.84				18.46			17.99			17.56			17.20			16.84
	Tangible Book Value per Common Share		17.45			15.79				17.45			16.97			16.53			16.17			15.79


	Average Diluted Shares Outstanding		10,603,218			10,582,377				10,596,432			10,602,348			10,611,811			10,582,377			10,582,820
	End of Period Common Shares Outstanding		10,593,225			10,582,219				10,593,225			10,596,345			10,605,080			10,582,218			10,581,052

	Selected Balance Sheet Data (Bank Only)
	Net Loans	$	1,101,586		$	1,049,480			$	1,101,586		$	1,048,418		$	1,023,367		$	1,040,412		$	1,063,772
	Non-Interest Bearing Deposits		347,929			315,953				347,929			336,698			339,177			346,232			339,785
	Interest Bearing Demand Deposits		260,371			286,112				260,371			249,649			243,744			260,624			270,473
	Savings & Money Market Deposits		402,641			393,139				402,641			401,234			422,048			441,911			444,170
	Time Deposits		276,898			231,692				276,898			211,590			193,110			175,534			161,933

	Earnings Summary
	Net Interest Income		55,025			51,701				14,496			13,998			13,569			12,963			12,934
	Provision for Credit Losses		557			450				28			252			272			5			242
	Non-Interest Income		4,781			4,718				1,076			1,106			1,392			1,208			1,098
	Non-Interest Expense		36,245			34,488				8,934			9,142			9,047			9,123			8,275
	Earnings before Taxes		23,004			21,481				6,610			5,710			5,641			5,043			5,515
	Income Taxes		1,199			2,149				465			263			319			152			(416	)
	Net Income		21,804			19,332				6,144			5,447			5,322			4,891			5,931

	Annualized Performance Ratios (Bank Only)
	Return on Average Assets		1.68	%		1.55	%			1.79	%		1.65	%		1.73	%		1.55	%		1.84	%
	Return on Average Equity		12.74	%		12.25	%			13.69	%		12.37	%		13.12	%		11.74	%		14.11	%
	Equity/Assets		12.84	%		13.07	%			12.84	%		13.23	%		13.18	%		13.09	%		13.07	%
	Cost of Funds		2.12	%		1.57	%			2.06	%		2.18	%		2.16	%		2.09	%		1.92	%
	Net Interest Margin		4.06	%		3.98	%			4.17	%		4.10	%		4.02	%		3.95	%		3.97	%
	Efficiency Ratio		58.27	%		57.51	%			54.21	%		58.90	%		58.36	%		61.92	%		55.17	%
	Efficiency Ratio Net of Tax Credit Amortization Expense		53.30	%		52.99	%			49.45	%		53.96	%		53.40	%		56.68	%		50.90	%
	Nonperforming Assets to Total Loans and Other Real Estate		0.41	%		0.58	%			0.41	%		0.46	%		0.39	%		0.28	%		0.58	%
	Past Due and Nonaccural Loans Ratio		0.72	%		0.65	%			0.72	%		1.01	%		0.68	%		0.73	%		0.65	%
	Net Chargeoffs to Average Loans		0.04	%		0.01	%			0.01	%		0.03	%		0.02	%		0.00	%		0.33	%


	Shares outstanding and per share amounts for March 31, 2024 and prior quarters have been adjusted to reflect the April 22, 2024 4-for-1 stock dividend.

The MIL Network –

February 5, 2025

MIL-OSI: Sunrun’s Power Plant Programs Complete Successful 2024 with Expansion and Innovation To Support Power Grids Across the Country

Source: GlobeNewswire (MIL-OSI)

SAN FRANCISCO, Feb. 04, 2025 (GLOBE NEWSWIRE) — Sunrun (Nasdaq: RUN), the nation’s leading provider of clean energy as a subscription service, announced today that its growing portfolio of virtual power plants (VPPs) successfully supported power grids across the country in 2024 with a combined instantaneous peak of nearly 80 megawatts—a capacity greater than many traditional fossil-fuel power plants. These innovative programs leveraged Sunrun’s fleet of residential solar and battery systems—the largest in America—empowering customers to generate, store, and share their own solar energy.

In 2024, more than 20,000 Sunrun customers participated in 16 virtual power plant programs across nine states and territories. From California and Texas to Puerto Rico and New England, the customers’ batteries supplied on-demand, stored solar energy to augment power resources during hundreds of critical energy events.

“Utilities are at a point where they can’t grow fast enough for the increased demand for electricity, which is why they are coming to Sunrun for help,” said Sunrun CEO Mary Powell. “Our power plant portfolio is at an inflection point because we have the resources and expertise to quickly develop, deploy, and scale programs to provide smart, controllable load. Combining solar with storage not only provides American families with energy independence and peace of mind, but also the ability to support the grid when it’s needed most.”

Extreme weather events and soaring electricity demand underscore the importance for these power plant programs. The North American Electric Reliability Corporation warns that over half the U.S. faces blackout risks in the next decade due to capacity shortfalls, as peak demand continues to climb with the rise of artificial intelligence, domestic manufacturing growth, and electrification of the economy. According to the Department of Energy, data center load growth has tripled over the past decade and is expected to more than double by 2028.

Sunrun’s 2024 virtual power plant initiatives have demonstrated the ability to enhance grid reliability, lower harmful emissions, and decrease costs for all electricity customers. Notable examples of performance include:

California: Over 16,000 Sunrun customers participating in California’s statewide CalReady program—the nation’s largest single-owner virtual power plant—delivering an average of 48 megawatts of stored solar energy to the grid during peak evening hours in the summer months. Output peaked at 54 megawatts, enough to power approximately 48,000 homes—equivalent to a city the size of Santa Monica.
Puerto Rico: Over 4,000 customers’ batteries participating in Sunrun’s PowerOn Puerto Rico program provided vital backup energy to the island’s grid during more than 70 energy shortfall events. Within just an hour’s notice, Sunrun dispatched its batteries as a single power plant to avoid rolling blackouts to help keep the lights on for communities across Puerto Rico.
Texas: Sunrun partnered with Tesla Electric, a retail electricity provider operated by Tesla Energy Ventures LLC, a subsidiary of Tesla, Inc., and Vistra on two virtual power plants in the Lone Star State. Still growing, the Tesla Electric program leverages home batteries to provide reserves during peak consumption. Customers receive an annual payment, currently set at $400 per Powerwall, while Sunrun earns recurring revenue through the program. The Vistra partnership also offers customers financial incentives and credits.
New York: Sunrun activated the state’s largest residential virtual power plant in collaboration with Orange & Rockland Utilities, Inc., a subsidiary of Consolidated Edison, Inc. Over 300 solar-plus-storage systems provided stored solar energy during peak demand events in the summer. Participating customers received a free or heavily discounted home battery in exchange for their commitment to the 10-year program, while Sunrun received upfront payments from O&R.
Maryland: Sunrun launched the nation’s first bidirectional electric vehicle-to-home virtual power plant, partnering with Baltimore Gas and Electric Company (BGE), a subsidiary of Exelon Corporation, to utilize a small group of customer-owned Ford F-150 Lightnings. BGE was awarded grant funding from the Department of Energy to create the program, and Sunrun developed and operated this first-in-the-nation electric vehicle VPP. Participating customers earned several hundred dollars by sharing energy from their F-150 Lightning trucks.

“My wife and I earned nearly $1,700 just by sharing the energy from our Ford Lightning,” said Sunrun customer Brian Foreman. “It’s exciting to be an early adopter of this technology and making extra money with our electric truck is just an added bonus.”

“Sunrun is executing its virtual power plant strategy at a scale that is unmatched, and we’re excited to monetize more battery assets and secure additional, recurring revenue streams in 2025,” said Sunrun President and Chief Revenue Officer Paul Dickson. “With over half of new Sunrun customers installing storage, we are laying a strong foundation to create future programs where there is value for our customers, benefit to the grid, and revenue for Sunrun.”

Sunrun’s storage-first approach has positioned it to become one of the nation’s largest distributed power providers, serving as a vital resource for utilities and grid operators in protecting Americans from outages, pollution, and rising energy costs. Peak season customer enrollment in Sunrun’s power-sharing programs grew approximately 100% year-over-year in 2024.

“Sunrun is the industry leader, and we’re proving that every utility can and should have a virtual power plant program,” said Chris Rauscher, head of Grid Services at Sunrun. “Our largest and most successful programs are in Puerto Rico and California—places with vastly different power grids—but both equally benefiting from Sunrun customers’ solar-plus-storage systems being networked together to augment supply. I want to thank our amazing team which has turned the dream of VPPs into a reality.”

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

Media Contact
Wyatt Semanek
Director, Corporate Communications
press@sunrun.com

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

The MIL Network –

February 5, 2025

MIL-OSI United Kingdom: Stoke-on-Trent businesses shine with nominations at Tourism Awards

Source: City of Stoke-on-Trent

Published: Tuesday, 4th February 2025

Some of the city’s best hospitality and leisure businesses have been shortlisted for awards at the prestigious Staffordshire & Stoke-on-Trent Tourism Awards 2025.

The annual awards ceremony – sponsored by the University of Staffordshire – recognises the diverse range of attractions, accommodations and food and drink businesses and will be held in Stoke-on-Trent this year as part of the city’s centenary celebrations.

This comes as latest figures show that a £2.3 billion tourism boom has seen more visitors flock to the area and numbers using the sector are up 30 per cent since 2019.

World of Wedgwood has been recognised with several nominations, including for the International Tourism Award, Large Visitor Attraction of the Year and the tea room has been nominated in the Taste of England – Tea Room & Coffee Shop of the Year category.

Jemma Harrison, Director of Destinations at Fiskars UK Limited, who run World of Wedgwood, said: “We are thrilled to have been shortlisted for three awards this year, especially in the new category of International Attraction of the Year.

“The team at World of Wedgwood have worked hard to build brand awareness within the inbound travel market as well as creating bespoke itineraries and products for our international guests. It’s fantastic news to be shortlisted for an award which reflects such great collaboration between the marketing and operational teams.”

Doubletree by Hilton, on Festival Park, has been shortlisted for two awards, in the categories of Large Hotel of the Year and their Revenue, Sales & Marketing team have been nominated for Team of the Year.

Middleport Pottery has been shortlisted for Small Visitor Attraction of the Year and two restaurants, including Lunar Restaurant, are finalists for Restaurant of the Year.

Craig Wilkinson, Director and Owner of Lunar Restaurant, said: “Words cannot express how much it means to everyone at Lunar to be finalists in the category of ‘Restaurant of the Year’ in our home city which we are so proud to serve and celebrate.

“Our guests travel from near and far to experience our wonderful county which as well as being steeped in history has so many wonderful opportunities, people, organisations and places to explore in 2025.”

Other local businesses that have been shortlisted at the awards include:

Adventure Mini Village (New Tourism Business of the Year)
Dusk Beaver Safari at Trentham Estate (Experience of the Year)
Trentham Estate (Accessible & Inclusive Tourism Award/Large Visitor Attraction)
Waterworld Leisure Resort (Large Visitor Attraction)
Willow on the Trentham Estate (Restaurant of the Year)

The hard work and talent of employees has also been recognised with Jodie Knapper being shortlisted for the Unsung Hero Award (Trentham Estate) and Daniel West being shortlisted for the Rising Star Award (The Upper House Hotel).

Councillor Jane Ashworth, Leader of Stoke-on-Trent City Council, said: “It is amazing to see so many businesses in Stoke-on-Trent being recognised at the Tourism Awards and the brilliant work of our residents being acknowledged and celebrated.

“In our centenary year, it is great that we can spotlight the very best that our city has to offer in leisure, hospitality and tourism and we are confident our year-long programme of fantastic events will drive many more people to come and discover what a wonderful part of the world this is.

“I would like to congratulate all the people and businesses that have been shortlisted at this year’s awards and wish them the best of luck at the ceremony.”

The winners will be announced live at a ceremony on Thursday 20th March 2025, at the Doubletree by Hilton, Stoke-on-Trent.

For more information, visit www.enjoystaffordshire.com/awards

MIL OSI United Kingdom –

February 5, 2025

MIL-OSI: Oaktree Specialty Lending Corporation Announces First Fiscal Quarter 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

LOS ANGELES, Feb. 04, 2025 (GLOBE NEWSWIRE) — Oaktree Specialty Lending Corporation (NASDAQ: OCSL) (“Oaktree Specialty Lending” or the “Company”), a specialty finance company, today announced its financial results for the fiscal quarter ended December 31, 2024.

Financial Highlights for the Quarter Ended December 31, 2024

Oaktree Capital I, L.P. purchased $100.0 million of shares of OCSL common stock on February 3, 2025 at the Company’s net asset value as of January 31, 2025, which was $17.63 per share and represented a 10% premium to the closing stock price and resulted in a nearly 7% increase to NAV. The equity raise will help grow OCSL’s asset base and further diversify the portfolio.

Implemented total return hurdle resulting in waived Part I incentive fees of $6.4 million for the quarter ended December 31, 2024. In connection with the institution of this incentive fee cap, the calculation of the Part I incentive fee will consider capital gains and losses when determining Part I incentive fees payable. This new arrangement includes a lookback provision that commences effective October 1, 2024, and will build over time to a rolling 12 quarter lookback by the Company’s 2027 fiscal year-end.

Total investment income was $86.6 million ($1.05 per share) for the first fiscal quarter of 2025, as compared with $94.7 million ($1.15 per share) for the fourth fiscal quarter of 2024. Adjusted total investment income was $87.1 million ($1.06 per share) for the first fiscal quarter, as compared with $95.0 million ($1.16 per share) for the fourth fiscal quarter of 2024. The decrease was driven by (i) lower interest income, which was attributable to decreases in reference rates, the impact of certain investments that were placed on non-accrual status, a smaller investment portfolio and lower original issue discount (“OID”) acceleration from investment repayments, (ii) lower fee income from a decrease in prepayment fees and (iii) lower dividend income from the Company’s investment in Senior Loan Fund JV I, LLC (“SLF JV I”).

GAAP net investment income was $44.3 million ($0.54 per share) for the first fiscal quarter of 2025, as compared with $44.9 million ($0.55 per share) for the fourth fiscal quarter of 2024. The decrease for the quarter was primarily driven by lower total investment income and higher operating expenses, partially offset by lower interest expense and lower management and income-based (“Part I”) incentive fees (net of fees waived).

Adjusted net investment income was $44.7 million ($0.54 per share) for the first fiscal quarter of 2025, as compared with $45.2 million ($0.55 per share) for the fourth fiscal quarter of 2024. The decrease for the quarter was primarily driven by lower adjusted total investment income and higher operating expenses, partially offset by lower interest expense and lower management and Part I incentive fees (net of fees waived).

Net asset value (“NAV”) per share was $17.63 as of December 31, 2024, down as compared with $18.09 as of September 30, 2024. The decline from September 30, 2024 primarily reflected losses on certain debt and equity investments.

Originated $198.1 million of new investment commitments and received $352.4 million of proceeds from prepayments, exits, other paydowns and sales during the quarter ended December 31, 2024. The weighted average yield on new debt investments was 9.6%.

Total debt outstanding was $1,610.0 million as of December 31, 2024. The total debt to equity ratio was 1.11x, and the net debt to equity ratio was 1.03x, after adjusting for cash and cash equivalents.

Liquidity as of December 31, 2024 was composed of $112.9 million of unrestricted cash and cash equivalents and $957.5 million of undrawn capacity under the Company’s credit facilities (subject to borrowing base and other limitations). Unfunded investment commitments were $302.3 million, or $275.2 million excluding unfunded commitments to the Company’s joint ventures. Of the $275.2 million, approximately $243.7 million can be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions.

A quarterly and supplemental cash distribution was declared of $0.40 per share and $0.07 per share, respectively, payable in cash on March 31, 2025 to stockholders of record on March 17, 2025. The modification to the dividend policy introduces a stable base dividend, which is anticipated to be sustainable across market cycles, amid fluctuations in rates and spreads.

Armen Panossian, Chief Executive Officer and Co-Chief Investment Officer said, “We had several positive outcomes within the portfolio, but continued to face challenges with several names. We remain focused on our underperforming borrowers, working through each situation to identify the appropriate course of action.”

“We remain committed to our shareholders and growing our business. As part of that process, Oaktree has purchased $100 million of shares at NAV. And, in addition to the permanent fee reduction announced last year and additional support provided via voluntary fee waivers, starting with the quarter ending December 31, 2024, we have instituted a cap in the calculation of our Part I Incentive Fee to consider capital gains and losses, which will build up over time and look back to 12 quarters by our 2027 fiscal year-end. We believe these actions further demonstrate our ongoing commitment to our shareholders while providing the capital to execute on our long-term initiatives.”

Distribution Declaration

The Board of Directors declared a quarterly distribution of $0.40 per share, payable in cash on March 31, 2025 to stockholders of record on March 17, 2025. The Board of Directors also declared a supplemental distribution of $0.07 per share, payable in cash on March 31, 2025 to stockholders of record on March 17, 2025. For the quarter ended December 31, 2024 and going forward, in addition to a quarterly base dividend of $0.40 per share, the Company’s Board of Directors expects to declare, when applicable, a quarterly supplemental dividend in an amount to be determined each quarter.

Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company’s stockholders.

Results of Operations

	For the three months ended
($ in thousands, except per share data)	December 31, 2024 (unaudited)			September 30, 2024 (unaudited)			December 31, 2023 (unaudited)
GAAP operating results:
Interest income	$	78,422		$	83,626		$	91,414
PIK interest income		5,728			6,018			3,849
Fee income		1,679			3,897			1,307
Dividend income		818			1,144			1,415
Total investment income		86,647			94,685			97,985
Net expenses		42,082			49,764			53,796
Net investment income before taxes		44,565			44,921			44,189
(Provision) benefit for taxes on net investment income		(263	)		—			—
Net investment income		44,302			44,921			44,189
Net realized and unrealized gains (losses), net of taxes		(37,063	)		(8,008	)		(33,654	)
Net increase (decrease) in net assets resulting from operations	$	7,239		$	36,913		$	10,535
Total investment income per common share	$	1.05		$	1.15		$	1.26
Net investment income per common share	$	0.54		$	0.55		$	0.57
Net realized and unrealized gains (losses), net of taxes per common share	$	(0.45	)	$	(0.10	)	$	(0.43	)
Earnings (loss) per common share — basic and diluted	$	0.09		$	0.45		$	0.14
Non-GAAP Financial Measures¹:
Adjusted total investment income	$	87,070		$	95,000		$	98,014
Adjusted net investment income	$	44,725		$	45,236		$	44,218
Adjusted net realized and unrealized gains (losses), net of taxes	$	(37,124	)	$	(8,322	)	$	(32,858	)
Adjusted earnings (loss)	$	7,601		$	36,914		$	11,360
Adjusted total investment income per share	$	1.06		$	1.16		$	1.26
Adjusted net investment income per share	$	0.54		$	0.55		$	0.57
Adjusted net realized and unrealized gains (losses), net of taxes per share	$	(0.45	)	$	(0.10	)	$	(0.42	)
Adjusted earnings (loss) per share	$	0.09		$	0.45		$	0.15

______________________
¹ See Non-GAAP Financial Measures below for a description of the non-GAAP measures and the reconciliations from the most comparable GAAP financial measures to the Company’s non-GAAP measures, including on a per share basis. The Company’s management uses these non-GAAP financial measures internally to analyze and evaluate financial results and performance and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company’s performance without giving effect to non-cash income/gain/loss resulting from the merger of Oaktree Strategic Income Corporation (“OCSI”) with and into the Company in March 2021 (the “OCSI Merger”) and the merger of Oaktree Strategic Income II, Inc. (“OSI2”) with and into the Company in January 2023 (the “OSI2 Merger”) and, in the case of adjusted net investment income, without giving effect to capital gains incentive fees. The presentation of non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.


	As of
($ in thousands, except per share data and ratios)	December 31, 2024 (unaudited)		September 30, 2024		December 31, 2023 (unaudited)
Select balance sheet and other data:
Cash and cash equivalents	$	112,913	$	63,966	$	112,369
Investment portfolio at fair value		2,835,294		3,021,279		3,018,552
Total debt outstanding (net of unamortized financing costs)		1,577,795		1,638,693		1,622,717
Net assets		1,449,815		1,487,811		1,511,651
Net asset value per share		17.63		18.09		19.14
Total debt to equity ratio		1.11x	1.12x			1.10x
Net debt to equity ratio		1.03x	1.07x			1.02x

Adjusted total investment income for the quarter ended December 31, 2024 was $87.1 million and included $78.9 million of interest income from portfolio investments, $5.7 million of payment-in-kind (“PIK”) interest income, $1.7 million of fee income and $0.8 million of dividend income. The $7.9 million quarterly decline in adjusted total investment income was primarily due to a $5.4 million decrease in interest income, which resulted from a decreases in reference rates, the impact of certain investments that were placed on non-accrual status, a smaller investment portfolio and lower OID acceleration from investment repayments. Additionally, there was a $2.2 million decrease in fee income driven by lower prepayment fees and a $0.3 million reduction in dividend income from the Company’s investment in SLF JV I.

Net expenses for the quarter ended December 31, 2024 totaled $42.1 million, down $7.7 million from the quarter ended September 30, 2024. The decrease for the quarter was primarily driven by $6.2 million of lower Part I incentive fees (net of fees waived) and $1.5 million of lower interest expense due to lower reference rates on the Company’s floating rate liabilities.

Adjusted net investment income was $44.7 million ($0.54 per share) for the quarter ended December 31, 2024, which was down from $45.2 million ($0.55 per share) for the quarter ended September 30, 2024. The decline of $0.5 million primarily reflected $7.9 million of lower adjusted total investment income and an increase in income tax expense of $0.3 million, partially offset by $7.7 million of lower net expenses.

Adjusted net realized and unrealized losses, net of taxes, were $37.1 million for the quarter ended December 31, 2024, primarily reflecting realized and unrealized losses on certain debt and equity investments.

Portfolio and Investment Activity

	As of
($ in thousands)	December 31, 2024 (unaudited)			September 30, 2024 (unaudited)			December 31, 2023 (unaudited)
Investments at fair value	$	2,835,294		$	3,021,279		$	3,018,552
Number of portfolio companies		136			144			146
Average portfolio company debt size	$	22,000		$	22,000		$	20,200

Asset class:
First lien debt		81.8	%		81.7	%		77.9	%
Second lien debt		3.0	%		3.5	%		8.4	%
Unsecured debt		3.9	%		3.6	%		2.5	%
Equity		4.8	%		5.0	%		4.8	%
JV interests		6.5	%		6.1	%		6.4	%

Non-accrual debt investments:
Non-accrual investments at fair value	$	105,326		$	114,292		$	120,713
Non-accrual investments at cost		138,703			140,748			174,897
Non-accrual investments as a percentage of debt investments at fair value		3.9	%		4.0	%		4.2	%
Non-accrual investments as a percentage of debt investments at cost		5.1	%		4.9	%		5.9	%
Number of investments on non-accrual		9			9			7

Interest rate type:
Percentage floating-rate		87.6	%		88.4	%		84.3	%
Percentage fixed-rate		12.4	%		11.6	%		15.7	%

Yields:
Weighted average yield on debt investments¹		10.7	%		11.2	%		12.2	%
Cash component of weighted average yield on debt investments		9.5	%		10.0	%		11.1	%
Weighted average yield on total portfolio investments²		10.2	%		10.7	%		11.7	%

Investment activity:
New investment commitments	$	198,100		$	259,000		$	370,300
New funded investment activity³	$	201,300		$	232,700		$	367,600
Proceeds from prepayments, exits, other paydowns and sales	$	352,400		$	338,300		$	213,500
Net new investments⁴	$	(151,100	)	$	(105,600	)	$	154,100
Number of new investment commitments in new portfolio companies		5			9			14
Number of new investment commitments in existing portfolio companies		8			10			10
Number of portfolio company exits		13			23			10

______________________
¹ Annual stated yield earned plus net annual amortization of OID or premium earned on accruing investments, including the Company’s share of the return on debt investments in SLF JV I and Glick JV, and excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see Non-GAAP Financial Measures below) for the assets acquired in connection with the OCSI Merger and OSI2 Merger.
² Annual stated yield earned plus net annual amortization of OID or premium earned on accruing investments and dividend income, including the Company’s share of the return on debt investments in SLF JV I and Glick JV, and excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 for the assets acquired in connection with the OCSI Merger and OSI2 Merger.
³ New funded investment activity includes drawdowns on existing revolver and delayed draw term loan commitments.
⁴ Net new investments consists of new funded investment activity less proceeds from prepayments, exits, other paydowns and sales.

As of December 31, 2024, the fair value of the investment portfolio was $2.8 billion and was composed of investments in 136 companies. These included debt investments in 114 companies, equity investments in 42 companies, and the Company’s joint venture investments in SLF JV I and OCSI Glick JV LLC (“Glick JV”). 22 of the equity investments were in companies in which the Company also had a debt investment.

As of December 31, 2024, 94.4% of the Company’s portfolio at fair value consisted of debt investments, including 81.8% of first lien loans, 3.0% of second lien loans and 9.6% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV. This compared to 81.7% of first lien loans, 3.5% of second lien loans and 9.0% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV, as of September 30, 2024.

As of December 31, 2024, there were nine investments on non-accrual status, which represented 5.1% and 3.9% of the debt portfolio at cost and fair value, respectively. As of September 30, 2024, there were nine investments on non-accrual status, which represented 4.9% and 4.0% of the debt portfolio at cost and fair value, respectively.

SLF JV I

The Company’s investments in SLF JV I totaled $135.4 million at fair value as of December 31, 2024, up 0.1% from $135.2 million as of September 30, 2024.

As of December 31, 2024, SLF JV I had $344.9 million in assets, including senior secured loans to 42 portfolio companies. This compared to $375.8 million in assets, including senior secured loans to 48 portfolio companies, as of September 30, 2024. SLF JV I generated cash interest income of $3.4 million for the Company during the quarter ended December 31, 2024, down from $3.6 million in the prior quarter. In addition, SLF JV I generated dividend income of $0.7 million for the Company during the quarter ended December 31, 2024, down from $1.1 million in the prior quarter. As of December 31, 2024, SLF JV I had $95.0 million of undrawn capacity (subject to borrowing base and other limitations) on its $270 million senior revolving credit facility, and its debt to equity ratio was 1.1x.

Glick JV

The Company’s investments in Glick JV totaled $49.6 million at fair value as of December 31, 2024, up 1.4% from $48.9 million as of September 30, 2024. The increase was primarily driven by Glick JV’s use of leverage and unrealized appreciation in the underlying investment portfolio.

As of December 31, 2024, Glick JV had $127.9 million in assets, including senior secured loans to 39 portfolio companies. This compared to $145.0 million in assets, including senior secured loans to 44 portfolio companies, as of September 30, 2024. Glick JV generated cash interest income of $1.4 million for the Company during the quarter ended December 31, 2024, down from $1.5 million in the prior quarter. As of December 31, 2024, Glick JV had $31.0 million of undrawn capacity (subject to borrowing base and other limitations) on its $100 million senior revolving credit facility, and its debt to equity ratio was 1.2x.

Liquidity and Capital Resources

As of December 31, 2024, the Company had total principal value of debt outstanding of $1,610.0 million, including $660.0 million of outstanding borrowings under its revolving credit facilities, $300.0 million of the 3.500% Notes due 2025, $350.0 million of the 2.700% Notes due 2027 and $300.0 million of the 7.100% Notes due 2029. The funding mix was composed of 41% secured and 59% unsecured borrowings as of December 31, 2024. The Company was in compliance with all financial covenants under its credit facilities as of December 31, 2024.

As of December 31, 2024, the Company had $112.9 million of unrestricted cash and cash equivalents and $957.5 million of undrawn capacity on its credit facilities (subject to borrowing base and other limitations). As of December 31, 2024, unfunded investment commitments were $302.3 million, or $275.2 million excluding unfunded commitments to the Company’s joint ventures. Of the $275.2 million, approximately $243.7 million could be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions. The Company has analyzed cash and cash equivalents, availability under its credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believes its liquidity and capital resources are sufficient to invest in market opportunities as they arise.

As of December 31, 2024, the weighted average interest rate on debt outstanding, including the effect of the interest rate swap agreements was 6.2%, down from 6.7% as of September 30, 2024, primarily driven by the impact of lower interest rates on the Company’s floating rate liabilities.

The Company’s total debt to equity ratio was 1.11x and 1.12x as of each of December 31, 2024 and September 30, 2024, respectively. The Company’s net debt to equity ratio was 1.03x and 1.07x as of each of December 31, 2024 and September 30, 2024, respectively.

Incentive Fee Lookback

Effective as of October 1, 2024, Oaktree has agreed to waive incentive fees on income to institute an incentive fee cap (also known as a “total return hurdle”) in the calculation of the Part I Incentive Fee, which will consider capital gains and losses. This new arrangement includes a lookback provision that commences effective October 1, 2024, and will build over time to a rolling 12-quarter lookback by the Company’s 2027 fiscal year-end. Additional details regarding this new arrangement can be found in the Company’s Form 10-Q filed on February 4, 2025.

Purchase Agreement

On January 31, 2025, the Company and Oaktree Capital I, L.P., an affiliate of the Adviser, entered into a purchase agreement pursuant to which Oaktree Capital I, L.P. purchased 5,672,149 shares of the Company’s common stock on February 3, 2025 for an aggregate purchase price of $100.0 million. These shares were sold at the Company’s net asset value per share as of January 31, 2025, which was $17.63 per share and calculated in accordance with Section 23 of the Investment Company Act of 1940, as amended. Oaktree Capital I, L.P. has agreed not to sell the shares acquired in this transaction through February 3, 2026. This transaction represented a 10% premium to the closing stock price on January 31, 2025, and resulted in a nearly 7% increase in net assets, which (coupled with additional leverage) will increase dry powder for deployment, enabling growth and further diversification of the portfolio.

Non-GAAP Financial Measures

On a supplemental basis, the Company is disclosing certain adjusted financial measures, each of which is calculated and presented on a basis of methodology other than in accordance with GAAP (“non-GAAP”). The Company’s management uses these non-GAAP financial measures internally to analyze and evaluate financial results and performance and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company’s performance without giving effect to non-cash income/gain/loss resulting from the OCSI Merger and the OSI2 Merger and in the case of adjusted net investment income, without giving effect to capital gains incentive fees. The presentation of the below non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.

“Adjusted Total Investment Income” and “Adjusted Total Investment Income Per Share” – represents total investment income excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger.

“Adjusted Net Investment Income” and “Adjusted Net Investment Income Per Share” – represents net investment income, excluding (i) any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger and (ii) capital gains incentive fees (“Part II incentive fees”).

“Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes” and “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share” – represents net realized and unrealized gains (losses) net of taxes excluding any net realized and unrealized gains (losses) resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger.

“Adjusted Earnings (Loss)” and “Adjusted Earnings (Loss) Per Share” – represents the sum of (i) Adjusted Net Investment Income and (ii) Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes and includes the impact of Part II incentive fees¹, if any.

The OCSI Merger and the OSI2 Merger (the “Mergers”) were accounted for as asset acquisitions in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations—Related Issues (“ASC 805”). The consideration paid to each of the stockholders of OCSI and OSI2 were allocated to the individual assets acquired and liabilities assumed based on the relative fair values of the net identifiable assets acquired other than “non-qualifying” assets, which established a new cost basis for the acquired investments under ASC 805 that, in aggregate, was different than the historical cost basis of the acquired investments prior to the OCSI Merger or the OSI2 Merger, as applicable. Additionally, immediately following the completion of the Mergers, the acquired investments were marked to their respective fair values under ASC 820, Fair Value Measurements, which resulted in unrealized appreciation/depreciation. The new cost basis established by ASC 805 on debt investments acquired will accrete/amortize over the life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation/depreciation on such investment acquired through its ultimate disposition. The new cost basis established by ASC 805 on equity investments acquired will not accrete/amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company will recognize a realized gain/loss with a corresponding reversal of the unrealized appreciation/depreciation on disposition of such equity investments acquired.

The Company’s management uses the non-GAAP financial measures described above internally to analyze and evaluate financial results and performance and to compare its financial results with those of other business development companies that have not adjusted the cost basis of certain investments pursuant to ASC 805. The Company’s management believes “Adjusted Total Investment Income”, “Adjusted Total Investment Income Per Share”, “Adjusted Net Investment Income” and “Adjusted Net Investment Income Per Share” are useful to investors as an additional tool to evaluate ongoing results and trends for the Company without giving effect to the income resulting from the new cost basis of the investments acquired in the Mergers because these amounts do not impact the fees payable to Oaktree Fund Advisors, LLC (the “Adviser”) under its investment advisory agreement (as amended and restated from time to time, the “A&R Advisory Agreement”), and specifically as its relates to “Adjusted Net Investment Income” and “Adjusted Net Investment Income Per Share”, without giving effect to Part II incentive fees. In addition, the Company’s management believes that “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes”, “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share”, “Adjusted Earnings (Loss)” and “Adjusted Earnings (Loss) Per Share” are useful to investors as they exclude the non-cash income and gain/loss resulting from the Mergers and are used by management to evaluate the economic earnings of its investment portfolio. Moreover, these metrics more closely align the Company’s key financial measures with the calculation of incentive fees payable to the Adviser under with the A&R Advisory Agreement (i.e., excluding amounts resulting solely from the lower cost basis of the acquired investments established by ASC 805 that would have been to the benefit of the Adviser absent such exclusion).

The following table provides a reconciliation of total investment income (the most comparable U.S. GAAP measure) to adjusted total investment income for the periods presented:

	For the three months ended
	December 31, 2024 (unaudited)				September 30, 2024 (unaudited)				December 31, 2023 (unaudited)
($ in thousands, except per share data)	Amount		Per Share		Amount		Per Share		Amount		Per Share
GAAP total investment income	$	86,647	$	1.05	$	94,685	$	1.15	$	97,985	$	1.26
Interest income amortization (accretion) related to merger accounting adjustments		423		0.01		315		—		29		—
Adjusted total investment income	$	87,070	$	1.06	$	95,000	$	1.16	$	98,014	$	1.26

The following table provides a reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented:

	For the three months ended
	December 31, 2024 (unaudited)				September 30, 2024 (unaudited)				December 31, 2023 (unaudited)
($ in thousands, except per share data)	Amount		Per Share		Amount		Per Share		Amount		Per Share
GAAP net investment income	$	44,302	$	0.54	$	44,921	$	0.55	$	44,189	$	0.57
Interest income amortization (accretion) related to merger accounting adjustments		423		0.01		315		—		29		—
Part II incentive fee		—		—		—		—		—		—
Adjusted net investment income	$	44,725	$	0.54	$	45,236	$	0.55	$	44,218	$	0.57

The following table provides a reconciliation of net realized and unrealized gains (losses), net of taxes (the most comparable U.S. GAAP measure) to adjusted net realized and unrealized gains (losses), net of taxes for the periods presented:

	For the three months ended
	December 31, 2024 (unaudited)						September 30, 2024 (unaudited)						December 31, 2023 (unaudited)
($ in thousands, except per share data)	Amount			Per Share			Amount			Per Share			Amount			Per Share
GAAP net realized and unrealized gains (losses), net of taxes	$	(37,063	)	$	(0.45	)	$	(8,008	)	$	(0.10	)	$	(33,654	)	$	(0.43	)
Net realized and unrealized gains (losses) related to merger accounting adjustments		(61	)		—			(314	)		—			796			0.01
Adjusted net realized and unrealized gains (losses), net of taxes	$	(37,124	)	$	(0.45	)	$	(8,322	)	$	(0.10	)	$	(32,858	)	$	(0.42	)

The following table provides a reconciliation of net increase (decrease) in net assets resulting from operations (the most comparable U.S. GAAP measure) to adjusted earnings (loss) for the periods presented:

	For the three months ended
	December 31, 2024 (unaudited)					September 30, 2024 (unaudited)					December 31, 2023 (unaudited)
($ in thousands, except per share data)	Amount			Per Share		Amount			Per Share		Amount		Per Share
Net increase (decrease) in net assets resulting from operations	$	7,239		$	0.09	$	36,913		$	0.45	$	10,535	$	0.14
Interest income amortization (accretion) related to merger accounting adjustments		423			0.01		315			—		29		—
Net realized and unrealized gains (losses) related to merger accounting adjustments		(61	)		—		(314	)		—		796		0.01
Adjusted earnings (loss)	$	7,601		$	0.09	$	36,914		$	0.45	$	11,360	$	0.15

Conference Call Information

Oaktree Specialty Lending will host a conference call to discuss its first fiscal quarter 2025 results at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time on February 4, 2025. The conference call may be accessed by dialing (877) 507-3275 (U.S. callers) or +1 (412) 317-5238 (non-U.S. callers). All callers will need to reference “Oaktree Specialty Lending” once connected with the operator. Alternatively, a live webcast of the conference call can be accessed through the Investors section of Oaktree Specialty Lending’s website, www.oaktreespecialtylending.com. During the conference call, the Company intends to refer to an investor presentation that will be available on the Investors section of its website.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Specialty Lending’s website, or by dialing (877) 344-7529 (U.S. callers) or +1 (412) 317-0088 (non-U.S. callers), access code 1211943, beginning approximately one hour after the broadcast.

About Oaktree Specialty Lending Corporation

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a specialty finance company dedicated to providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company’s investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions including first and second lien loans, unsecured and mezzanine loans, and preferred equity. The Company is regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Oaktree Fund Advisors, LLC, an affiliate of Oaktree Capital Management, L.P. For additional information, please visit Oaktree Specialty Lending’s website at www.oaktreespecialtylending.com.

Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) changes in the economy, financial markets and political environment, including the impacts of inflation and elevated interest rates; (ii) risks associated with possible disruption in the operations of the Company or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflicts in Ukraine and Israel), natural disasters, pandemics or cybersecurity incidents; (iii) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (iv) conditions in the Company’s operating areas, particularly with respect to business development companies or regulated investment companies; and (v) other considerations that may be disclosed from time to time in the Company’s publicly disseminated documents and filings. The Company has based the forward-looking statements included in this press release on information available to it on the date of this press release, and the Company assumes no obligation to update any such forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that it may make directly to you or through reports that the Company in the future may file with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Contacts

Investor Relations:
Oaktree Specialty Lending Corporation
Dane Kleven
(213) 356-3260
ocsl-ir@oaktreecapital.com

Media Relations:
Financial Profiles, Inc.
Moira Conlon
(310) 478-2700
mediainquiries@oaktreecapital.com


Oaktree Specialty Lending Corporation Consolidated Statements of Assets and Liabilities (in thousands, except per share amounts)

	December 31, 2024 (unaudited)			September 30, 2024
ASSETS
Investments at fair value:
Control investments (cost December 31, 2024: $374,509; cost September 30, 2024: $372,901)	$	267,782		$	289,404
Affiliate investments (cost December 31, 2024: $37,358; cost September 30, 2024: $38,175)		35,180			35,677
Non-control/Non-affiliate investments (cost December 31, 2024: $2,576,053; cost September 30, 2024: $2,733,843)		2,532,332			2,696,198
Total investments at fair value (cost December 31, 2024: $2,987,920; September 30, 2024: $3,144,919)		2,835,294			3,021,279
Cash and cash equivalents		112,913			63,966
Restricted cash		13,159			14,577
Interest, dividends and fees receivable		25,290			38,804
Due from portfolio companies		408			12,530
Receivables from unsettled transactions		55,661			17,548
Due from broker		21,880			17,060
Deferred financing costs		10,936			11,677
Deferred offering costs		162			125
Derivative assets at fair value		6,652			—
Other assets		1,437			775
Total assets	$	3,083,792		$	3,198,341

LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	3,371		$	3,492
Base management fee and incentive fee payable		8,930			15,517
Due to affiliate		1,508			4,088
Interest payable		17,600			16,231
Payables from unsettled transactions		—			15,666
Derivative liabilities at fair value		24,759			16,843
Deferred tax liability		14			—
Credit facilities payable		660,000			710,000
Unsecured notes payable (net of $4,401 and $4,935 of unamortized financing costs as of December 31, 2024 and September 30, 2024, respectively)		917,795			928,693
Total liabilities		1,633,977			1,710,530
Commitments and contingencies
Net assets:
Common stock, $0.01 par value per share, 250,000 shares authorized; 82,245 and 82,245 shares issued and outstanding as of December 31, 2024 and September 30, 2024, respectively		822			822
Additional paid-in-capital		2,264,449			2,264,449
Accumulated overdistributed earnings		(815,456	)		(777,460	)
Total net assets (equivalent to $17.63 and $18.09 per common share as of December 31, 2024 and September 30, 2024, respectively)		1,449,815			1,487,811
Total liabilities and net assets	$	3,083,792		$	3,198,341


Oaktree Specialty Lending Corporation Consolidated Statements of Operations (in thousands, except per share amounts)


	Three months ended December 31, 2024 (unaudited)			Three months ended September 30, 2024 (unaudited)			Three months ended December 31, 2023 (unaudited)
Interest income:
Control investments	$	5,226		$	6,012		$	6,005
Affiliate investments		166			159			324
Non-control/Non-affiliate investments		71,809			76,476			82,721
Interest on cash and cash equivalents		1,221			979			2,364
Total interest income		78,422			83,626			91,414
PIK interest income:
Control investments		830			765			544
Affiliate investments		28			45			—
Non-control/Non-affiliate investments		4,870			5,208			3,305
Total PIK interest income		5,728			6,018			3,849
Fee income:
Control investments		—			12			13
Affiliate investments		—			—			5
Non-control/Non-affiliate investments		1,679			3,885			1,289
Total fee income		1,679			3,897			1,307
Dividend income:
Control investments		700			1,050			1,400
Non-control/Non-affiliate investments		118			94			15
Total dividend income		818			1,144			1,415
Total investment income		86,647			94,685			97,985
Expenses:
Base management fee		8,144			8,550			11,477
Part I incentive fee		7,913			8,943			9,028
Professional fees		1,067			862			1,504
Directors fees		160			160			160
Interest expense		30,562			32,058			32,170
Administrator expense		437			465			366
General and administrative expenses		926			704			591
Total expenses		49,209			51,742			55,296
Management fees waived		(750	)		(750	)		(1,500	)
Part I incentive fees waived		(6,377	)		(1,228	)		—
Net expenses		42,082			49,764			53,796
Net investment income before taxes		44,565			44,921			44,189
(Provision) benefit for taxes on net investment income		(263	)		—			—
Net investment income		44,302			44,921			44,189
Unrealized appreciation (depreciation):
Control investments		(23,230	)		(12,909	)		1,339
Affiliate investments		320			207			(925	)
Non-control/Non-affiliate investments		(7,198	)		60,159			(17,615	)
Foreign currency forward contracts		10,494			(4,278	)		(7,824	)
Net unrealized appreciation (depreciation)		(19,614	)		43,179			(25,025	)
Realized gains (losses):
Control investments		—			—			786
Affiliate investments		(288	)		—			—
Non-control/Non-affiliate investments		(17,056	)		(50,349	)		(13,340	)
Foreign currency forward contracts		34			(1,499	)		4,101
Net realized gains (losses)		(17,310	)		(51,848	)		(8,453	)
(Provision) benefit for taxes on realized and unrealized gains (losses)		(139	)		661			(176	)
Net realized and unrealized gains (losses), net of taxes		(37,063	)		(8,008	)		(33,654	)
Net increase (decrease) in net assets resulting from operations	$	7,239		$	36,913		$	10,535
Net investment income per common share — basic and diluted	$	0.54		$	0.55		$	0.57
Earnings (loss) per common share — basic and diluted	$	0.09		$	0.45		$	0.14
Weighted average common shares outstanding — basic and diluted		82,245			82,245			77,840

¹ Adjusted earnings (loss) includes accrued Part II incentive fees. As of and for the three months ended December 31, 2024, there was no accrued Part II incentive fee liability. Part II incentive fees are contractually calculated and paid at the end of the fiscal year in accordance with the A&R Advisory Agreement, which differs from Part II incentive fees accrued under GAAP. For the three months ended December 31, 2024, no amounts were payable under the A&R Advisory Agreement.

The MIL Network –

February 5, 2025

Category: Taxation

Feb 4, 2025 IPAA Supports Hoeven and Pfluger CRA to Block Implementation of Methane Tax

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