Market Newsdesk

August 5, 2026 6:40 am

Thomson Reuters Reports Second-Quarter 2026 Results

PR Newswire

TORONTO, Aug. 5, 2026 /PRNewswire/ — Thomson Reuters (TSX: TRI) (Nasdaq: TRI) today reported results for the second quarter ended June 30, 2026:

Strong revenue growth in the second quarter
- Total company revenues up 9% / organic revenues up 8%
- Organic revenues up 10% for the “Big 3” segments (Legal Professionals, Corporates and Tax, Audit & Accounting Professionals)
Raised full-year 2026 total and organic revenue growth outlook to approximately 8.0% for the total company, and to a range of 9.5% to 10.0% for the “Big 3” segments
Announced signing of definitive agreement with KKR to form a joint venture to operate the Global Print business, where Thomson Reuters will sell a 51% stake to capital accounts advised by KKR with Thomson Reuters receiving approximately $500 million in gross proceeds on closing
Completed $605 million return of capital transaction on May 4, 2026 and reduced share count by approximately 6.5 million shares by way of share consolidation
Completed $600 million share repurchase program announced on February 25, 2026
Repaid $500 million 3.35% notes in May 2026

“We saw strong momentum continue in the second quarter, underscored by 10% organic revenue growth in our “Big 3″ segments,” said Steve Hasker, President and CEO of Thomson Reuters. “Our priority for the second half of the year is further deepening our leadership in trusted Fiduciary-Grade AI solutions. We are very pleased with the recent release of CoCounsel Legal and the very strong evaluation results of the first production ready version of the Thomson LLM. The recently announced Global Print transaction with KKR allows us to sharpen our focus on content-powered AI solutions that provide fiduciary grade outcomes for our professional markets.”

Consolidated Financial Highlights – Three Months Ended June 30

Three months ended June 30,
(Millions of U.S. dollars, except for EPS)
(unaudited)

IFRS Financial Measures ⁽¹⁾	2026	2025	Change
Revenues	$1,954	$1,785	9 %
Operating profit	$558	$436	28 %
Diluted earnings per share (EPS)	$1.02	$0.69	48 %
Net cash provided by operating activities	$920	$746	23 %

Non-IFRS Financial Measures ⁽¹⁾	2026	2025	Change	Change at Constant Currency
Revenue growth in constant currency				9 %
Organic revenue growth				8 %
Adjusted EBITDA	$745	$678	10 %	9 %
Adjusted EBITDA margin	38.1 %	37.8 %	30bp	20bp
Adjusted EPS	$0.99	$0.87	14 %	13 %
Free cash flow	$727	$566	29 %

(1) In addition to results reported in accordance with International Financial Reporting Standards (IFRS), the company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See the “Non-IFRS Financial Measures” section and the tables appended to this news release for additional information on these and other non-IFRS financial measures, including how they are defined and reconciled to the most directly comparable IFRS measures.

Revenues increased 9% due to 9% growth in recurring revenues (82% of total revenues) and 16% growth in transactions revenues, partly offset by a 3% decline in Global Print. Total company revenue growth benefited approximately 1% from foreign currency and 1% from net acquisitions and disposals.

Organic revenues increased 8% reflecting 9% growth in recurring revenues, 11% growth in transactions revenues and a 3% decline in Global Print.
The company’s “Big 3” segments reported organic revenue growth of 10% and collectively comprised 83% of total revenues.

Operating profit increased 28%, primarily due to the net impact of higher revenues and operating expenses as well as other operating gains in the current-year period, partly offset by higher amortization of software.

Adjusted EBITDA, which excludes other operating gains, amortization of software, as well as other adjustments, increased 10% and the related margin increased to 38.1% from 37.8% in the prior-year period. Foreign currency contributed 10 basis points to the year-over-year change in adjusted EBITDA margin.

Diluted EPS increased to $1.02 per share compared to $0.69 per share in the prior-year period, primarily due to higher operating profit and, to a lesser extent, a benefit from a reduction in weighted-average common shares outstanding.

Adjusted EPS increased to $0.99 per share compared to $0.87 per share in the prior-year period, primarily due to higher adjusted EBITDA and a benefit from a reduction in weighted-average common shares outstanding, partly offset by higher amortization of internally developed software.

Net cash provided by operating activities increased by $174 million primarily due to higher cash benefits from the net impact of higher revenues and operating expenses and certain favorable changes in working capital.

Free cash flow increased by $161 million primarily due to higher net cash provided by operating activities, partly offset by higher capital expenditures.

Highlights by Customer Segment – Three Months Ended June 30

(Millions of U.S. dollars)
(unaudited)
	Three months ended June 30,		Change
	2026	2025 ⁽²⁾	Total	Constant Currency ⁽¹⁾		Organic ⁽¹⁾⁽³⁾
Revenues
Legal Professionals	$772	$704	10 %		9 %	10 %
Corporates	537	480	12 %		11 %	10 %
Tax, Audit & Accounting Professionals	311	274	14 %		12 %	8 %
“Big 3” Segments Combined⁽¹⁾	1,620	1,458	11 %		10 %	10 %
Reuters	229	218	5 %		5 %	4 %
Global Print	111	114	-3 %		-3 %	-3 %
Eliminations/Rounding	(6)	(5)
Total Revenues	$1,954	$1,785	9 %		9 %	8 %

Adjusted EBITDA ⁽¹⁾
Legal Professionals	$371	$339	10 %		9 %
Corporates	200	172	17 %		15 %
Tax, Audit & Accounting Professionals	120	110	9 %		7 %
“Big 3” Segments Combined⁽¹⁾	691	621	12 %		10 %
Reuters	48	45	5 %		10 %
Global Print	42	41	2 %		1 %
Corporate costs	(36)	(29)	n/a		n/a
Total Adjusted EBITDA	$745	$678	10 %		9 %

Adjusted EBITDA Margin ⁽¹⁾
Legal Professionals	48.1 %	48.1 %	0bp		-10bp
Corporates	37.2 %	35.7 %	150bp		130bp
Tax, Audit & Accounting Professionals	38.7 %	38.9 %	-20bp		-40bp
“Big 3” Segments Combined⁽¹⁾	42.7 %	42.3 %	40bp		30bp
Reuters	20.8 %	20.8 %	0bp		80bp
Global Print	37.7 %	36.0 %	170bp		150bp
Total Adjusted EBITDA Margin	38.1 %	37.8 %	30bp		20bp

(1) The company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See the “Non-IFRS Financial Measures” section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. To compute segment and consolidated adjusted EBITDA margin, the company excludes fair value adjustments related to acquired deferred revenue.
(2) For comparative purposes, 2025 segment results have been revised to reflect the current period presentation. For additional information, including a summary of how the changes impacted results for the three and six months ended June 30, 2025, see the “Revision to Prior-Year Segment Results” section of this news release.
(3) Computed for revenue growth only.
n/a: not applicable

Unless otherwise noted, all revenue growth comparisons by customer segment in this news release are at

constant

currency (which excludes the impact of foreign currency) as the company believes this provides the best basis to measure performance.

Legal Professionals

Revenues increased 9% at constant currency. Organic revenue growth was 10%.

Recurring revenues increased 9% (97% of total, all organic). Organic revenue growth was primarily driven by Westlaw and CoCounsel.
Transactions revenues increased 16% (3% of total, 18% organic) driven by CLEAR.

Adjusted EBITDA increased 10% to $371 million.

The margin was 48.1%, unchanged from the prior-year period.

Corporates

Revenues increased 11% at constant currency. Organic revenue growth was 10%.

Recurring revenues increased 9% (86% of total, all organic). Organic revenue growth was primarily driven by Westlaw, CoCounsel, Indirect Tax, Pagero, CLEAR and the segment’s international businesses.
Transactions revenues increased 27% (14% of total, 24% organic). Organic revenue growth was primarily driven by Confirmation, Pagero, Trust, Checkpoint, Indirect Tax and the segment’s international businesses.

Adjusted EBITDA increased 17% to $200 million.

The margin increased to 37.2% from 35.7% driven by operating leverage. Foreign currency benefited the year-over-year change in adjusted EBITDA margin by 20 basis points.

Tax, Audit & Accounting Professionals

Revenues increased 12% at constant currency, including the acquisition impact of SafeSend in the prior-year period, which is reflected in transactions revenues. Organic revenue growth was 8%.

Recurring revenues increased 9% (67% of total, all organic). Organic revenue growth was primarily driven by tax and audit products, including GoSystem and CoCounsel, as well as Cloud Audit Suite and the segment’s Latin America business.
Transactions revenues increased 17% (33% of total, 6% organic). Organic revenue growth was primarily driven by SafeSend.

Adjusted EBITDA increased 9% to $120 million.

The margin decreased to 38.7% from 38.9%. Foreign currency benefited the year-over-year change in adjusted EBITDA margin by 20 basis points.

The Tax, Audit & Accounting Professionals segment is the company’s most seasonal business with approximately 60% of full-year revenues typically generated in the first and fourth quarters. As a result, the margin performance of this segment has been generally higher in the first and fourth quarters as costs are typically incurred in a more linear fashion throughout the year.

Reuters

Revenues increased 5% at constant currency (4% organic), primarily due to higher Agency revenues and a contractual price increase from the company’s news agreement with the Data & Analytics business of London Stock Exchange Group.

Adjusted EBITDA increased 5% to $48 million and the margin was 20.8%, unchanged from the prior-year period. Foreign currency negatively impacted the year-over-year change in adjusted EBITDA margin by 80 basis points.

Global Print

Revenues decreased 3% at constant currency, all organic, driven by lower shipment volumes.

Adjusted EBITDA increased 2% to $42 million, and the margin increased to 37.7% from 36.0%, reflecting lower expenses.

Corporate Costs

Corporate costs were $36 million compared to $29 million in the prior-year period.

Consolidated Financial Highlights – Six Months Ended June 30

Six months ended June 30,
(Millions of U.S. dollars, except for EPS)
(unaudited)

IFRS Financial Measures ⁽¹⁾	2026	2025	Change
Revenues	$4,041	$3,685	10 %
Operating profit	$1,197	$999	20 %
Diluted EPS	$2.05	$1.65	24 %
Net cash provided by operating activities	$1,425	$1,191	19 %

Non-IFRS Financial Measures ⁽¹⁾	2026	2025	Change	Change at Constant Currency
Revenue growth in constant currency				9 %
Organic revenue growth				8 %
Adjusted EBITDA	$1,626	$1,487	9 %	9 %
Adjusted EBITDA margin	40.2 %	40.1 %	10bp	30bp
Adjusted EPS	$2.22	$2.00	11 %	11 %
Free cash flow	$1,059	$843	26 %

(1) In addition to results reported in accordance with IFRS, the company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See the “Non-IFRS Financial Measures” section and the tables appended to this news release for additional information on these and other non-IFRS financial measures, including how they are defined and reconciled to the most directly comparable IFRS measures.

Revenues increased 10% due to 10% growth in recurring revenues (79% of total revenues) and 15% growth in transactions revenues, partly offset by a 3% decline in Global Print. Total company revenue growth benefited approximately 1% from foreign currency and 1% from net acquisitions and disposals.

Organic revenues increased 8% reflecting 8% growth in recurring revenues, 10% growth in transactions revenues and a 4% decline in Global Print.
The company’s “Big 3” segments reported organic revenue growth of 9% and collectively comprised 84% of total revenues.

Operating profit increased 20%, primarily due to the net impact of higher revenues and operating expenses as well as other operating gains in the current-year period, partly offset by higher amortization of software.

Adjusted EBITDA, which excludes other operating gains, amortization of software, as well as other adjustments, increased 9% and the related margin increased to 40.2% from 40.1% in the prior-year period. Foreign currency negatively impacted the year-over-year change in adjusted EBITDA margin by 20 basis points.

Diluted EPS increased to $2.05 per share compared to $1.65 per share in the prior-year period, primarily due to higher operating profit and, to a lesser extent, a benefit from a reduction in weighted-average common shares outstanding.

Adjusted EPS increased to $2.22 per share compared to $2.00 per share in the prior-year period, primarily due to higher adjusted EBITDA and a benefit from a reduction in weighted-average common shares outstanding, partly offset by higher amortization of internally developed software.

Net cash provided by operating activities increased by $234 million primarily due to higher cash benefits from the net impact of higher revenues and operating expenses and certain favorable changes in working capital.

Free cash flow increased by $216 million primarily due to higher net cash provided by operating activities, partly offset by higher capital expenditures.

Highlights by Customer Segment – Six Months Ended June 30

(Millions of U.S. dollars)
(unaudited)
	Six months ended June 30,		Change
	2026	2025 ⁽²⁾	Total	Constant Currency ⁽¹⁾		Organic ⁽¹⁾⁽³⁾
Revenues
Legal Professionals	$1,528	$1,392	10 %		9 %	9 %
Corporates	1,145	1,028	11 %		10 %	10 %
Tax, Audit & Accounting Professionals	721	632	14 %		13 %	9 %
“Big 3” Segments Combined⁽¹⁾	3,394	3,052	11 %		10 %	9 %
Reuters	441	414	6 %		6 %	5 %
Global Print	223	230	-3 %		-4 %	-4 %
Eliminations/Rounding	(17)	(11)
Total Revenues	$4,041	$3,685	10 %		9 %	8 %

Adjusted EBITDA ⁽¹⁾
Legal Professionals	$736	$675	9 %		9 %
Corporates	443	387	15 %		14 %
Tax, Audit & Accounting Professionals	341	318	7 %		6 %
“Big 3” Segments Combined⁽¹⁾	1,520	1,380	10 %		9 %
Reuters	82	84	-3 %		4 %
Global Print	85	85	0 %		-1 %
Corporate costs	(61)	(62)	n/a		n/a
Total Adjusted EBITDA	$1,626	$1,487	9 %		9 %

Adjusted EBITDA Margin ⁽¹⁾
Legal Professionals	48.2 %	48.4 %	-20bp		-20bp
Corporates	38.7 %	37.6 %	110bp		130bp
Tax, Audit & Accounting Professionals	47.3 %	48.9 %	-160bp		-140bp
“Big 3” Segments Combined⁽¹⁾	44.8 %	44.9 %	-10bp		0bp
Reuters	18.6 %	20.4 %	-180bp		-50bp
Global Print	38.2 %	36.9 %	130bp		120bp
Total Adjusted EBITDA Margin	40.2 %	40.1 %	10bp		30bp

(1) The company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See the “Non-IFRS Financial Measures” section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. To compute segment and consolidated adjusted EBITDA margin, the company excludes fair value adjustments related to acquired deferred revenue.
(2) For comparative purposes, 2025 segment results have been revised to reflect the current period presentation. For additional information, including a summary of how the changes impacted results for the three and six months ended June 30, 2025, see the “Revision to Prior-Year Segment Results” section of this news release.
(3) Computed for revenue growth only.
n/a: not applicable

2026 Outlook

The company raised its 2026 full-year outlook for total and organic revenue growth for the total company and its “Big 3” segments to reflect the performance of its businesses during the first six months of the year. All other metrics are unchanged from the previous 2026 full-year outlook communicated on May 5, 2026.

The company’s outlook for 2026 in the table below assumes constant currency rates and incorporates the February 2026 Noetica acquisition, but excludes the impact of any future acquisitions or dispositions that may occur during the remainder of the year. Thomson Reuters believes that this type of guidance provides useful insight into the anticipated performance of its businesses.

The company signed a definitive agreement to enter into a joint venture with KKR. As part of the transaction, Thomson Reuters will sell a 51% stake in its Global Print business to capital accounts advised by KKR. Thomson Reuters will receive approximately $500 million in gross proceeds at closing. The transaction is expected to close in the fourth quarter of 2026, subject to specified regulatory approvals and customary closing conditions. The company’s full-year 2026 outlook includes the forecasted results of the Global Print segment, consistent with its prior 2026 full-year outlooks. The company will report its Global Print business as a discontinued operation when it releases its third quarter results and plans to provide an updated full-year 2026 outlook at that time.

The company’s 2026 outlook is forward-looking information that is subject to risks and uncertainties (see “Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions”). In particular, the company continues to operate in an uncertain macroeconomic environment, reflecting ongoing geopolitical risk, uneven economic growth, and an evolving interest rate and inflationary backdrop. Any worsening of the global economic or business environment, among other factors, could impact the company’s ability to achieve its outlook.

Reported Full-Year 2025 Results and Full-Year 2026 Outlook

Total Thomson Reuters	FY 2025 Reported	FY 2026 Outlook 2/5/2026	FY 2026 Outlook 5/5/2026	FY 2026 Outlook 8/5/2026
Total Revenue Growth	3%⁽²⁾	7.5% – 8.0%	Unchanged	~ 8.0%
Organic Revenue Growth⁽¹⁾	7 %	7.5% – 8.0%	Unchanged	~ 8.0%
Adjusted EBITDA Margin⁽¹⁾	39.2 %	+100bps vs 2025	Unchanged	Unchanged
Corporate Costs	$118 million	$115 – $125 million	Unchanged	Unchanged
Free Cash Flow⁽¹⁾	$1.95 billion	~ $2.1 billion	Unchanged	Unchanged
Accrued Capex as % of Revenues⁽¹⁾	8.2 %	~ 8.0%	Unchanged	Unchanged
Depreciation & Amortization of Software Depreciation & Amortization of Internally Developed Software Amortization of Acquired Software	$832 million $626 million $206 million	$890- $910 million $680 – $690 million $210 – $220 million	Unchanged Unchanged Unchanged	Unchanged Unchanged Unchanged
Net Interest Expense	$143 million	$150 – $160 million	$180 – $190 million	Unchanged
Effective Tax Rate on Adjusted Earnings⁽¹⁾	18.5 %	~ 19%	Unchanged	Unchanged
“Big 3” Segments ⁽¹⁾	FY 2025 Reported	FY 2026 Outlook 2/5/2026	FY 2026 Outlook 5/5/2026	FY 2026 Outlook 8/5/2026
Total Revenue Growth	4%⁽²⁾	~ 9.5%	Unchanged	9.5% – 10.0%
Organic Revenue Growth	9 %	~ 9.5%	Unchanged	9.5% – 10.0%
Adjusted EBITDA Margin	43.6 %	+100bps vs 2025	Unchanged	Unchanged

(1)	Non-IFRS financial measures. See the “Non-IFRS Financial Measures” section below as well as the tables appended to this news release for more information.
(2)	Total revenue growth reflects the impact of the disposals of FindLaw and other non-core businesses in December 2024.

The company’s third-quarter 2026 outlook includes the forecasted results of the Global Print segment, consistent with its prior 2026 quarterly outlooks. The company expects its third-quarter 2026 organic revenue growth to be approximately 8% and its adjusted EBITDA margin to be approximately 36%.

The information in this section is forward-looking. Actual results, which will include the impact of currency, and future acquisitions and dispositions completed during 2026

may differ materially from the company’s

2026

outlook. T

he information in this section should also be read in conjunction with the section below entitled “Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions.”

Global Print Transaction

On July 14, 2026, Thomson Reuters announced that it signed a definitive agreement to enter into a joint venture with KKR, a leading global investment firm. As part of the transaction, Thomson Reuters will sell a 51% stake in its Global Print business to capital accounts advised by KKR and retain a 49% equity interest in the joint venture. Thomson Reuters will receive approximately $500 million in gross proceeds at closing and expects the transaction to close in the fourth quarter of 2026, subject to specified regulatory approvals and customary closing conditions. We expect to record a pre-tax gain on the transaction at the time of closing.

Thomson Reuters will also maintain intellectual property rights and full editorial control over its content portfolio. This new joint venture will hold an exclusive license to distribute the content in print and on ProView, Global Print’s eBook platform, under which it will pay Thomson Reuters a royalty in return.

The transaction is not subject to any financing conditions. As part of the transaction, Thomson Reuters has agreed to provide certain financial support designed to give KKR a minimum return on its equity investment in the joint venture under certain circumstances.

The Global Print business will be classified as a discontinued operation in the third quarter of 2026 and will no longer be a reportable segment.

Return of Capital and Share Consolidation

On May 4, 2026, the company returned $605 million to its shareholders and reduced its common shares outstanding by approximately 6.5 million, in accordance with its previously announced return of capital and share consolidation transactions. The transactions consisted of a special cash distribution of $1.435518 per participating common share and a share consolidation, or “reverse stock split”, which reduced the number of outstanding common shares at a ratio of 1 pre-consolidated share for 0.984560 post-consolidated shares, which was proportional to the special cash distribution.

$600 Million Share Repurchase Program and Common Shares Outstanding

In February 2026, the company announced its plan to repurchase up to $600 million of additional common shares under an amended Normal Course Issuer Bid that was approved by the TSX. In July 2026, the company completed the program, repurchasing a total of 6.2 million common shares for $600 million, consisting of 3.6 million shares for $362 million through June 30, 2026 and 2.6 million shares for $238 million in July 2026.

As of August 3, 2026, Thomson Reuters had approximately 433.2 million common shares outstanding.

Debt Repayment

In May 2026, the company repaid its $500 million 3.35% notes upon maturity with cash on hand and commercial paper borrowings.

Dividends

In February 2026, the company announced a 10% or $0.24 per share annualized increase in the dividend to $2.62 per common share, representing the 33^rd consecutive year of dividend increases and the fifth consecutive 10% increase. A quarterly dividend of $0.655 per share is payable on September 10, 2026 to common shareholders of record as of August 19, 2026.

Thomson Reuters

Thomson Reuters (TSX/Nasdaq: TRI) informs the way forward by bringing together the trusted content and technology that people and organizations need to make the right decisions. The company serves professionals across legal, tax, audit, accounting, compliance, government, and media. Its products combine highly specialized software and insights to empower professionals with the data, intelligence, and solutions needed to make informed decisions, and to help institutions in their pursuit of justice, truth and transparency. Reuters, part of Thomson Reuters, is a world leading provider of trusted journalism and news. For more information, visit thomsonreuters.com.

NON-IFRS FINANCIAL MEASURES

Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

This news release includes certain non-IFRS financial measures, which include ratios that incorporate one or more non-IFRS financial measures, such as adjusted EBITDA (other than at the customer segment level) and the related margin, free cash flow, adjusted earnings and the effective tax rate on adjusted earnings, adjusted EPS, accrued capital expenditures expressed as a percentage of revenues, net debt and leverage ratio of net debt to adjusted EBITDA, selected measures excluding the impact of foreign currency, changes in revenues computed on an organic basis as well as all financial measures for the “Big 3” segments.

Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position as well as for internal planning purposes and the company’s business outlook. Additionally, Thomson Reuters uses non-IFRS measures as the basis for management incentive programs. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables.

The company’s outlook contains various non-IFRS financial measures. The company believes that providing reconciliations of forward-looking non-IFRS financial measures in its outlook would be potentially misleading and not practical due to the difficulty of projecting items that are not reflective of ongoing operations in any future period. The magnitude of these items may be significant. Consequently, for purposes of its outlook only, the company is unable to reconcile these non-IFRS measures to the most directly comparable IFRS measures because it cannot predict, with reasonable certainty, the impacts of changes in foreign exchange rates which impact (i) the translation of its results reported at average foreign currency rates for the year, and (ii) other finance income or expense related to intercompany financing arrangements. Additionally, the company cannot reasonably predict the occurrence or amount of other operating gains and losses that generally arise from business transactions that the company does not currently anticipate.

ROUNDING

Other than EPS, the company reports its results in millions of U.S. dollars, but computes percentage changes and margins using whole dollars to be more precise. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.

REVISION TO PRIOR-YEAR SEGMENT RESULTS

In the first quarter of 2026, the company changed its segment reporting to reflect how it currently manages its segments. The change reflects the transfer of certain customers and their related revenues and expenses among the company’s Legal Professionals, Corporates and Tax, Audit & Accounting Professionals segments. These changes impact the financial results of the company’s segments, but do not change its consolidated financial results. The following summarizes the changes to the applicable segment’s reported amounts.

Three months ended June 30, 2025

Legal Professionals revenues decreased $5 million to $704 million, adjusted EBITDA was unchanged at $339 million and adjusted EBITDA margin increased 30 basis points to 48.1%;
Corporates revenues increased $8 million to $480 million, adjusted EBITDA increased $3 million to $172 million and adjusted EBITDA margin was unchanged at 35.7%; and
Tax, Audit & Accounting Professionals revenues decreased $3 million to $274 million, adjusted EBITDA decreased $3 million to $110 million and adjusted EBITDA margin decreased 40 basis points to 38.9%.

Six months ended June 30, 2025

Legal Professionals revenues decreased $10 million to $1,392 million, adjusted EBITDA was unchanged at $675 million and adjusted EBITDA margin increased 30 basis points to 48.4%;
Corporates revenues increased $15 million to $1,028 million, adjusted EBITDA increased $5 million to $387 million and adjusted EBITDA margin decreased 10 basis points to 37.6%; and
Tax, Audit & Accounting Professionals revenues decreased $5 million to $632 million, adjusted EBITDA decreased $5 million to $318 million and adjusted EBITDA margin decreased 20 basis points to 48.9%.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS

Certain statements in this news release, including, but not limited to, statements in Mr. Hasker’s comments, the “2026 Outlook” section, and statements regarding the company’s expectations with respect to the Global Print transaction including its current expectation that the transaction will close in the fourth quarter of 2026 are forward looking. The words “will”, “expect”, “believe”, “target”, “estimate”, “could”, “should”, “intend”, “predict”, “project” and similar expressions identify forward-looking statements. While the company believes that it has a reasonable basis for making forward-looking statements in this news release, they are not a guarantee of future performance or outcomes and there is no assurance that any of the other events described in any forward-looking statement will materialize. Forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from current expectations. Many of these risks, uncertainties and assumptions are beyond the company’s control and the effects of them can be difficult to predict.

Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, those discussed on pages 19-32 in the “Risk Factors” section of the company’s 2025 annual report. These and other risk factors are discussed in materials that Thomson Reuters from time-to-time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission (SEC). Thomson Reuters’ annual and quarterly reports are also available in the “Investor Relations” section of
thomsonreuters.com
.

The company’s 2026 business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are appropriate under the circumstances. Material assumptions and material risks may cause actual performance to differ from the company’s expectations underlying its 2026 business outlook. In particular, the global economy has experienced substantial disruption due to concerns regarding economic effects associated with the macroeconomic backdrop and ongoing geopolitical risks. The company’s 2026 business outlook assumes that uncertain macroeconomic and geopolitical conditions will continue to disrupt the economy and cause periods of volatility, however, these conditions may last substantially longer than expected and any worsening of the global economic or business environment could impact the company’s ability to achieve its outlook and affect its results and other expectations. For a discussion of material assumptions and material risks related to the company’s 2026 outlook see pages 16-17 of the company’s first-quarter management’s discussion and analysis (MD&A) for the period ended March 31, 2026. The company’s quarterly MD&A and annual report were filed with, or furnished to, the Canadian securities regulatory authorities and the U.S. SEC and are also available in the “Investor Relations” section of
thomsonreuters.com
.

The company has provided an outlook for the purpose of presenting information about current expectations for the period presented. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this news release.

Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.

CONTACTS

MEDIA

Zoe Zanettos

Director, Corporate Communications

+1 647 202 8948

[email protected]

INVESTORS

Gary Bisbee, CFA

Head of Investor Relations

+1 646 540 3249

[email protected]

Thomson Reuters will webcast a discussion of its second-quarter 2026 results and its 2026 business outlook today beginning at 8:30 a.m. Eastern Daylight Time (EDT). You can access the webcast by visiting

ir.thomsonreuters.com

. An archive of the webcast will be available following the presentation.

Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
CONTINUING OPERATIONS
Revenues	$1,954	$1,785	$4,041	$3,685
Operating expenses	(1,211)	(1,124)	(2,414)	(2,232)
Depreciation	(27)	(28)	(55)	(55)
Amortization of software	(201)	(178)	(394)	(352)
Amortization of other identifiable intangible assets	(25)	(24)	(49)	(49)
Other operating gains, net	68	5	68	2
Operating profit	558	436	1,197	999
Finance costs, net:
Net interest expense	(47)	(35)	(86)	(65)
Other finance income (costs)	8	(48)	17	(58)
Income before tax and equity method investments	519	353	1,128	876
Share of post-tax losses in equity method investments	(4)	(4)	(11)	(10)
Tax expense	(71)	(52)	(196)	(144)
Earnings from continuing operations	444	297	921	722
Earnings (loss) from discontinued operations, net of tax	4	16	(14)	25
Net earnings	$448	$313	$907	$747
Earnings attributable to common shareholders	$448	$313	$907	$747

Earnings per share:
Basic and diluted earnings (loss) per share:
From continuing operations	$1.01	$0.66	$2.08	$1.60
From discontinued operations	0.01	0.03	(0.03)	0.05
Basic and diluted earnings per share	$1.02	$0.69	$2.05	$1.65

Basic weighted-average common shares	438,500,639	450,673,826	441,515,334	450,481,106
Diluted weighted-average common shares	438,611,374	451,204,832	441,709,328	451,025,807

Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
	June 30,	December 31,
	2026	2025
Assets
Cash and cash equivalents	$577	$511
Trade and other receivables	1,127	1,143
Other financial assets	116	94
Prepaid expenses and other current assets	449	480
Current assets	2,269	2,228

Property and equipment, net	342	361
Software, net	1,711	1,645
Other identifiable intangible assets, net	3,058	3,102
Goodwill	8,094	7,913
Equity method investments	168	202
Other financial assets	469	466
Other non-current assets	705	680
Deferred tax	1,263	1,343
Total assets	$18,079	$17,940

Liabilities and equity
Liabilities
Current indebtedness	$1,618	$795
Payables, accruals and provisions	1,014	1,090
Current tax liabilities	240	224
Deferred revenue	1,256	1,251
Other financial liabilities	318	108
Current liabilities	4,446	3,468

Long-term indebtedness	1,323	1,328
Provisions and other non-current liabilities	597	656
Other financial liabilities	206	210
Deferred tax	382	364
Total liabilities	6,954	6,026

Equity
Capital	3,031	3,597
Retained earnings	9,047	9,220
Accumulated other comprehensive loss	(953)	(903)
Total equity	11,125	11,914
Total liabilities and equity	$18,079	$17,940

Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Cash provided by (used in):
Operating activities
Earnings from continuing operations	$444	$297	$921	$722
Adjustments for:
Depreciation	27	28	55	55
Amortization of software	201	178	394	352
Amortization of other identifiable intangible assets	25	24	49	49
Share of post-tax losses in equity method investments	4	4	11	10
Deferred tax	12	(1)	48	18
Other	1	105	47	169
Changes in working capital and other items	207	107	(98)	(186)
Operating cash flows from continuing operations	921	742	1,427	1,189
Operating cash flows from discontinued operations	(1)	4	(2)	2
Net cash provided by operating activities	920	746	1,425	1,191
Investing activities
Acquisitions, net of cash acquired	(36)	(24)	(248)	(630)
Proceeds related to disposals of businesses and investments, net of taxes	7	5	8	5
Capital expenditures	(177)	(163)	(333)	(314)
Other investing activities	–	–	–	1
Net cash used in investing activities	(206)	(182)	(573)	(938)
Financing activities
Repayments of debt	(500)	(999)	(500)	(999)
Net borrowings under short-term loan facilities	983	–	1,305	–
Payments of lease principal	(15)	(16)	(31)	(33)
Payments for return of capital on common shares	(605)	–	(605)	–
Repurchases of common shares	(100)	–	(362)	–
Dividends paid on preference shares	(1)	(1)	(2)	(2)
Dividends paid on common shares	(275)	(260)	(555)	(519)
Other financing activities	(24)	1	(35)	(10)
Net cash used in financing activities	(537)	(1,275)	(785)	(1,563)
Translation adjustments	–	4	(1)	6
Increase (decrease) in cash and cash equivalents	177	(707)	66	(1,304)
Cash and cash equivalents at beginning of period	400	1,371	511	1,968
Cash and cash equivalents at end of period	$577	$664	$577	$664

Thomson Reuters Corporation
Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA ⁽¹⁾
(millions of U.S. dollars)
(unaudited)

	Three months ended June 30,		Six months ended June 30,		Year ended December 31,
	2026	2025	2026	2025	2025
Earnings from continuing operations	$444	$297	$921	$722	$1,483
Adjustments to remove:
Tax expense	71	52	196	144	423
Other finance (income) costs	(8)	48	(17)	58	55
Net interest expense	47	35	86	65	143
Amortization of other identifiable intangible assets	25	24	49	49	98
Amortization of software	201	178	394	352	721
Depreciation	27	28	55	55	111
EBITDA	$807	$662	$1,684	$1,445	$3,034
Adjustments to remove:
Share of post-tax losses in equity method investments	4	4	11	10	28
Other operating gains, net	(68)	(5)	(68)	(2)	(164)
Fair value adjustments*	2	17	(1)	34	38
Adjusted EBITDA ⁽¹⁾	$745	$678	$1,626	$1,487	$2,936
Adjusted EBITDA margin ⁽¹⁾	38.1 %	37.8 %	40.2 %	40.1 %	39.2 %

* Fair value adjustments primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business, which are a component of operating expenses, as well as adjustments related to acquired deferred revenue.

Thomson Reuters Corporation
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow ⁽¹⁾
(millions of U.S. dollars)
(unaudited)

	Three months ended June 30,		Six months ended June 30,		Year ended December 31,
	2026	2025	2026	2025	2025
Net cash provided by operating activities	$920	$746	$1,425	$1,191	$2,651
Capital expenditures	(177)	(163)	(333)	(314)	(634)
Other investing activities	–	–	–	1	1
Payments of lease principal	(15)	(16)	(31)	(33)	(64)
Dividends paid on preference shares	(1)	(1)	(2)	(2)	(4)
Free cash flow ⁽¹⁾	$727	$566	$1,059	$843	$1,950

Thomson Reuters Corporation
Reconciliation of Capital Expenditures to Accrued Capital Expenditures ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
							Year ended December 31,
							2025
Capital expenditures							$634
Remove: IFRS adjustment to cash basis							(18)
Accrued capital expenditures ⁽¹⁾							$616
Accrued capital expenditures as a percentage of revenues ⁽¹⁾							8.2 %

(1)	Refer to page 22 for additional information on non-IFRS financial measures.

Thomson Reuters Corporation
Reconciliation of Net Earnings to Adjusted Earnings ⁽¹⁾
Reconciliation of Total Change in Adjusted EPS to Change in Constant Currency ⁽¹⁾
(millions of U.S. dollars, except for share and per share data)
(unaudited)

	Three months ended June 30,		Six months ended June 30,		Year ended December 31,
	2026	2025	2026	2025	2025
Net earnings	$448	$313	$907	$747	$1,502
Adjustments to remove:
Fair value adjustments*	2	17	(1)	34	38
Amortization of acquired software	60	52	116	101	206
Amortization of other identifiable intangible assets	25	24	49	49	98
Other operating gains, net	(68)	(5)	(68)	(2)	(164)
Other finance (income) costs	(8)	48	(17)	58	55
Share of post-tax losses in equity method investments	4	4	11	10	28
Tax on above items⁽¹⁾	(20)	(22)	(34)	(46)	(35)
Tax items impacting comparability⁽¹⁾	(3)	(21)	(4)	(20)	57
(Earnings) loss from discontinued operations, net of tax	(4)	(16)	14	(25)	(19)
Interim period effective tax rate normalization⁽¹⁾	–	1	11	(4)	–
Dividends declared on preference shares	(1)	(1)	(2)	(2)	(4)
Adjusted earnings ⁽¹⁾	$435	$394	$982	$900	$1,762
Adjusted EPS ⁽¹⁾	$0.99	$0.87	$2.22	$2.00
Total change	14 %		11 %
Foreign currency	1 %		1 %
Constant currency	13 %		11 %
Diluted weighted-average common shares (millions)	438.6	451.2	441.7	451.0

Reconciliation of Full-Year Effective Tax Rate on Adjusted Earnings ⁽¹⁾							Year ended December 31,
							2025
Adjusted earnings							$1,762
Plus: Dividends declared on preference shares							4
Plus: Tax expense on adjusted earnings							401
Pre-tax adjusted earnings							$2,167

IFRS tax expense							$423
Remove tax related to:
Amortization of acquired software							46
Amortization of other identifiable intangible assets							23
Share of post-tax losses in equity method investments							2
Other finance costs							2
Other operating gains, net							(43)
Other items							5
Subtotal – Remove tax benefit on pre-tax items removed from adjusted earnings							35
Remove: Tax items impacting comparability							(57)
Total – Remove all items impacting comparability							(22)
Tax expense on adjusted earnings							$401
Effective tax rate on adjusted earnings							18.5 %

*Fair value adjustments primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business, which are a component of operating expenses, as well as adjustments related to acquired deferred revenue.

(1) Refer to page 22 for additional information on non-IFRS financial measures.

Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency ⁽¹⁾ and Organic Basis ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
	Three months ended June 30,			Change
		2026	2025	Total	Foreign Currency		SUBTOTAL Constant Currency	Net Acquisitions/ (Disposals)		Organic
Total Revenues
Legal Professionals		$772	$704	10 %		0 %	9 %		0 %	10 %
Corporates		537	480	12 %		1 %	11 %		0 %	10 %
Tax, Audit & Accounting Professionals		311	274	14 %		2 %	12 %		4 %	8 %
“Big 3” Segments Combined⁽¹⁾		1,620	1,458	11 %		1 %	10 %		1 %	10 %
Reuters		229	218	5 %		0 %	5 %		1 %	4 %
Global Print		111	114	-3 %		0 %	-3 %		0 %	-3 %
Eliminations/Rounding		(6)	(5)
Total Revenues		$1,954	$1,785	9 %		1 %	9 %		1 %	8 %

Recurring Revenues
Legal Professionals		$748	$684	10 %		0 %	9 %		0 %	9 %
Corporates		462	421	10 %		1 %	9 %		0 %	9 %
Tax, Audit & Accounting Professionals		209	187	12 %		2 %	9 %		0 %	9 %
“Big 3” Segments Combined⁽¹⁾		1,419	1,292	10 %		1 %	9 %		0 %	9 %
Reuters		188	176	7 %		0 %	6 %		1 %	6 %
Eliminations/Rounding		(6)	(5)
Total Recurring Revenues		$1,601	$1,463	9 %		1 %	9 %		0 %	9 %

Transactions Revenues
Legal Professionals		$24	$20	16 %		0 %	16 %		-2 %	18 %
Corporates		75	59	27 %		0 %	27 %		3 %	24 %
Tax, Audit & Accounting Professionals		102	87	17 %		0 %	17 %		11 %	6 %
“Big 3” Segments Combined⁽¹⁾		201	166	21 %		0 %	20 %		7 %	13 %
Reuters		41	42	-2 %		-3 %	1 %		1 %	-1 %
Eliminations/Rounding		–	–
Total Transactions Revenues		$242	$208	16 %		0 %	16 %		6 %	11 %

Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.

Refer to page 22 for additional information on non-IFRS financial measures.

Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency ⁽¹⁾ and Organic Basis ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
	Six months ended June 30,			Change
		2026	2025	Total	Foreign Currency		SUBTOTAL Constant Currency	Net Acquisitions/ (Disposals)		Organic
Total Revenues
Legal Professionals		$1,528	$1,392	10 %		1 %	9 %		0 %	9 %
Corporates		1,145	1,028	11 %		1 %	10 %		0 %	10 %
Tax, Audit & Accounting Professionals		721	632	14 %		1 %	13 %		3 %	9 %
“Big 3” Segments Combined⁽¹⁾		3,394	3,052	11 %		1 %	10 %		1 %	9 %
Reuters		441	414	6 %		0 %	6 %		1 %	5 %
Global Print		223	230	-3 %		1 %	-4 %		0 %	-4 %
Eliminations/Rounding		(17)	(11)
Total Revenues		$4,041	$3,685	10 %		1 %	9 %		1 %	8 %

Recurring Revenues
Legal Professionals		$1,487	$1,354	10 %		1 %	9 %		0 %	9 %
Corporates		911	828	10 %		1 %	8 %		0 %	8 %
Tax, Audit & Accounting Professionals		438	392	12 %		2 %	10 %		0 %	10 %
“Big 3” Segments Combined⁽¹⁾		2,836	2,574	10 %		1 %	9 %		0 %	9 %
Reuters		374	351	7 %		1 %	6 %		1 %	5 %
Eliminations/Rounding		(14)	(11)
Total Recurring Revenues		$3,196	$2,914	10 %		1 %	9 %		0 %	8 %

Transactions Revenues
Legal Professionals		$41	$38	8 %		1 %	8 %		-1 %	9 %
Corporates		234	200	17 %		1 %	17 %		1 %	16 %
Tax, Audit & Accounting Professionals		283	240	18 %		0 %	18 %		9 %	9 %
“Big 3” Segments Combined⁽¹⁾		558	478	17 %		0 %	17 %		5 %	12 %
Reuters		67	63	6 %		-2 %	8 %		2 %	6 %
Eliminations/Rounding		(3)	–
Total Transactions Revenues		$622	$541	15 %		0 %	15 %		4 %	10 %


	Year ended December 31,		Change
	2025	2024	Total	Foreign Currency		SUBTOTAL Constant Currency	Net Acquisitions/ (Disposals)		Organic
Total Revenues
Legal Professionals	$2,843	$2,902	-2 %		0 %	-2 %		-10 %	8 %
Corporates	2,023	1,875	8 %		0 %	7 %		-1 %	9 %
Tax, Audit & Accounting Professionals	1,291	1,154	12 %		-1 %	13 %		3 %	11 %
“Big 3” Segments Combined⁽¹⁾	6,157	5,931	4 %		0 %	4 %		-5 %	9 %
Reuters	853	832	3 %		1 %	2 %		1 %	1 %
Global Print	490	519	-6 %		0 %	-5 %		0 %	-5 %
Eliminations/Rounding	(24)	(24)
Total Revenues	$7,476	$7,258	3 %		0 %	3 %		-4 %	7 %

Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.

Refer to page 22 for additional information on non-IFRS financial measures.

Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA ⁽¹⁾ and Related Margin ⁽¹⁾ to Changes on a Constant Currency Basis ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
	Three months ended June 30,			Change
		2026	2025	Total	Foreign Currency		Constant Currency
Adjusted EBITDA ⁽¹⁾
Legal Professionals		$371	$339	10 %		0 %	9 %
Corporates		200	172	17 %		2 %	15 %
Tax, Audit & Accounting Professionals		120	110	9 %		2 %	7 %
“Big 3” Segments Combined⁽¹⁾		691	621	12 %		1 %	10 %
Reuters		48	45	5 %		-5 %	10 %
Global Print		42	41	2 %		1 %	1 %
Corporate costs		(36)	(29)	n/a		n/a	n/a
Total Adjusted EBITDA		$745	$678	10 %		1 %	9 %

Adjusted EBITDA Margin ⁽¹⁾
Legal Professionals		48.1 %	48.1 %	0bp		10bp	-10bp
Corporates		37.2 %	35.7 %	150bp		20bp	130bp
Tax, Audit & Accounting Professionals		38.7 %	38.9 %	-20bp		20bp	-40bp
“Big 3” Segments Combined⁽¹⁾		42.7 %	42.3 %	40bp		10bp	30bp
Reuters		20.8 %	20.8 %	0bp		-80bp	80bp
Global Print		37.7 %	36.0 %	170bp		20bp	150bp
Total Adjusted EBITDA Margin		38.1 %	37.8 %	30bp		10bp	20bp

Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA ⁽¹⁾ and Related Margin ⁽¹⁾ to Changes on a Constant Currency Basis ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
	Six months ended June 30,			Change
		2026	2025	Total	Foreign Currency		Constant Currency
Adjusted EBITDA ⁽¹⁾
Legal Professionals		$736	$675	9 %		1 %	9 %
Corporates		443	387	15 %		1 %	14 %
Tax, Audit & Accounting Professionals		341	318	7 %		1 %	6 %
“Big 3” Segments Combined⁽¹⁾		1,520	1,380	10 %		1 %	9 %
Reuters		82	84	-3 %		-7 %	4 %
Global Print		85	85	0 %		1 %	-1 %
Corporate costs		(61)	(62)	n/a		n/a	n/a
Total Adjusted EBITDA		$1,626	$1,487	9 %		0 %	9 %

Adjusted EBITDA Margin ⁽¹⁾
Legal Professionals		48.2 %	48.4 %	-20bp		0bp	-20bp
Corporates		38.7 %	37.6 %	110bp		-20bp	130bp
Tax, Audit & Accounting Professionals		47.3 %	48.9 %	-160bp		-20bp	-140bp
“Big 3” Segments Combined⁽¹⁾		44.8 %	44.9 %	-10bp		-10bp	0bp
Reuters		18.6 %	20.4 %	-180bp		-130bp	-50bp
Global Print		38.2 %	36.9 %	130bp		10bp	120bp
Total Adjusted EBITDA Margin		40.2 %	40.1 %	10bp		-20bp	30bp

n/a: not applicable

Growth percentages and margins are computed using whole dollars. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.

Refer to page 22 for additional information on non-IFRS financial measures.

Reconciliation of adjusted EBITDA margin

⁽¹⁾

To compute segment and consolidated adjusted EBITDA margin, the company excludes fair value adjustments related to acquired deferred revenue from its IFRS revenues. The charts below reconcile IFRS revenues to revenues used in the calculation of adjusted EBITDA margin, which excludes fair value adjustments related to acquired deferred revenue.

(millions of U.S. dollars) (unaudited) Three months ended June 30, 2026	IFRS revenues	Remove fair value adjustments to acquired deferred revenue	Revenues excluding fair value adjustments to acquired deferred revenue	Adjusted EBITDA	Adjusted EBITDA Margin
Legal Professionals	$772	–	$772	$371	48.1 %
Corporates	537	–	537	200	37.2 %
Tax, Audit & Accounting Professionals	311	–	311	120	38.7 %
“Big 3” Segments Combined⁽¹⁾	1,620	–	1,620	691	42.7 %
Reuters	229	–	229	48	20.8 %
Global Print	111	–	111	42	37.7 %
Eliminations/Rounding	(6)	–	(6)	–	n/a
Corporate costs	–	–	–	(36)	n/a
Consolidated totals	$1,954	–	$1,954	$745	38.1 %

Six months ended June 30, 2026
Legal Professionals	$1,528	–	$1,528	$736	48.2 %
Corporates	1,145	–	1,145	443	38.7 %
Tax, Audit & Accounting Professionals	721	–	721	341	47.3 %
“Big 3” Segments Combined⁽¹⁾	3,394	–	3,394	1,520	44.8 %
Reuters	441	–	441	82	18.6 %
Global Print	223	–	223	85	38.2 %
Eliminations/Rounding	(17)	–	(17)	–	n/a
Corporate costs	–	–	–	(61)	n/a
Consolidated totals	$4,041	–	$4,041	$1,626	40.2 %

Three months ended June 30, 2025
Legal Professionals	$704	–	$704	$339	48.1 %
Corporates	480	–	480	172	35.7 %
Tax, Audit & Accounting Professionals	274	$10	284	110	38.9 %
“Big 3” Segments Combined⁽¹⁾	1,458	10	1,468	621	42.3 %
Reuters	218	–	218	45	20.8 %
Global Print	114	–	114	41	36.0 %
Eliminations/Rounding	(5)	–	(5)	–	n/a
Corporate costs	–	–	–	(29)	n/a
Consolidated totals	$1,785	$10	$1,795	$678	37.8 %

Six months ended June 30, 2025
Legal Professionals	$1,392	–	$1,392	$675	48.4 %
Corporates	1,028	–	1,028	387	37.6 %
Tax, Audit & Accounting Professionals	632	$20	652	318	48.9 %
“Big 3” Segments Combined⁽¹⁾	3,052	20	3,072	1,380	44.9 %
Reuters	414	–	414	84	20.4 %
Global Print	230	–	230	85	36.9 %
Eliminations/Rounding	(11)	–	(11)	–	n/a
Corporate costs	–	–	–	(62)	n/a
Consolidated totals	$3,685	$20	$3,705	$1,487	40.1 %

n/a: not applicable

Margins are computed using whole dollars, as a result, margins calculated from reported amounts may differ from those presented due to rounding.

(1) Refer to page 22 for additional information on non-IFRS financial measures.

Thomson Reuters Corporation
“Big 3” Segments and Consolidated Adjusted EBITDA ⁽¹⁾ and the Related Margins ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
										Year ended December 31,
										2025
Adjusted EBITDA ⁽¹⁾
Legal Professionals										$1,354
Corporates										727
Tax, Audit & Accounting Professionals										614
“Big 3” Segments Combined⁽¹⁾										2,695
Reuters										174
Global Print										185
Corporate costs										(118)
Total Adjusted EBITDA										$2,936

“Big 3” Segments Combined ⁽¹⁾
Adjusted EBITDA										$2,695
Revenues, excluding $20 million of fair value adjustments to acquired deferred revenue										$6,177
Adjusted EBITDA margin										43.6 %

Consolidated ⁽¹⁾
Adjusted EBITDA										$2,936
Revenues, excluding $20 million of fair value adjustments to acquired deferred revenue										$7,496
Adjusted EBITDA margin										39.2 %

Margins are computed using whole dollars, as a result, margins calculated from reported amounts may differ from those presented due to rounding.

Thomson Reuters Corporation
Reconciliation of Net Debt ⁽¹⁾ and Leverage Ratio of Net Debt to Adjusted EBITDA ⁽¹⁾
(millions of U.S. dollars)
(unaudited)
	June 30,		December 31,
		2026	2025
Current indebtedness		$1,618	$795
Long-term indebtedness		1,323	1,328
Total debt		2,941	2,123
Swaps		23	16
Total debt after swaps		2,964	2,139
Remove fair value adjustments for hedges		(3)	(2)
Total debt after hedging arrangements		2,961	2,137
Collateral assets		(25)	(7)
Remove transaction costs, premiums or discounts, included in the carrying value of debt		28	28
Add: Lease liabilities (current and non-current)		241	249
Less: Cash and cash equivalents		(577)	(511)
Net debt		$2,628	$1,896
Leverage ratio of net debt to adjusted EBITDA
Adjusted EBITDA		$3,075	$2,936
Net debt/adjusted EBITDA		0.9:1	0.6:1

(1) Refer to page 22 for additional information on non-IFRS financial measures.

Non-IFRS Financial Measures	Definition	Why Useful to the Company and Investors
Adjusted EBITDA and the related margin	Represents earnings or losses from continuing operations before tax expense or benefit, net interest expense, other finance costs or income, depreciation, amortization of software and other identifiable intangible assets, Thomson Reuters share of post-tax earnings or losses in equity method investments, other operating gains and losses, certain asset impairment charges and fair value adjustments, including those related to acquired deferred revenue. The related margin is adjusted EBITDA expressed as a percentage of revenues. For purposes of this calculation, revenues are before fair value adjustments to acquired deferred revenue.	Provides a consistent basis to evaluate operating profitability and performance trends by excluding items that the company does not consider to be controllable activities for this purpose. Also, represents a measure commonly reported and widely used by investors as a valuation metric, as well as to assess the company’s ability to incur and service debt.
Adjusted earnings and adjusted EPS	Net earnings or loss including dividends declared on preference shares but excluding the post-tax impacts of fair value adjustments, including those related to acquired deferred revenue, amortization of acquired intangible assets (attributable to other identifiable intangible assets and acquired software), other operating gains and losses, certain asset impairment charges, other finance costs or income, Thomson Reuters share of post-tax earnings or losses in equity method investments, discontinued operations and other items affecting comparability. Acquired intangible assets contribute to the generation of revenues from acquired companies, which are included in the company’s computation of adjusted earnings. The post-tax amount of each item is excluded from adjusted earnings based on the specific tax rules and tax rates associated with the nature and jurisdiction of each item. Adjusted EPS is calculated from adjusted earnings using diluted weighted-average shares and does not represent actual earnings or loss per share attributable to shareholders.	Provides a more comparable basis to analyze earnings. These measures are commonly used by shareholders to measure performance.
Effective tax rate on adjusted earnings	Adjusted tax expense divided by pre-tax adjusted earnings. Adjusted tax expense is computed as income tax expense or benefit plus or minus the income tax impacts of all items impacting adjusted earnings (as described above), and other tax items impacting comparability. In interim periods, the company also makes an adjustment to reflect income taxes based on the estimated full-year effective tax rate. Earnings or losses for interim periods under IFRS reflect income taxes based on the estimated effective tax rates of each of the jurisdictions in which Thomson Reuters operates. The non-IFRS adjustment reallocates estimated full-year income taxes between interim periods but has no effect on full-year income taxes.	Provides a basis to analyze the effective tax rate associated with adjusted earnings. The company’s effective tax rate computed in accordance with IFRS may be more volatile by quarter because the geographical mix of pre-tax profits and losses in interim periods may be different from that for the full year. Therefore, the company believes that using the expected full-year effective tax rate provides more comparability among interim periods.
Free cash flow	Net cash provided by operating activities and other investing activities, less capital expenditures, payments of lease principal and dividends paid on the company’s preference shares.	Helps assess the company’s ability, over the long term, to create value for its shareholders as it represents cash available to repay debt, pay common dividends, fund share repurchases and acquisitions.
Changes before the impact of foreign currency or at constant currency	The changes in revenues, adjusted EBITDA and the related margin, and adjusted EPS before currency (at constant currency or excluding the effects of currency) are determined by converting the current and equivalent prior period’s local currency results using the same foreign currency exchange rate.	Provides better comparability of business trends from period to period.
Changes in revenues computed on an organic basis	Represent changes in revenues of the company’s existing businesses at constant currency. The metric excludes the distortive impacts of acquisitions and dispositions from not owning the business in both comparable periods.	Provides further insight into the performance of the company’s existing businesses by excluding distortive impacts and serves as a better measure of the company’s ability to grow its business over the long term.
Accrued capital expenditures as a percentage of revenues	Accrued capital expenditures divided by revenues, where accrued capital expenditures include amounts that remain unpaid at the end of the reporting period. For purposes of this calculation, revenues are before fair value adjustments to acquired deferred revenue.	Reflects the basis on which the company manages capital expenditures for internal planning purposes.
“Big 3” segments	The company’s combined Legal Professionals, Corporates and Tax, Audit & Accounting Professionals segments. All measures reported for the “Big 3” segments are non-IFRS financial measures.	The “Big 3” segments comprised approximately 80% of revenues and represent the core of the company’s business information service product offerings.
Net debt and leverage ratio of net debt to adjusted EBITDA	Net debt is total debt, plus related hedging instruments and collateral balances, along with lease liabilities, excluding unamortized transaction costs and any premiums or discounts on debt, minus cash and cash equivalents. We exclude specific hedging components to reflect the net cash outflow upon debt maturity. Net debt to adjusted EBITDA is net debt divided by adjusted EBITDA for the previous twelve-month period ending with the current fiscal quarter.	Provides a commonly used measure of a company’s leverage and its ability to pay its debt. Given that the company hedges some of its debt to manage risk, the company includes hedging instruments as it believes it provides a better measure of the total obligation associated with its outstanding debt. Since the company plans to hold its debt and related hedges until maturity, the net debt calculation is adjusted to reflect the net cash outflow at maturity, after deducting cash and cash equivalents. The company’s non-IFRS measure is aligned with the calculation of its internal target leverage ratio and is more conservative than the maximum ratio allowed under the contractual covenants in its credit facility.

Please refer to reconciliations for the most directly comparable IFRS financial measure
s.

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SOURCE Thomson Reuters

August 5, 2026 6:40 am

BorgWarner Reports Strong Second Quarter 2026 Results, Increases 2026 Adjusted EPS Guidance and Share Repurchase Authorization By $1 Billion, And Announces 7 Awards Across Portfolio to Support Long-Term Profitable Growth

PR Newswire

AUBURN HILLS, Mich., Aug. 5, 2026 /PRNewswire/ — BorgWarner Inc. (NYSE: BWA) today reported second quarter results for 2026.

Second Quarter Results and Business Update

BorgWarner’s (the “Company”) U.S. GAAP net sales increased approximately 0.3%, while organic net sales decreased approximately 1.2%, year-over-year compared with the second quarter of 2025. Excluding the decline in Battery Energy Systems segment sales of approximately $60 million, the Company’s organic net sales were up modestly year-over-year.
The Company achieved a U.S. GAAP operating margin of 10.1% during the second quarter of 2026, or an increase of 220 basis points, compared with the second quarter of 2025. The Company achieved an adjusted operating margin of 11.3%, or an increase of 100 basis points, compared with the second quarter of 2025. The Company’s continued focus on cost controls allowed it to deliver strong performance despite a lower industry production environment.
The Company repurchased approximately $100 million of its outstanding shares and paid a $34 million cash dividend to its shareholders during the second quarter of 2026.
The Company’s Board of Directors authorized an increase to its share repurchase program of $1 billion, bringing the Company’s total authorization to approximately $1.35 billion, which is intended to allow management to repurchase the Company’s outstanding shares through 2029.
The Company continued to make progress in its product readiness across its portfolio offerings for the data center and industrial markets. The Company plans to increase 2026 R&D spending to accelerate these future growth opportunities.

New Business Awards Across Portfolio
The Company secured multiple new business awards that are expected to support its long-term profitable growth, including the following:

New eTurbo award with a major European OEM for an advanced hybrid passenger car application. Production is expected to begin in 2029.
Torque-on-demand with mechanical lock transfer case award with a Chinese OEM for a newly developed, full-size SUV. Production is expected to begin in the fourth quarter of 2026.
Two variable cam timing awards. These include a conquest award with a major Chinese OEM and a program life extension award with a leading European premium OEM. Production is expected to begin in 2026 and 2027, respectively.
Integrated Drive Modules (iDM) award with a global OEM. This program utilizes the Company’s next-generation iDM technology, setting a new benchmark in performance, efficiency and system integration. Production is expected to begin in 2027.
Two high-volume inverter extension awards with a major European OEM for plug-in hybrid and 800V battery-electric vehicles. Production is expected to begin in 2029.

Second Quarter Highlights:

U.S. GAAP net sales of $3,648 million, an increase of approximately 0.3% compared with the second quarter of 2025.
- Excluding the impact of foreign currencies, organic net sales decreased 1.2% compared with the second quarter of 2025.
U.S. GAAP net earnings of $1.34 per diluted share.
- Excluding $0.08 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.42 per diluted share, an increase of 17.4% compared with the second quarter of 2025.
U.S. GAAP operating income of $370 million, or 10.1% of net sales.
- Excluding $43 million of pretax expenses related to non-comparable items, adjusted operating income was $413 million, or 11.3% of net sales.
Net cash provided by operating activities of $586 million.
- Free cash flow of $492 million.

Financial Results:
The Company believes the following table is useful in highlighting non-comparable items that impacted its U.S. GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods presented. The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations and related tax effects.

	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Earnings per diluted share	$ 1.34	$ 1.03	$ 2.50	$ 1.75

Non-comparable items:
Restructuring expense	0.07	0.06	0.13	0.17
Accelerated depreciation	0.03	0.08	0.03	0.08
Adjustments associated with Spin-Off related balances	—	0.01	0.01	(0.01)
Impairment charges	—	0.01	—	0.16
Write-off of customer incentive asset	—	0.03	—	0.03
Costs to exit charging business	—	0.02	—	0.13
Chief Executive Officer (“CEO”) transition compensation	—	0.03	—	0.03
Loss on sale of assets	—	0.02	—	0.02
Merger and acquisition expense, net	—	—	(0.01)	0.01
Unrealized gain on equity securities	(0.02)	—	(0.01)	—
Tax adjustments	(0.01)	(0.08)	—	(0.06)
Other non-comparable items	0.01	—	0.01	0.01
Adjusted earnings per diluted share	$ 1.42	$ 1.21	$ 2.66	$ 2.32

Net sales were $3,648 million for the second quarter of 2026, an increase of approximately 0.3% compared with the second quarter of 2025. This increase was due to stronger foreign currencies compared to the U.S. dollar, partially offset by declining market production volumes and lower Battery Energy Systems segment sales. Net earnings for the second quarter of 2026 were $277 million, compared with net earnings of $224 million for the second quarter of 2025. Net earnings per share for the second quarter of 2026 were $1.34 per diluted share, up 30.1% from $1.03 per diluted share for the second quarter of 2025. Adjusted net earnings per diluted share for the second quarter of 2026 were $1.42, up 17.4% from adjusted net earnings per diluted share of $1.21 for the second quarter of 2025. Adjusted net earnings for the second quarter of 2026 excluded net non-comparable items of $(0.08) per diluted share, while adjusted net earnings for the second quarter of 2025 excluded net non-comparable items of $(0.18) per diluted share. These and other non-comparable items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The increase in adjusted net earnings per diluted share was primarily due to higher adjusted operating income and the impact of a lower share count as a result of 2025 and 2026 share repurchases.

Full Year 2026 Guidance Update: The Company increased its 2026 full year adjusted earnings per share guidance, while maintaining its sales, adjusted operating margin and cash flow expectations.

At the mid-point of its 2026 guidance, the Company expects to deliver another year of adjusted operating margin improvement and adjusted earnings per share growth despite the Company’s expectation that its weighted light vehicle markets will be down 3% to approximately flat and a decline in the Company’s Battery Energy Systems segment sales. Net sales are expected to be in the range of $14.0 billion to $14.3 billion in 2026, compared with 2025 net sales of approximately $14.3 billion. The Company’s net sales guidance implies a year-over-year change in organic net sales of down 3.5% to down 1.5%. The Company’s net sales guidance includes an expected year-over-year sales decline of approximately $250 million in the Company’s Battery Energy Systems segment, which represents approximately a 1.7% headwind to organic net sales growth in 2026. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $175 million primarily due to the strengthening of the Euro and Chinese Renminbi against the U.S. dollar.

U.S. GAAP operating margin is expected to be in the range of 9.6% to 9.8% in 2026. Excluding the impact of non-comparable items and the add back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.7% to 10.9%. U.S. GAAP net earnings are expected to be within the range of $4.72 to $4.94 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be in the range of $5.05 to $5.30 per diluted share, compared to the Company’s previous adjusted net earnings range of $5.00 to $5.20 per diluted share. The increase is due to the impact of the Company’s share repurchases during the first half of 2026. Full year operating cash flow is expected to be in the range of $1,600 million to $1,700 million, while free cash flow is expected to be in the range of $900 million to $1,100 million.

At 9:30 a.m. ET today, a brief conference call concerning second quarter 2026 results and full year guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.

For more than 130 years, BorgWarner has been a transformative global product leader bringing successful mobility innovation to market. With a focus on sustainability, we’re helping to build a cleaner, healthier, safer future for all.

Forward Looking Statements: This release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management’s current outlook, expectations, estimates and projections. Words such as “anticipates,” “believes,” “continues,” “could,” “designed,” “effect,” “estimates,” “evaluates,” “expects,” “forecasts,” “goal,” “guidance,” “initiative,” “intends,” “may,” “outlook,” “plans,” “potential,” “predicts,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this release that we expect or anticipate will or may occur in the future regarding our financial position, including our guidance for full year 2026, our business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and profitable growth of our business and operations, plans, references to future success, including the anticipated benefits of increased investments in research and development, our new business awards and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading “Critical Accounting Policies and Estimates” in Item 7 of our most recently filed Annual Report on Form 10-K (“Form 10-K”), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company’s actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: the success of our portfolio strategy; supply disruptions impacting us or our customers, commodity availability and pricing and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; conditions in the automotive industry; competitive challenges from existing and new competitors, including original equipment manufacturer (“OEM”) customers; the challenges associated with rapidly changing technologies, including artificial intelligence, and our ability to innovate in response; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; potential disruptions in the global economy caused by wars or other geopolitical conflicts; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended tax benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; impacts of our exit of the charging business; our dependence on automotive and truck production, which is highly cyclical and subject to disruptions; our reliance on major OEM customers; impacts of any future strikes involving any of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the uncertainty surrounding global trade policies, including tariffs (and any potential refund recovery of tariffs imposed under the International Emergency Economic Powers Act) and export restrictions and their impact on the Company, its customers and its suppliers; the outcome of existing or any future legal proceedings, including litigation with respect to various claims, or governmental investigations, including related litigation; impacts from any potential future acquisition or disposition transactions; and the other risks discussed in reports that we file with the Securities and Exchange Commission, including in Item 1A. “Risk Factors” in our most recently filed Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.

BorgWarner Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in millions, except per share amounts)
	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Net sales	$ 3,648	$ 3,638	$ 7,181	$ 7,153
Cost of sales	2,927	2,998	5,783	5,874
Gross profit	721	640	1,398	1,279
Gross margin	19.8 %	17.6 %	19.5 %	17.9 %

Selling, general and administrative expenses	331	317	659	632
Restructuring expense	21	17	39	48
Other operating (income) expense, net	(1)	14	(6)	31
Impairment charges	—	3	—	42
Operating income	370	289	706	526

Equity in affiliates’ earnings, net of tax	(10)	(8)	(16)	(18)
Unrealized gain on equity securities	(4)	(1)	(3)	(1)
Interest expense, net	10	12	21	24
Other postretirement expense	2	2	4	5
Earnings before income taxes and noncontrolling interest	372	284	700	516

Provision for income taxes	81	52	154	113
Net earnings	291	232	546	403
Net earnings attributable to noncontrolling interest	14	8	27	22
Net earnings attributable to BorgWarner Inc.	$ 277	$ 224	$ 519	$ 381

Earnings per share attributable to BorgWarner Inc. — diluted	$ 1.34	$ 1.03	$ 2.50	$ 1.75

Weighted average shares outstanding:
Basic	203.0	216.3	204.2	216.7
Diluted	206.3	218.2	207.3	218.1

BorgWarner Inc.
Net Sales by Reportable Segment (Unaudited)
(in millions)
	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Turbos & Thermal Technologies	$ 1,442	$ 1,481	$ 2,875	$ 2,935
Drivetrain & Morse Systems	1,455	1,429	2,877	2,790
PowerDrive Systems	665	581	1,252	1,142
Battery Energy Systems	100	159	202	309
Inter-segment eliminations	(14)	(12)	(25)	(23)
Net sales	$ 3,648	$ 3,638	$ 7,181	$ 7,153

Segment Adjusted Operating Income (Loss) (Unaudited)
(in millions)
	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Turbos & Thermal Technologies	$ 225	$ 227	$ 439	$ 462
Drivetrain & Morse Systems	277	260	537	503
PowerDrive Systems	(29)	(33)	(65)	(76)
Battery Energy Systems	(2)	(12)	(4)	(34)
Segment Adjusted Operating Income	471	442	907	855
Corporate, including stock-based compensation	58	69	122	130
Restructuring expense	21	17	39	48
Intangible asset amortization expense	14	16	30	33
Accelerated depreciation	7	21	9	21
Adjustments associated with Spin-Off related balances	(1)	2	1	(1)
Impairment charges	—	3	—	42
Write-off of customer incentive asset	—	7	—	7
Costs to exit charging business	—	6	—	32
Chief Executive Officer (“CEO”) transition compensation	—	6	—	6
Loss on sale of assets	—	5	—	5
Loss on sale of businesses	—	—	—	1
Merger and acquisition expense, net	—	—	(2)	2
Other non-comparable items	2	1	2	3
Equity in affiliates’ earnings, net of tax	(10)	(8)	(16)	(18)
Unrealized gain on equity securities	(4)	(1)	(3)	(1)
Interest expense, net	10	12	21	24
Other postretirement expense	2	2	4	5
Earnings before income taxes and noncontrolling interest	$ 372	$ 284	$ 700	$ 516
Provision for income taxes	81	52	154	113
Net earnings	291	232	546	403
Net earnings attributable to noncontrolling interest	14	8	27	22
Net earnings attributable to BorgWarner Inc.	$ 277	$ 224	$ 519	$ 381

BorgWarner Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in millions)

	June 30, 2026	December 31, 2025
ASSETS
Cash and cash equivalents	$ 2,448	$ 2,313
Receivables, net	3,056	2,962
Inventories	1,232	1,207
Prepayments and other current assets	352	313
Total current assets	7,088	6,795

Property, plant and equipment, net	3,220	3,330
Other non-current assets	3,626	3,644
Total assets	$ 13,934	$ 13,769

LIABILITIES AND EQUITY
Short-term debt	$ 5	$ 5
Accounts payable	2,138	1,996
Other current liabilities	1,190	1,281
Total current liabilities	3,333	3,282

Long-term debt	3,863	3,894
Other non-current liabilities:	940	979
Total liabilities	8,136	8,155

Total BorgWarner Inc. stockholders’ equity	5,621	5,442
Noncontrolling interest	177	172
Total equity	5,798	5,614
Total liabilities and equity	$ 13,934	$ 13,769

BorgWarner Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)
	Six Months Ended June 30,
	2026	2025
OPERATING ACTIVITIES
Net cash provided by operating activities	$ 738	$ 661
INVESTING ACTIVITIES
Capital expenditures, including tooling outlays	(239)	(196)
Customer advances related to capital expenditures	6	7
Proceeds from settlement of net investment hedges, net	9	8
Payments for investments in equity securities	(2)	—
Proceeds from the sale of business, net	—	7
Proceeds from asset disposals and other, net	1	16
Net cash used in investing activities	(225)	(158)
FINANCING ACTIVITIES
Payments of notes payable	—	(5)
Repayments of debt, including current portion	(3)	(403)
Payments for purchase of treasury stock	(250)	(108)
Payments for excise tax on purchase of treasury stock	(5)	—
Payments for stock-based compensation items	(28)	(18)
Payment for business acquired, net of cash acquired	(3)	—
Payments for contingent consideration	—	(4)
Dividends paid to BorgWarner stockholders	(69)	(48)
Dividends paid to noncontrolling stockholders	(10)	(20)
Net cash used in financing activities	(368)	(606)
Effect of exchange rate changes on cash	(10)	50
Net increase (decrease) in cash and cash equivalents	135	(53)
Cash and cash equivalents at beginning of year	2,313	2,094
Cash, cash equivalents and restricted cash at end of period	$ 2,448	$ 2,041

Supplemental Information (Unaudited)
(in millions)
	Six Months Ended June 30,
	2026	2025
Depreciation and tooling amortization	$ 264	$ 301
Intangible asset amortization	$ 30	$ 33

Non-GAAP Financial Measures
This press release contains information about the Company’s financial results that is not presented in accordance with U.S. GAAP. Such non-GAAP financial measures are reconciled to their closest U.S. GAAP financial measures below and in the Financial Results table above. The provision of these comparable U.S. GAAP financial measures for 2026 is not intended to indicate that the Company is explicitly or implicitly providing projections on those U.S. GAAP financial measures and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict.

Management believes that these non-GAAP financial measures are useful to management, investors and banking institutions in their analyses of the Company’s business and operating performance. Management also uses this information for operational planning and decision-making purposes.

Non-GAAP financial measures are not and should not be considered a substitute for any U.S. GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by the Company may not be comparable to similarly titled measures reported by other companies.

Adjusted Operating Income and Adjusted Operating Margin
The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.

Adjusted Net Earnings
The Company defines adjusted net earnings as net earnings attributable to the Company, adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted net earnings.

Adjusted Earnings per Diluted Share
The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.

Free Cash Flow
The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, net of customer advances related to capital expenditures. The Company believes this measure is useful to both management and investors in evaluating the Company’s ability to service and repay its debt.

Organic Net Sales Change
The Company defines organic net sales changes as net sales change year-over-year excluding the estimated impact of foreign exchange (“FX”) and net mergers, acquisitions and divestitures.

Adjusted Operating Income and Adjusted Operating Margin (Unaudited)
	Three Months Ended June 30,		Six Months Ended June 30,
(in millions)	2026	2025	2026	2025
Net sales	$ 3,648	$ 3,638	$ 7,181	$ 7,153

Operating income	$ 370	$ 289	$ 706	$ 526
Operating margin	10.1 %	7.9 %	9.8 %	7.4 %

Non-comparable items:
Restructuring expense	$ 21	$ 17	$ 39	$ 48
Intangible asset amortization expense	14	16	30	33
Accelerated depreciation	7	21	9	21
Adjustments associated with Spin-Off related balances	(1)	2	1	(1)
Impairment charges	—	3	—	42
Costs to exit charging business	—	6	—	32
Chief Executive Officer (“CEO”) transition compensation	—	6	—	6
Write-off of customer incentive asset	—	7	—	7
Loss on sale of assets	—	5	—	5
Loss on sale of businesses	—	—	—	1
Merger and acquisition expense, net	—	—	(2)	2
Other non-comparable items	2	1	2	3
Adjusted operating income	$ 413	$ 373	$ 785	$ 725
Adjusted operating margin	11.3 %	10.3 %	10.9 %	10.1 %

Free Cash Flow Reconciliation (Unaudited)
	Three Months Ended June 30,		Six Months Ended June 30,
(in millions)	2026	2025	2026	2025
Net cash provided by operating activities	$ 586	$ 579	$ 738	$ 661
Capital expenditures, including tooling outlays	(96)	(77)	(239)	(196)
Customer advances related to capital expenditures	2	5	6	7
Free cash flow	$ 492	$ 507	$ 505	$ 472

Second Quarter 2026 Organic Net Sales Change (Unaudited)
(in millions)	Q2 2025 Net Sales	FX	Organic Net Sales Change	Q2 2026 Net Sales	Organic Net Sales Change %
Turbos & Thermal Technologies	$ 1,481	$ 24	$ (63)	$ 1,442	(4.3) %
Drivetrain & Morse Systems	1,429	11	15	1,455	1.0 %
PowerDrive Systems	581	16	68	665	11.7 %
Battery Energy Systems	159	3	(62)	100	(39.0) %
Inter-segment eliminations	(12)	—	(2)	(14)	16.7 %
Net sales	$ 3,638	$ 54	$ (44)	$ 3,648	(1.2) %

Year to Date 2026 Organic Net Sales Change (Unaudited)
(in millions)	Q2 2025 YTD Net Sales	FX	Organic Net Sales Change	Q2 2026 YTD Net Sales	Organic Net Sales Change %
Turbos & Thermal Technologies	$ 2,935	$ 105	$ (165)	$ 2,875	(5.6) %
Drivetrain & Morse Systems	2,790	60	27	2,877	1.0 %
PowerDrive Systems	1,142	47	63	1,252	5.5 %
Battery Energy Systems	309	9	(116)	202	(37.5) %
Inter-segment eliminations	(23)	—	(2)	(25)	8.7 %
Total	$ 7,153	$ 221	$ (193)	$ 7,181	(2.7) %

Adjusted Operating Income and Adjusted Operating Margin Guidance Reconciliation (Unaudited)
	Full Year 2026 Guidance
(in millions)	Low	High
Net sales	$ 14,000	$ 14,300

Operating income	$ 1,343	$ 1,398
Operating margin	9.6 %	9.8 %

Non-comparable items:
Restructuring expense	$ 90	$ 100
Intangible asset amortization	57	57
Accelerated depreciation	9	9
Adjustment associated with Spin-Off related balances	1	1
Merger and acquisition expense, net	(2)	(2)
Other non-comparable items	2	2
Adjusted operating income	$ 1,500	$ 1,565
Adjusted operating margin	10.7 %	10.9 %

Adjusted Earnings Per Diluted Share Guidance Reconciliation (Unaudited)
	Full Year 2026 Guidance
	Low	High
Earnings per Diluted Share	$ 4.72	$ 4.94

Non-comparable items:
Restructuring expense	$ 0.30	$ 0.33
Accelerated depreciation	0.03	0.03
Adjustment associated with Spin-Off related balances	0.01	0.01
Unrealized gain on equity securities	(0.01)	(0.01)
Merger and acquisition expense, net	(0.01)	(0.01)
Other non-comparable items	0.01	0.01
Adjusted Earnings per Diluted Share	$ 5.05	$ 5.30

Free Cash Flow Guidance Reconciliation (Unaudited)
	Full Year 2026 Guidance
(in millions)	Low	High
Net cash provided by operating activities	$ 1,600	$ 1,700
Capital expenditures, including tooling outlays	(700)	(600)
Free cash flow	$ 900	$ 1,100

Full Year 2026 Organic Net Sales Change Guidance Reconciliation (Unaudited)

(in millions)	FY 2025 Net Sales	FX	Battery Energy Systems (“BES”) Sales Change	Organic Net Sales Change	FY 2026 Net Sales	Organic Net Sales Change Excluding BES %	Organic Net Sales Change Including BES %	BorgWarner LV Weighted Market %
Low	$ 14,316	$ 175	$ (250)	$ (241)	$ 14,000	(1.7) %	(3.4) %	(3.0) %
High	$ 14,316	$ 175	$ (250)	$ 59	$ 14,300	0.4 %	(1.3) %	— %

Full Year 2026 Estimated Year-Over-Year Change in Production (Unaudited)

	North America	Europe	China	Total	BorgWarner Weighted Total
Light vehicle	(2.5)% to 1.5%	(2)% to 1%	(7)% to (4)%	(3)% to (1)%	(3)% to 0%

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SOURCE BorgWarner

August 5, 2026 6:39 am

CHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2026 RESULTS

PR Newswire

U.S. Net Rooms Growth Improved for the Second Consecutive Quarter, Supporting 2.6% Global Net Rooms Growth

NORTH BETHESDA, Md., Aug. 5, 2026 /PRNewswire/ — Choice Hotels International, Inc. (“Choice” or “the Company”) (NYSE: CHH), a leading global lodging franchisor with an asset-light model, today reported results for the second quarter ended June 30, 2026.

Highlights include:

Net income was $64 million, or $1.41 per diluted share, for the second quarter.
Adjusted EBITDA totaled $175 million, and adjusted diluted EPS reached $2.02 for the second quarter.
U.S. room openings increased 27% in the second quarter compared to the same period of 2025, as the Company opened approximately 6,400 U.S. rooms—the highest second-quarter level since 2019, while exits declined to their lowest second-quarter level since 2020, supporting continued improvement in U.S. net rooms growth.
Global net rooms grew 2.6% compared to June 30, 2025, driven by 3.6% growth in the higher revenue extended stay, midscale, and upscale brands.
U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, reflecting improvements in both occupancy and rate.
U.S. franchise agreements awarded increased 30% in the second quarter compared to the same period of 2025, representing approximately 9,400 new U.S. rooms for development.
The Company’s U.S. conversion rooms pipeline grew 24% to 24,100 rooms, compared to June 30, 2025, and 6% sequentially from March 31, 2026.
The U.S. royalty rate expanded 11 basis points to 5.2% in the second quarter, compared to the same period of 2025.
The Company returned $139 million to shareholders through dividends and share repurchases year-to-date through June 30, 2026.
The Company raised several full-year 2026 guidance ranges.

“Our second quarter results reflect encouraging progress across our key priorities, with U.S. net rooms growth improving for the second consecutive quarter to its strongest first-half performance since 2021 and U.S. RevPAR trends strengthening,” said Dom Dragisich, Interim Chief Executive Officer. “Over the past several years, we’ve built a stronger commercial engine and technology platform, and we continue to invest in both. Our biggest opportunity now is sharpening execution—leveraging those capabilities to further enhance franchisee economics by increasing the number and quality of the guests we deliver while lowering operating costs. While we still have work to do, this business has significantly more potential, and I’m confident we can realize it. The progress we delivered this quarter reinforces that confidence.”

Financial Performance

($ in millions, except per-share amounts)	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Total revenues	$441	$426	$781	$759
Revenue excl. revenue for reimbursable costs from franchised and managed properties¹	$277	$259	$494	$469
Net income	$64	$82	$85	$126
Adjusted net income	$92	$90	$142	$153
Diluted EPS	$1.41	$1.75	$1.84	$2.68
Adjusted diluted EPS	$2.02	$1.92	$3.09	$3.25
Adjusted EBITDA	$175	$165	$301	$295

Net income was $64 million for the second quarter, a 21% decline compared to the same period of 2025. The year-over-year decrease primarily reflected a higher net reimbursable deficit from franchised and managed properties related to investments in franchisee-related tools and guest delivery capabilities, timing of SG&A expenses, and increased depreciation and amortization associated with owned hotels and the prior year acquisition of Choice Hotels Canada. These items were partially offset by higher franchise and management fees.²
Adjusted EBITDA increased 6%, and adjusted diluted EPS increased 5% compared to the same period of 2025.
Franchise and management fees increased 6% to $188 million for the second quarter, compared to the same period of 2025, reflecting higher international royalty fees, higher franchisee programs and services revenue, along with U.S. RevPAR and U.S. royalty rate improvement.
Partnership services and fees increased 6% to $29 million for the second quarter, compared to the same period of 2025, primarily reflecting growth in procurement services revenue.

__________________________

¹ Calculated as total revenues excluding reimbursable revenues. Reimbursable revenues totaled $163 million and $167 million for second quarter 2026 and 2025, respectively, and $287 million and $291 million year-to-date through June 30, 2026 and June 30, 2025, respectively.
² Selling, general and administrative expenses for the three months ended June 30, 2026 included $0.2 million of expense related to the post-employment benefits announced on May 20, 2026. The Company expects to recognize approximately $2.7 million of total post-employment benefits through August 31, 2026.


RevPAR
(% change on a currency-neutral basis)	Change vs. Prior Year Period
	Three months ended June 30, 2026
U.S.	1.3 %
International	2.1 %
Global	1.7 %

U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, driven by a 0.7% increase in rate and a 40-basis-point increase in occupancy, primarily reflecting strength in the East North Central, Middle Atlantic, and West South Central regions.
International RevPAR increased 2.1% on a currency-neutral basis in the second quarter, compared to the same period of 2025, led by the Caribbean and Latin America and further supported by continued strength in Canada and Asia Pacific.

System Size and Development
(Rooms)
	June 30, 2026	June 30, 2025	Change
U.S.	499,226	500,562	-0.3 %
U.S. upscale, extended stay, and midscale	442,676	439,744	0.7 %
International	161,863	143,838	12.5 %
Global	661,089	644,400	2.6 %
Global upscale, extended stay, and midscale	599,207	578,226	3.6 %

Global room openings increased 16% in the second quarter of 2026 compared to the same period of 2025, as the Company opened approximately 8,300 global rooms.
Extended stay remained a core growth engine, supported by strong unit economics and continued developer demand, with U.S. extended stay net rooms growing 13.0% compared to June 30, 2025, marking the 12th consecutive quarter of double-digit growth.
International net rooms grew 12.5% compared to June 30, 2025, led by double-digit growth in Asia Pacific and EMEA, with continued growth in Canada.
Global franchise agreements awarded increased 20% in the second quarter compared to the same period of 2025, representing 11,200 new global rooms for development and reflecting continued demand for conversion-led brands.
The Company’s global pipeline totaled approximately 77,300 rooms as of June 30, 2026, with 96% concentrated in extended stay, midscale, and upscale brands. The pipeline included:
- 71,100 U.S. rooms and 6,200 international rooms.
- 29,900 extended stay rooms, representing 39% of the total pipeline.
- 26,400 conversion rooms and 50,900 new-construction rooms.

Balance Sheet and Liquidity

As of June 30, 2026, Choice had total available liquidity of $475 million, comprised of cash and cash equivalents and available borrowing capacity. The Company’s net debt-to-adjusted EBITDA ratio was 3.1x for the trailing twelve months ended June 30, 2026, within the Company’s target range of 3.0x to 4.0x.

During the six months ended June 30, 2026, the Company generated $67 million in cash flows from operating activities, compared to $116 million in the prior-year period, primarily reflecting higher franchise agreement acquisition costs associated with a 27% increase in U.S. room openings and higher marketing and reservation system reimbursable expenses.

During the six months ended June 30, 2026, net capital outlays for hotel development and lending activities declined 80% to $15 million, from $76 million in the prior-year period.³

The Company expects to enter the next phase of its asset-light strategy by recycling capital from its owned hotel portfolio. As of August 5, 2026, the Company owned 19 operating hotels, with one additional hotel under construction. The Company expects the first asset sales to occur during the first half of 2027, subject to market conditions.

Shareholder Returns

During the six months ended June 30, 2026, the Company returned $26 million to shareholders through dividends and $113 million in share repurchases.⁴

As of June 30, 2026, 1.8 million shares of common stock remained available under the Company’s current share repurchase authorization.

Outlook

The Company is updating certain aspects of its full-year 2026 outlook. The following outlook includes forward-looking non-GAAP measures used by management to assess expected performance. Adjusted metrics exclude the net surplus or deficit from reimbursable revenue from franchised and managed properties, due diligence and transition costs, and other items.

	Full-Year 2026	Prior Outlook
Net income	$230 to $241 million	$265 to $275 million
Adjusted net income	$312 to $323 million	$320 to $330 million
Adjusted EBITDA	$635 to $650 million	$632 to $647 million
Adjusted SG&A	Mid-single digits	Mid-single digits
Diluted EPS	$5.07 to $5.31	$5.72 to $5.94
Adjusted diluted EPS	$6.86 to $7.10	$6.92 to $7.14
Effective tax rate	26 %	25 %

	Full-Year 2026 vs. 2025	Full-Year 2026 vs. 2025
Global RevPAR growth	0% to 1%	-2% to 1%
U.S. RevPAR growth	0% to 1.25%	-2% to 1%
U.S. royalty rate growth	7 bps to 9 bps	Mid-single digits
Global net system rooms growth	Approximately 1.5%	Approximately 1%

The net income guidance range has been revised from the Company’s prior outlook primarily to reflect higher expected marketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools and guest delivery capabilities, as well as higher interest expense and a higher effective tax rate.

The adjusted net income guidance range has been revised from the Company’s prior outlook primarily to reflect higher expected interest expense and a higher effective tax rate.

Adjusted EBITDA guidance has been raised from the Company’s prior outlook, primarily reflecting improvement in U.S. RevPAR, global net rooms growth, and U.S. royalty rate.

Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 to a range of $20 million to $45 million in 2026.³

__________________________

³ Net capital outlays include investments in owned hotel properties, investments in affiliates, notes receivable issued, net of collections, proceeds from asset sales, and distributions from sales of affiliates.
⁴ Share repurchases include repurchases under the Company’s stock repurchase program and repurchases from employees in connection with tax withholding and option exercises relating to awards under the Company’s equity incentive plans.

Webcast and Conference Call

Choice will host a conference call to discuss second quarter 2026 results on August 5, 2026, at 10:00 a.m. ET. A live webcast will be available on the Company’s Investor Relations website at www.investor.choicehotels.com/events-and-presentations. Participants may also dial (833) 461-5787 (U.S.) or (585) 542-9983 (international) and reference conference ID 558894687. A replay and transcript will be available within 24 hours on the Company’s Investor Relations website.

About Choice Hotels

^®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with over 7,500 hotels, representing more than 650,000 rooms, in 49 countries and territories. A wide-ranging portfolio of 22 brands that includes full-service upper upscale, midscale, extended stay, and economy properties enables Choice® to meet travelers’ needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® rewards program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. For more information, visit www.choicehotels.com.

Forward-Looking Statements

Information set forth herein includes “forward-looking statements.” Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “expect,” “estimate,” “believe,” “anticipate,” “should,” “will,” “forecast,” “plan,” “project,” “assume,” or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management’s current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of Choice’s revenue, expenses, adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, net surplus or deficit, repurchases of common stock and other financial and operational measures, including occupancy, room openings and open hotels, RevPAR, royalty rate, strategic investment and acquisition performance, international expansion performance, macroeconomic backdrop and Choice’s liquidity, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties, and other factors.

Several factors could cause our actual results, performance or achievements to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, U.S. and foreign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future U.S. or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to the status of our relationship with employees of our franchisees; the potential impact of changes in laws and regulations generally, or the interpretation thereof, including, without limitation, those relating to taxes, wages, labor and immigration; foreign currency fluctuations; changes in global interest rates and rate differentials; variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; governmental action or inaction relating to the federal budget, including funding lapses and government shutdowns; impairments or declines in the value of our assets; our assumptions underlying our critical accounting estimates; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for our marketing and reservation systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, franchise agreement acquisition costs and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; the impact of inflation; information technology, cyber security and data breach risks; introduction and integration of artificial intelligence technologies; climate change; our sustainability strategy; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations; political instability, geopolitical conflicts and terrorism; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness.

These and other risk factors are discussed in detail in the Company’s filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measurements and Other Definitions

The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted selling, general and administrative (SG&A) expenses, adjusted net income, and adjusted diluted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibits 6 and 7, should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as SG&A, net income and EPS. The company’s calculation of these measurements may be different from the calculations used by other companies and comparability may therefore be limited. Management believes these non-GAAP financial measures provide investors with additional meaningful financial information that should be considered when assessing our underlying business performance and trends. We further discuss management’s reasons for reporting these non-GAAP measures and how each non-GAAP measure is calculated below.

In addition to the specific adjustments noted below with respect to each measure, the non-GAAP measures presented herein also exclude restructuring of the company’s operations including employee severance benefit, income taxes and legal costs, acquisition related to business combination, due diligence and transition (recoveries) costs, and global ERP system implementation and related costs to allow for period-over-period comparison of ongoing core operations before the impact of these discrete and infrequent charges.

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization: Adjusted EBITDA, presented herein, is calculated as net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, amortization of cloud computing arrangements, impairments and gains on sale of business, joint ventures and assets, other (gains) and losses, equity in net income (loss) of unconsolidated affiliates and (gain) loss on extinguishment of debt, further adjusted to exclude certain items, including, franchisee agreement acquisition cost amortization and charges, mark-to-market adjustments on non-qualified retirement plan investments, share based compensation expense (benefit) and surplus or deficits generated by reimbursable revenue from franchised and managed properties. We consider adjusted EBITDA to be an indicator of operating performance because it measures our ability to service debt, fund capital expenditures, and expand our business. We also use these measures, as do analysts, lenders, investors, and others, to evaluate companies because they exclude certain items that can vary widely across industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings, and share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of interest expense and share based compensation expense (benefit) on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. These measures also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets or amortizing franchise-agreement acquisition costs. These differences can result in considerable variability in the relative asset costs and estimated lives and, therefore, the depreciation and amortization expense among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are excluded from adjusted EBITDA, as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company’s net income. Surpluses and deficits generated from reimbursable revenues from franchised and managed properties are excluded, as the company does not operate these programs to generate a profit and has the contractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company’s franchise and management agreements require these revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from these activities and the company is required to spend any surpluses generated in future periods. The reimbursement for franchise and management services is typically billed and collected monthly, based on the underlying hotel’s sales or usage, while the associated costs are recognized as incurred by the company, creating timing differences with the net effect impacting net income in the reporting period. These timing differences are due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company’s operating performance.

Adjusted Net Income and Adjusted Diluted Earnings Per Share: Adjusted net income and adjusted diluted EPS exclude the impact of surpluses or deficits generated from reimbursable revenue from franchised and managed properties, impairments, formation costs and gains on sale of business, joint ventures and assets and gains on extinguishment of debt. Surpluses and deficits generated from reimbursable revenue from franchised and managed properties are excluded, as the company does not operate these programs to generate a profit and has the contractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company’s franchise agreements require these revenues to be used exclusively for expenses associated with providing franchised and managed services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from activities and the company is required to spend any surpluses generated in future periods. The reimbursement for franchise and management services is typically billed and collected monthly, based on the underlying hotel’s sales or usage, while the associated costs are recognized as incurred by the company, creating timing differences with the net effect impacting net income in the reporting period. These timing differences are due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company’s operating performance. We consider adjusted net income and adjusted diluted EPS to be indicators of operating performance because excluding these items allows for period-over-period comparisons of our ongoing operations.

Adjusted SG&A: Adjusted SG&A reflects SG&A excluding the impact of mark-to-market adjustments on non-qualified retirement plan investments, amortization of cloud computing arrangements and share based compensation expense. We use this measure, as do analysts, lenders, investors, and others, to evaluate companies because it excludes certain items that can vary widely across industries or among companies within the same industry. For example, share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of share-based compensation expense (benefit) on earnings can vary significantly among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are also excluded as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company’s net income.

Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel for a given period. Occupancy measures the utilization of the hotels’ available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. The company calculates occupancy based on information as reported by its franchisees. To accurately reflect occupancy, the company may revise its prior years’ operating statistics for the most current information provided.

Average Daily Rate (ADR): ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the company is able to generate. The company calculates ADR based on information as reported by its franchisees. To accurately reflect ADR, the company may revise its prior years’ operating statistics for the most current information provided.

Revenue Per Available Room (RevPAR): RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of hotel performance and therefore company royalty and system revenues as it provides a metric correlated to the two key drivers of operations at a hotel: occupancy and ADR. The company calculates RevPAR based on information as reported by its franchisees. To accurately reflect RevPAR, the company may revise its prior years’ operating statistics for the most current information provided. RevPAR is also a useful indicator in measuring performance over comparable periods.

Pipeline: Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and master development agreements committing owners to future franchise development.

Contacts

Allie Summers, Senior Director, Investor Relations
[email protected]
© 2026 Choice Hotels International, Inc. All rights reserved.

Choice Hotels International, Inc.				Exhibit 1
Condensed Consolidated Statements of Income
(Unaudited)

(In thousands, except per share amounts)	For the Three Months Ended		For the Six Months Ended
	June 30,		June 30,
	2026	2025	2026	2025
REVENUES
Franchise and management fees	$ 187,536	$ 177,086	$ 337,167	$ 322,154
Partnership services and fees	28,674	27,064	53,408	52,445
Owned hotels	34,896	30,228	65,329	58,088
Other	26,332	24,716	38,205	35,843
Revenue for reimbursable costs from franchised and managed properties	163,324	167,349	287,228	290,773
Total revenues	440,762	426,443	781,337	759,303

OPERATING EXPENSES
Selling, general and administrative	96,153	89,298	174,199	163,508
Business combination, diligence and transition costs	536	347	772	446
Depreciation and amortization	16,813	13,424	33,634	27,172
Owned hotels	25,457	22,419	49,108	43,479
Reimbursable expenses from franchised and managed properties	197,665	176,358	359,452	320,169
Total operating expenses	336,624	301,846	617,165	554,774

Operating income	104,138	124,597	164,172	204,529

OTHER EXPENSES AND (INCOME), NET
Interest expense	24,259	22,736	48,221	43,978
Interest income	(1,095)	(1,456)	(2,306)	(3,015)
Other gains, net	(6,124)	(5,374)	(5,403)	(4,938)
Equity in net loss of affiliates	1,216	80	7,468	131
Total other expenses and (income), net	18,256	15,986	47,980	36,156

Income before income taxes	85,882	108,611	116,192	168,373
Income tax expense	21,544	26,877	31,550	42,105
Net income	$ 64,338	$ 81,734	$ 84,642	$ 126,268

Basic earnings per share	$ 1.42	$ 1.76	$ 1.85	$ 2.71
Diluted earnings per share	$ 1.41	$ 1.75	$ 1.84	$ 2.68

Choice Hotels International, Inc.			Exhibit 2
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)		June 30,	December 31,
		2026	2025
ASSETS
Cash and cash equivalents		$ 42,826	$ 44,997
Accounts receivable, net		279,813	207,491
Other current assets		109,297	153,510
	Total current assets	431,936	405,998

Property and equipment, net		653,503	649,291
Operating lease right-of-use assets		75,004	77,670
Goodwill		302,877	305,758
Intangible assets, net		1,105,813	1,082,486
Notes receivable, net of allowances		28,558	12,490
Investments for employee benefit plans, at fair value		54,794	50,227
Investments in affiliates		137,251	134,975
Other assets		199,080	199,308
	Total assets	$ 2,988,816	$ 2,918,203

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$ 165,441	$ 156,276
Accrued expenses and other current liabilities		110,873	125,282
Deferred revenue		104,256	100,698
Liability for guest loyalty program		85,898	85,035
	Total current liabilities	466,468	467,291

Long-term debt		2,002,339	1,906,122
Long-term deferred revenue		133,998	130,505
Deferred compensation and retirement plan obligations		61,090	56,532
Deferred income taxes		32,890	25,303
Operating lease liabilities		104,349	107,963
Liability for guest loyalty program		41,139	39,771
Other liabilities		4,365	3,487
	Total liabilities	2,846,638	2,736,974

	Total shareholders’ equity	142,178	181,229

	Total liabilities and shareholders’ equity	$ 2,988,816	$ 2,918,203

Choice Hotels International, Inc.		Exhibit 3
Condensed Consolidated Statements of Cash Flows
(Unaudited)

(In thousands)	Six Months Ended June 30,
	2026	2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 84,642	$ 126,268
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33,634	27,172
Depreciation and amortization – reimbursable expenses from franchised and managed properties	11,228	9,426
Franchise agreement acquisition cost amortization	20,201	17,261
Non-cash share-based compensation and other charges	13,098	19,438
Non-cash interest, investments, and affiliate loss (income), net	(3,391)	(1,668)
Deferred income taxes	7,493	850
Equity in net loss of affiliates, less distributions received	7,468	692
Franchise agreement acquisition costs, net of reimbursements	(72,169)	(41,474)
Change in working capital and other	(34,842)	(41,895)
Net cash provided by operating activities	67,362	116,070
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in other property and equipment	(17,900)	(18,333)
Investments in owned hotel properties	(27,292)	(65,676)
Contributions to investments in affiliates	(10,588)	(9,358)
Issuances of notes receivable	(1,859)	(3,353)
Collections of notes receivable	24,610	2,773
Other items, net	(995)	(1,201)
Net cash used in investing activities	(34,024)	(95,148)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings pursuant to revolving credit facilities	96,275	130,000
Purchases of treasury stock	(107,464)	(112,756)
Dividends paid	(26,333)	(26,868)
Proceeds from the exercise of stock options	2,339	6,385
Net cash used in financing activities	(35,183)	(3,239)
Net change in cash and cash equivalents	(1,845)	17,683
Effect of foreign exchange rate changes on cash and cash equivalents	(326)	750
Cash and cash equivalents, beginning of period	44,997	40,177
Cash and cash equivalents, end of period	$ 42,826	$ 58,610

							Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
CURRENCY-NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
(UNAUDITED)

	For the Three Months Ended June 30, 2026
	ADR		Occupancy			RevPAR
	2026	vs. 2025	2026	vs. 2025		2026	vs. 2025
Total U.S.	$ 98.28	0.7 %	60.0 %	40	bps	$ 58.92	1.3 %
Upscale & Above ⁽¹⁾	155.49	2.0 %	60.0 %	(50)	bps	93.33	1.3 %
Midscale & Upper Midscale ⁽²⁾	102.76	0.7 %	59.6 %	20	bps	61.24	1.1 %
Extended Stay ⁽³⁾	69.24	3.5 %	71.3 %	10	bps	49.37	3.7 %
Economy ⁽⁴⁾	71.16	(0.2) %	49.9 %	(20)	bps	35.51	(0.7) %
International ⁽⁵⁾	111.14	2.0 %	64.8 %	10	bps	71.96	2.1 %
Total System ⁽⁵⁾	$ 101.45	1.2 %	61.1 %	40	bps	$ 61.95	1.7 %

	For the Six Months Ended June 30, 2026
	ADR		Occupancy			RevPAR
	2026	vs. 2025	2026	vs. 2025		2026	vs. 2025
Total U.S.	$ 93.92	(0.5) %	55.5 %	20	bps	$ 52.08	(0.2) %
Upscale & Above ⁽¹⁾	148.67	1.4 %	55.1 %	(10)	bps	81.97	1.4 %
Midscale & Upper Midscale ⁽²⁾	98.02	(0.5) %	54.7 %	10	bps	53.62	(0.2) %
Extended Stay ⁽³⁾	67.87	1.9 %	68.7 %	(80)	bps	46.65	0.7 %
Economy ⁽⁴⁾	68.80	(2.6) %	46.1 %	(80)	bps	31.71	(4.4) %
International ⁽⁵⁾	105.01	2.7 %	60.9 %	(20)	bps	63.90	2.2 %
Total System ⁽⁵⁾	$ 96.68	0.4 %	56.7 %	10	bps	$ 54.83	0.6 %


	For the Three Months Ended		For the Six Months Ended
	June 30, 2026	June 30, 2025	June 30, 2026	June 30, 2025
	U.S. Average Royalty Rate
Total U.S.	5.23 %	5.12 %	5.22 %	5.11 %

⁽¹⁾ Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.
⁽²⁾Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands.
⁽³⁾Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands.
⁽⁴⁾Includes Econo Lodge and Rodeway brands.
⁽⁵⁾International and Total System results are presented on a currency-neutral basis and exclude the impact of foreign currency exchange movements.

		Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SYSTEM HOTEL AND ROOM SUPPLY
(UNAUDITED)

Global System by Brand	June 30, 2026
	Hotels	Rooms
Ascend Hotel Collection	528	71,347
Cambria Hotels	77	10,278
Radisson⁽¹⁾	129	22,600
Comfort⁽²⁾	2,135	178,818
Quality	1,881	148,452
Country	404	32,618
Sleep	427	30,610
Clarion⁽³⁾	274	37,020
Park Inn	31	2,573
WoodSpring	298	35,869
MainStay	157	11,486
Suburban	121	9,995
Everhome	30	3,451
Econo Lodge	631	35,947
Rodeway	427	23,479
Other ⁽⁴⁾	58	6,546
⁽¹⁾ Includes Radisson, Radisson Blu, Radisson Individuals, Radisson RED and Park Plaza brands.
⁽²⁾ Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.
⁽³⁾Includes Clarion family of brand extensions including Clarion and Clarion Pointe.
⁽⁴⁾Includes other brands under Master Franchise Agreements.

U.S. System by Chain Scale	June 30, 2026
	Hotels	Rooms
Upscale & Above	374	60,259
Midscale & Upper Midscale	4,223	322,296
Extended Stay	598	60,121
Economy	1,000	56,550

Global System by Region	June 30, 2026
	Hotels	Rooms
U.S.	6,195	499,226
Total International	1,413	161,863
Americas (excluding U.S.)	545	56,036
Europe & Middle East	484	70,998
Asia-Pacific	384	34,829

Total System	7,608	661,089

					Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)

ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(dollar amounts in thousands)		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2026	2025	2026	2025

Total selling, general and administrative expenses		$ 96,153	$ 89,298	$ 174,199	$ 163,508
	Mark to market adjustments on non-qualified retirement plan investments	(6,023)	(3,973)	(4,972)	(3,250)
	Non-recurring operational restructuring charges and executive severance	(2,057)	(372)	(2,538)	(4,302)
	Share-based compensation	(4,555)	(6,236)	(9,367)	(12,126)
	Amortization of cloud computing arrangements	(297)	—	(576)	—
	Global ERP system implementation and related costs	(59)	(1,076)	(359)	(2,066)
Adjusted selling, general and administrative expenses		$ 83,162	$ 77,641	$ 156,387	$ 141,764

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“ADJUSTED EBITDA”)
(dollar amounts in thousands)		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2026	2025	2026	2025

Net income		$ 64,338	$ 81,734	$ 84,642	$ 126,268
	Income tax expense	21,544	26,877	31,550	42,105
	Interest expense	24,259	22,736	48,221	43,978
	Interest income	(1,095)	(1,456)	(2,306)	(3,015)
	Amortization of cloud computing arrangements	297	—	576	—
	Depreciation and amortization	16,813	13,424	33,634	27,172
	Other gains, net	(6,124)	(5,374)	(5,403)	(4,938)
	Equity in net loss of affiliates	1,216	80	7,468	131
	Share-based compensation	4,555	6,236	9,367	12,126
	Mark to market adjustments on non-qualified retirement plan investments	6,023	3,973	4,972	3,250
	Franchise agreement acquisition costs amortization and charges	6,564	5,941	12,489	11,327
	Revenue for reimbursable costs from franchised and managed properties	(163,324)	(167,349)	(287,228)	(290,773)
	Reimbursable expenses from franchised and managed properties	197,665	176,358	359,452	320,169
	Global ERP system implementation and related costs	59	1,076	359	2,066
	Business combination, diligence and transition costs	536	347	772	446
	Non-recurring operational restructuring charges and executive severance	2,057	372	2,538	4,302
Adjusted EBITDA		$ 175,383	$ 164,975	$ 301,103	$ 294,614

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (“EPS”)
(dollar amounts in thousands, except per share amounts)		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2026	2025	2026	2025

Net income		$ 64,338	$ 81,734	$ 84,642	$ 126,268
	Revenue for reimbursable costs from franchised and managed properties	(163,324)	(167,349)	(287,228)	(290,773)
	Reimbursable expenses from franchised and managed properties	197,665	176,358	359,452	320,169
	Business combination, diligence and transition costs	536	347	772	446
	Non-recurring operational restructuring charges and executive severance	2,057	372	2,538	4,302
	Global ERP system implementation and related costs	59	1,076	359	2,066
	Income tax expense on adjustments	(9,278)	(2,756)	(18,883)	(9,053)
Adjusted Net Income		$ 92,053	$ 89,782	$ 141,652	$ 153,425

Diluted EPS		$ 1.41	$ 1.75	$ 1.84	$ 2.68
Adjusted Diluted EPS		$ 2.02	$ 1.92	$ 3.09	$ 3.25

		Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
OUTLOOK
(UNAUDITED)


Guidance represents the company’s range of estimated outcomes for the full year ended December 31, 2026

ADJUSTED EBITDA
(in thousands)		Full Year	Full Year
		Lower Range	Upper Range

Net income		$ 230,000	$ 241,000
	Income tax expense	79,900	83,700
	Interest expense	96,200	96,400
	Interest income	(4,000)	(4,000)
	Amortization of cloud computing arrangements	1,200	1,200
	Depreciation and amortization	68,200	68,200
	Other gains, net	(5,300)	(5,300)
	Equity in net loss of affiliates	10,600	10,600
	Share-based compensation	17,500	17,500
	Mark to market adjustments on non-qualified retirement plan investments	5,000	5,000
	Franchise agreement acquisition costs amortization and charges	26,600	26,600
	Revenue for reimbursable costs from franchised and managed properties	(595,700)	(595,700)
	Reimbursable expenses from franchised and managed properties	695,600	695,600
	Global ERP system implementation and related costs	1,700	1,700
	Business combination, diligence and transition costs	1,500	1,500
	Non-recurring operational restructuring charges and executive severance	6,000	6,000
Adjusted EBITDA		$ 635,000	$ 650,000

ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE (“EPS”)
(in thousands, except per share amounts)		Full Year	Full Year
		Lower Range	Upper Range

Net income		$ 230,000	$ 241,000
	Revenue for reimbursable costs from franchised and managed properties	(595,700)	(595,700)
	Reimbursable expenses from franchised and managed properties	695,600	695,600
	Business combination, diligence and transition costs	1,500	1,500
	Non-recurring operational restructuring charges and executive severance	6,000	6,000
	Global ERP system implementation and related costs	1,700	1,700
	Income tax expense on adjustments	(27,100)	(27,100)
Adjusted net income		$ 312,000	$ 323,000

Diluted EPS		$ 5.07	$ 5.31
Adjusted Diluted EPS		$ 6.86	$ 7.10

View original content to download multimedia:https://www.prnewswire.com/news-releases/choice-hotels-international-reports-second-quarter-2026-results-302843172.html

SOURCE Choice Hotels International, Inc.

August 5, 2026 6:38 am

Kennametal Reports Fiscal 2026 and Fourth Quarter Results

PR Newswire

Q4 sales of $737 million increased 43 percent and 42 percent on a reported and organic basis, respectively
Q4 earnings per diluted share (EPS) of $2.91 and record adjusted EPS of $2.96
FY26 EPS of $4.42 and record adjusted EPS of $4.57
Company provides FY27 Q1 and annual Outlook

PITTSBURGH, Aug. 5, 2026 /PRNewswire/ — Kennametal Inc. (NYSE: KMT) (the “Company”) today announced fourth quarter and fiscal 2026 results.

“Our team delivered strong fiscal 2026 results, reflecting volume from improving market conditions and our strategic growth initiatives,” said Sanjay Chowbey, President and CEO. “We achieved record adjusted EPS this quarter through decisive pricing actions in an unprecedented tungsten environment, volume growth and cost improvement efforts.”

He continued: “Looking ahead, we are encouraged by the volume trends we have seen across several end markets and expect those improving conditions, along with our strategic initiatives, to continue to drive sales growth throughout fiscal 2027. Recent wins in the Aerospace & Defense, Energy and Earthworks end markets showcase the ability of our team to take share in any market condition. I am confident that our commitment to above market growth and continuous improvement will unlock long-term value for shareholders.”

Fiscal 2026 Fourth Quarter Key Developments

Sales of $737 million increased 43 percent from $516 million in the prior year quarter, reflecting organic sales growth of 42 percent, a favorable foreign currency exchange effect of 1 percent and a favorable business days effect of 1 percent, partially offset by a divestiture effect of 1 percent.

Operating income was $303 million, or 41.1 percent margin, compared with $31 million, or 6.1 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $252 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $5 million. These factors were partially offset by higher compensation costs and tariffs and general inflation. Adjusted operating income was $306 million, or 41.5 percent margin, compared with $38 million, or 7.4 percent margin, in the prior year quarter.

Fiscal 2026 Key Developments

Sales of $2,357 million increased 20 percent from $1,967 million in the prior year, reflecting organic sales growth of 19 percent and a favorable foreign currency exchange effect of 2 percent, partially offset by a divestiture effect of 1 percent.

Operating income was $473 million, or 20.1 percent margin, compared with $143 million, or 7.3 percent margin, in the prior year. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to raw material costs of approximately $316 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $27 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, and fewer insurance proceeds received within Infrastructure in the current year. Adjusted operating income was $484 million, or 20.5 percent margin, compared with $158 million, or 8.0 percent margin, in the prior year.

Net cash flow from operating activities in fiscal 2026 was negative $4 million compared to positive $208 million in the prior year. The decline was driven primarily by working capital requirements, including increased inventory values resulting from unprecedented tungsten price increases, as well as advance payments made to certain suppliers to secure raw material supply. These working capital requirements were partially offset by higher net income during the year. Free operating cash flow (FOCF) was negative $79 million compared to positive $121 million in the prior year. The decrease in FOCF was driven primarily by the aforementioned working capital requirements, partially offset by higher net income and lower capital expenditures compared to the prior year.

Outlook

The Company’s expectations for the first quarter of fiscal 2027 and the full year are as follows:

Quarterly Outlook:

Sales expected to be $745 – $775 million; foreign exchange anticipated to be neutral compared to the first quarter of fiscal 2026
Adjusted EPS is expected to be $2.50 – $2.80

Annual Outlook:

Sales expected to be $3.33 – $3.45 billion; foreign exchange anticipated to be neutral compared to the fiscal 2026
Adjusted EPS is expected to be $4.15 – $5.15
Free operating cash flow of approximately 20 percent of adjusted net income
Capital spending expected to be approximately $85 million

The Company will provide more details regarding its fiscal 2027 assumptions during its quarterly earnings conference call.

Fiscal 2026 Fourth Quarter Segment Results

Metal Cutting sales of $398 million increased 24 percent from $321 million in the prior year quarter, reflecting organic sales growth of 22 percent, a favorable foreign currency exchange effect of 1 percent and a favorable business days effect of 1 percent. Operating income was $106 million, or 26.7 percent margin, compared to $21 million, or 6.6 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $54 million, non-raw material-related pricing and tariff surcharges, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $4 million. These factors were partially offset by higher compensation costs and general inflation in the current quarter. Adjusted operating income was $108 million, or 27.3 percent margin, compared to $25 million, or 7.9 percent margin, in the prior year quarter.

Infrastructure sales of $339 million increased 73 percent from $196 million in the prior year quarter, reflecting organic sales growth of 74 percent, a favorable currency exchange effect of 1 percent and a favorable business days effect of 1 percent, partially offset by a divestiture effect of 3 percent. Operating income was $197 million, or 58.3 percent margin, compared to $11 million, or 5.5 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $198 million, partially offset by lower sales and production volumes, higher compensation costs and general inflation in the current quarter. Adjusted operating income was $198 million, or 58.4 percent margin, compared to $13 million, or 6.8 percent margin, in the prior year quarter.

Dividend Declared

Kennametal also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable on August 25, 2026 to shareholders of record as of the close of business on August 11, 2026.

Earnings Call and Webcast

The Company will discuss its fiscal 2026 fourth quarter and full year results in a live webcast at 9:30 a.m. Eastern Time, Wednesday, August 5, 2026. The conference call will be broadcast via real-time audio on Kennametal’s investor relations website at https://investors.kennametal.com/ – click “Event” (located in the blue Quarterly Earnings block).

This earnings release contains non-GAAP financial measures. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the tables that follow.

Certain statements in this release may be forward-looking in nature, or “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal’s outlook for sales, adjusted operating income, adjusted EPS, FOCF and capital expenditures for the first quarter and full year of fiscal 2027 and our expectations regarding future growth and financial performance are forward-looking statements. Any forward-looking statements are based on current knowledge, expectations and estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: uncertainties related to changes in macroeconomic and/or global conditions, including as a result of increased inflation, tariffs, and Russia’s invasion of Ukraine and the resulting sanctions on Russia; the conflicts in the Middle East; other economic recession; our ability to achieve all anticipated benefits of restructuring initiatives; Commercial Excellence growth initiatives, Operational Excellence initiatives, our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political instability, including the conflicts in Ukraine and the Middle East; changes in the regulatory environment in which we operate, including environmental, health and safety regulations; potential for future goodwill and other intangible asset impairment charges; our ability to protect and defend our intellectual property; continuity of information technology infrastructure; competition; our ability to retain our management and employees; demands on management resources; availability and cost of the raw materials we use to manufacture our products, including tungsten; product liability claims; integrating acquisitions and achieving the expected savings and synergies; global or regional catastrophic events; demand for and market acceptance of our products; business divestitures; energy costs; commodity prices; labor relations; and implementation of environmental remediation matters. Many of these risks and other risks are more fully described in Kennametal’s latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

About Kennametal

With over 85 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace and defense, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 8,100 employees are helping customers in nearly 100 countries stay competitive. Kennametal generated $2.4 billion in revenues in fiscal 2026. Learn more at www.kennametal.com. Follow @Kennametal: Instagram, Facebook, LinkedIn and YouTube.

FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
	Three Months Ended June 30,		Twelve Months Ended June 30,
(in thousands, except per share amounts)	2026	2025	2026	2025
Sales	$ 736,614	$ 516,448	$ 2,356,698	$ 1,966,845
Cost of goods sold	303,055	370,783	1,386,742	1,368,775
Gross profit	433,559	145,665	969,956	598,070
Operating expense	125,616	105,860	478,993	430,835
Restructuring and other charges, net	2,677	4,278	8,909	11,813
Loss on divestiture	—	1,512	—	1,512
Amortization of intangibles	2,384	2,646	9,522	10,787
Operating income	302,882	31,369	472,532	143,123
Interest expense	10,023	6,225	28,561	24,930
Other income, net	(6,393)	(5,223)	(17,358)	(13,811)
Income before income taxes	299,252	30,367	461,329	132,004
Provision for income taxes	69,790	7,244	110,915	33,296
Net income	229,462	23,123	350,414	98,708
Less: Net income attributable to noncontrolling interests	2,485	1,531	8,025	5,583
Net income attributable to Kennametal	$ 226,977	$ 21,592	$ 342,389	$ 93,125
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
Basic earnings per share	$ 2.98	$ 0.28	$ 4.49	$ 1.21
Diluted earnings per share	$ 2.91	$ 0.28	$ 4.42	$ 1.20
Dividends per share	$ 0.20	$ 0.20	$ 0.80	$ 0.80
Basic weighted average shares outstanding	76,274	76,209	76,215	77,264
Diluted weighted average shares outstanding	77,929	76,934	77,424	77,894

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)	June 30, 2026	June 30, 2025
ASSETS
Cash and cash equivalents	$ 95,791	$ 140,540
Accounts receivable, net	408,438	295,401
Inventories	1,108,450	538,237
Other current assets	159,092	65,092
Total current assets	1,771,771	1,039,270
Property, plant and equipment, net	843,584	919,914
Goodwill and other intangible assets, net	335,099	349,935
Other assets	219,151	236,293
Total assets	$ 3,169,605	$ 2,545,412
LIABILITIES
Revolving and other lines of credit and notes payable	$ 32,170	$ 977
Accounts payable	369,841	195,929
Other current liabilities	274,697	225,423
Total current liabilities	676,708	422,329
Long-term debt	685,280	596,788
Other liabilities	194,180	201,647
Total liabilities	1,556,168	1,220,764
KENNAMETAL SHAREHOLDERS’ EQUITY	1,569,844	1,283,979
NONCONTROLLING INTERESTS	43,593	40,669
Total liabilities and equity	$ 3,169,605	$ 2,545,412

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Year ended June 30 (in thousands)	2026	2025
OPERATING ACTIVITIES
Net income	$ 350,414	$ 98,708
Adjustments to reconcile to cash from operations:
Depreciation	133,633	125,709
Amortization	9,522	10,787
Stock-based compensation expense	34,851	22,115
Restructuring and other charges, net	8,909	11,813
Deferred income taxes	44,686	(13,084)
Gain on insurance recoveries	(3,400)	(12,100)
Loss on divestiture	—	1,512
Debt refinancing charge	1,261	—
Other	10,648	2,048
Changes in certain assets and liabilities:
Accounts receivable	(116,866)	9,068
Inventories	(593,396)	(17,396)
Other current assets	(102,093)	2,002
Accounts payable and accrued liabilities	226,097	(6,157)
Accrued income taxes	11,006	(12,267)
Accrued pension and postretirement benefits	(7,051)	(7,393)
Other	(12,229)	(7,041)
Net cash flow (used for) provided by operating activities	(4,008)	208,324
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(76,905)	(88,971)
Disposals of property, plant and equipment	1,775	1,841
Proceeds from divestiture	—	18,689
Proceeds from insurance recoveries	3,400	11,793
Other	435	(5,177)
Net cash flow used for investing activities	(71,295)	(61,825)
FINANCING ACTIVITIES
Net increase (decrease) in notes payable	11,293	(459)
Net increase in revolving and other lines of credit	20,000	—
Term debt borrowings	296,994	—
Term debt repayments	(209,387)	—
Purchase of capital stock	(10,106)	(60,120)
The effect of employee benefit and stock plans and dividend reinvestment	(8,086)	(7,059)
Cash dividends paid to Shareholders	(60,847)	(61,852)
Other	(8,227)	(4,429)
Net cash flow provided by (used for) financing activities	31,634	(133,919)
Effect of exchange rate changes on cash and cash equivalents	(1,080)	(11)
CASH AND CASH EQUIVALENTS
Net (decrease) increase in cash and cash equivalents	(44,749)	12,569
Cash and cash equivalents, beginning of year	140,540	127,971
Cash and cash equivalents, end of year	$ 95,791	$ 140,540

SEGMENT DATA (UNAUDITED)	Three Months Ended June 30,		Twelve Months Ended June 30,
(in thousands)	2026	2025	2026	2025
Outside Sales:
Metal Cutting	$ 397,827	$ 320,652	$ 1,397,418	$ 1,219,686
Infrastructure	338,787	195,796	959,280	747,159
Total sales	$ 736,614	$ 516,448	$ 2,356,698	$ 1,966,845
Sales By Geographic Region:
Americas	$ 400,814	$ 254,263	$ 1,211,850	$ 967,608
EMEA	203,580	158,402	687,131	601,087
Asia Pacific	132,220	103,783	457,717	398,150
Total sales	$ 736,614	$ 516,448	$ 2,356,698	$ 1,966,845
Operating Income:
Metal Cutting	$ 106,159	$ 21,067	$ 195,605	$ 86,375
Infrastructure	197,381	10,696	279,893	58,465
Corporate ⁽¹⁾	(658)	(394)	(2,966)	(1,717)
Total operating income	$ 302,882	$ 31,369	$ 472,532	$ 143,123

⁽¹⁾ Represents unallocated corporate expenses.

NON-GAAP RECONCILIATIONS (UNAUDITED)

In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables include, where appropriate, a reconciliation of adjusted results including: operating income and margin; ETR; net income attributable to Kennametal; diluted EPS; Metal Cutting operating income and margin; Infrastructure operating income and margin; FOCF; and consolidated and segment organic sales growth (all of which are non-GAAP financial measures), to the most directly comparable GAAP financial measures. Adjustments for the three months ended June 30, 2026 include restructuring and related charges, loss on early extinguishment of debt and differences in projected annual tax rates. Adjustments for the three months ended June 30, 2025 include restructuring and related charges, loss on divestiture and differences in projected annual tax rates. Adjustments for the twelve months ended June 30, 2026 include restructuring and related charges and loss on early extinguishment of debt. Adjustments for the twelve months ended June 30, 2025 include restructuring and related charges and loss on divestiture. For those adjustments that are presented ‘net of tax’, the tax effect of the adjustment can be derived by calculating the difference between the pre-tax and the post-tax adjustments presented. The tax effect on adjustments is calculated by preparing an overall tax calculation including the adjustments and then a tax calculation excluding the adjustments. The difference between these calculations results in the tax impact of the adjustments.

Management believes that presentation of these non-GAAP financial measures provides useful information about the results of operations of the Company for the current and past periods. Management believes that investors should have available the same information that management uses to assess operating performance, determine compensation and assess the capital structure of the Company. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures used by management may not be comparable to non-GAAP financial measures used by other companies. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the disclosures below.

Reconciliations to the most directly comparable GAAP financial measures for the following forward-looking non-GAAP financial measures for the first quarter and full fiscal year of 2027 have not been provided, including but not limited to: FOCF, adjusted operating income, adjusted net income, and adjusted EPS. The most comparable GAAP financial measures are net cash flow from operating activities, operating income, and net income attributable to Kennametal, respectively. Because the non-GAAP financial measures on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors – including, but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, gains or losses on the potential sale of businesses or other assets, restructuring costs, asset impairment charges, gains or losses from early extinguishment of debt, the tax impact of the items above and the impact of tax law changes or other tax matters – reconciliations to the most directly comparable forward-looking GAAP financial measures are not available without unreasonable effort.

THREE MONTHS ENDED JUNE 30, 2026 (UNAUDITED)
(in thousands, except percents)	Sales	Operating income	ETR	Net income ⁽²⁾	Diluted EPS
Reported results	$ 736,614	$ 302,882	23.3 %	$ 226,977	$ 2.91
Reported margins		41.1 %
Restructuring and related charges	—	2,778	17.2	2,301	0.03
Loss on early extinguishment of debt	—	—	24.5	1,672	0.02
Differences in projected annual tax rates	—	—	(41.6)	(235)	—
Adjusted results	$ 736,614	$ 305,660	23.4 %	$ 230,715	$ 2.96
Adjusted margins		41.5 %

⁽²⁾ Attributable to Kennametal.

THREE MONTHS ENDED JUNE 30, 2026 (UNAUDITED)
	Metal Cutting		Infrastructure
(in thousands, except percents)	Sales	Operating income	Sales	Operating income
Reported results	$ 397,827	$ 106,159	$ 338,787	$ 197,381
Reported operating margin		26.7 %		58.3 %
Restructuring and related charges	—	2,290	—	488
Adjusted results	$ 397,827	$ 108,449	$ 338,787	$ 197,869
Adjusted operating margin		27.3 %		58.4 %

THREE MONTHS ENDED JUNE 30, 2025 (UNAUDITED)
(in thousands, except percents)	Sales	Operating income	ETR	Net income ⁽²⁾	Diluted EPS
Reported results	$ 516,448	$ 31,369	23.9 %	$ 21,592	$ 0.28
Reported margins		6.1 %
Restructuring and related charges	—	5,366	23.6	4,100	0.05
Loss on divestiture	—	1,512	24.5	1,142	0.01
Differences in projected annual tax rates	—	—	(46.3)	(691)	—
Adjusted results	$ 516,448	$ 38,247	25.7 %	$ 26,143	$ 0.34
Adjusted margins		7.4 %

⁽²⁾Attributable to Kennametal.

THREE MONTHS ENDED JUNE 30, 2025 (UNAUDITED)
	Metal Cutting		Infrastructure
(in thousands, except percents)	Sales	Operating income	Sales	Operating income
Reported results	$ 320,652	$ 21,067	$ 195,796	$ 10,696
Reported operating margin		6.6 %		5.5 %
Restructuring and related charges	—	4,266	—	1,101
Loss on divestiture	—	—	—	1,512
Adjusted results	$ 320,652	$ 25,333	$ 195,796	$ 13,309
Adjusted operating margin		7.9 %		6.8 %

TWELVE MONTHS ENDED JUNE 30, 2026 (UNAUDITED)
(in thousands, except percents)	Sales	Operating income	Net income ⁽²⁾	Diluted EPS
Reported results	$ 2,356,698	$ 472,532	$ 342,389	$ 4.42
Reported operating margin		20.1 %
Restructuring and related charges	—	11,413	9,400	0.13
Loss on early extinguishment of debt	—	—	1,671	0.02
Adjusted results	$ 2,356,698	$ 483,945	$ 353,460	$ 4.57
Adjusted operating margin		20.5 %

⁽²⁾Attributable to Kennametal.

TWELVE MONTHS ENDED JUNE 30, 2025 (UNAUDITED)
(in thousands, except percents)	Sales	Operating income	Net income ⁽²⁾	Diluted EPS
Reported results	$ 1,966,845	$ 143,123	$ 93,125	$ 1.20
Reported operating margin		7.3 %
Restructuring and related charges	—	13,252	10,475	0.13
Loss on divestiture	—	1,512	1,142	0.01
Adjusted results	$ 1,966,845	$ 157,887	$ 104,742	$ 1.34
Adjusted operating margin		8.0 %

⁽²⁾Attributable to Kennametal.

Free Operating Cash Flow (FOCF)

FOCF is a non-GAAP financial measure and is defined by the Company as cash provided by operations (which is the most directly comparable GAAP financial measure) less capital expenditures plus proceeds from disposals of fixed assets. Management considers FOCF to be an important indicator of the Company’s cash generating capability because it better represents cash generated from operations that can be used for dividends, debt repayment, strategic initiatives (such as acquisitions) and other investing and financing activities.

FREE OPERATING CASH FLOW (UNAUDITED)	Twelve Months Ended
	June 30,
(in thousands)	2026	2025
Net cash flow from operating activities	$ (4,008)	$ 208,324
Purchases of property, plant and equipment	(76,905)	(88,971)
Proceeds from disposals of property, plant and equipment	1,775	1,841
Free operating cash flow	$ (79,138)	$ 121,194

Organic Sales Growth

Organic sales growth is a non-GAAP financial measure of sales growth (which is the most directly comparable GAAP measure) excluding the impacts of acquisitions, divestitures, business days and foreign currency exchange from year-over-year comparisons. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. Management reports organic sales growth at the consolidated and segment levels.

ORGANIC SALES GROWTH (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2026	Metal Cutting	Infrastructure	Total
Organic sales growth	22 %	74 %	42 %
Foreign currency exchange effect⁽³⁾	1	1	1
Business days effect⁽⁴⁾	1	1	1
Divestiture effect⁽⁵⁾	—	(3)	(1)
Sales growth	24 %	73 %	43 %

TWELVE MONTHS ENDED JUNE 30, 2026		Total
Organic sales growth		19 %
Foreign currency exchange effect⁽³⁾		2
Business days effect⁽⁴⁾		—
Divestiture effect⁽⁵⁾		(1)
Sales growth		20 %

⁽³⁾ Foreign currency exchange effect is calculated by dividing the difference between current period sales and current period sales at prior period foreign exchange rates by prior period sales.

⁽⁴⁾ Business days effect is calculated by dividing the year-over-year change in weighted average working days (based on mix of sales by country) by prior period weighted average working days.

⁽⁵⁾ Divestiture effect is calculated by dividing prior period sales attributable to divested businesses by prior period sales.

View original content:https://www.prnewswire.com/news-releases/kennametal-reports-fiscal-2026-and-fourth-quarter-results-302843158.html

SOURCE Kennametal Inc.

August 5, 2026 6:37 am

CVS HEALTH CORPORATION REPORTS STRONG SECOND QUARTER 2026 RESULTS AND RAISES FULL-YEAR 2026 GUIDANCE

PR Newswire

Second quarter total revenues increased to $106.1 billion, up 7.3% year-over-year
Second quarter GAAP diluted EPS of $2.31 and Adjusted EPS of $2.58
Generated year-to-date cash flow from operations of $10.6 billion
Raising full-year 2026 guidance:
- GAAP diluted EPS guidance range to $6.84 to $7.04 from $6.24 to $6.44
- Adjusted EPS guidance range to $7.90 to $8.10 from $7.30 to $7.50
- Cash flow from operations guidance to at least $11.5 billion from at least $9.5 billion

WOONSOCKET, R.I., Aug. 5, 2026 /PRNewswire/ — CVS Health Corporation (NYSE: CVS) today announced operating results for the three months ended June 30, 2026.

“Our CVS Health colleagues build trust every day in communities across our country by making healthcare easier for millions of customers, patients and members. As our businesses work together to deliver a technology-powered care engagement experience, we continue to deliver strong performance. We uniquely enable what our customers want the most: simple, connected and convenient access to affordable, quality healthcare, where, when, and how they want it.”

– David Joyner, CVS Health Chairman and CEO


	Three Months Ended June 30,		Year Ending December 31,
In *billions,* *except* *per* *share* *amounts*	2026	2025	2026 Projected
Total revenues	$ 106.1	$ 98.9	At least $414.0
Diluted earnings per share	$ 2.31	$ 0.80	$6.84-$7.04
Adjusted EPS ⁽²⁾	$ 2.58	$ 1.81	$7.90-$8.10

Second quarter GAAP diluted EPS of $2.31 increased from $0.80 in the prior year. Adjusted EPS of $2.58 increased from $1.81 in the prior year, primarily due to improved adjusted operating income in the Health Care Benefits segment, reflecting continued execution on the Health Care Benefits segment margin recovery plan.

The Company is increasing its full-year 2026 GAAP diluted EPS, Adjusted EPS and cash flow from operations guidance to reflect increases in the Health Care Benefits and Pharmacy & Consumer Wellness segments, while maintaining a cautious view for the remainder of the year in light of continued elevated cost trends and the potential for macro headwinds.

Consolidated second quarter results

	Three Months Ended June 30,			Six Months Ended June 30,
*In millions, except per share amounts*	2026	2025	Change	2026	2025	Change
Total revenues	$ 106,096	$ 98,915	$ 7,181	$ 206,522	$ 193,503	$ 13,019
Operating income	4,703	2,381	2,322	9,383	5,755	3,628
Adjusted operating income ⁽¹⁾	5,157	3,808	1,349	10,307	8,387	1,920
Net income	2,995	1,013	1,982	5,952	2,795	3,157
Diluted earnings per share	$ 2.31	$ 0.80	$ 1.51	$ 4.61	$ 2.21	$ 2.40
Adjusted EPS ⁽²⁾	$ 2.58	$ 1.81	$ 0.77	$ 5.16	$ 4.06	$ 1.10

For the three months ended June 30, 2026 compared to the prior year:

Total revenues increased 7.3% driven by revenue growth across all operating segments.
Operating income increased 97.5% primarily due to the increase in adjusted operating income described below and the absence of $833 million in legacy litigation charges recorded in the prior year.
Adjusted operating income increased 35.4% driven by increases across all operating segments. See pages 3 through 5 for additional discussion of the adjusted operating income performance of the Company’s segments.

Operational Updates

CVS Health launched a comprehensive approach to GLP-1 support across its CVS Pharmacy^®and MinuteClinic^® locations. New offerings include expanded pharmacy support designed to help patients access these treatments and stay on them, and a new $29 MinuteClinic virtual visit that connects eligible adults with licensed clinicians who can evaluate and, where clinically appropriate, prescribe GLP-1 therapy. In addition, CVS Pharmacy participates in the Centers for Medicare & Medicaid Services Medicare GLP-1 Bridge program, which runs through December 31, 2027. Eligible Medicare beneficiaries can access certain GLP-1 medications for $50 per month, offering more predictable and affordable pricing for patients who qualify.
CVS Caremark updated its most common commercial formularies, expanding GLP-1 options for members, building on its industry-leading efforts to help patients get FDA-approved weight management medications at an affordable cost.
CVS Health is deploying agentic AI to simplify and streamline call center interactions for members and providers engaging with Aetna^®and CVS Caremark^® businesses on a secure call center platform.
Aetna launched its second generation Aetna Claims Assist Manager (“CAM”), an AI-powered agentic claims advisor platform designed to streamline claims processing and improve payment accuracy. CAM reduces processing time by over 20% for complex claims that require manual review, helping providers get paid faster and more consistently.

Health Care Benefits segment

The Health Care Benefits segment offers a full range of insured and self-insured (“ASC”) medical, pharmacy, dental and behavioral health products and services. The segment results for the three and six months ended June 30, 2026 and 2025 were as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
In *millions, except percentages*	2026	2025	Change	2026	2025	Change
Total revenues	$ 37,538	$ 36,258	$ 1,280	$ 73,509	$ 71,068	$ 2,441
Adjusted operating income ⁽¹⁾	2,426	1,308	1,118	5,467	3,301	2,166
Medical benefit ratio (“MBR”) ⁽³⁾	87.4 %	89.9 %	(2.5) %	86.0 %	88.6 %	(2.6) %
Medical membership ⁽⁴⁾				26.0	26.7	(0.7)

Total revenues increased 3.5% for the three months ended June 30, 2026 compared to the prior year primarily driven by an increase in the Government business, partially offset by a decline as a result of the Company’s exit of the individual exchange business in 2026.
Adjusted operating income increased 85.5% for the three months ended June 30, 2026 compared to the prior year primarily driven by improved underlying performance in the Government business and the absence of a $471 million premium deficiency reserve recorded within the Group Medicare Advantage product line in the prior year.
The MBR decreased to 87.4% in the three months ended June 30, 2026 compared to 89.9% in the prior year primarily driven by improved underlying performance in the Government business and the absence of the premium deficiency reserve recorded in the prior year.
Medical membership as of June 30, 2026 of 26.0 million remained consistent compared with March 31, 2026.
Prior years’ health care costs payable estimates developed favorably by $1.2 billion during the six months ended June 30, 2026.
Days claims payable were 41.7 days as of June 30, 2026, a decrease of 1.2 days compared to March 31, 2026.

Health Services segment

The Health Services segment provides a full range of pharmacy benefit management solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. The segment results for the three and six months ended June 30, 2026 and 2025 were as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
In *millions*	2026	2025	Change	2026	2025	Change
Total revenues	$ 51,795	$ 46,453	$ 5,342	$ 100,032	$ 89,915	$ 10,117
Adjusted operating income ⁽¹⁾	1,733	1,575	158	3,222	3,178	44
Pharmacy claims processed ^{(5) (6)}	473.0	469.0	4.0	937.7	933.2	4.5

Total revenues increased 11.5% for the three months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Adjusted operating income increased 10.0% for the three months ended June 30, 2026 compared to the prior year primarily driven by improved purchasing economics, pharmacy drug mix and modest improvement in the Company’s health care delivery business. These increases were partially offset by continued pharmacy client price improvements.
Pharmacy claims processed remained consistent on a 30-day equivalent basis for the three months ended June 30, 2026 compared to the prior year.

Pharmacy & Consumer Wellness segment

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. The segment results for the three and six months ended June 30, 2026 and 2025 were as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
In *millions*	2026	2025	Change	2026	2025	Change
Total revenues	$ 33,816	$ 33,581	$ 235	$ 65,805	$ 65,493	$ 312
Adjusted operating income ⁽¹⁾	1,475	1,338	137	2,672	2,651	21
Prescriptions filled ^{(5) (6)}	457.0	438.1	18.9	908.2	873.6	34.6

Total revenues increased slightly for the three months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Company’s Rite Aid asset acquisitions which were completed during the third quarter of 2025, and brand inflation. These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Adjusted operating income increased 10.2% for the three months ended June 30, 2026 compared to the prior year primarily driven by core pharmacy strength and contributions from the Company’s Rite Aid asset acquisitions. These increases were partially offset by continued business investments and the impact of consumer dynamics.
Prescriptions filled increased 4.3% on a 30-day equivalent basis for the three months ended June 30, 2026 compared to the prior year primarily driven by incremental volume resulting from the Company’s Rite Aid prescription file acquisitions and increased utilization, partially offset by the absence of long-term care pharmacy prescription volume following the deconsolidation of Omnicare, LLC in September 2025.

About CVS Health

CVS Health is a leading health solutions company simplifying health care one person, one family and one community at a time. As of June 30, 2026, the Company had approximately 9,000 retail pharmacy locations, more than 1,000 walk-in and primary care medical clinics and a leading pharmacy benefits manager with approximately 87 million plan members. The Company also serves an estimated 37 million people through a broad range of health insurance products and related services. The Company’s integrated model uses personalized, technology driven services to connect people to simply better health, increasing access to quality care, delivering better outcomes, and lowering overall costs.

Teleconference and Webcast

The Company will be holding a conference call today for investors at 8:00 a.m. (Eastern Time) to discuss its second quarter results. An audio webcast of the call will be broadcast simultaneously for all interested parties through the Investor Relations section of the CVS Health website at http://investors.cvshealth.com. This webcast will be archived and available on the website for a one-year period following the conference call.

Non-GAAP Financial Information

The Company presents both GAAP and non-GAAP financial measures in this press release to assist in the comparison of the Company’s past financial performance with its current financial performance. See “Non-GAAP Financial Information” beginning on page 10 and endnotes beginning on page 20 for explanations of non-GAAP financial measures presented in this press release. See pages 12 through 14 and page 19 for reconciliations of each non-GAAP financial measure used in this release to the most directly comparable GAAP financial measure.

Cautionary Statement Concerning Forward-looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. Statements in this press release that are forward-looking include, but are not limited to, the full-year 2026 guidance information, Mr. Joyner’s quotation and the information included in the reconciliations and endnotes. By their nature, all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may differ materially from those contemplated by the forward-looking statements due to the risks and uncertainties described in our Securities and Exchange Commission (“SEC”) filings, including those set forth in the Risk Factors section and under the heading “Cautionary Statement Concerning Forward-Looking Statements” in our most recently filed Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2026 and June 30, 2026 and our Current Reports on Form 8-K.

You are cautioned not to place undue reliance on CVS Health’s forward-looking statements. CVS Health’s forward-looking statements are and will be based upon management’s then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. CVS Health does not assume any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.

– Tables Follow –

CVS HEALTH CORPORATION Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
In *millions,* *except* *per* *share* *amounts*	2026	2025	2026	2025
Revenues:
Products	$ 66,219	$ 60,607	$ 128,445	$ 118,276
Premiums	35,117	34,195	68,908	67,015
Services	4,119	3,626	7,954	7,205
Net investment income	641	487	1,215	1,007
Total revenues	106,096	98,915	206,522	193,503
Operating costs:
Cost of products sold	58,862	54,005	114,306	105,062
Health care costs	31,485	31,317	60,843	60,452
Operating expenses	11,046	11,212	21,990	22,234
Total operating costs	101,393	96,534	197,139	187,748
Operating income	4,703	2,381	9,383	5,755
Interest expense	(757)	(763)	(1,531)	(1,548)
Other income	31	29	63	57
Income before income tax provision	3,977	1,647	7,915	4,264
Income tax provision	982	634	1,963	1,469
Net income	2,995	1,013	5,952	2,795
Net (income) loss attributable to noncontrolling interests	(16)	8	(30)	5
Net income attributable to CVS Health	$ 2,979	$ 1,021	$ 5,922	$ 2,800

Net income per share attributable to CVS Health:
Basic	$ 2.33	$ 0.81	$ 4.64	$ 2.22
Diluted	$ 2.31	$ 0.80	$ 4.61	$ 2.21
Weighted average shares outstanding:
Basic	1,279	1,266	1,276	1,264
Diluted	1,287	1,270	1,283	1,267

CVS HEALTH CORPORATION Condensed Consolidated Balance Sheets (Unaudited)

In *millions*	June 30, 2026	December 31, 2025
Assets:
Cash and cash equivalents	$ 11,329	$ 8,453
Investments	2,629	2,145
Accounts receivable, net	40,309	39,779
Inventories	17,622	19,246
Other current assets	3,457	5,091
Total current assets	75,346	74,714
Long-term investments	33,247	32,669
Property and equipment, net	13,168	13,083
Operating lease right-of-use assets	14,451	14,973
Goodwill	85,478	85,478
Intangible assets, net	24,644	25,508
Other assets	7,434	7,113
Total assets	$ 253,768	$ 253,538

Liabilities:
Accounts payable	$ 17,167	$ 17,641
Pharmacy claims and discounts payable	26,203	26,344
Health care costs payable	16,313	15,399
Accrued expenses and other current liabilities	22,477	22,387
Other insurance liabilities	1,009	1,116
Current portion of operating lease liabilities	1,914	1,737
Current portion of long-term debt	1,958	4,068
Total current liabilities	87,041	88,692
Long-term operating lease liabilities	12,982	13,643
Long-term debt	59,452	60,502
Deferred income taxes	3,766	3,832
Other long-term insurance liabilities	4,516	4,716
Other long-term liabilities	6,112	6,771
Total liabilities	173,869	178,156

Shareholders’ equity:
Preferred stock	—	—
Common stock and capital surplus	50,968	50,402
Treasury stock	(36,852)	(36,790)
Retained earnings	65,398	61,196
Accumulated other comprehensive income	188	406
Total CVS Health shareholders’ equity	79,702	75,214
Noncontrolling interests	197	168
Total shareholders’ equity	79,899	75,382
Total liabilities and shareholders’ equity	$ 253,768	$ 253,538

CVS HEALTH CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
In *millions*	2026	2025
Cash flows from operating activities:
Reconciliation of net income to net cash provided by operating activities:
Net income	$ 5,952	$ 2,795
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,241	2,325
Stock-based compensation	442	262
Loss on sale of subsidiary	—	236
Deferred income taxes and other items	(241)	(283)
Change in operating assets and liabilities	2,200	1,118
Net cash provided by operating activities	10,594	6,453

Cash flows from investing activities:
Proceeds from sales and maturities of investments	7,483	6,866
Purchases of investments	(8,704)	(7,186)
Purchases of property and equipment	(1,540)	(1,350)
Acquisitions	(9)	(139)
Other	12	23
Net cash used in investing activities	(2,758)	(1,786)

Cash flows from financing activities:
Commercial paper borrowings (repayments), net	—	921
Repayments of long-term debt	(3,287)	(762)
Dividends paid	(1,725)	(1,706)
Proceeds from exercise of stock options	217	191
Payments for taxes related to net share settlement of equity awards	(154)	(125)
Other	(62)	(45)
Net cash used in financing activities	(5,011)	(1,526)
Net increase in cash, cash equivalents and restricted cash	2,825	3,141
Cash, cash equivalents and restricted cash at the beginning of the period	8,712	8,884
Cash, cash equivalents and restricted cash at the end of the period	$ 11,537	$ 12,025

Non-GAAP Financial Information

The Company uses non-GAAP financial measures to analyze underlying business performance and trends. The Company believes that providing these non-GAAP financial measures enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current and expected future performance. These non-GAAP financial measures, which are included in this press release and which may be referred to on the conference call discussing the Company’s second quarter financial results, are provided as supplemental information to the financial measures presented in this press release and discussed on the conference call that are calculated and presented in accordance with GAAP. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The Company’s definitions of its non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.

Non-GAAP financial measures such as consolidated adjusted operating income, adjusted earnings per share (“EPS”) and adjusted income attributable to CVS Health exclude from the relevant GAAP metrics, as applicable: amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance.

For the periods covered in this press release, the following items are excluded from the non-GAAP financial measures described above, as applicable, because the Company believes they neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance:

The Company’s acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in operating expenses within each segment. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.
The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Accordingly, the Company believes excluding net realized capital gains and losses enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends.
During the three and six months ended June 30, 2026 and 2025, the acquisition-related integration costs relate to the acquisitions of Signify Health, Inc. and Oak Street Health, Inc. The acquisition-related integration costs are reflected in operating expenses within the Corporate/Other segment.
During the three and six months ended June 30, 2025, the Company recorded legacy litigation charges related to two court decisions associated with its past business practices. The legacy litigation charges were reflected in operating expenses within the Pharmacy & Consumer Wellness and Health Services segments.
During the three and six months ended June 30, 2025, the loss on the wind down and sale of Accountable Care assets represents the pre-tax loss on the divestiture of the Company’s Medicare Shared Savings Program (“MSSP”) operations, as well as costs incurred in connection with the wind down of the Company’s ACO REACH operations. The loss on Accountable Care assets was reflected in operating expenses within the Health Services segment.
During the three and six months ended June 30, 2025, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the Company’s evaluation of corporate office real estate space. The office real estate optimization charges were reflected in operating expenses within each segment.
The corresponding tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health and Adjusted EPS above. The nature of each non-GAAP adjustment is evaluated to determine whether a discrete adjustment should be made to the adjusted income tax provision.

See endnotes (1) and (2) on page 20 for definitions of non-GAAP financial measures. Reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are presented on pages 12 through 14 and page 19.

Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures Adjusted Operating Income (Unaudited)

The following are reconciliations of consolidated operating income (GAAP measure) to consolidated adjusted operating income, as well as reconciliations of segment GAAP operating income (loss) to segment adjusted operating income (loss):
	Three Months Ended June 30, 2026
*In millions*	Health Care Benefits	Health Services	Pharmacy & Consumer Wellness	Corporate/ Other	Consolidated Totals
Operating income (loss) (GAAP measure)	$ 2,191	$ 1,603	$ 1,411	$ (502)	$ 4,703
Amortization of intangible assets	237	130	64	—	431
Net realized capital (gains) losses	(2)	—	—	15	13
Acquisition-related integration costs	—	—	—	10	10
Adjusted operating income (loss) ⁽¹⁾	$ 2,426	$ 1,733	$ 1,475	$ (477)	$ 5,157

	Three Months Ended June 30, 2025
*In millions*	Health Care Benefits	Health Services	Pharmacy & Consumer Wellness	Corporate/ Other	Consolidated Totals
Operating income (loss) (GAAP measure)	$ 1,002	$ 1,102	$ 736	$ (459)	$ 2,381
Amortization of intangible assets	293	141	60	—	494
Net realized capital losses	13	—	—	14	27
Acquisition-related integration costs	—	—	—	28	28
Legacy litigation charges	—	291	542	—	833
Loss on Accountable Care assets	—	41	—	—	41
Office real estate optimization charges	—	—	—	4	4
Adjusted operating income (loss) ⁽¹⁾	$ 1,308	$ 1,575	$ 1,338	$ (413)	$ 3,808

	Six Months Ended June 30, 2026
*In millions*	Health Care Benefits	Health Services	Pharmacy & Consumer Wellness	Corporate/ Other	Consolidated Totals
Operating income (loss) (GAAP measure)	$ 4,997	$ 2,950	$ 2,545	$ (1,109)	$ 9,383
Amortization of intangible assets	473	272	127	1	873
Net realized capital (gains) losses	(3)	—	—	32	29
Acquisition-related integration costs	—	—	—	22	22
Adjusted operating income (loss) ⁽¹⁾	$ 5,467	$ 3,222	$ 2,672	$ (1,054)	$ 10,307

	Six Months Ended June 30, 2025
*In millions*	Health Care Benefits	Health Services	Pharmacy & Consumer Wellness	Corporate/ Other	Consolidated Totals
Operating income (loss) (GAAP measure)	$ 2,676	$ 2,329	$ 1,600	$ (850)	$ 5,755
Amortization of intangible assets	587	285	120	1	993
Net realized capital (gains) losses	34	(15)	—	29	48
Acquisition-related integration costs	—	—	—	73	73
Legacy litigation charges	—	291	929	—	1,220
Loss on Accountable Care assets	—	288	—	—	288
Office real estate optimization charges	4	—	2	4	10
Adjusted operating income (loss) ⁽¹⁾	$ 3,301	$ 3,178	$ 2,651	$ (743)	$ 8,387

Adjusted Earnings Per Share (Unaudited)
The following are reconciliations of net income attributable to CVS Health to adjusted income attributable to CVS Health and calculations of GAAP diluted EPS and Adjusted EPS:

	Three Months Ended June 30, 2026		Three Months Ended June 30, 2025
In *millions,* *except* *per* *share* *amounts*	Total Company	Per Common Share	Total Company	Per Common Share
Net income attributable to CVS Health (GAAP measure)	$ 2,979	$ 2.31	$ 1,021	$ 0.80
Amortization of intangible assets	431	0.33	494	0.39
Net realized capital losses	13	0.01	27	0.02
Acquisition-related integration costs	10	0.01	28	0.02
Legacy litigation charges	—	—	833	0.66
Loss on Accountable Care assets	—	—	41	0.03
Office real estate optimization charges	—	—	4	—
Tax impact of non-GAAP adjustments	(109)	(0.08)	(144)	(0.11)
Adjusted income attributable to CVS Health ⁽²⁾	$ 3,324	$ 2.58	$ 2,304	$ 1.81

Weighted average diluted shares outstanding		1,287		1,270

	Six Months Ended June 30, 2026		Six Months Ended June 30, 2025
In *millions,* *except* *per* *share* *amounts*	Total Company	Per Common Share	Total Company	Per Common Share
Net income attributable to CVS Health (GAAP measure)	$ 5,922	$ 4.61	$ 2,800	$ 2.21
Amortization of intangible assets	873	0.68	993	0.78
Net realized capital losses	29	0.02	48	0.04
Acquisition-related integration costs	22	0.02	73	0.06
Legacy litigation charges	—	—	1,220	0.96
Loss on Accountable Care assets	—	—	288	0.23
Office real estate optimization charges	—	—	10	0.01
Tax impact of non-GAAP adjustments	(230)	(0.17)	(284)	(0.23)
Adjusted income attributable to CVS Health⁽²⁾	$ 6,616	$ 5.16	$ 5,148	$ 4.06

Weighted average diluted shares outstanding		1,283		1,267

Supplemental Information (Unaudited)
The following are reconciliations of financial measures of the Company’s segments to the consolidated totals:

In *millions*	Health Care Benefits	Health Services	Pharmacy & Consumer Wellness	Corporate/ Other	Intersegment Eliminations ^(a)	Consolidated Totals
Three Months Ended
June 30, 2026
Total revenues	$ 37,538	$ 51,795	$ 33,816	$ 147	$ (17,200)	$ 106,096
Adjusted operating income (loss) ⁽¹⁾	2,426	1,733	1,475	(477)	—	5,157
June 30, 2025
Total revenues	$ 36,258	$ 46,453	$ 33,581	$ 96	$ (17,473)	$ 98,915
Adjusted operating income (loss) ⁽¹⁾	1,308	1,575	1,338	(413)	—	3,808

Six Months Ended
June 30, 2026
Total revenues	$ 73,509	$ 100,032	$ 65,805	$ 273	$ (33,097)	$ 206,522
Adjusted operating income (loss) ⁽¹⁾	5,467	3,222	2,672	(1,054)	—	10,307
June 30, 2025
Total revenues	$ 71,068	$ 89,915	$ 65,493	$ 229	$ (33,202)	$ 193,503
Adjusted operating income (loss) ⁽¹⁾	3,301	3,178	2,651	(743)	—	8,387


(a)	Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment.

Supplemental Information (Unaudited)
Health Care Benefits segment
The following table summarizes the Health Care Benefits segment’s performance for the respective periods:

					Change
	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30, 2026 vs 2025			Six Months Ended June 30, 2026 vs 2025
In millions, except percentages and basis points (“bps”)	2026	2025	2026	2025	$		%	$		%
Revenues:
Premiums	$ 35,119	$ 34,184	$ 68,911	$ 66,992	$ 935		2.7 %	$ 1,919		2.9 %
Services	1,911	1,667	3,628	3,282	244		14.6 %	346		10.5 %
Net investment income	508	407	970	794	101		24.8 %	176		22.2 %
Total revenues	37,538	36,258	73,509	71,068	1,280		3.5 %	2,441		3.4 %
Health care costs	30,692	30,740	59,271	59,377	(48)		(0.2) %	(106)		(0.2) %
MBR (Health care costs as a % of premium revenues) ⁽³⁾	87.4 %	89.9 %	86.0 %	88.6 %	(250)	bps		(260)	bps
Operating expenses	$ 4,655	$ 4,516	$ 9,241	$ 9,015	$ 139		3.1 %	$ 226		2.5 %
Operating expenses as a % of total revenues	12.4 %	12.5 %	12.6 %	12.7 %
Operating income	$ 2,191	$ 1,002	$ 4,997	$ 2,676	$ 1,189		118.7 %	$ 2,321		86.7 %
Operating income as a % of total revenues	5.8 %	2.8 %	6.8 %	3.8 %
Adjusted operating income ⁽¹⁾	$ 2,426	$ 1,308	$ 5,467	$ 3,301	$ 1,118		85.5 %	$ 2,166		65.6 %
Adjusted operating income as a % of total revenues	6.5 %	3.6 %	7.4 %	4.6 %
Premium revenues (by business):
Government	$ 28,494	$ 25,930	$ 56,277	$ 50,832	$ 2,564		9.9 %	$ 5,445		10.7 %
Commercial	6,625	8,254	12,634	16,160	(1,629)		(19.7) %	(3,526)		(21.8) %

The following table summarizes the Health Care Benefits segment’s medical membership for the respective periods:

	June 30, 2026			March 31, 2026			December 31, 2025			June 30, 2025
In *thousands*	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total
Medical membership: ⁽⁴⁾
Commercial	2,487	15,833	18,320	2,462	15,872	18,334	3,447	15,350	18,797	3,608	15,251	18,859
Medicare Advantage	4,202	—	4,202	4,175	—	4,175	4,267	—	4,267	4,240	—	4,240
Medicare Supplement	1,176	—	1,176	1,192	—	1,192	1,202	—	1,202	1,236	—	1,236
Medicaid	1,964	361	2,325	1,938	366	2,304	1,952	373	2,325	1,985	401	2,386
Total medical membership	9,829	16,194	26,023	9,767	16,238	26,005	10,868	15,723	26,591	11,069	15,652	26,721

Supplemental membership information:
Medicare Prescription Drug Plan (stand-alone)			3,870			3,889			4,041			4,065

The following table summarizes the Health Care Benefits segment’s days claims payable for the respective periods:

	June 30, 2026	March 31, 2026	December 31, 2025	June 30, 2025
Days Claims Payable ⁽⁷⁾	41.7	42.9	38.9	40.9

Supplemental Information (Unaudited)
Health Services segment The following table summarizes the Health Services segment’s performance for the respective periods:

					Change
	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30, 2026 vs 2025		Six Months Ended June 30, 2026 vs 2025
In *millions, except percentages*	2026	2025	2026	2025	$	%	$	%
Revenues:
Products	$ 49,216	$ 44,223	$ 94,942	$ 85,358	$ 4,993	11.3 %	$ 9,584	11.2 %
Services	2,580	2,233	5,091	4,546	347	15.5 %	545	12.0 %
Net investment income (loss)	(1)	(3)	(1)	11	2	66.7 %	(12)	(109.1) %
Total revenues	51,795	46,453	100,032	89,915	5,342	11.5 %	10,117	11.3 %
Cost of products sold	47,908	43,080	92,627	83,195	4,828	11.2 %	9,432	11.3 %
Health care costs	1,350	1,101	2,652	2,148	249	22.6 %	504	23.5 %
Gross profit ⁽⁸⁾	2,537	2,272	4,753	4,572	265	11.7 %	181	4.0 %
Gross margin (Gross profit as a % of total revenues) ⁽⁸⁾	4.9 %	4.9 %	4.8 %	5.1 %
Operating expenses	$ 934	$ 1,170	$ 1,803	$ 2,243	$ (236)	(20.2) %	$ (440)	(19.6) %
Operating expenses as a % of total revenues	1.8 %	2.5 %	1.8 %	2.5 %
Operating income	$ 1,603	$ 1,102	$ 2,950	$ 2,329	$ 501	45.5 %	$ 621	26.7 %
Operating income as a % of total revenues	3.1 %	2.4 %	2.9 %	2.6 %
Adjusted operating income ⁽¹⁾	$ 1,733	$ 1,575	$ 3,222	$ 3,178	$ 158	10.0 %	$ 44	1.4 %
Adjusted operating income as a % of total revenues	3.3 %	3.4 %	3.2 %	3.5 %
Pharmacy claims processed ^{(5) (6)}	473.0	469.0	937.7	933.2	4.0	0.9 %	4.5	0.5 %

Supplemental Information (Unaudited)
Pharmacy & Consumer Wellness segment The following table summarizes the Pharmacy & Consumer Wellness segment’s performance for the respective periods:

					Change
	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30, 2026 vs 2025		Six Months Ended June 30, 2026 vs 2025
In *millions, except percentages*	2026	2025	2026	2025	$	%	$	%
Revenues:
Products	$ 33,152	$ 32,942	$ 64,491	$ 64,227	$ 210	0.6 %	$ 264	0.4 %
Services	664	639	1,314	1,266	25	3.9 %	48	3.8 %
Total revenues	33,816	33,581	65,805	65,493	235	0.7 %	312	0.5 %
Cost of products sold	27,282	27,554	53,072	53,358	(272)	(1.0) %	(286)	(0.5) %
Gross profit ⁽⁸⁾	6,534	6,027	12,733	12,135	507	8.4 %	598	4.9 %
Gross margin (Gross profit as a % of total revenues) ⁽⁸⁾	19.3 %	17.9 %	19.3 %	18.5 %
Operating expenses	$ 5,123	$ 5,291	$ 10,188	$ 10,535	$ (168)	(3.2) %	$ (347)	(3.3) %
Operating expenses as a % of total revenues	15.1 %	15.8 %	15.5 %	16.1 %
Operating income	$ 1,411	$ 736	$ 2,545	$ 1,600	$ 675	91.7 %	$ 945	59.1 %
Operating income as a % of total revenues	4.2 %	2.2 %	3.9 %	2.4 %
Adjusted operating income ⁽¹⁾	$ 1,475	$ 1,338	$ 2,672	$ 2,651	$ 137	10.2 %	$ 21	0.8 %
Adjusted operating income as a % of total revenues	4.4 %	4.0 %	4.1 %	4.0 %
Revenues (by major goods/service lines):
Pharmacy	$ 27,781	$ 27,631	$ 53,904	$ 53,707	$ 150	0.5 %	$ 197	0.4 %
Front Store	5,407	5,368	10,666	10,611	39	0.7 %	55	0.5 %
Other	628	582	1,235	1,175	46	7.9 %	60	5.1 %
Prescriptions filled ^{(5) (6)}	457.0	438.1	908.2	873.6	18.9	4.3 %	34.6	4.0 %
Same store sales increase: ⁽⁹⁾
Total	2.6 %	15.4 %	2.7 %	14.8 %
Pharmacy	2.9 %	18.1 %	3.0 %	17.9 %
Front Store	1.0 %	3.4 %	1.1 %	1.5 %
Prescription volume ⁽⁶⁾	7.0 %	6.4 %	6.9 %	6.5 %

Adjusted Earnings Per Share Guidance (Unaudited)
The following reconciliations of projected net income attributable to CVS Health to projected adjusted income attributable to CVS Health and calculations of projected GAAP diluted EPS and projected Adjusted EPS contain forward-looking information. All forward-looking information involves risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking information for a number of reasons as described in our SEC filings, including those set forth in the Risk Factors section and under the heading “Cautionary Statement Concerning Forward-Looking Statements” in our most recently filed Annual Report on Form 10-K and our most recently filed Quarterly Report on Form 10-Q. See “Non-GAAP Financial Information” earlier in this press release and endnote (2) later in this press release for more information on how we calculate Adjusted EPS.

	Year Ending December 31, 2026
	Low		High
In *millions,* *except* *per* *share* *amounts*	Total Company	Per Common Share	Total Company	Per Common Share
Net income attributable to CVS Health (GAAP measure)	$ 8,810	$ 6.84	$ 9,065	$ 7.04
Non-GAAP adjustments:
Amortization of intangible assets	1,730	1.34	1,730	1.34
Net realized capital losses	29	0.02	29	0.02
Acquisition-related integration costs	80	0.06	80	0.06
Tax impact of non-GAAP adjustments	(463)	(0.36)	(463)	(0.36)
Adjusted income attributable to CVS Health ⁽²⁾	$ 10,186	$ 7.90	$ 10,441	$ 8.10

Weighted average diluted shares outstanding		1,289		1,289

Endnotes

⁽¹⁾ The Company defines adjusted operating income as operating income (GAAP measure) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, such as acquisition-related integration costs, certain legacy litigation charges, losses on Accountable Care assets and office real estate optimization charges. The chief operating decision maker (the “CODM”) uses adjusted operating income as its principal measure of segment performance as it enhances the CODM’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. The consolidated measure is not determined in accordance with GAAP and should not be considered a substitute for, or superior to, the most directly comparable GAAP measure, consolidated operating income. See “Non-GAAP Financial Information” earlier in this press release for additional information regarding the items excluded from consolidated operating income in determining consolidated adjusted operating income.

⁽²⁾ GAAP diluted earnings per share and Adjusted EPS, respectively, are calculated by dividing net income attributable to CVS Health and adjusted income attributable to CVS Health by the Company’s weighted average diluted shares outstanding. The Company defines adjusted income attributable to CVS Health as net income attributable to CVS Health (GAAP measure) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, such as acquisition-related integration costs, certain legacy litigation charges, losses on Accountable Care assets, office real estate optimization charges, as well as the corresponding income tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health. See “Non-GAAP Financial Information” earlier in this press release for additional information regarding the items excluded from net income attributable to CVS Health in determining adjusted income attributable to CVS Health.

⁽³⁾ Medical benefit ratio is calculated by dividing the Health Care Benefits segment’s health care costs by premium revenues and represents the percentage of premium revenues spent on medical benefits for the segment’s insured members. Management uses MBR to assess the underlying business performance and underwriting of its insurance products, understand variances between actual results and expected results and identify trends in period-over-period results. MBR provides management and investors with information useful in assessing the operating results of the Health Care Benefits segment’s insured products.

⁽⁴⁾ Medical membership represents the number of members covered by the Health Care Benefits segment’s insured and ASC medical products and related services at a specified point in time. Management uses this metric to understand variances between actual medical membership and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of medical membership on the Health Care Benefits segment’s total revenues and operating results.

⁽⁵⁾ Pharmacy claims processed represents the number of prescription claims processed through the Company’s pharmacy benefits manager and dispensed by either its retail network pharmacies or the Company’s mail and specialty pharmacies. Prescriptions filled represents the number of prescriptions dispensed through the Pharmacy & Consumer Wellness segment’s retail pharmacies and infusion services operations, as well as through the Omnicare long-term care pharmacies prior to their deconsolidation in September 2025. Management uses these metrics to understand variances between actual claims processed and prescriptions dispensed, respectively, and expected amounts as well as trends in period-over-period results. These metrics provide management and investors with information useful in understanding the impact of pharmacy claim volume and prescription volume, respectively, on segment total revenues and operating results.

⁽⁶⁾ Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

⁽⁷⁾ Days claims payable is calculated by dividing the Health Care Benefits segment’s health care costs payable at the end of each quarter by its average health care costs per day during such quarter. Management and investors use this metric as one of the indicators of the adequacy of the health care costs payable liability at the end of each quarter.

⁽⁸⁾ Gross profit is calculated as the segment’s total revenues less its cost of products sold, and, for the Health Services segment, health care costs. Gross margin is calculated by dividing the segment’s gross profit by its total revenues and represents the percentage of total revenues that remains after incurring direct costs associated with the segment’s products sold and services provided. Gross margin provides investors with information that may be useful in assessing the operating results of the Company’s Health Services and Pharmacy & Consumer Wellness segments.

⁽⁹⁾ Same store sales and prescription volume represent the change in revenues and prescriptions filled in the Company’s retail pharmacy stores that have been operating for greater than one year and digital sales initiated online or through mobile applications and fulfilled through the Company’s distribution centers, expressed as a percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics exclude revenues and prescriptions from infusion services operations and long-term care pharmacies. Management uses these metrics to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding existing stores and new locations. Same-store metrics provide management and investors with information useful in understanding the portion of current revenues and prescriptions resulting from organic growth in existing locations versus the portion resulting from opening new stores.

CVS Health logo (PRNewsFoto/CVS Health)

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SOURCE CVS Health

August 5, 2026 6:36 am

Zimmer Biomet Announces Second Quarter 2026 Financial Results

PR Newswire

Second quarter net sales of $2.177 billion increased 4.8% on a reported basis, 4.7% on a constant currency¹ basis and 4.0% on an organic constant currency¹ basis
Second quarter diluted earnings per share were $1.03, an increase of 33.8%; adjusted¹ diluted earnings per share were $2.07, consistent with the prior year period
Company updates full-year 2026 financial guidance

WARSAW, Ind., Aug. 5, 2026 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE: ZBH) and (SIX: ZBH) today reported financial results for the quarter ended June 30, 2026. The Company reported second quarter net sales of $2.177 billion, an increase of 4.8% over the prior year period, an increase of 4.7% on a constant currency¹ basis and an increase of 4.0% on an organic constant currency¹ basis. Net earnings for the second quarter were $198.3 million, or $399.6 million on an adjusted¹ basis.

Diluted earnings per share were $1.03 for the second quarter, an increase of 33.8%, and adjusted¹ diluted earnings per share were $2.07, consistent with the prior year period. Zimmer Biomet generated $447.9 million in operating cash flow and $308.3 million of free cash flow¹ in the second quarter.

¹ Reconciliations of these measures to the corresponding U.S. generally accepted accounting principles measures are included in this press release.

“We delivered strong second quarter results with solid top- and bottom-line performance and continued progress on our key growth drivers and commercial transformation,” said Ivan Tornos, Chairman, President and CEO of Zimmer Biomet. “With a strong first half, healthy underlying markets, go-to-market changes progressing as planned and continued momentum from our innovation cycle, we are raising our revenue and adjusted EPS guidance for the year. Importantly, we continue to advance our strategic priorities and remain confident our efforts will strengthen our business, build the boldest leader in MedTech, and better position Zimmer Biomet to deliver consistent, durable growth over the long term.”

Recent Highlights

Announced increase to share repurchase expectations of up to $1 billion of its common stock during fiscal year 2026.
Received U.S. FDA 510(k) clearance and completed first cases of the next generation ROSA^®Shoulder System, the first in the industry to support both glenoid and humeral bone preparation for anatomic and reverse techniques.
Recognized as “Best Healthcare Robotics Solution” in 2026 MedTech Breakthrough Awards ROSA^® Knee with OptimiZe^™.
Named Chintan Desai president of the company’s Asia Pacific Region to replace Sang Yi, who will depart the company on Aug. 28.
Named to TIME’s 2026 list of America’s Best Companies, demonstrating excellence across employee satisfaction, financial results and sustainability transparency.
Issued 2025 Sustainability Report, highlighting meaningful progress reducing the company’s environmental footprint, strengthening communities and expanding access to care.
Zimmer Biomet Institute held its inaugural Sharpening Your Edge immersive, hands-on bioskills training experience, designed to deliver immediate, practice-ready impact to early career surgeons.

Geographic and Product Category Sales

The following sales tables provide results by geography and product category for the three and six-month periods ended June 30, 2026, as well as the percentage change compared to the prior year periods, on both a reported basis and a constant currency basis. Percentage change is also presented on an organic constant currency basis to exclude the impact on net sales from the April 2025 acquisition of Paragon 28, Inc. (“Paragon 28”).

NET SALES – THREE MONTHS ENDED JUNE 30, 2026
(in millions, unaudited)


									Organic
						Constant			Constant
	Net					Currency			Currency
	Sales		% Change			% Change			% Change
Geographic Results
United States	$	1,239.9		5.6	%		5.6	%		4.6	%
International		937.0		3.7			3.5			3.1
Total	$	2,177.0		4.8	%		4.7	%		4.0	%
Product Categories
Knees
United States	$	455.0		1.4	%		1.4	%		1.4	%
International		374.0		(0.9)			(1.5)			(1.5)
Total		828.9		0.4			0.1			0.1
Hips
United States		288.5		5.9			5.9			5.9
International		274.1		4.0			4.2			4.2
Total		562.7		5.0			5.1			5.1
S.E.T. *		586.0		6.4			6.2			3.4
Technology & Data, Bone Cement and Surgical		199.4		21.1			21.5			21.5
Total	$	2,177.0		4.8	%		4.7	%		4.0	%

* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

NET SALES – SIX MONTHS ENDED JUNE 30, 2026
(in millions, unaudited)


									Organic
						Constant			Constant
	Net					Currency			Currency
	Sales		% Change			% Change			% Change
Geographic Results
United States	$	2,449.3		7.1	%		7.1	%		3.9	%
International		1,814.4		6.8			3.8			2.8
Total	$	4,263.7		7.0	%		5.7	%		3.4	%
Product Categories
Knees
United States	$	924.1		1.8	%		1.8	%		1.8	%
International		733.4		3.1			(0.2)			(0.2)
Total		1,657.5		2.4			0.9			0.9
Hips
United States		566.1		5.5			5.5			5.5
International		520.7		5.2			2.7			2.7
Total		1,086.8		5.3			4.2			4.2
S.E.T. *		1,148.2		12.5			11.3			2.6
Technology & Data, Bone Cement and Surgical		371.2		18.0			16.8			16.8
Total	$	4,263.7		7.0	%		5.7	%		3.4	%

* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

Amounts reported in millions are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Percentages presented are calculated from the underlying unrounded amounts.

Financial Guidance

The Company is updating its full-year 2026 financial guidance as follows:

Projected Year Ending December 31, 2026
	Previous Guidance	Updated Guidance
2026 Reported Revenue Change	2.5% – 4.5%	3.9% – 4.9%
Foreign Currency Exchange Impact	+0.5 %	+0.5 %
2026 Constant Currency Revenue Change	2.0% – 4.0%	3.4% – 4.4%
2026 Organic Constant Currency Revenue Change⁽¹⁾	1.0% – 3.0%	2.25% – 3.25%
Adjusted Diluted EPS⁽²⁾	$8.40 – $8.55	$8.47 – $8.59

⁽¹⁾

Excludes the impact of the Paragon 28 acquisition through the one-year anniversary of the acquisition date, which is estimated to be approximately 110bps.

⁽²⁾

This measure is a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. See “Forward-Looking Non-GAAP Financial Measures” below, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that this forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure.

Conference Call

The Company will conduct its second quarter 2026 investor conference call today, August 5, 2026, at 8:30 a.m. ET. The audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at https://investor.zimmerbiomet.com. It will be archived for replay following the conference call.

About the Company

Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence.

With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation.

For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow on LinkedIn at www.linkedin.com/company/zimmerbiomet or X / Twitter at www.x.com/zimmerbiomet.

Website Information

We routinely post important information for investors on our website, www.zimmerbiomet.com, in the “Investor Relations” section. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, our website or any other website referenced herein is not incorporated by reference into, and is not a part of, this document.

Note on Non-GAAP Financial Measures

This press release and our commentary in our investor conference call today include non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.

Net sales change information for the three and six-month periods ended June 30, 2026 is presented on a GAAP (reported) basis and on a constant currency basis. Net sales change for these periods is also presented on an organic constant currency basis to exclude the impact on net sales from the April 2025 acquisition of Paragon 28. Constant currency percentage changes exclude the effects of foreign currency exchange rates. They are calculated by translating current and prior-period sales at the same predetermined exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases. Projected revenue change information for the year ending December 31, 2026, is also presented on an organic constant currency basis. In addition to excluding the projected effects of foreign currency exchange rates, projected 2026 organic constant currency revenue change also excludes the impact on net sales from the April 2025 acquisition of Paragon 28 through the one-year anniversary of the acquisition date in April 2026.

Net earnings and diluted earnings per share for the three and six-month periods ended June 30, 2026 and 2025 are presented on a GAAP (reported) basis and on an adjusted basis. These adjusted financial measures exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in the press release.

Free cash flow is an additional non-GAAP measure that is presented in this press release. Free cash flow is computed by deducting additions to instruments and other property, plant and equipment from net cash provided by operating activities.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release. This press release also contains supplemental reconciliations of additional non-GAAP financial measures that the Company presents in other contexts. These additional non-GAAP financial measures are computed from the most directly comparable GAAP financial measure as indicated in the applicable reconciliation.

Management uses non-GAAP financial measures internally to evaluate the performance of the business. Additionally, management believes these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company. Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income but that do not impact the fundamentals of our operations. The non-GAAP measures enable the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures. In addition, constant currency revenue change, adjusted operating profit, adjusted diluted earnings per share and free cash flow are used as performance metrics in our incentive compensation programs.

Forward-Looking Non-GAAP Financial Measures

This press release and our commentary in our investor conference call today also include certain forward-looking non-GAAP financial measures for the year ending December 31, 2026. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, we exclude the impact of restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; and certain legal and tax matters. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures (other than projected 2026 organic constant currency revenue change) to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. For example, the timing of certain transactions is difficult to predict because management’s plans may change. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding financial guidance, statements regarding macro pressures, including the impact of such pressures on our business, and any statements about our forecasts, expectations, plans, intentions, commitments, strategies or prospects. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to: competition; pricing pressures; dependence on new product development, technological advances and innovation; changes in customer demand for our products and services caused by demographic changes, obsolescence, development of different therapies or other factors; our ability to attract, retain, develop and maintain adequate succession plans for the highly skilled employees, senior management, independent agents and distributors we need to support our business; the transformation of our sales and distribution network in the U.S. and other markets; shifts in the product category or regional sales mix of our products and services; the risks and uncertainties related to our ability to successfully execute our restructuring plans; the risks and uncertainties relating to our ability to successfully execute on our product portfolio rationalization plans; control of costs and expenses; risks related to the ability to realize the anticipated benefits of our acquisitions, including the possibility that the expected benefits from such transactions will not be realized or will not be realized within the expected time period; the risk that acquired businesses will not be integrated successfully; the effects of business disruptions affecting us, our suppliers, customers or payors, either alone or in combination with other risks on our business and operations; the risks and uncertainties related to our ability to successfully integrate the operations, products, service providers, agents, employees, sales representatives and distributors of acquired companies; the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; unplanned delays, disruptions and expenses attributable to our enterprise resource planning and other system updates; the ability to form and implement alliances; dependence on a limited number of suppliers for key raw materials and other inputs and for outsourced activities; the risk of disruptions in the supply of materials and components used in manufacturing or sterilizing our products; breaches or failures of our (or of our business partners’ or other third parties’) information technology systems or products, including by cyberattack, unauthorized access or theft; the outcome of government investigations; the impact of healthcare reform and cost containment measures, including efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, through reductions in reimbursement levels, repayment demands and otherwise; the effects of natural disasters, or of legal, regulatory or market measures to address natural disasters; the effects of our commitments, goals and disclosures relating to corporate responsibility matters; the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; changes in tax obligations arising from examinations by tax authorities and from changes in tax laws in jurisdictions where we do business, including as a result of the “base erosion and profit shifting” project undertaken by the Organisation for Economic Co-operation and Development and otherwise; challenges to the tax-free nature of the ZimVie Inc. spinoff transaction and the subsequent liquidation of our retained interest in ZimVie Inc.; the risk of additional tax liability due to the recategorization of our independent agents and distributors to employees; changes in tariffs relating to imports to the U.S. and other countries; the risk that material impairment of the carrying value of our intangible assets, including goodwill, could negatively affect our operating results; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; changes in general industry and market conditions, including domestic and international growth, inflation and currency exchange rates; the domestic and international business impact of political, social and economic instability, tariffs, trade restrictions and embargoes, sanctions, wars, disputes and other conflicts, including on our ability to operate in, export from or collect accounts receivable in affected countries; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration (“FDA”) and other government regulators relating to medical products, healthcare fraud and abuse laws and data privacy and cybersecurity laws; the success of our quality and operational excellence initiatives; the ability to remediate matters identified in inspectional observations issued by the FDA and other regulators, while continuing to satisfy the demand for our products; product liability, intellectual property and commercial litigation losses; and the ability to obtain and maintain adequate intellectual property protection. A further list and description of these risks and uncertainties and other factors can be found in our Annual Report on Form 10-K for the year ended December 31, 2025, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and our subsequent filings with the Securities and Exchange Commission (SEC). Copies of these filings are available online at www.sec.gov, www.zimmerbiomet.com or on request from us. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of this press release are cautioned not to rely on these forward-looking statements since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary note is applicable to all forward-looking statements contained in this press release.

Note:

Amounts reported in millions within this press release are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.

ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, except per share amounts, unaudited)

	2026		2025
Net Sales	$	2,177.0	$	2,077.3
Cost of products sold, excluding intangible asset amortization		635.5		592.2
Intangible asset amortization		163.4		160.6
Research and development		104.8		113.3
Selling, general and administrative		899.3		814.8
Restructuring and other cost reduction initiatives		29.8		17.5
Acquisition, integration, divestiture and related		18.1		78.9
Operating expenses		1,850.9		1,777.3
Operating Profit		326.1		300.0
Other income, net		1.9		3.9
Interest expense, net		(72.9)		(79.3)
Earnings before income taxes		255.1		224.6
Provision for income taxes		55.5		71.2
Net Earnings		199.6		153.4
Less: Net earnings attributable to noncontrolling interest		1.3		0.6
Net Earnings of Zimmer Biomet Holdings, Inc.	$	198.3	$	152.8

Earnings Per Common Share
Basic	$	1.03	$	0.77
Diluted	$	1.03	$	0.77
Weighted Average Common Shares Outstanding
Basic		192.2		197.9
Diluted		192.8		198.3

ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, except per share amounts, unaudited)

	2026		2025
Net Sales	$	4,263.7	$	3,986.4
Cost of products sold, excluding intangible asset amortization		1,211.6		1,142.0
Intangible asset amortization		325.5		311.6
Research and development		208.2		223.9
Selling, general and administrative		1,749.3		1,573.5
Restructuring and other cost reduction initiatives		36.1		53.5
Acquisition, integration, divestiture and related		33.7		89.5
Operating expenses		3,564.4		3,394.0
Operating Profit		699.2		592.3
Other (expense) income, net		(1.1)		6.9
Interest expense, net		(141.7)		(145.5)
Earnings before income taxes		556.4		453.6
Provision for income taxes		118.5		117.6
Net Earnings		437.9		336.0
Less: Net earnings attributable to noncontrolling interest		1.5		1.1
Net Earnings of Zimmer Biomet Holdings, Inc.	$	436.5	$	334.9

Earnings Per Common Share
Basic	$	2.25	$	1.69
Diluted	$	2.25	$	1.68
Weighted Average Common Shares Outstanding
Basic		193.6		198.4
Diluted		194.3		199.0

ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)

	June 30,		December 31,
	2026		2025
Assets
Cash and cash equivalents	$	410.0	$	591.9
Receivables, net		1,769.5		1,704.4
Inventories		2,270.3		2,286.4
Other current assets		646.9		537.3
Total current assets		5,096.7		5,119.9
Property, plant and equipment, net		2,236.8		2,207.1
Goodwill		9,919.5		9,947.1
Intangible assets, net		4,461.6		4,717.3
Other assets		1,083.3		1,100.3
Total Assets	$	22,797.8	$	23,091.7
Liabilities and Stockholders’ Equity
Current liabilities	$	1,812.0	$	1,996.6
Current portion of long-term debt		1,201.5		587.1
Other long-term liabilities		874.3		870.2
Long-term debt		6,277.5		6,932.0
Stockholders’ equity		12,632.5		12,705.8
Total Liabilities and Stockholders’ Equity	$	22,797.8	$	23,091.7

ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, unaudited)

	2026		2025
Cash flows provided by (used in) operating activities
Net earnings	$	437.9	$	336.0
Depreciation and amortization		540.8		526.2
Share-based compensation		48.8		40.8
Changes in operating assets and liabilities, net of acquired assets and liabilities
Income taxes		(80.1)		(132.0)
Receivables		(24.0)		(18.6)
Inventories		(51.4)		(40.2)
Accounts payable and accrued liabilities		(91.0)		40.4
Other assets and liabilities		26.1		8.3
Net cash provided by operating activities		807.2		761.0
Cash flows provided by (used in) investing activities
Additions to instruments		(162.6)		(140.2)
Additions to other property, plant and equipment		(90.5)		(94.7)
Net investment hedge settlements		10.8		3.5
Business combination investments, net of acquired cash		–		(1,226.3)
Acquisition of intangible assets		(101.2)		(32.4)
Other investing activities		(6.3)		(0.3)
Net cash used in investing activities		(349.8)		(1,490.4)
Cash flows provided by (used in) financing activities
Net proceeds on revolving facilities		30.0		220.0
Proceeds from senior notes		–		1,748.1
Redemption of senior notes		–		(863.0)
Dividends paid to stockholders		(93.4)		(95.3)
Proceeds from employee stock compensation plans		12.4		17.1
Business combination contingent consideration payments		(69.2)		(17.4)
Debt issuance costs		(1.3)		(17.3)
Repurchase of common stock		(500.8)		(237.0)
Other financing activities		(17.9)		(16.1)
Net cash (used in) provided by financing activities		(640.3)		739.2
Effect of exchange rates on cash and cash equivalents		1.1		21.6
Change in cash and cash equivalents		(181.9)		31.4
Cash and cash equivalents, beginning of year		591.9		525.5
Cash and cash equivalents, end of period	$	410.0	$	556.9

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED NET SALES % CHANGE TO
CONSTANT CURRENCY AND ORGANIC CONSTANT CURRENCY % CHANGE
(unaudited)


	For the Three Months Ended
	June 30, 2026 vs. 2025
													Organic
				Foreign			Constant			Paragon			Constant
				Exchange			Currency			28			Currency
	% Change			Impact			% Change			Impact			% Change
Geographic Results
United States		5.6	%		–	%		5.6	%		1.0	%		4.6	%
International		3.7			0.2			3.5			0.4			3.1
Total		4.8	%		0.1	%		4.7	%		0.7	%		4.0	%
Product Categories
Knees
United States		1.4	%		–	%		1.4	%		–	%		1.4	%
International		(0.9)			0.6			(1.5)			–			(1.5)
Total		0.4			0.3			0.1			–			0.1
Hips
United States		5.9			–			5.9			–			5.9
International		4.0			(0.2)			4.2			–			4.2
Total		5.0			(0.1)			5.1			–			5.1
S.E.T.		6.4			0.2			6.2			2.8			3.4
Technology & Data, Bone Cement and Surgical		21.1			(0.4)			21.5			–			21.5
Total		4.8	%		0.1	%		4.7	%		0.7	%		4.0	%

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED NET SALES % CHANGE TO
CONSTANT CURRENCY AND ORGANIC CONSTANT CURRENCY % CHANGE
(unaudited)


	For the Six Months Ended
	June 30, 2026 vs. 2025
													Organic
				Foreign			Constant			Paragon			Constant
				Exchange			Currency			28			Currency
	% Change			Impact			% Change			Impact			% Change
Geographic Results
United States		7.1	%		–	%		7.1	%		3.2	%		3.9	%
International		6.8			3.0			3.8			1.0			2.8
Total		7.0	%		1.3	%		5.7	%		2.3	%		3.4	%
Product Categories
Knees
United States		1.8	%		–	%		1.8	%		–	%		1.8	%
International		3.1			3.3			(0.2)			–			(0.2)
Total		2.4			1.5			0.9			–			0.9
Hips
United States		5.5			–			5.5			–			5.5
International		5.2			2.5			2.7			–			2.7
Total		5.3			1.1			4.2			–			4.2
S.E.T.		12.5			1.2			11.3			8.7			2.6
Technology & Data, Bone Cement and Surgical		18.0			1.2			16.8			–			16.8
Total		7.0	%		1.3	%		5.7	%		2.3	%		3.4	%

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS
FOR THE THREE MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, except per share amounts, unaudited)


FOR THE THREE MONTHS ENDED JUNE 30, 2026
	Cost of products sold, excluding intangible asset amortization		Intangible asset amortization		Selling, general and administrative		Restructuring and other cost reduction initiatives		Acquisition, integration, divestiture and related		Other income, net		Provision for income taxes		Net Earnings of Zimmer Biomet Holdings, Inc.		Diluted earnings per common share
As Reported	$	635.5	$	163.4	$	899.3	$	29.8	$	18.1	$	1.9	$	55.5	$	198.3	$	1.03
Inventory and manufacturing-related charges⁽¹⁾		(6.0)		–		–		–		–		–		0.3		5.7		0.03
Intangible asset amortization⁽²⁾		–		(163.4)		–		–		–		–		33.9		129.5		0.67
Restructuring and other cost reduction initiatives⁽³⁾		–		–		–		(29.8)		–		–		6.4		23.4		0.12
Acquisition, integration, divestiture and related⁽⁴⁾		–		–		–		–		(18.1)		–		1.7		16.4		0.09
Litigation⁽⁵⁾		–		–		(12.3)		–		–		–		3.1		9.2		0.05
Other charges⁽⁶⁾		–		–		(4.0)		–		–		0.1		1.0		3.1		0.02
Other certain tax adjustments⁽⁷⁾		–		–		–		–		–		–		(14.0)		14.0		0.07
As Adjusted	$	629.5	$	–	$	883.0	$	–	$	–	$	2.0	$	87.9	$	399.6	$	2.07

FOR THE THREE MONTHS ENDED JUNE 30, 2025
	Cost of products sold, excluding intangible asset amortization		Intangible asset amortization		Research and development		Selling, general and administrative		Restructuring and other cost reduction initiatives		Acquisition, integration, divestiture and related		Other income, net		Interest expense, net		Provision for income taxes		Net Earnings of Zimmer Biomet Holdings, Inc.		Diluted earnings per common share
As Reported	$	592.2	$	160.6	$	113.3	$	814.8	$	17.5	$	78.9	$	3.9	$	(79.3)	$	71.2	$	152.8	$	0.77
Inventory and manufacturing- related charges⁽¹⁾		(17.0)		–		–		–		–		–		–		–		4.7		12.3		0.06
Intangible asset amortization⁽²⁾		–		(160.6)		–		–		–		–		–		–		32.6		128.0		0.65
Restructuring and other cost reduction initiatives⁽³⁾		–		–		–		–		(17.5)		–		–		–		3.9		13.6		0.07
Acquisition, integration, divestiture and related⁽⁴⁾		–		–		–		–		–		(78.9)		–		–		13.4		65.5		0.33
European Union Medical Device Regulation⁽⁸⁾		–		–		(4.3)		–		–		–		–		–		1.0		3.3		0.02
Other charges⁽⁶⁾		–		–		–		(0.3)		–		–		(0.5)		0.8		0.1		0.5		–
Other certain tax adjustments⁽⁷⁾		–		–		–		–		–		–		–		–		(35.2)		35.2		0.18
As Adjusted	$	575.2	$	–	$	109.0	$	814.5	$	–	$	–	$	3.4	$	(78.5)	$	91.7	$	411.2	$	2.07

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, except per share amounts, unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2026
	Cost of products sold, excluding intangible asset amortization		Intangible asset amortization		Selling, general and administrative		Restructuring and other cost reduction initiatives		Acquisition, integration, divestiture and related		Other (expense) income, net			Provision for income taxes		Net Earnings of Zimmer Biomet Holdings, Inc.		Diluted earnings per common share
As Reported	$	1,211.6	$	325.5	$	1,749.3	$	36.1	$	33.7	$	(1.1)		$	118.5	$	436.5	$	2.25
Inventory and manufacturing-related charges⁽¹⁾		(19.3)		–		–		–		–		–			3.9		15.4		0.08
Intangible asset amortization⁽²⁾		–		(325.5)		–		–		–		–			68.1		257.4		1.32
Restructuring and other cost reduction initiatives⁽³⁾		–		–		–		(36.1)		–		–			7.4		28.7		0.15
Acquisition, integration, divestiture and related⁽⁴⁾		–		–		–		–		(33.7)		–			3.1		30.6		0.16
Litigation⁽⁵⁾		–		–		(12.3)		–		–		–			3.1		9.2		0.05
Other charges⁽⁶⁾		–		–		(4.1)		–		–		0.9	–		1.2		3.8		0.02
Other certain tax adjustments⁽⁷⁾		–		–		–		–		–		–			(27.5)		27.5		0.14
As Adjusted	$	1,192.4	$	–	$	1,732.9	$	–	$	–	$	(0.2)		$	177.8	$	809.0	$	4.16

FOR THE SIX MONTHS ENDED JUNE 30, 2025
	Cost of products sold, excluding intangible asset amortization		Intangible asset amortization		Research and development		Selling, general and administrative		Restructuring and other cost reduction initiatives		Acquisition, integration, divestiture and related		Other (expense) income, net		Interest expense, net		Provision for income taxes		Net Earnings of Zimmer Biomet Holdings, Inc.		Diluted earnings per common share
As Reported	$	1,142.0	$	311.6	$	223.9	$	1,573.5	$	53.5	$	89.5	$	6.9	$	(145.5)	$	117.6	$	334.9	$	1.68
Inventory and manufacturing-related charges⁽¹⁾		(23.2)		–		–		–		–		–		–		–		6.8		16.4		0.08
Intangible asset amortization⁽²⁾		–		(311.6)		–		–		–		–		–		–		60.8		250.8		1.26
Restructuring and other cost reduction initiatives⁽³⁾		–		–		–		–		(53.5)		–		–		–		11.1		42.4		0.21
Acquisition, integration, divestiture and related⁽⁴⁾		–		–		–		–		–		(89.5)		–		–		15.3		74.2		0.37
European Union Medical Device Regulation⁽⁸⁾		–		–		(8.7)		–		–		–		–		–		1.9		6.8		0.04
Other charges⁽⁶⁾		–		–		–		(0.2)		–		–		(0.5)		5.6		2.8		2.5		0.01
Other certain tax adjustments⁽⁷⁾		–		–		–		–		–		–		–		–		(44.3)		44.3		0.22
As Adjusted	$	1,118.8	$	–	$	215.3	$	1,573.4	$	–	$	–	$	6.4	$	(139.9)	$	172.0	$	772.3	$	3.88

(1)	Inventory and manufacturing-related charges include excess and obsolete inventory charges on certain product lines we intend to discontinue by 2032, inventory step-up expense, and other inventory and manufacturing-related charges or gains. Inventory step-up expense represents the incremental expense of inventory sold recognized at its fair value after business combination accounting is applied versus the expense that would have been recognized if sold at its cost to manufacture. Since only the inventory that existed at the business combination date was stepped-up to fair value, we believe excluding the incremental expense provides investors useful information as to what our costs may have been if we had not been required to increase the inventory’s book value to fair value. The excess and obsolete inventory impacts to product lines we intend to discontinue were income of $3.9 million and expense of $3.0 million in the three-month periods ended June 30, 2026 and 2025, respectively, and were income of $2.6 million and expense of $5.6 million in the six-month periods ended June 30, 2026 and 2025, respectively. Inventory step-up expense was $12.0 million and $7.9 million in the three-month periods ended June 30, 2026 and 2025, respectively, and were $24.0 million and $7.9 million in the six-month periods ended June 30, 2026 and 2025, respectively.
(2)	We exclude intangible asset amortization as well as deferred tax rate changes on our intangible assets from our non-GAAP financial measures because we internally assess our performance against our peers without this amortization. Due to various levels of acquisitions among our peers, intangible asset amortization can vary significantly from company to company.
(3)	In December 2019, 2021 and 2023, and in February and December 2025, we initiated global restructuring programs that included a reorganization of key businesses and an overall effort to reduce costs in order to accelerate decision-making, focus the organization on priorities to drive growth and, in the case of the December 2021 program, to prepare for the spinoff of ZimVie Inc. (“ZimVie”). Restructuring and other cost reduction initiatives also include other cost reduction and optimization initiatives that have the goal of reducing costs across the organization. The costs include employee termination benefits; contract terminations for facilities and sales agents; and other charges, such as consulting fees, project management expenses, retention period salaries and benefits and relocation costs.
(4)	The acquisition, integration, divestiture and related gains and expenses we have excluded from our non-GAAP financial measures resulted from various acquisitions, post-separation costs we have incurred related to ZimVie and gains related to a transition services agreement for services we provided to ZimVie and a transition manufacturing and supply agreement for products we supplied to ZimVie for a limited period. The expenses in each of the three and six-month periods ended June 30, 2025, include $43.4 million of compensation expense related to the discretionary accelerated vesting of Paragon 28 unvested restricted stock units as agreed upon as part of the merger agreement. In the three-month periods ended June 30, 2026 and 2025, this line item includes expense of $11.1 million and income of $9.4 million, respectively, related to changes in the estimated fair values of contingent consideration due to updated forecasts of net sales from certain acquisitions. In the six-month periods ended June 30, 2026 and 2025, this line item includes expense of $19.2 million and income of $7.7 million, respectively, related to changes in estimated fair values of contingent consideration.
(5)	We are involved in patent litigation, product liability litigation, commercial litigation and other various litigation matters. We review litigation matters from both a qualitative and quantitative perspective to determine if excluding the losses or gains will provide our investors with useful incremental information. Litigation matters can vary in their characteristics, frequency and significance to our operating results. The litigation charges and gains excluded from our non-GAAP financial measures in the periods presented relate to certain product liability litigation and claims across multiple districts and countries. Once a litigation matter has been excluded from our non-GAAP financial measures in a particular period, any additional expenses or gains from changes in estimates are also excluded, even if they are not significant, to ensure consistency in our non-GAAP financial measures from period-to-period.
(6)	We have incurred other various expenses from specific events or projects that we consider highly variable or that have a significant impact to our operating results that we have excluded from our non-GAAP measures. These include gains and losses from changes in fair value on our equity investments and impairment of instruments related to certain product lines we intend to discontinue, among other various costs. In addition, in February 2025 we issued senior notes in order to have the necessary cash-on-hand to acquire Paragon 28 once regulatory approval was received. We have excluded from our non-GAAP financial measures the interest on this debt related to the principal amount of the estimated purchase price and acquisition-related costs up through the acquisition date. Interest expense subsequent to the acquisition date has not been excluded.
(7)	Other certain tax adjustments are primarily related to significant and discrete tax adjustments. The primary adjustments include benefits of $13.1 million and $8.2 million in the three-month periods ended June 30, 2026, and 2025, respectively, and benefits of $25.2 million and $16.7 million in the six-month periods ended June 30, 2026, and 2025, respectively, related to Swiss tax reform; and benefits of $26.8 million in each of the three and six-month periods ended June 30, 2025, related to certain unremitted foreign earnings (no impact on 2026 periods).
(8)	The European Union Medical Device Regulation imposes significant additional premarket and postmarket requirements. The new regulations provided a transition period until May 2021 for previously-approved medical devices to meet the additional requirements. For certain devices, this transition period was extended until May 2024. A conditional extension of the transition period has been implemented until December 2027 and 2028 depending on the legacy medical device’s risk class. We are excluding from our non-GAAP financial measures the incremental costs incurred to establish initial compliance with the regulations related to our previously-approved medical devices. The incremental costs primarily relate to temporary personnel and third-party professionals necessary to supplement our internal resources. Starting January 1, 2026, we do not expect to incur any significant incremental costs related to these new regulations.

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING
ACTIVITIES TO FREE CASH FLOW
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Net cash provided by operating activities	$	447.9	$	378.2	$	807.2	$	761.0
Additions to instruments		(85.4)		(80.5)		(162.6)		(140.2)
Additions to other property, plant and equipment		(54.2)		(50.0)		(90.5)		(94.7)
Free cash flow	$	308.3	$	247.7	$	554.1	$	526.1

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF GROSS PROFIT & MARGIN
TO ADJUSTED GROSS PROFIT & MARGIN
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Net Sales	$	2,177.0		$	2,077.3		$	4,263.7		$	3,986.4
Cost of products sold, excluding intangible asset amortization		635.5			592.2			1,211.6			1,142.0
Intangible asset amortization		163.4			160.6			325.5			311.6
Gross Profit	$	1,378.1		$	1,324.5		$	2,726.6		$	2,532.8

Inventory and manufacturing-related charges		6.0			17.0			19.3			23.2
Intangible asset amortization		163.4			160.6			325.5			311.6
Adjusted gross profit	$	1,547.5		$	1,502.1		$	3,071.4		$	2,867.6


Gross margin		63.3	%		63.8	%		63.9	%		63.5	%
Inventory and manufacturing-related charges		0.3			0.8			0.5			0.6
Intangible asset amortization		7.5			7.7			7.6			7.8
Adjusted gross margin		71.1	%		72.3	%		72.0	%		71.9	%

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF OPERATING PROFIT & MARGIN TO ADJUSTED OPERATING PROFIT & MARGIN
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 and 2025
(in millions, unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Operating profit	$	326.1		$	300.0		$	699.2		$	592.3
Inventory and manufacturing-related charges		6.0			17.0			19.3			23.2
Intangible asset amortization		163.4			160.6			325.5			311.6
Restructuring and other cost reduction initiatives		29.8			17.5			36.1			53.5
Acquisition, integration, divestiture and related		18.1			78.9			33.7			89.5
Litigation		12.3			–			12.3			–
European Union Medical Device Regulation		–			4.3			–			8.7
Other charges		4.0			0.3			4.1			0.2
Adjusted operating profit	$	559.7		$	578.5		$	1,130.2		$	1,079.0


Operating profit margin		15.0	%		14.4	%		16.4	%		14.9	%
Inventory and manufacturing-related charges		0.3			0.8			0.5			0.6
Intangible asset amortization		7.5			7.7			7.6			7.8
Restructuring and other cost reduction initiatives		1.4			0.8			0.8			1.3
Acquisition, integration, divestiture and related		0.8			3.8			0.8			2.2
Litigation		0.6			–			0.3			–
European Union Medical Device Regulation		–			0.2			–			0.2
Other charges		0.2			–			0.1			–
Adjusted operating profit margin		25.7	%		27.8	%		26.5	%		27.1	%

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF EFFECTIVE TAX RATE TO ADJUSTED EFFECTIVE TAX RATE
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 and 2025
(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Effective tax rate		21.8	%		31.7	%		21.3	%		25.9	%
Tax effect of adjustments made to earnings before taxes⁽¹⁾		1.6			2.2			1.6			2.1
Other certain tax adjustments⁽²⁾		(5.4)			(15.7)			(4.9)			(9.8)
Adjusted effective tax rate		18.0	%		18.2	%		18.0	%		18.2	%

⁽¹⁾ Includes inventory and manufacturing-related charges; intangible asset amortization; restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; litigation; European Union Medical Device Regulation; and other charges

⁽²⁾ Other certain tax adjustments are primarily related to significant and discrete tax adjustments. The primary adjustments include benefits of $13.1 million and $8.2 million in the three-month periods ended June 30, 2026, and 2025, respectively, and benefits of $25.2 million and $16.7 million in the six-month periods ended June 30, 2026, and 2025, respectively, related to Swiss tax reform; and benefits of $26.8 million in each of the three and six-month periods ended June 30, 2025, related to certain unremitted foreign earnings (no impact on 2026 periods).

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF DEBT TO NET DEBT
AS OF JUNE 30, 2026 and DECEMBER 31, 2025
(in millions, unaudited)


	June 30, 2026		December 31, 2025
Debt, both current and long-term	$	7,479.0	$	7,519.1
Cash and cash equivalents		(410.0)		(591.9)
Net debt	$	7,069.0	$	6,927.2

Media	Investors
Troy Kirkpatrick	David DeMartino
614-284-1926	646-531-6115
[email protected]	[email protected]

Kirsten Fallon	Zach Weiner
781-779-5561	908-591-6955
[email protected]	[email protected]

View original content to download multimedia:https://www.prnewswire.com/news-releases/zimmer-biomet-announces-second-quarter-2026-financial-results-302843081.html

SOURCE Zimmer Biomet Holdings, Inc.

August 5, 2026 6:36 am

Perrigo Reports Second Quarter 2026 Financial Results From Continuing Operations

PR Newswire

Execution of Three-S plan driving continued improvement in underlying business fundamentals, including market share growth in U.S. store-brand OTC and key European brands
Streamlined portfolio through completion of Dermacosmetics divestiture and continuing strategic reviews of Infant Formula and Oral Care businesses
Reaffirmed full-year 2026 outlook with sequentially stronger second-half performance

DUBLIN, Aug. 5, 2026 /PRNewswire/ — Perrigo Company plc (NYSE: PRGO) (“Perrigo” or the “Company”), a leading provider of Consumer Self-Care Products, today announced financial results from continuing operations for the second quarter ended June 27, 2026.

“We continued to execute our Three-S plan in the second quarter, strengthening areas of the business within our control, improving operational performance, streamlining our portfolio, and further reducing debt,” said Albert Manzone, Interim President and Chief Executive Officer. “While results were impacted by ongoing category softness and macroeconomic headwinds, we again drove market share gains as our broad portfolio of quality self-care products across all price points continues to resonate with consumers seeking value and affordability. We also took another important step in simplifying our portfolio by completing the previously announced sale of our Dermacosmetics business, and are continuing the strategic reviews of our Infant Formula and Oral Care businesses. We are becoming a more focused consumer self-care company, and are making progress in strengthening the underlying fundamentals of our business.”

“Looking ahead, we are reaffirming our full-year 2026 outlook with a sequentially stronger second half, supported by clear and tangible drivers, including the expected moderation of planned under absorption stemming from lower prior-year sales volumes, more favorable category comparisons, and continued strong operational execution. While mindful of an uncertain consumer and macroeconomic environment, we are continuing to gain market share, streamline our portfolio, and strengthen our balance sheet. At the same time, we remain focused on converting our operational progress into sustainable growth and long-term shareholder value.”

Second Quarter Results

As announced previously, the Company now reports results on both an All In and Core Perrigo basis. All In results reflect the entirety of our business, while Core represents our go-forward business and excludes Infant Formula and previously announced divestitures.

	All In			Core
	2Q’26	2Q’25	Change	2Q’26	2Q’25	Change
Reported Net Sales	$1,023	$1,056	(3.2) %	$907	$936	(3.1) %
Reported Gross Margin	30.7 %	34.4 %	(370)bps
Reported Operating Margin	2.3 %	4.3 %	(200)bps
Reported Diluted Earnings Per Share (“EPS”)	$0.63	$0.00	n/m

	All In			Core
	2Q’26	2Q’25	Change	2Q’26	2Q’25	Change
Organic Net Sales⁽¹⁾	$1,019	$1,033	(1.3) %	$903	$936	(3.5) %
Adj. Gross Margin	35.6 %	38.1 %	(250)bps	37.0 %	39.5 %	(250)bps
Adj. Operating Margin	12.2 %	12.8 %	(60)bps	13.0 %	14.6 %	(160)bps
Adj. Diluted EPS	$0.50	$0.57	(12.3) %	$0.46	$0.58	(20.7) %

* Absolute amounts in millions. Data may not add due to rounding. Percentages are based on actuals.

(1) See attached Appendix for details. Change in net sales on an organic basis excludes the effects of acquisitions, divestitures and exited products, and the impact of currency.

Net Sales

Core net sales were $907 million, declining 3.1% year-over-year, while Core organic net sales decreased 3.5%. Core results reflected ongoing softness in consumption compared to a strong prior-year period, along with continued lower retail inventory levels. Consumption trends improved throughout the quarter, and Perrigo continued to gain market share across key categories driven by innovation and strong commercial execution. Pricing declined 0.7% and volume/mix decreased 2.4%.
All In reported net sales declined 3.2% year-over-year to $1.02 billion. All In results were primarily driven by the same factors as Core net sales in addition to Infant Formula net sales growth of 23.1% year-over-year, which was more than offset by the impact of divestitures.

Gross Margin

Reported All In gross margin was 30.7%, a decrease of 370 basis points versus the prior year due to the impact of lower net sales volumes, primarily within the Self Care segment, the carry over impact of planned under absorption stemming from lower prior-year sales volumes, and unfavorable mix, partially offset by improved Infant Formula productivity and the net recognition of a recovery of a portion of previously paid tariffs.
Core adjusted gross margin decreased 250 basis points to 37.0% driven by lower net sales volumes, the carry over impact of planned under absorption stemming from lower prior-year sales volumes in U.S. OTC, and unfavorable mix. These headwinds were partially offset by the net recognition of a recovery of a portion of previously paid tariffs and the gross margin contribution from innovation and continued market share gains.
All In adjusted gross margin decreased 250 basis points to 35.6%, driven by the same factors impacting Core adjusted gross margin in addition to the impact of divestitures. These pressures were partially offset by improved Infant Formula productivity, which more than offset planned under absorption stemming from lower prior-year sales volumes.

Operating Margin

Reported operating margin was 2.3% compared to 4.3% in the prior year due to unfavorable gross profit flow through partially offset by lower administrative expenses primarily related to the Operational Enhancement Program.
Core adjusted operating margin decreased 160 basis points to 13.0% primarily due to unfavorable gross profit flow through. This decline was partially offset by reduced operating expenses primarily driven by benefits from the Operational Enhancement Program.
All In adjusted operating margin decreased 60 basis points to 12.2%, driven by the same factors impacting Core adjusted operating margin as well as the impact of divestitures. These factors were partially offset by the strong performance of Infant Formula.

Other Items

Reported net interest and other income increased $124.1 million to $81.9 million primarily due to the gain on the sale of the Dermacosmetics business.
Net adjusted interest and other expense decreased $0.6 million to $39.3 million due to the reduction in debt outstanding.
The Company’s reported effective tax rate was 16.0%. The Company’s adjusted effective tax rate increased 60 basis points to 17.5%.

Diluted EPS

Reported diluted EPS was $0.63 compared to $0.00 in the prior year, benefiting from the gain on sale of the Dermacosmetics business, as well as prior year isolated production variability in Infant Formula and restructuring expenses.
Core adjusted EPS declined $0.12 to $0.46, a 20.7% decrease from the prior year.
All In adjusted diluted EPS declined $0.07 to $0.50, a 12.3% decrease from the prior year.

Business Segment Results

	2Q’26	2Q’25	Change	Organic Change
Segment net sales:
Self Care	$577	$599	(3.7) %	(3.9) %
Specialty Care	227	233	(2.8) %	(2.9) %
Infant Formula	101	82	23.1 %	23.1 %
Total segment net sales	904	914	(1.0) %	(1.2) %
All Other	119	143	(16.9) %	(2.4) %
Consolidated net sales	$1,023	$1,056	(3.2) %	(1.3) %

		2Q’26	2Q’25	Change
Segment operating income:
Self Care		$79	$94	(16.2) %
Specialty Care		48	66	(27.9) %
Infant Formula		4	(12)	n/m
Total segment operating income		$131	$148	(11.8) %
All Other		26	26	0.5 %
Unallocated		(32)	(38)	(17.3) %
Consolidated adjusted operating income		$125	$135	(7.9) %

* Absolute amounts in millions. Data may not add due to rounding. Percentages are based on actuals.

Self Care

Net sales decreased 3.7% compared to the prior year, inclusive of a 0.5% favorable impact of currency translation. The decline was driven by continued softness in category consumption across both the U.S. and Europe and a slower start to certain summer seasonal categories, which led to a continued reduction of retail inventory levels, most notably in Europe. Innovation, distribution gains, and strong commercial execution drove continued market share gains across key categories.

Segment operating income decreased 16.2%, primarily due to lower net sales volumes, unfavorable mix, and the planned under absorption stemming from lower prior-year sales volumes. These pressures were partially offset by benefits from the Operational Enhancement Program.

Specialty Care

Net sales decreased 2.8%, inclusive of a 0.1% favorable impact of currency translation. The decline was driven by Skin Health results, which were impacted by a slower start in summer seasonal categories, lower sales of store brand Minoxidil, and a difficult prior-year comparison for Mederma^®due to the timing of inventory restocking. This sales decline was partially offset by growth in the Women’s Health category led by continued momentum from Opill^® and ellaOne^®.

Segment operating income decreased 27.9% due to unfavorable mix, higher advertising and promotional investments to support second-half growth initiatives, and the planned under absorption stemming from lower prior-year sales volumes. These pressures were partially offset by benefits from the Operational Enhancement Program.

Infant Formula

Net sales increased 23.1% primarily driven by timing of contract infant formula shipments, in addition to increased net sales of store brand formula. This growth was partially offset by lower net sales of branded infant formula.

Segment operating income increased primarily due to improved gross profit flow through from the lapping of isolated production variability in the prior-year period that resulted in higher product scrap, and the benefit of higher net sales. These factors were partially offset by planned under absorption stemming from lower prior-year sales volumes.

All Other

Net sales decreased 16.9%, inclusive of a 0.1% favorable impact of currency translation, primarily due to the impact of divestitures.

Segment operating income increased 0.5% due to the net recognition of a recovery of a portion of previously paid tariffs in addition to improved productivity and lower operating expenses in the Oral Care category. These factors more than offset the impact of divestitures.

Cash Flow and Balance Sheet

Net cash from operating activities was $83 million in the second quarter.
Second quarter capital expenditures were $14 million and the Company returned $40 million to shareholders through dividends.
Cash and cash equivalents as of June 27, 2026 were $400 million while total debt was $3.3 billion.
The substantial majority of the approximately $359 million of cash proceeds from the Dermacosmetics divestiture were applied toward debt reduction, reducing borrowings under the revolving credit facility and enhancing financial flexibility to support the Company’s Three-S plan and long-term value creation.

Fiscal 2026 Outlook

The Company reaffirms its 2026 outlook. Second-half results are expected to benefit from the moderation of planned under absorption stemming from lower prior-year sales volumes, more favorable category comparisons, lower interest expense, continued cost benefits from the Operational Enhancement Program and progress across the Company’s key growth initiatives, including innovation, distribution gains and demand generation. As indicated previously, planned under absorption stemming from lower prior-year sales volumes is expected to result in an unfavorable All In EPS impact of approximately $0.60 in 2026. Approximately $0.26 of that impact was recognized in the first quarter and $0.18 was recognized in the second quarter. The Company continues to closely monitor the consumer and macroeconomic environment.

	All In	Ex Infant Formula	Ex Divestitures	Core	Foreign Currency	Organic Core
Net Sales Growth	(5.5)% to (1.5)%	—	~270 bps	(3.0)% to +1.0%	(0.5) %	(3.5)% to +0.5%
Adj. Gross Margin	36.5% to 37.5%	~240 bps	~(10) bps	39.0% to 40.0%
Adj. Operating Margin	12.5% to 13.5%	~260 bps	~(10) bps	15.0% to 16.0%
Adj. EPS	$2.00 to $2.30	~$0.30	~$(0.05)	$2.25 to $2.55

Other assumptions

Net interest expense of approximately $156 million.
Adjusted effective tax rate of approximately 18.0%.
Adjusted weighted average shares outstanding of approximately 139.3 million.
Net leverage of, or slightly lower than, approximately 4.0 times adjusted EBITDA.
Cash from operating activities as a percentage of adjusted net income in the mid-60% range.

Webcast and Conference Call Information

Perrigo previously announced that management will host a call/webcast to discuss its second quarter 2026 financial results beginning at 08:30 A.M. (EDT) Wednesday, August 5, 2026. The call will be available live via webcast to interested parties in the investor relations section of the Perrigo website at http://perrigo.investorroom.com/events-webcasts or by phone at 800-836-8184, International 646-357-8785, and reference ID # 98476. A taped replay of the call will be available beginning at approximately 12:00 P.M. (EDT) Wednesday, August 5, until midnight Wednesday, August 12, 2026. To listen to the replay, dial 888-660-6345, International 646-517-4150, and use access code 98476#.

About Perrigo

Perrigo Company plc (NYSE: PRGO) is a leading provider of Consumer Self-Care Products and over-the-counter (OTC) health and wellness solutions that enhance individual well-being by empowering consumers to proactively prevent or treat conditions that can be self-managed.

For more information, visit www.perrigo.com.

Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our, or our industry’s actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this report are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “outlook,” “momentum,” “continue,” “estimate,” “forecast,” “predict,” “potential” or the negative of those terms or other comparable terminology. The information presented under “Fiscal 2026 Outlook” is inherently forward-looking. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control, including: supply chain impacts on our business, including those caused or exacerbated by armed conflict, trade and other economic sanctions and/or disease; general economic, credit, and market conditions; increased or new tariffs by the U.S. or foreign governments (and any retaliatory or reciprocal tariffs) and changes in global trade relations; the impact of the war in Ukraine and any escalation thereof, including the effects of economic and political sanctions imposed by the United States, United Kingdom, European Union, and other countries related thereto; the outbreak or escalation of conflict in other regions where we do business, including the ongoing conflict and social, political and economic environment in Israel and the broader Middle East; current and future impairment charges, if we determine that the carrying amount of specific assets may not be recoverable from the expected future cash flows of such assets; customer acceptance of new products; competition from other industry participants, some of whom have greater marketing resources or larger market shares in certain product categories than we do; pricing pressures from customers and consumers; resolution of uncertain tax positions and any litigation relating thereto, ongoing or future government investigations and regulatory initiatives; uncertainty regarding our ability to obtain and maintain our regulatory approvals; potential costs and reputational impact of product recalls or sales halts; potential adverse changes to U.S. and foreign tax, healthcare and other government policy; the effect of epidemic or pandemic disease; the timing, amount and cost of any share repurchases (or the absence thereof) and/or any refinancing of outstanding debt at or prior to maturity; fluctuations in currency exchange rates and interest rates; receipt of potential earnout payments in connection with the sale of the HRA Rare Diseases Business and the risk that potential costs or liabilities incurred or retained in connection with this transaction may exceed our estimates or adversely affect our business or operations; the risk that potential costs or liabilities incurred or retained in connection with the sale of our Rx business may exceed our estimates or adversely affect our business or operations; the satisfaction of certain deferred payment milestones associated with the Dermacosmetics business divestment; the consummation and success of other announced and unannounced acquisitions or dispositions, and our ability to realize the desired benefits thereof; and our ability to execute and achieve the desired benefits of announced cost-reduction efforts and other strategic initiatives and investments, including our ability to achieve the expected benefits from our ongoing restructuring programs and strategic review processes described herein. Adverse results with respect to pending litigation could have a material adverse impact on our operating results, cash flows and liquidity, and could ultimately require the use of corporate assets to pay damages, reducing assets that would otherwise be available for other corporate purposes. These and other important factors, including those discussed in our Form 10-K for the year ended December 31, 2025, and in any subsequent filings with the United States Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this press release are made only as of the date hereof, and unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Measures

This press release contains certain non-GAAP measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts different from the most directly comparable measure calculated and presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP) in the statements of operations, balance sheets or statements of cash flows of the Company. Pursuant to the requirements of the U.S. Securities and Exchange Commission, the Company has provided reconciliations to the most directly comparable U.S. GAAP measures for the following ‘All In’ and ‘Core’ non-GAAP financial measures referred to in this press release:

net sales growth on an organic basis, which excludes acquisitions, divestitures and exited products, and the impact of currency,
adjusted gross profit,
adjusted gross margin,
adjusted operating income,
adjusted operating margin,
adjusted net income,
adjusted diluted earnings per share,
adjusted effective tax rate,
constant currency net sales.

These non-GAAP financial measures should be considered as supplements to the GAAP reported measures, should not be considered replacements for, or superior to the GAAP measures and may not be comparable to similarly named measures used by other companies. The Company presents these non-GAAP financial measures in order to provide transparency to our investors because they are measures that management uses to assess both management performance and the financial performance of our operations and to allocate resources. In addition, management believes that these measures may assist investors with understanding and evaluating our initiatives to drive improved financial performance and enables investors to supplementally compare our operating performance with the operating performance of our competitors including with those of our competitors having different capital structures. While we have excluded certain of these items from historical non-GAAP financial measures, there is no guarantee that the items excluded from non-GAAP financial measures will not continue into future periods. For instance, we expect to continue to experience and report restructuring-related charges associated with continued execution of our strategic initiatives.

The Company provides non-GAAP financial measures as additional information that it believes is useful to investors and analysts in evaluating the performance of the Company’s ongoing operating trends, facilitating comparability between periods and, where applicable, with companies in similar industries and assessing the Company’s prospects for future performance. These non-GAAP financial measures exclude items, such as amortization expense, unusual litigation, impairment charges, restructuring charges, and acquisition and integration-related charges, that by their nature affect comparability of operational performance or that we believe obscure underlying business operational trends. The intangible asset amortization excluded from these non-GAAP financial measures represents the entire amount recorded within the Company’s GAAP financial statements and is excluded because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. The non-GAAP measures the Company provides are consistent with how management analyzes and assesses the operating performance of the Company, and disclosing them provides investor insight into management’s view of the business. Management uses these adjusted financial measures for planning and forecasting in future periods, and evaluating segment and overall operating performance. In addition, management uses certain of the profit measures as factors in determining compensation.

Non-GAAP measures related to profit measurements, which may include adjusted gross profit, adjusted net income, adjusted operating income, adjusted diluted earnings per share, adjusted gross margin, constant currency net sales, adjusted operating margin and adjusted effective tax rate are useful to investors as they provide them with supplemental information to enhance their understanding of the Company’s underlying business performance and trends, and enhance the ability of investors and analysts to compare the Company’s period-to-period financial results. Management believes that adjusted gross margin and adjusted operating margin are useful to investors, in addition to the reasons discussed above, by allowing them to more easily compare and analyze trends in the Company’s peer business group and assisting them in comparing the Company’s overall performance to that of its competitors. The Company also discloses net sales growth excluding the impact of currency on an organic basis. In addition, the Company presents non‑GAAP measures for ‘Core’ Perrigo, reflecting its go‑forward business and excluding infant formula currently under strategic review and previously announced divestitures. Core measures may include Core net income, Core net sales, Core organic net sales, Core gross profit, Core operating income, Core diluted earnings per share, Core gross margin, and Core operating margin, including on an organic, constant‑currency basis. Management believes these measures provide greater consistency in financial reporting and facilitate meaningful comparisons of underlying operating results and acquisition and divestiture activity.

The Company cannot reconcile its ‘All In’ or ‘Core’ expected organic net sales growth, adjusted gross margin, adjusted operating margin, adjusted earnings per share, adjusted diluted earnings per share, or adjusted effective tax rate to the most directly comparable GAAP measures under “Fiscal Year 2026 Outlook from Continuing Operations” without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company’s control and/or cannot be reasonably predicted at this time. These items include, but are not limited to, uncertainty of non-recurring infant formula related charges and timing and amount of restructuring charges and the income tax effects of these items or other income tax-related events.

The Company believes these supplemental financial measures provide investors with consistency in financial reporting, enabling meaningful comparisons of past and present underlying operating results, and also facilitate analysis of the Company’s operating performance and acquisition and divestiture trends.

A copy of this press release, including the reconciliations, is available on the Company’s website at www.perrigo.com.

Perrigo Contacts

Eric Jacobson, Vice President, Global Investor Relations
(616) 886-0375, [email protected]

Nick Gallagher, Associate Director, Global Investor Relations
(269) 686-3238, [email protected]

PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(unaudited)

	Three Months Ended		Six Months Ended
	June 27, 2026	June 28, 2025	June 27, 2026	June 28, 2025
Net sales	$ 1,022.8	$ 1,056.3	$ 1,992.0	$ 2,100.2
Cost of sales	708.9	693.4	1,352.6	1,345.0
Gross profit	313.9	362.9	639.4	755.2

Operating expenses
Distribution	21.7	23.6	44.3	46.4
Research and development	23.7	22.0	48.4	48.7
Selling	129.5	136.5	259.2	282.7
Administration	100.0	113.0	215.0	225.2
Impairment charges	1.0	1.5	331.8	4.6
Restructuring	14.4	8.7	89.5	38.1
Other operating expense, net	—	12.2	—	17.2
Total operating expenses	290.5	317.5	988.3	662.9

Operating income (loss)	23.5	45.4	(348.9)	92.3

Interest expense, net	38.4	39.6	79.3	78.6
Other (income) expense, net	(120.5)	2.6	(126.5)	2.2
Loss on extinguishment of debt	0.1	—	1.4	—
Income (loss) from continuing operations before income taxes	105.4	3.2	(303.1)	11.5
Income tax expense (benefit)	16.9	3.7	(1.8)	11.9
Income (loss) from continuing operations	88.5	(0.5)	(301.3)	(0.4)
Loss from discontinued operations, net of tax	(14.1)	(7.9)	(22.8)	(14.4)
Net income (loss)	$ 74.5	$ (8.4)	$ (324.1)	$ (14.8)

Earnings (loss) per share
Basic
Continuing operations	$ 0.64	$ (0.00)	$ (2.17)	$ 0.00
Discontinued operations	(0.10)	(0.06)	(0.16)	(0.10)
Basic earnings (loss) per share	$ 0.54	$ (0.06)	$ (2.33)	$ (0.10)
Diluted
Continuing operations	$ 0.63	$ (0.00)	$ (2.17)	$ 0.00
Discontinued operations	(0.10)	(0.06)	(0.16)	(0.10)
Diluted earnings (loss) per share	$ 0.53	$ (0.06)	$ (2.33)	$ (0.10)

Weighted-average shares outstanding
Basic	139.1	138.2	138.9	138.0
Diluted	139.6	138.2	138.9	138.0

PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
(unaudited)

	June 27, 2026	December 31, 2025
Assets
Cash and cash equivalents	$ 399.7	$ 531.6
Accounts receivable, net of allowance for credit losses of $3.9 and $6.5, respectively	709.9	612.8
Inventories	1,064.5	1,149.0
Prepaid expenses and other current assets	277.7	231.4
Current assets held for sale	—	272.6
Total current assets	2,451.7	2,797.4
Property, plant and equipment, net	849.0	898.7
Operating lease assets	156.0	167.8
Goodwill and indefinite-lived intangible assets	1,697.6	2,054.7
Definite-lived intangible assets, net	2,190.2	2,351.5
Deferred income taxes	6.3	3.3
Other non-current assets	258.6	261.8
Total non-current assets	5,157.7	5,737.8
Total assets	$ 7,609.5	$ 8,535.2
Liabilities and Shareholders’ Equity
Liabilities
Accounts payable	$ 400.4	$ 474.5
Payroll and related taxes	153.2	112.2
Accrued customer programs	109.4	111.4
Other accrued liabilities	265.4	216.1
Accrued derivative liabilities	86.2	14.5
Accrued income taxes	28.8	20.8
Current indebtedness	11.4	36.6
Current liabilities held for sale	—	26.8
Total current liabilities	1,054.8	1,012.9
Non-current liabilities
Long-term debt, less current portion	3,283.4	3,603.6
Deferred income taxes	146.7	168.9
Other non-current liabilities	608.8	814.3
Total non-current liabilities	4,038.9	4,586.8
Total liabilities	5,093.7	5,599.7
Contingencies – Refer to Note 16
Shareholders’ equity
Controlling interests:
Preferred shares, $0.0001 par value per share, 10 shares authorized	—	—
Ordinary shares, €0.001 par value per share, 10,000 shares authorized	6,540.5	6,608.2
Accumulated other comprehensive income (loss)	(22.8)	4.8
Retained earnings (accumulated deficit)	(4,001.9)	(3,677.5)
Total shareholders’ equity	2,515.8	2,935.5
Total liabilities and shareholders’ equity	$ 7,609.5	$ 8,535.2

Supplemental Disclosures of Balance Sheet Information
Preferred shares, issued and outstanding	—	—
Ordinary shares, issued and outstanding	138.7	137.6

PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

	Six Months Ended
	June 27, 2026	June 28, 2025
Cash Flows From (For) Operating Activities
Net income (loss)	$ (324.1)	$ (14.8)
Adjustments to derive cash flows:
Depreciation and amortization	179.1	166.2
Restructuring charges	84.9	35.0
Share-based compensation	21.2	28.4
Impairment charges	331.8	4.6
Amortization of debt discount	4.1	4.4
Deferred income taxes	(19.3)	9.6
(Gain) loss on sale of business	(129.5)	1.6
Amortization on hedging instruments	(10.3)	(12.6)
Other non-cash adjustments, net	(8.7)	1.2
Subtotal	129.3	223.6
Increase (decrease) in cash due to:
Inventories	74.2	(97.4)
Accrued income taxes	(13.4)	(54.5)
Payroll and related taxes	(45.0)	(23.6)
Accounts payable	(66.8)	(19.9)
Accrued customer programs	0.5	(0.6)
Other accrued liabilities	44.4	(29.3)
Accounts receivable	(102.3)	(5.9)
Other long term liabilities	2.6	2.4
Prepaid expenses and other current assets	(54.6)	16.6
Subtotal	(160.3)	(212.2)
Net cash (for) from operating activities	(31.0)	11.4
Cash Flows From (For) Investing Activities
Net proceeds from sale of businesses	362.9	14.4
Asset acquisitions, net	—	(1.5)
Additions to property, plant and equipment	(28.1)	(44.7)
Other investing, net	2.2	2.3
Net cash from (for) investing activities	337.0	(29.5)
Cash Flows From (For) Financing Activities
Payments on long-term debt	(759.3)	(17.6)
Cash dividends	(80.1)	(79.5)
Borrowings of revolving credit agreements and other financing, net	427.6	—
Payments for debt issuance costs	(5.5)	—
Shares used to settle taxes	(7.0)	(17.7)
Other financing, net	(9.9)	(1.0)
Net cash for financing activities	(434.2)	(115.8)
Effect of exchange rate changes on cash and cash equivalents	(6.1)	29.3
Net decrease in cash and cash equivalents	(134.2)	(104.6)
Cash and cash equivalents of continuing operations, beginning of period	531.6	558.8
Cash and cash equivalents held for sale, beginning of period	2.3	—
Less cash and cash equivalents held for sale, end of period	—	—
Cash and cash equivalents of continuing operations, end of period	$ 399.7	$ 454.2

TABLE I
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)

	Three Months Ended June 27, 2026				Three Months Ended June 28, 2025
Consolidated Continuing Operations	Gross Profit	Operating Income	Income from Continuing Operations	Diluted Earnings per Share	Gross Profit	Operating Income	Income (Loss) from Continuing Operations	Diluted Earnings (Loss) per Share
Reported	$ 313.9	$ 23.5	$ 88.5	$ 0.63	$ 362.9	$ 45.4	$ (0.5)	$ 0.00
As a % of reported net sales⁽¹⁾	30.7 %	2.3 %	8.7 %		34.4 %	4.3 %	— %
Pre-tax adjustments ⁽²⁾ :
Amortization expense related primarily to acquired intangible assets	35.3	54.5	54.5	0.39	35.5	56.8	57.3	0.41
Impairment charges⁽³⁾	—	1.0	1.0	0.01	—	1.5	1.5	0.01
Unusual litigation	—	12.4	12.4	0.09	—	15.4	15.4	0.11
Restructuring charges and other termination benefits	—	14.4	14.4	0.10	—	8.7	8.7	0.06
(Gain) Loss on divestitures⁽⁴⁾	—	—	(129.4)	(0.93)	—	—	1.8	0.01
Other⁽⁵⁾	15.3	18.8	26.8	0.19	4.3	7.4	7.4	0.05
Non-GAAP tax adjustments⁽⁶⁾	—	—	2.0	0.01	—	—	(12.4)	(0.09)
Adjusted	$ 364.5	$ 124.5	$ 70.3	$ 0.50	$ 402.8	$ 135.2	$ 79.2	$ 0.57
As a % of reported net sales⁽¹⁾	35.6 %	12.2 %	6.9 %		38.1 %	12.8 %	7.5 %

Diluted weighted average shares outstanding (in millions)
			Reported	139.6				138.2
Effect of dilution as reported amount was a loss, while adjusted amount was income⁽⁷⁾				—				0.4
			Adjusted	139.6				138.6


Note: Amounts may not add or recalculate due to rounding. Percentages are based on actuals.

(1)	Reported net sales for the three months ended June 27, 2026 and June 28, 2025 were $1,022.8 million and $1,056.3 million, respectively.
(2)	Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the “Non-GAAP tax adjustments” line item.
(3)	During the three months ended June 27, 2026, we determined the carrying value of an in process R&D asset was impaired by $1.0 million. During the three months ended June 28, 2025, we determined the carrying value of our Prevacid^® branded product was impaired by $1.5 million.
(4)	Represents the gain on the divestiture of our Dermacosmetics business for the three months ended June 27, 2026.
(5)	Other pre-tax adjustments impacting reported income from continuing operations for the three months ended June 27, 2026 includes $15.4 million of accelerated depreciation, $6.5 million of professional consulting fees for potential divestiture activity and other legal matters and $4.9 million of unfavorable hedging activity related to divestiture activity. Other pre-tax adjustments impacting reported income (loss) from continuing operations for the three months ended June 28, 2025 are related to $4.5 million of accelerated depreciation as a result of Nutrition Network Optimization and $2.8 million of professional consulting fees for divestiture activity.
(6)	Non-GAAP tax adjustments for the three months ended June 27, 2026 are primarily due to removal of $2.0 million of tax expense on pre-tax non-GAAP adjustments. Non-GAAP tax adjustments for the three months ended June 28, 2025 are primarily due to $13.9 million of tax expense on pre-tax non-GAAP adjustments.
(7)	In the period of a net loss, reported diluted shares outstanding equal basic shares outstanding.

TABLE II
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)

	Three Months Ended June 27, 2026			Three Months Ended June 28, 2025
Consolidated Continuing Operations	R&D Expense	DSG&A Expense	Restructuring, Impairments and Other	R&D Expense	DSG&A Expense	Restructuring, Impairments and Other
Reported	$ 23.7	$ 251.3	$ 15.4	$ 22.0	$ 273.1	$ 22.4
As a % of reported net sales⁽¹⁾	2.3 %	24.6 %	1.5 %	2.1 %	25.9 %	2.1 %
Pre-tax adjustments ⁽²⁾ :
Amortization expense related primarily to acquired intangible assets	(0.2)	(19.0)	—	—	(21.2)	—
Impairment charges⁽³⁾	—	—	(1.0)	—	—	(1.5)
Restructuring charges and other termination benefits	—	—	(14.4)	—	—	(8.7)
Unusual litigation	—	(12.4)	—	—	(3.2)	(12.2)
Other⁽⁴⁾	(0.1)	(3.4)	—	(0.2)	(2.9)	—
Adjusted	$ 23.4	$ 216.6	$ —	$ 21.8	$ 245.8	$ —
As a % of reported net sales⁽¹⁾	2.3 %	21.2 %	— %	2.1 %	23.3 %	— %


Note: Amounts may not add or recalculate due to rounding. Percentages are based on actuals.

(1)	Reported net sales for the three months ended June 27, 2026 and June 28, 2025 were $1,022.8 million and $1,056.3 million, respectively.
(2)	Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the “Non-GAAP tax adjustments” line item.
(3)	During the three months ended June 27, 2026, we determined the carrying value of an in process R&D asset was impaired by $1.0 million. During the three months ended June 28, 2025, we determined the carrying value of our Prevacid^® branded product was impaired by $1.5 million.
(4)	Other pre-tax adjustments for the three months ended June 27, 2026 and June 28, 2025 are due primarily to professional consulting fees for divestiture activity.

TABLE III
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)

	Three Months Ended June 27, 2026		Three Months Ended June 28, 2025
Consolidated Continuing Operations	Interest and Other	Income Tax Expense	Interest and Other	Income Tax Expense
Reported	$ (81.9)	$ 16.9	$ 42.2	$ 3.7
As a % of reported net sales⁽¹⁾	(8.0) %	1.7 %	4.0 %	0.3 %
Effective tax rate		16.0 %		115.7 %
Pre-tax adjustments ⁽²⁾ :
Amortization expense related primarily to acquired intangible assets	—	—	(0.5)	—
Gain (loss) on divestitures⁽³⁾	129.4	—	(1.8)	—
Other⁽⁴⁾	(8.0)	—	—	—
Non-GAAP tax adjustments⁽⁵⁾	—	(2.0)	—	12.4
Adjusted	$ 39.3	$ 14.9	$ 39.9	$ 16.0
As a % of reported net sales⁽¹⁾	3.8 %	1.5 %	3.8 %	1.5 %
Adjusted effective tax rate		17.5 %		16.8 %


Note: Amounts may not add or recalculate due to rounding. Percentages are based on actuals.

(1)	Reported net sales for the three months ended June 27, 2026 and June 28, 2025 were $1,022.8 million and $1,056.3 million, respectively.
(2)	Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the “Non-GAAP tax adjustments” line item.
(3)	Represents the gain on the divestiture of our Dermacosmetics business for the three months ended June 27, 2026.
(4)	Other pre-tax adjustments impacting reported interest and other from continuing operations for the three months ended June 27, 2026 are primarily due to $4.9 million of unfavorable hedging activity related to divestiture activity.
(5)	Non-GAAP tax adjustments for the three months ended June 27, 2026 are primarily due to removal of $2.0 million of tax expense on pre-tax non-GAAP adjustments. Non-GAAP tax adjustments for the three months ended June 28, 2025 are primarily due to $13.9 million of tax expense on pre-tax non-GAAP adjustments.

TABLE IV
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)

	Three Months Ended
Consolidated Continuing Operations	June 27, 2026	June 28, 2025	% Change
Net Sales	$ 1,022.8	$ 1,056.3	(3.2) %
Less: Currency impact⁽¹⁾	3.7	—	0.3 %
Constant currency net sales	$ 1,019.1	$ 1,056.3	(3.5) %
Less: Divestitures and exited products⁽²⁾	—	23.6	(2.2) %
Organic net sales	$ 1,019.1	$ 1,032.8	(1.3) %

Self Care
Net Sales	$ 576.6	$ 598.6	(3.7) %
Less: Currency impact⁽¹⁾	3.2	—	0.5 %
Constant currency net sales	$ 573.4	$ 598.6	(4.2) %
Less: Divestitures and exited products⁽²⁾	—	2.1	(0.3) %
Organic net sales	$ 573.4	$ 596.5	(3.9) %

Specialty Care
Net Sales	$ 226.6	$ 233.1	(2.8) %
Less: Currency impact⁽¹⁾	0.2	—	0.1 %
Organic net sales	$ 226.4	$ 233.1	(2.9) %

Infant Formula
Net Sales	$ 100.9	$ 82.0	23.1 %
Less: Currency impact⁽¹⁾	—	—	— %
Organic net sales	$ 100.9	$ 82.0	23.1 %

All Other
Net Sales	$ 118.6	$ 142.7	(16.9) %
Less: Currency impact⁽¹⁾	0.3	—	0.1 %
Constant currency net sales	$ 118.4	$ 142.7	(17.0) %
Less: Divestitures and exited products⁽²⁾	—	21.5	(14.7) %
Organic net sales	$ 118.4	$ 121.3	(2.4) %


Note: Amounts may not add or recalculate due to rounding. Percentages are based on actuals.

(1)	Currency impact is calculated using the exchange rates used to translate our financial statements in the comparable prior-year period to show what current period US dollar results would have been if such currency exchange rates had not changed.
(2)	Represents divestiture of the Dermacosmetics business within All Other and Richard Bittner Business and exited products within the Self Care segment.

TABLE V
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)

	Three Months Ended June 27, 2026					Three Months Ended June 28, 2025
Consolidated Continuing Operations	Net Sales	Gross Profit	Operating Income	Income from Continuing Operations	Diluted Earnings per Share	Net Sales	Gross Profit	Operating Income	Income from Continuing Operations	Diluted Earnings (Loss) per Share
All In Adjusted	$ 1,022.8	$ 364.5	$ 124.5	$ 70.3	$ 0.50	$ 1,056.3	$ 402.8	$ 135.2	$ 79.2	$ 0.57
As a % of reported net sales		35.6 %	12.2 %	6.9 %			38.1 %	12.8 %	7.5 %
Core Adjustments:
Less: Infant Formula	100.9	20.7	4.0	4.0	0.03	82.0	10.8	(12.2)	(12.2)	(0.09)
Less: Previously Announced Divestitures⁽¹⁾	15.2	8.3	3.0	3.0	0.02	38.2	22.0	10.8	10.8	0.08
Non-GAAP tax adjustments	—	—	—	(0.8)	0.01	—	—	—	0.2	—
Core Adjusted	$ 906.7	$ 335.5	$ 117.6	$ 64.1	$ 0.46	$ 936.2	$ 370.0	$ 136.6	$ 80.4	$ 0.58
As a % of Core net sales		37.0 %	13.0 %	6.3 %			39.5 %	14.6 %	8.6 %
Less: Currency impact⁽²⁾	3.7
Core Organic	$ 903.0

Diluted weighted average shares outstanding (in millions)
			Reported		139.6					138.2
Effect of dilution as reported amount was a loss, while adjusted amount was income⁽³⁾					—					0.4
			Adjusted		139.6					138.6


Note: Amounts may not add or recalculate due to rounding. Percentages are based on actuals.

(1)	Represents previously announced divestitures, primarily Dermacosmetics, and exited products.
(2)	Currency impact is calculated using the exchange rates used to translate our financial statements in the comparable prior-year period to show what current period U.S. dollar results would have been if such currency exchange rates had not changed.
(3)	In the period of a net loss, reported diluted shares outstanding equal basic shares outstanding.

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SOURCE Perrigo Company plc

August 5, 2026 6:36 am

Broadridge and Payward Services Collaborate to Give xStocks Holders a Voice in Corporate Governance

PR Newswire

Broadridge’s unified governance platform enables xStocks holders to submit voting preferences for shares underpinning their tokenized equities, closing one of the clearest gaps between tokenized equities and traditional stock ownership

NEW YORK, Aug. 5, 2026 /PRNewswire/ — Broadridge Financial Solutions, Inc., (NYSE: BR), a global Fintech leader, today announced Broadridge’s unified governance platform will support shareholder communications and proxy voting for eligible holders of xStocks, the industry-leading tokenized equities framework developed by Payward Services, the B2B infrastructure platform from Payward.

“The endgame for tokenization was never just building faster programmable capital markets. It’s about giving people across the world everything that comes with owning a piece of a company, including a voice in how it’s run,” said Mark Greenberg, Payward’s Chief Commercial Officer and Global Head of Payward Services. “Working with Broadridge is a step in that direction, unlocking opportunities for xStocks holders to participate in corporate governance, while closing the gap between tokenized equities and traditional shares.”

“As tokenized securities continue to reshape global capital markets, investors should not have to choose between blockchain innovation and shareholder rights,” said Doug DeSchutter, President of Broadridge’s Investor Communication Solutions business. “By extending our governance platform to support xStocks, we are enabling eligible token holders to have a voice in corporate governance and extending our leadership in digital asset governance.”

Payward Services continues to accelerate its tokenized assets offering at pace, with more than 500 tokenized assets now available across tokenized equities, ETFs and pre-IPO offerings, and with tokenized equities from several international markets slated to follow soon. xStocks is the most widely traded tokenized equities framework in the market by total transaction volume, and now represents the widest range of assets offered by any tokenized equities framework.

Eligible holders of supported tokenized securities available through Payward Services’ xStocks tokenized asset framework will securely authenticate to ProxyVote.com using Web3 authentication, review proxy materials for the underlying securities, and submit their proxy voting preferences through a seamless digital experience. The experience brings established trusted governance capabilities investors expect from traditional capital markets into blockchain-native ecosystems while preserving the accessibility and efficiency of tokenized assets.

Key capabilities include:

Secure Web3 authentication to ProxyVote.com for eligible token holders.
Digital delivery of proxy materials and shareholder communications.
Proxy voting preference submission for supported tokenized securities, including Payward Services’ xStocks offering.
A consistent governance experience across traditional securities and all major tokenization models.
Institutional-grade governance, reporting and auditability built on Broadridge’s trusted proxy infrastructure.

Today’s announcement builds on Broadridge’s continued investment in digital asset governance and reflects the company’s vision of extending trusted shareholder communications and voting capabilities across the evolving tokenized securities landscape. Together with its recent initiatives supporting issuer-sponsored and custodial tokenized securities, this partnership demonstrates Broadridge’s ability to deliver a unified governance solution spanning traditional markets and the full spectrum of blockchain-based securities.

About xStocks:
xStocks is the industry standard for tokenized securities, bringing publicly listed equities onchain through fully collateralized, 1:1-backed tokens. Powered by Payward’s digital asset infrastructure, xStocks places traditional assets on blockchain rails, expanding access to global capital markets with extended availability, global reach, and digital-native settlement. Launched initially as tokenized US equities, xStocks will soon be expanding to tokenize equities from markets across the world, including the UK, Europe and Asia.

Designed for interoperability, xStocks move seamlessly between centralized exchanges, self-custodied wallets, and onchain applications, unlocking new utility across trading, collateralization, and decentralized finance. Since launching in June 2025, xStocks has grown to power billions of dollars in transaction volume across multiple blockchain ecosystems, anchoring a rapidly expanding global network shaping the future of tokenized markets.

For more information, visit https://xstocks.fi.

About Broadridge’s Tokenization Solutions
Broadridge enables on-chain proxy voting and governance, digital asset infrastructure including post trade, wallets and custody, and the scaling of digital asset capabilities across multiple asset classes. Broadridge’s governance platform serves all models of tokenized securities, including issuer-listed models, synthetic securities issued outside the United States, and third-party tokenized shares within the Unted States, helping ensure investors receive the same rights and protections regardless of how assets are structured or owned.

Broadridge’s Distributed Ledger Repo (DLR) solution is the world’s largest institutional platform for settling tokenized real assets, tokenizing approximately over $357 billion a day. As tokenization gains momentum across financial services, Broadridge is meeting the complexity of operating across traditional and digital ecosystems with established scale, critical market knowledge, and technological expertise.

About Payward Services:
Payward Services is the B2B infrastructure platform built on 15 years of operating Kraken, one of the world’s largest crypto platforms. Through a single integration, eligible partners can access crypto and tokenized equity trading, fiat and stablecoin payments, yield, lending, prediction markets and derivatives. Fintechs, banks, brokerages, payment providers, exchanges, consumer tech platforms and asset managers can use Payward Services to offer digital assets to their clients without building the stack themselves.

Liquidity, custody, payments, compliance, risk and settlement are integrated by design, replacing fragmented multi-vendor stacks with a single regulated foundation. Partners build on the same infrastructure that powers Payward’s family of products, deployed as modular services they can scale alongside their own.

For more information, visit https://www.payward.com/payward-services.

About Broadridge

Broadridge Financial Solutions (NYSE: BR) is a global technology leader with trusted expertise and transformative technology, helping clients and the financial services industry operate, innovate, and grow. We power investing, governance, and communications for our clients – driving operational resiliency, elevating business performance, and transforming investor experiences.

Our technology and operations platforms process and generate over 8 billion communications annually and underpin the daily average trading of over $18 trillion in tokenized and traditional securities globally. A certified Great Place to Work®, Broadridge is part of the S&P 500® Index, employing approximately 16,000 associates in 28 countries. For more information about us, please visit www.broadridge.com

For more information about us, please visit www.broadridge.com.

Broadridge Contacts:

Investors:

[email protected]

Media:
Gregg Rosenberg
Global Head of Corporate Communications
[email protected]

Payward Contacts
Lauren Post
[email protected]

xStocks are issued by Backed Assets (JE) Limited (a Jersey private limited company) and offered to eligible Kraken customers via Payward Digital Solutions Ltd. (“PDSL”), a company licensed to conduct digital asset business by the Bermuda Monetary Authority. In the European Union / European Economic Area, xStocks are offered to eligible customers via Payward Europe Digital Solutions (CY) Ltd. (“PEDLS-CY”), a Cyprus investment firm authorized and regulated under EU MiFID II.

* xStocks are not registered under the U.S. Securities Act and are not available in the United States or to U.S. persons. xStocks are also not currently available in the United Kingdom or in any other jurisdiction where their offer or distribution would be unlawful or would require regulatory authorization that has not been obtained.

Neither PDSL, Payward Europe Digital Solutions (CY) Ltd. (“PEDLS-CY”), nor their respective affiliates provide investment advice or recommendations, PDSL (Kraken) does not provide investment advice and/or recommendations, and no communication, through any Kraken App or website or otherwise, should be construed as such. Individual investors should make their own decisions or seek professional independent advice if they are unsure as to the suitability / appropriateness of any investment for their circumstances or needs, including potential tax treatment. Investing in xStocks involves an element of risk. The value of an investment may go down as well as up, and past performance is not a reliable indicator of future results. Geographic restrictions apply. Read Kraken’s xStocks Risk Disclosure at kraken.com/legal/xstocks as well as the Base Prospectus and related Final Terms for xStocks at https://assets.backed.fi/legal-documentation to learn more.

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SOURCE Broadridge Financial Solutions, Inc.

August 5, 2026 6:36 am

Dynatrace Reports First Quarter Fiscal Year 2027 Financial Results

Dynatrace Reports First Quarter Fiscal Year 2027 Financial Results

Exceeds high end of guidance across all metrics

Delivers ARR growth of 17%

Achieves record new logo ARR growth of more than 160%

BOSTON–(BUSINESS WIRE)–
Dynatrace (NYSE: DT), the leading AI-powered observability platform, today announced financial results for the first quarter of fiscal 2027 ended June 30, 2026.

“Dynatrace delivered an exceptional quarter, led by 41% organic net new ARR growth,”¹ said Rick McConnell, Chief Executive Officer of Dynatrace. “Demand continues to strengthen as enterprises expand cloud-native workloads and accelerate their AI initiatives. As software becomes increasingly AI-driven, customers are turning to Dynatrace for the deterministic answers, contextual analytics, and intelligent automation required to operate at scale, and we are increasingly confident in the opportunity ahead.”

“In Q1, we exceeded the high end of our top-line and profitability guidance, increased free cash flow, and returned capital to shareholders,” said Jim Benson, Chief Financial Officer, Dynatrace. “These strong results reflect the competitive differentiation of our platform and the momentum in our business, providing a solid start toward our goal of accelerating ARR growth in fiscal 2027. During the quarter, we also repurchased $275 million of Dynatrace stock, underscoring our confidence in our long-term growth trajectory and our commitment to delivering shareholder value.”

First Quarter Fiscal 2027 Financial and Other Recent Business Highlights:

All growth rates are compared to the first quarter of fiscal 2026, unless otherwise noted.

Financial Highlights:

Total ARR of $2,136 million, an increase of 17% on an as reported and constant currency basis
Total revenue of $555 million, an increase of 16%, or 15% on a constant currency basis
Subscription revenue of $530 million, an increase of 16%, or 15% on a constant currency basis
GAAP income from operations of $71 million and non-GAAP income from operations of $162 million
GAAP net income per share of $0.12 and non-GAAP net income per share of $0.48, on a dilutive basis

Business Highlights

Demonstrated four consecutive quarters of acceleration in trailing-twelve-month organic net new ARR growth.
Nearly doubled annualized logs consumption in the last two quarters to $200 million, growing well over 100% year-over-year.
Named a Leader in the 2026 Gartner® Magic Quadrant™ for Observability Platforms for the 16th consecutive year.²
Named a Leader and an Outperformer in the 2026 GigaOm Radar for Kubernetes Observability.
Launched the private preview of our observability offering for AI-first teams, Dynatrace Bluebox, at the AWS Summit New York.
Delivered significant advancements of Dynatrace Intelligence, extending the power of the Dynatrace platform. New capabilities include Autonomous SRE agent, Cloud SE agent, and Agent Building to help customers move beyond analysis and recommendations into trusted, autonomous execution.

Share Repurchase Program

During the first quarter of fiscal 2027, Dynatrace spent $275 million to repurchase 7.1 million shares at an average price of $38.88 under that program.

_________________________

¹ Represents the quarterly increase in ARR for the first quarter of fiscal 2027 compared to ARR for the first quarter of fiscal 2026, adjusted for foreign exchange, and excludes $13 million of ARR contributed from the Bindplane acquisition.

²Gartner, Magic Quadrant for Observability Platforms, Padraig Byrne, Martin Caren, D.B. Cummings, Neil Young, 13 July 2026. See below for disclaimers.

CFO Leadership Update

Dynatrace also announced today that in connection with his planned retirement, Jim Benson will resign from his position as Chief Financial Officer by the company’s current fiscal year end on March 31, 2027. Dynatrace has initiated a search for a new CFO, and Mr. Benson will ensure a smooth transition of his duties once a new CFO is appointed.

“I want to thank Jim for his leadership and many contributions to Dynatrace,” said Rick McConnell. “Jim has played a critical role in scaling the business, strengthening our financial profile, and positioning Dynatrace for its next phase of growth acceleration. Jim built a world-class Finance organization, and we will miss his valuable insights and guidance when he retires.”

“Serving as CFO of Dynatrace has been a privilege, and I am proud of what we have accomplished over the last four years,” said Jim Benson. “During my tenure, Dynatrace delivered consistent growth and profitability with disciplined capital allocation, strategic investment, and a relentless focus on shareholder value creation. The momentum across the business and the opportunities ahead give me tremendous confidence in Dynatrace’s future. I am committed to assisting Rick in the search process and ensuring a smooth transition once a new CFO is appointed.”

First Quarter 2027 Financial Highlights (Unaudited – In thousands, except per share data)

	Three Months Ended June 30,
	2026			2025
Annual recurring revenue (ARR):
Total ARR	$	2,135,982		$	1,822,205
Year-over-Year Increase		17	%
Year-over-Year Increase – constant currency ^()*		17	%

Revenue:
Total revenue	$	554,548		$	477,349
Year-over-Year Increase		16	%
Year-over-Year Increase – constant currency^()*		15	%

Subscription revenue	$	530,255		$	457,507
Year-over-Year Increase		16	%
Year-over-Year Increase – constant currency^()*		15	%

GAAP Financial Measures:
GAAP income from operations	$	71,476		$	62,338
GAAP operating margin		13	%		13	%

GAAP net income	$	36,651		$	47,955

GAAP net income per share – diluted	$	0.12		$	0.16

GAAP shares outstanding – diluted		293,744			304,160

Net cash provided by operating activities	$	306,240		$	269,692
Net cash provided by operating activities as a percent of revenue		55	%		56	%

*Non-GAAP Financial Measures ^():**
Non-GAAP income from operations	$	161,600		$	143,106
Non-GAAP operating margin		29	%		30	%

Non-GAAP net income	$	139,721		$	126,277

Non-GAAP net income per share – diluted	$	0.48		$	0.42

Non-GAAP shares outstanding – diluted		293,744			304,160

Adjusted free cash flow	$	309,177		$	262,157
Adjusted free cash flow margin		56	%		55	%

* For additional information, please see the “Non-GAAP Financial Measures” and “Definitions – Non-GAAP and Other Metrics” sections of this press release.

Financial Outlook

Based on information available as of August 5, 2026, Dynatrace is issuing guidance for the second quarter and updating its prior guidance for full year fiscal 2027 in the tables below.

This guidance is based on foreign exchange rates as of June 30, 2026. We expect foreign exchange to be a headwind of approximately $14 million on ARR and approximately $4 million on revenue for fiscal 2027 compared to ARR and revenue at constant currency. This represents an incremental headwind of approximately $23 million to ARR and $19 million to revenue compared to our prior guidance. This guidance also excludes the impact of any share repurchases after June 30, 2026.

Growth rates for ARR, Total revenue, and Subscription revenue are presented in constant currency to provide better visibility into the underlying growth of the business.

All growth rates below are compared to the full year and second quarter of fiscal 2026.

(In millions, except per share data)	Current Guidance Fiscal 2027	Prior Guidance Fiscal 2027*	Guidance Change at Midpoint**
ARR	$2,359 – $2,379	$2,382 – $2,402	$(23)
As reported	15% – 16%	16% – 17%	(100) bps
Constant currency	15.5% – 16.5%	15.5% – 16.5%	—
Total revenue	$2,306 – $2,320	$2,317 – $2,335	$(13)
As reported	14% – 15%	15% – 16%	(100) bps
Constant currency	14.5% – 15%	14% – 15%	25 bps
Subscription revenue	$2,206 – $2,220	$2,217 – $2,235	$(13)
As reported	14% – 15%	15% – 16%	(100) bps
Constant currency	14.5% – 15%	14% – 15%	25 bps
Non-GAAP income from operations	$682 – $690	$682 – $690	$—
Non-GAAP operating margin	29.5% – 29.75%	29.5%	13 bps
Non-GAAP net income	$581 – $591	$584 – $594	$(3)
Non-GAAP net income per diluted share	$1.97 – $1.99	$1.93 – $1.95	$0.04
Diluted weighted average shares outstanding	295 – 297	302 – 304	(7)
Adjusted free cash flow*	$610 – $615	$613 – $620	$(4)
Adjusted free cash flow margin*	26.5%	26.5%	—

*Beginning in the first quarter of fiscal 2027, we updated our non-GAAP liquidity measure from free cash flow to adjusted free cash flow (with a corresponding update to the related margin). For additional information, please see the “Non-GAAP Financial Measures” and “Definitions – Non-GAAP and Other Metrics” sections of this press release. Our prior guidance for fiscal 2027 issued on May 13, 2026 (as set forth in this table) reflected our previous definition of free cash flow and the related margin and there were no “below the line” items contemplated at the time to be adjusted (as set forth in our current definition of adjusted free cash flow).
**Guidance change at midpoint is rounded to the nearest million.

(In millions, except per share data)	Q2 Fiscal 2027 Guidance
Total revenue	$565 – $570
As reported	14% – 15%
Constant currency	15% – 16%
Subscription revenue	$540 – $545
As reported	14% – 15%
Constant currency	15% – 16%
Non-GAAP income from operations	$166 – $170
Non-GAAP operating margin	29.5% – 30%
Non-GAAP net income	$141 – $145
Non-GAAP net income per diluted share	$0.48 – $0.49
Diluted weighted average shares outstanding	293 – 294

Conference Call and Webcast Information

Dynatrace will host a conference call and live webcast to discuss its results and business outlook at 8:00 a.m. Eastern Time today, August 5, 2026. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with event confirmation #: 13761927. The call will also be available live via webcast on the company’s website, ir.dynatrace.com.

An audio replay of the call will also be available until 11:59 p.m. Eastern Time on August 19, 2026 by dialing (877) 660-6853 from the U.S. and Canada, or for international callers by dialing (201) 612-7415 and entering event confirmation #: 13761927. In addition, an archived webcast will be available at ir.dynatrace.com.

We announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts. We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures as defined by Regulation G, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, adjusted free cash flow, and adjusted free cash flow margin. We also use or discuss non-GAAP financial measures in conference calls, slide presentations and webcasts.

We use these non-GAAP financial measures for financial and operational decision-making purposes, and as a means to evaluate period-to-period comparisons and liquidity. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.

The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Our non-GAAP financial measures may not provide information that is directly comparable to similarly titled metrics provided by other companies.

Non-GAAP financial measures are defined in this press release and the tables included in this press release include reconciliations of historical non-GAAP financial measures to their most directly comparable GAAP measures.

We also include non-GAAP financial measures in our financial outlook included in this press release. Reconciliations of forward-looking non-GAAP income from operations, non-GAAP net income, non-GAAP net income per diluted share, and adjusted free cash flow guidance to the most directly comparable GAAP measures are not available without unreasonable efforts due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Beginning in the first quarter of fiscal 2027, we updated our non-GAAP liquidity measure from free cash flow to adjusted free cash flow (with a corresponding update to the related margin) to exclude the impact of certain items that management does not consider indicative of ongoing operating performance. We believe that adjusted free cash flow is a more useful measure as excluding payments for acquisition-related, restructuring, and other non-recurring and unusual items provides investors with better comparability of cash generated from our business period over period. Adjusted free cash flow is not residual cash flow available for our discretionary expenditures. Prior period results have been recast to conform to the current period presentation for comparability.

Definitions – Non-GAAP and Other Metrics

Adjusted Free Cash Flow is defined as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements, plus cash paid for acquisition-related, restructuring, and other non-recurring and unusual items. The related adjusted free cash flow margin is adjusted free cash flow expressed as a percentage of total revenue. We previously defined free cash flow as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements. The related free cash flow margin was previously defined as free cash flow expressed as a percentage of total revenue.

Annual Recurring Revenue (ARR) is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of ARR any revenues derived from month-to-month agreements and/or product usage overage billings.

Constant Currency amounts for ARR, Total revenue, and Subscription revenue are presented to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign exchange rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year.

Non-GAAP Income from Operations is defined as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; acquisition-related, restructuring and other non-recurring or unusual items that may arise from time to time. The related Non-GAAP Operating Margin is non-GAAP income from operations expressed as a percentage of total revenue.

Non-GAAP Net Income is defined as GAAP net income adjusted for the following items: income tax expense/benefit; non-GAAP effective cash taxes; net interest expense and income; net cash received from and paid for interest; share-based compensation; employer payroll taxes on employee stock transactions, amortization of intangibles; gains and losses on currency translation; and acquisition-related, restructuring and other non-recurring or unusual items that may arise from time to time. Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by the diluted weighted average shares outstanding used to compute GAAP net income per diluted share.

About Dynatrace

Dynatrace (NYSE: DT) is advancing observability for today’s digital businesses, helping to transform the complexity of modern digital ecosystems into powerful business assets. By leveraging AI-powered insights, Dynatrace enables organizations to analyze, automate, and innovate faster to drive their business forward. To learn more about Dynatrace, visit www.dynatrace.com, visit our blog and follow us on LinkedIn and X @dynatrace.

Cautionary Language Concerning Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth prospects, industry trends related to cloud, AI, and software, the expected and current benefits that we believe organizations receive from using the Dynatrace platform, Mr. Benson’s planned resignation as CFO and the timing thereof, and our financial and business outlook, including our financial guidance for the full year and second quarter of fiscal 2027. These forward-looking statements include, but are not limited to, plans, objectives, expectations, and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies, and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies, and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to maintain our revenue growth rates in future periods; overall demand for and market adoption of our solutions; our ability to compete; our ability to innovate and develop and effectively market solutions that meet customer needs, including with AI capabilities and functionalities; our ability to acquire new customers and retain and expand our relationships with existing customers; our ability to expand our sales and marketing capabilities; our ability to maintain successful relationships with partners; the ability of our platform and solutions to effectively interoperate with customers’ IT infrastructures; our ability to hire and retain necessary qualified employees to grow our business and expand our operations; our ability to successfully complete acquisitions and integrate newly acquired businesses and offerings; our use of new and evolving technologies, including AI, in our offerings and business; security breaches, computer malware, computer hacking attacks, and other security incidents or compromises; real or perceived errors, failures, defects, or vulnerabilities in our solutions; our ability to protect and enforce our proprietary technology and intellectual property rights; the effect on our business of uncertainty in the U.S. and global economies, along with uncertain geopolitical conditions; and other risks set forth under the caption “Risk Factors” in our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

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

	Three Months Ended June 30,
	2026			2025
Revenue:
Subscription	$	530,255		$	457,507
Service		24,293			19,842
Total revenue		554,548			477,349
Cost of revenue:
Cost of subscription		80,260			65,018
Cost of service		21,058			19,355
Amortization of acquired technology		2,135			836
Total cost of revenue		103,453			85,209
Gross profit		451,095			392,140

Operating expenses:
Research and development		135,990			108,172
Sales and marketing		181,631			165,314
General and administrative		61,736			56,304
Amortization of other intangibles		262			12
Total operating expenses		379,619			329,802
Income from operations		71,476			62,338
Interest income, net		8,893			12,295
Other income, net		432			6,757
Income before income taxes		80,801			81,390
Income tax expense		(44,150	)		(33,435	)
Net income	$	36,651		$	47,955
Net income per share:
Basic	$	0.13		$	0.16
Diluted	$	0.12		$	0.16
Weighted average shares outstanding:
Basic		292,202			300,153
Diluted		293,744			304,160

UNAUDITED SHARE-BASED COMPENSATION

	Three Months Ended June 30,
	2026		2025
Cost of revenue	$	9,366	$	9,850
Research and development		29,516		26,861
Sales and marketing		19,887		20,034
General and administrative		14,807		15,150
Total share-based compensation	$	73,576	$	71,895

DYNATRACE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)

	June 30, 2026			March 31, 2026
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,057,780		$	1,097,220
Short-term marketable securities		51,084			74,881
Accounts receivable, net		379,975			710,200
Deferred contract costs, current		130,287			127,495
Prepaid expenses and other current assets		104,575			113,651
Total current assets		1,723,701			2,123,447
Long-term marketable securities		47,079			51,908
Property and equipment, net		71,631			72,993
Operating lease right-of-use assets, net		134,360			139,285
Goodwill		1,413,246			1,350,256
Intangible assets, net		65,264			22,850
Deferred tax assets, net		498,149			508,742
Deferred contract costs, non-current		113,692			113,111
Other assets		42,372			33,133
Total assets	$	4,109,494		$	4,415,725

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	7,919		$	2,728
Accrued expenses, current		287,489			302,260
Deferred revenue, current		1,108,856			1,241,488
Operating lease liabilities, current		23,057			22,588
Total current liabilities		1,427,321			1,569,064
Deferred revenue, non-current		49,791			53,387
Accrued expenses, non-current		43,331			38,205
Operating lease liabilities, non-current		136,216			141,736
Deferred tax liabilities		2,082			1,943
Total liabilities		1,658,741			1,804,335

Shareholders’ equity:
Common shares, $0.001 par value, 600,000,000 shares authorized, 290,346,577 and 294,652,951 shares issued and outstanding at June 30, 2026 and March 31, 2026, respectively		290			295
Additional paid-in capital		2,001,910			2,199,494
Retained earnings		484,247			447,596
Accumulated other comprehensive loss		(35,694	)		(35,995	)
Total shareholders’ equity		2,450,753			2,611,390
Total liabilities and shareholders’ equity	$	4,109,494		$	4,415,725

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

	Three Months Ended June 30,
	2026			2025
Cash flows from operating activities:
Net income	$	36,651		$	47,955
Adjustments to reconcile net income to cash provided by operations:
Depreciation		4,740			5,095
Amortization		2,914			1,366
Share-based compensation		73,576			71,895
Deferred income taxes		2,604			3,750
Other		(281	)		(7,051	)
Net change in operating assets and liabilities:
Accounts receivable		335,226			343,732
Deferred contract costs		(3,505	)		2,727
Prepaid expenses and other assets		135			(8,840	)
Accounts payable and accrued expenses		(9,024	)		(73,110	)
Operating leases, net		(49	)		605
Deferred revenue		(136,747	)		(118,432	)
Net cash provided by operating activities		306,240			269,692

Cash flows from investing activities:
Purchase of property and equipment		(3,151	)		(7,482	)
Capitalized software additions		—			(194	)
Acquisition of a business, net of cash acquired		(99,481	)		—
Purchases of marketable securities		(3,713	)		(28,824	)
Proceeds from sales and maturities of marketable securities		33,436			28,052
Net cash used in investing activities		(72,909	)		(8,448	)

Cash flows from financing activities:
Proceeds from employee stock purchase plan		12,636			11,871
Proceeds from exercise of stock options		1,591			2,415
Repurchases of common stock		(275,478	)		(45,031	)
Taxes paid related to net share settlement of equity awards		(7,627	)		(10,347	)
Other		(1,104	)		(2,762	)
Net cash used in financing activities		(269,982	)		(43,854	)

Effect of exchange rates on cash and cash equivalents		(2,789	)		12,952

Net (decrease) increase in cash and cash equivalents		(39,440	)		230,342

Cash and cash equivalents, beginning of period		1,097,220			1,017,039
Cash and cash equivalents, end of period	$	1,057,780		$	1,247,381

DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited – In thousands, except percentages)

	Three Months Ended June 30,
	2026			2025
Non-GAAP cost of revenue:
Cost of revenue	$	103,453		$	85,209
Share-based compensation		(9,366	)		(9,850	)
Employer payroll taxes on employee stock transactions		(954	)		(1,416	)
Amortization of intangibles		(2,135	)		(836	)
Non-GAAP cost of revenue	$	90,998		$	73,107

Non-GAAP gross profit:
Gross profit	$	451,095		$	392,140
Share-based compensation		9,366			9,850
Employer payroll taxes on employee stock transactions		954			1,416
Amortization of intangibles		2,135			836
Non-GAAP gross profit	$	463,550		$	404,242

GAAP gross margin		81	%		82	%
Non-GAAP gross margin		84	%		85	%

Non-GAAP operating expenses:
Operating expenses	$	379,619		$	329,802
Share-based compensation		(64,210	)		(62,045	)
Employer payroll taxes on employee stock transactions		(5,504	)		(6,609	)
Amortization of intangibles		(262	)		(12	)
Acquisition-related, restructuring, and other		(7,693	)		—
Non-GAAP operating expenses	$	301,950		$	261,136

Non-GAAP income from operations:
Income from operations	$	71,476		$	62,338
Share-based compensation		73,576			71,895
Employer payroll taxes on employee stock transactions		6,458			8,025
Amortization of intangibles		2,397			848
Acquisition-related, restructuring, and other		7,693			—
Non-GAAP income from operations	$	161,600		$	143,106

GAAP operating margin		13	%		13	%
Non-GAAP operating margin		29	%		30	%

DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited – In thousands, except per share data)

	Three Months Ended June 30,
	2026			2025
Non-GAAP net income:
Net income	$	36,651		$	47,955
Income tax expense		44,150			33,435
Non-GAAP effective cash tax		(30,670	)		(28,664	)
Interest income, net		(8,893	)		(12,295	)
Cash received from interest, net		8,791			11,835
Share-based compensation		73,576			71,895
Employer payroll taxes on employee stock transactions		6,458			8,025
Amortization of intangibles		2,397			848
Acquisition-related, restructuring, and other		7,693			—
Gain on currency translation		(432	)		(6,757	)
Non-GAAP net income	$	139,721		$	126,277

Share count:
Weighted-average shares outstanding – basic		292,202			300,153
Weighted-average shares outstanding – diluted		293,744			304,160

Shares used in non-GAAP per share calculations:
Weighted-average shares outstanding – basic		292,202			300,153
Weighted-average shares outstanding – diluted		293,744			304,160

Non-GAAP net income per share:
Net income per share – basic	$	0.13		$	0.16
Net income per share – diluted	$	0.12		$	0.16
Non-GAAP net income per share – basic	$	0.48		$	0.42
Non-GAAP net income per share – diluted	$	0.48		$	0.42

	Three Months Ended June 30,
	2026			2025
Adjusted free cash flow:
Net cash provided by operating activities	$	306,240		$	269,692
Purchase of property and equipment		(3,151	)		(7,482	)
Capitalized software additions		—			(194	)
Cash paid for acquisition-related, restructuring, and other costs	$	6,088		$	141
Adjusted free cash flow	$	309,177		$	262,157

View source version on businesswire.com: https://www.businesswire.com/news/home/20260805401384/en/

Investor Contact:

Noelle Faris

VP, Investor Relations

[email protected]

Media Contact:

Stacy Gong

VP, Corporate Communications

[email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Software Technology Data Management

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August 5, 2026 6:36 am

Delek US Holdings Reports Second Quarter 2026 Results

Delek US Holdings Reports Second Quarter 2026 Results

Delek US reported a secondquarter net income of $169.5 million or $2.71 per share, adjusted net income of $343.9 million or $5.48 per share and adjusted EBITDA of $638.7 million
- Excluding the impacts of the RVO adjustment, adjusted EPS was $3.64 per share and adjusted EBITDA was $490.1 million
Delek’s high distillate yield, access to advantaged crudes, improving BSR performance and limited turnaround activity positions it well in the current margin environment
Delek Logistics (“DKL”) had its best quarter reporting adjusted EBITDA of $143.5 million. It is well positioned to meet its annual EBITDA guidance of $520-560 million
EOP is progressing well paving the way for further improvements in the plan to sustain and scale EOP’s momentum
Successfully refinanced portions of our capital structure, extending debt maturities while reducing interest expense
Purchased $20.0 million in DK common stock during the quarter
Paid $15.6 million of dividends and announced regular quarterly dividend of $0.255 per share

BRENTWOOD, Tenn.–(BUSINESS WIRE)–
Delek US Holdings, Inc. (NYSE: DK) (“Delek US”, “Company”) today announced financial results for its second quarter ended June 30, 2026.

“Our second quarter results demonstrate the tangible progress we are making in strengthening Delek’s free cash flow profile” said Avigal Soreq, President and Chief Executive Officer of Delek US. “Following the successful completion of the Big Spring refinery turnaround in the first quarter, Big Spring ran well during the second quarter and is continuing this trend as we move through the third quarter. We have no more planned turnarounds for the remainder of the year. With our full system online, we are well positioned to capture the benefits of a more constructive margin environment, supported by our peer-leading distillate yield, enhanced reliability, and the ongoing improvements from our Enterprise Optimization Plan. As we enter the second half of the year, we remain focused on disciplined execution, operational reliability, and advance the initiatives we believe can unlock meaningful value for our shareholders.”

“Delek Logistics Partners remains a key source of value creation, supported by its integrated three-stream service model, growing third-party cash flows, and continued asset optimization. As the economic separation between DK and DKL increases, we believe both companies are better positioned to unlock their respective standalone value”.

“Looking ahead, we are encouraged by the setup for the third quarter and the remainder of 2026. We remain focused on safe and reliable operations, capturing the higher margin environment, maintaining capital discipline, and advancing incremental value creation initiatives that support our Sum of the Parts objectives,” Soreq concluded.

Delek US Results

	Three Months Ended June 30,					Six Months Ended June 30,
*($ in millions, except per share data)*		2026		2025			2026			2025
Net income (loss) attributable to Delek	$	169.5	$	(106.4	)	$	(31.8	)	$	(279.1	)
Total diluted income (loss) per share	$	2.71	$	(1.76	)	$	(0.52	)	$	(4.55	)
Adjusted net income (loss)	$	343.9	$	(33.1	)	$	348.6		$	(177.5	)
Adjusted net income (loss) per share	$	5.48	$	(0.56	)	$	5.73		$	(2.90	)
Adjusted EBITDA	$	638.7	$	177.9		$	850.4		$	211.5

Refining Segment

The refining segment Adjusted EBITDA was $566.2 million in the second quarter 2026 compared with $114.8 million in the same quarter last year, which reflects an increase in refining margin driven by increased crack spreads. During the second quarter 2026, Delek US’s benchmark crack spreads were up an average of 136.0% from prior-year levels. Adjusted EBITDA was also impacted by inventory adjustments of $(157.3) million and $41.9 million for second quarter 2026 and 2025, respectively.

Logistics Segment

The logistics segment Adjusted EBITDA in the second quarter 2026 was $143.5 million compared with $127.4 million in the prior-year quarter. The increase over last year’s second quarter reflects higher margins in the wholesale business and increased interest income related to sales-type leases.

Shareholder Distributions

On July 23, 2026, the Board of Directors approved the regular quarterly dividend of $0.255 per share that will be paid on August 10, 2026 to shareholders of record on August 3, 2026.

Liquidity

As of June 30, 2026, Delek US had a cash balance of $628.6 million and total consolidated long-term debt of $3,189.7 million, resulting in net debt of $2,561.1 million. As of June 30, 2026, Delek Logistics Partners, LP (NYSE: DKL) (“Delek Logistics”) had $13.7 million of cash and $2,372.7 million of total long-term debt, which are included in the consolidated amounts on Delek US’ balance sheet. Excluding Delek Logistics, Delek US had $614.9 million in cash and $817.0 million of long-term debt, or a $202.1 million net debt position.

Second Quarter 2026 Results | Conference Call Information

Delek US will hold a conference call to discuss its second quarter 2026 results on Wednesday, August 5, 2026 at 10:00 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekUS.com and clicking on the Investor Relations tab. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. Presentation materials accompanying the call will be available on the investor relations tab of the Delek US website approximately ten minutes prior to the start of the call. For those who cannot listen to the live broadcast, the online replay will be available on the website for 90 days.

Investors may also wish to listen to Delek Logistics’ (NYSE: DKL) second quarter 2026 earnings conference call that will be held on Wednesday, August 5, 2026 at 11:30 a.m. Central Time and review Delek Logistics’ earnings press release. Market trends and information disclosed by Delek Logistics may be relevant to the logistics segment reported by Delek US. Both a replay of the conference call and press release for Delek Logistics will be available online at www.deleklogistics.com.

About Delek US Holdings, Inc.

Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, and renewable fuels. The refining assets consist primarily of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day.

The logistics operations include Delek Logistics Partners, LP (NYSE: DKL). Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. Delek US Holdings, Inc. and its subsidiaries owned approximately 63.0% (including the general partner interest) of Delek Logistics Partners, LP at June 30, 2026.

Safe Harbor Provisions Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the federal securities laws. These statements contain words such as “possible,” “believe,” “should,” “could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,” “anticipate,” “will,” “if”, “potential,” “expect” or similar expressions, as well as statements in the future tense. These forward-looking statements include, but are not limited to, statements regarding anticipated performance and financial position; cost reductions; throughput at the Company’s refineries; crude oil prices, discounts and quality and our ability to benefit therefrom; growth; scheduled turnaround activity; projected capital expenditures and investments into our business; liquidity and EBITDA impacts from strategic and intercompany transactions; the performance of our midstream growth initiatives, and the flexibility, benefits and expected returns therefrom; and projected benefits of Delek Logistics’ acquisition of the Delaware Gathering, Permian Gathering, H2O Midstream and Gravity Water Midstream businesses.

Investors are cautioned that the following important factors, among others, may affect these forward-looking statements: political or regulatory developments, including tariffs, taxes and changes in governmental policies relating to crude oil, natural gas, refined products or renewables; uncertainty related to timing and amount of future share repurchases and dividend payments; risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell, uncertainties regarding actions by OPEC and non-OPEC oil producing countries impacting crude oil production and pricing; risks and uncertainties related to the integration by Delek Logistics of the Delaware Gathering, Permian Gathering, H2O Midstream or Gravity businesses following their acquisition; Delek US’ ability to realize cost reductions; risks related to exposure to Permian Basin crude oil, such as supply, pricing, gathering, production and transportation capacity; gains and losses from derivative instruments; risks associated with acquisitions and dispositions; risks and uncertainties with respect to the possible benefits of the H2O Midstream and Gravity transactions; acquired assets may suffer a diminishment in fair value as a result of which we may need to record a write-down or impairment in carrying value of the asset; the possibility of litigation challenging and/or legislation changing renewable fuel standard waivers; changes in the scope, costs, and/or timing of capital and maintenance projects; the ability to grow the Midland Gathering System; the ability of the Red River joint venture to complete the expansion project to increase the Red River pipeline capacity; operating hazards inherent in transporting, storing and processing crude oil and intermediate and finished petroleum products; our competitive position and the effects of competition; the projected growth of the industries in which we operate; general economic and business conditions affecting the geographic areas in which we operate; and other risks described in Delek US’ filings with the United States Securities and Exchange Commission (the “SEC”), including risks disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings and reports with the SEC.

Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek US undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek US becomes aware of, after the date hereof, except as required by applicable law or regulation.

Non-GAAP Disclosures:

Our management uses certain “non-GAAP” operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our financial information presented in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”). These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:

Adjusting items – certain identified infrequently occurring items, non-cash items, and items that are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends;

Adjusted net income (loss) – calculated as net income (loss) attributable to Delek US adjusted for relevant Adjusting items recorded during the period;

Adjusted net income (loss) per share – calculated as Adjusted net income (loss) divided by weighted average shares outstanding, assuming dilution, as adjusted for any anti-dilutive instruments that may not be permitted for consideration in GAAP earnings per share calculations but that nonetheless favorably impact dilution;

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) – calculated as net income (loss) attributable to Delek adjusted to add back interest expense, income tax expense, depreciation, amortization and proportional interest, taxes, depreciation and amortization of equity method investments;

Adjusted EBITDA – calculated as EBITDA adjusted for the relevant identified Adjusting items in Adjusted net income (loss) that do not relate to interest expense, income tax expense, depreciation or amortization, and adjusted to include income (loss) attributable to non-controlling interests;

Refining margin – calculated as gross margin (which we define as sales minus cost of sales) adjusted for operating expenses and depreciation and amortization included in cost of sales;

Adjusted refining margin – calculated as refining margin adjusted for other inventory impacts, net inventory LCM valuation loss (benefit), unrealized hedging (gain) loss and intercompany lease impacts;

Refining production margin – calculated based on the regional market sales price of refined products produced, less allocated transportation, Renewable Fuel Standard volume obligation and associated feedstock costs. This measure reflects the economics of each refinery exclusive of the financial impact of inventory price risk mitigation programs and marketing uplift strategies;

Refining production margin per throughput barrel – calculated as refining production margin divided by our average refining throughput in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period; and

Net debt – calculated as long-term debt including both current and non-current portions (the most comparable GAAP measure) less cash and cash equivalents as of a specific balance sheet date.

We believe these non-GAAP operational and financial measures are useful to investors, lenders, ratings agencies and analysts to assess our ongoing performance because, when reconciled to their most comparable GAAP financial measure, they provide improved relevant comparability between periods, to peers or to market metrics through the inclusion of retroactive regulatory or other adjustments as if they had occurred in the prior periods they relate to, or through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying results and trends. “Net debt,” also a non-GAAP financial measure, is an important measure to monitor leverage and evaluate the balance sheet.

Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because Adjusted net income or loss, Adjusted net income or loss per share, EBITDA and Adjusted EBITDA, Adjusted Refining Margin and Refining Production Margin or any of our other identified non-GAAP measures may be defined differently by other companies in its industry, Delek US’ definition may not be comparable to similarly titled measures of other companies. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.

Delek US Holdings, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
*($ in millions, except share and per share data)*
	June 30, 2026			December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	628.6		$	625.8
Accounts receivable, net		866.3			648.7
Inventories, net of inventory valuation reserves		999.3			726.0
Other current assets		108.7			67.5
Total current assets		2,602.9			2,068.0
Property, plant and equipment:
Property, plant and equipment		5,909.4			5,586.9
Less: accumulated depreciation		(2,476.6	)		(2,314.4	)
Property, plant and equipment, net		3,432.8			3,272.5
Operating lease right-of-use assets		66.2			71.4
Goodwill		475.3			475.3
Other intangibles, net		400.4			405.7
Equity method investments		430.9			427.7
Other non-current assets		142.9			127.1
Total assets	$	7,551.4		$	6,847.7

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,853.0		$	1,633.8
Current portion of long-term debt		8.5			9.5
Current portion of operating lease liabilities		27.2			27.2
Accrued expenses and other current liabilities		1,522.6			858.9
Total current liabilities		3,411.3			2,529.4
Non-current liabilities:
Long-term debt, net of current portion		3,181.2			3,223.6
Obligation under Inventory Intermediation Agreement		95.2			119.5
Environmental liabilities, net of current portion		30.7			31.1
Asset retirement obligations		36.3			34.0
Deferred tax liabilities		152.3			217.9
Operating lease liabilities, net of current portion		38.3			46.1
Other non-current liabilities		183.4			98.8
Total non-current liabilities		3,717.4			3,771.0
Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.01 par value, 110,000,000 shares authorized, 78,774,745 shares and 77,357,447 shares issued at June 30, 2026, and December 31, 2025, respectively		0.8			0.8
Additional paid-in capital		1,267.6			1,290.9
Accumulated other comprehensive loss		—			—
Treasury stock, 17,575,527 shares, at cost, at June 30, 2026, and December 31, 2025, respectively		(694.1	)		(694.1	)
Retained earnings (deficit)		(387.8	)		(311.1	)
Non-controlling interests in subsidiaries		236.2			260.8
Total stockholders’ equity		422.7			547.3
Total liabilities and stockholders’ equity	$	7,551.4		$	6,847.7

Delek US Holdings, Inc.
Condensed Consolidated Statements of Income (Loss) (Unaudited)
*($ in millions, except share and per share data)*	Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Net revenues	$	4,087.0		$	2,764.6		$	6,740.1		$	5,406.5
Cost of sales:
Cost of materials and other		3,390.6			2,415.0			5,856.4			4,814.5
Operating expenses (excluding depreciation and amortization presented below)		220.1			209.8			440.0			420.9
Depreciation and amortization		111.2			87.6			208.8			182.6
Total cost of sales		3,721.9			2,712.4			6,505.2			5,418.0
Operating expenses related to wholesale business (excluding depreciation and amortization presented below)		2.9			2.2			4.5			3.5
General and administrative expenses		56.7			76.6			100.7			138.1
Depreciation and amortization		4.5			6.5			10.2			12.8
Other operating expense (income), net		(1.4	)		0.4			(3.6	)		(6.6	)
Total operating costs and expenses		3,784.6			2,798.1			6,617.0			5,565.8
Operating income (loss)		302.4			(33.5	)		123.1			(159.3	)
Interest expense, net		100.1			85.9			184.6			170.0
Income from equity method investments		(19.7	)		(22.2	)		(34.3	)		(35.5	)
Other expense (income), net		0.1			6.2			(0.2	)		4.6
Total non-operating expense, net		80.5			69.9			150.1			139.1
Income (loss) from continuing operations before income tax expense (benefit)		221.9			(103.4	)		(27.0	)		(298.4	)
Income tax expense (benefit)		41.8			(14.1	)		(16.4	)		(50.9	)
Income (loss) from continuing operations, net of tax		180.1			(89.3	)		(10.6	)		(247.5	)
Discontinued operations:
Income (loss) from discontinued operations		—			(1.0	)		(0.3	)		(1.4	)
Income tax expense (benefit)		—			(0.2	)		(0.1	)		(0.3	)
Income (loss) from discontinued operations, net of tax		—			(0.8	)		(0.2	)		(1.1	)
Net income (loss)		180.1			(90.1	)		(10.8	)		(248.6	)
Net income attributed to non-controlling interests		10.6			16.3			21.0			30.5
Net income (loss) attributable to Delek	$	169.5		$	(106.4	)	$	(31.8	)	$	(279.1	)
Basic income (loss) per share:
Income (loss) from continuing operations	$	2.76		$	(1.75	)	$	(0.52	)	$	(4.53	)
Income (loss) from discontinued operations		—			(0.01	)	$	—		$	(0.02	)
Total basic income (loss) per share	$	2.76		$	(1.76	)	$	(0.52	)	$	(4.55	)

Diluted income (loss) per share:
Income (loss) from continuing operations	$	2.71		$	(1.75	)	$	(0.52	)	$	(4.53	)
Income (loss) from discontinued operations		—			(0.01	)	$	—		$	(0.02	)
Total diluted income (loss) per share	$	2.71		$	(1.76	)	$	(0.52	)	$	(4.55	)
Weighted average common shares outstanding:
Basic		61,315,020			60,506,943			60,788,126			61,306,915
Diluted		62,486,336			60,506,943			60,788,126			61,306,915

Delek US Holdings, Inc.
Condensed Consolidated Cash Flow Data (Unaudited)
*($ in millions)*	Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Cash flows from operating activities:
Cash provided by (used in) operating activities – continuing operations	$	262.9		$	52.2		$	724.2		$	(9.9	)
Cash provided by (used in) operating activities – discontinued operations		—			(0.8	)		(0.2	)		(1.1	)
Net cash provided by (used in) operating activities		262.9			51.4			724.0			(11.0	)
Cash flows from investing activities:
Net cash used in investing activities		(176.2	)		(163.0	)		(366.5	)		(477.6	)
Cash flows from financing activities:
Net cash provided by (used in) financing activities		(82.2	)		103.3			(354.7	)		368.5
Net decrease in cash and cash equivalents		4.5			(8.3	)		2.8			(120.1	)
Cash and cash equivalents at the beginning of the period		624.1			623.8			625.8			735.6
Cash and cash equivalents at the end of the period		628.6			615.5			628.6			615.5

Working Capital Impacts Included in Cash Flows from Operating Activities from Continuing Operations
*($ in millions)*	Three Months Ended June 30,					Six Months Ended June 30,
		2026			2025		2026		2025
Favorable (unfavorable) cash flow working capital changes ⁽¹⁾	$	(137.9	)	$	51.3	$	463.0	$	76.9

⁽¹⁾	Includes obligations under the inventory intermediation agreement.

Significant Transactions During the Quarter Impacting Results:

Restructuring Costs

In 2022, we announced that we are progressing a business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure. For the second quarter 2026, we recorded restructuring costs totaling $10.9 million ($8.4 million after-tax) associated with our business transformation. Restructuring costs of $6.4 million are recorded in general and administrative expenses and $4.5 million are included in operating expenses in our condensed consolidated statements of income.

General and Administrative Expenses

Excluding transaction costs and restructuring costs, general and administrative expenses were $50.2 million for the three months ended June 30, 2026.

Transactions with Delek Logistics

In January 2026, we entered into asset purchase agreements with Delek Logistics, pursuant to which we agreed to acquire a Tyler refinery tank for total consideration of $19.0 million and El Dorado tank and terminal assets for total consideration of $66.0 million. The Tyler Tank Purchase closed on April 1, 2026 with consideration paid through transfer of Delek Logistics common units, based on a 30-day volume weighted average unit price. The El Dorado Terminal Purchase is expected to close on October 1, 2027, subject to the satisfaction of customary closing conditions.

Other Inventory Impact

“Other inventory impact” is primarily calculated by multiplying the number of barrels sold during the period by the difference between current period weighted average purchase cost per barrel directly related to our refineries and per barrel cost of materials and other for the period recognized on a first-in, first-out basis directly related to our refineries. It assumes no beginning or ending inventory, so that the current period average purchase cost per barrel is a reasonable estimate of our market purchase cost for the current period, without giving effect to any build or draw on beginning inventory. These amounts are based on management estimates using a methodology including these assumptions. However, this analysis provides management with a means to compare hypothetical refining margins to current period average crack spreads, as well as provides a means to better compare our results to peers.

Intercompany Leases

As a result of amendments to intercompany lease agreements in August 2024, we had to reassess lease classification for the agreements that contain leases under Accounting Standards Codification 842. As a result of these lease assessments, certain of these agreements met the criteria to be accounted for as sales-type leases for Delek Logistics and finance leases for the Refining segment. Therefore, portions of the minimum volume commitments under these agreements subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. Prior to the amendments, these agreements were accounted for as operating leases and these minimum volume commitments were recorded as revenues in the Logistics segment. Similarly, these minimum volume commitments were previously recorded as costs of sales for the Refining segment, as the underlying lease was reclassified from an operating lease to a finance lease, and these payments are now recorded as interest expense and reductions in the lease liability. These accounting changes have no impact to the Delek US consolidated results as these amounts eliminate in consolidation.

Delek Term Credit Facility

On May 15, 2026, Delek entered into an amendment (“Amendment No. 1”) to the Delek Term Loan Credit Facility. Proceeds and cash on hand were used to refinance the Company’s existing term loan facility. As a result of the refinancing effected pursuant to Amendment No. 1, outstanding term loans of the Company were reduced to an aggregate principal amount of $850.0 million. Amendment No. 1, among other modifications, (i) extended the maturity of the Delek Term Credit Facility to May 15, 2032 and (ii) reduces the rate of interest on borrowings, at the Company’s election, to either term SOFR plus 300 basis points or base rate plus 200 basis points. The amendment also allows for up to 750.0 million in incremental loans subject to certain restrictions.

Revolving Credit Facilities

On April 9, 2026, the Company entered into Amendment No. 4 to Third Amended and Restated Credit Agreement. Amendment No. 4, among other modifications, (i) increases the revolving loan commitments from $1,100.0 million to $1,250.0 million, (ii) extends the maturity date of the Delek Revolving Credit Facility from October 26, 2027 to April 9, 2031, (iii) reduces the interest rate margins applicable to the Delek Revolving Credit Facility by 0.25% and (iv) amends certain thresholds for obligations under the Existing ABL Credit Agreement.

Delek Logistics 2034 Notes

On May 14, 2026, Delek Logistics and its wholly owned subsidiary Delek Logistics Finance Corp. (“Finance Corp.” and together with Delek Logistics, the “Co-issuers”), sold $800.0 million in aggregate principal amount of the Co-issuers 6.875% Senior Notes due 2034 (the “Delek Logistics 2034 Notes”). Net proceeds were used to redeem the Delek Logistics 2028 Notes including accrued interest and a portion of the Delek Logistics 2029 Notes including accrued interest.

Reconciliation of Net Income (Loss) Attributable to Delek US to Adjusted Net Income (Loss)

	Three Months Ended June 30,						Six Months Ended June 30,
*$ in millions (unaudited)*		2026			2025			2026			2025

Reported net income (loss) attributable to Delek US	$	169.5		$	(106.4	)	$	(31.8	)	$	(279.1	)
Adjusting items ⁽¹⁾
Inventory and other LCM valuation (benefit) loss		4.5			(0.1	)		(4.2	)		0.1
Tax effect		(1.1	)		—			0.9			—
Inventory and other LCM valuation (benefit) loss, net		3.4			(0.1	)		(3.3	)		0.1
Other inventory impact		(157.3	)		41.9			(174.9	)		68.1
Tax effect		35.4			(9.4	)		39.4			(15.3	)
Other inventory impact, net ⁽²⁾		(121.9	)		32.5			(135.5	)		52.8
Loss on extinguishment of debt and other non-cash interest		31.0			—			31.0			—
Tax effect		(7.0	)		—			(7.0	)		—
Loss on extinguishment of debt and other non-cash interest, net ⁽⁴⁾		24.0			—			24.0			—
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		(23.1	)		6.3			0.8			4.7
Tax effect		5.2			(1.5	)		(0.2	)		(1.1	)
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements, net		(17.9	)		4.8			0.6			3.6
Transaction related expenses		0.1			3.9			2.2			7.4
Tax effect		—			(0.9	)		(0.5	)		(1.7	)
Transaction related expenses, net		0.1			3.0			1.7			5.7
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		210.5			7.6			391.3			7.4
Tax effect		(47.3	)		(1.7	)		(88.0	)		(1.7	)
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts, net		163.2			5.9			303.3			5.7
Restructuring costs		10.9			25.5			13.6			33.9
Tax effect		(2.5	)		(5.7	)		(3.1	)		(7.6	)
Restructuring costs, net ⁽²⁾		8.4			19.8			10.5			26.3
Renewable volume obligation short related to small refinery exemptions⁽³⁾		148.6			—			230.9			—
Tax effect		(33.5	)		—			(52.0	)		—
Renewable volume obligation short related to small refinery exemptions, net		115.1			—			178.9			—
Impairment of investments held at cost and other assets		—			8.6			—			8.6
Tax effect		—			(1.9	)		—			(1.9	)
Impairment of investments held at cost and other assets, net		—			6.7			—			6.7
DPG inventory adjustment		—			0.9			0.3			0.9
Tax effect		—			(0.2	)		(0.1	)		(0.2	)
DPG inventory adjustment, net		—			0.7			0.2			0.7
Total Adjusting items ⁽¹⁾		174.4			73.3			380.4			101.6
Adjusted net income (loss)	$	343.9		$	(33.1	)	$	348.6		$	(177.5	)

⁽¹⁾	All adjustments have been tax effected using the estimated marginal income tax rate, as applicable.
⁽²⁾	See further discussion in the “Significant Transactions During the Quarter Impacting Results” section.
⁽³⁾	Starting with the quarter ended September 30, 2025, we have updated our non-GAAP financial measures to include the benefit related to small refinery exemptions expected to be received specific to the current year obligation based on current laws and regulations. Consistent with our historical accounting practice, we have recorded the full amount of our Consolidated Net RINs Obligation assuming no future exemptions are granted. However, based on our history of being granted the exemptions and expected future activity, we have adjusted the non-GAAP measure to include the benefit of receiving exemptions equal to approximately 50% of our recorded current-period obligation.
⁽⁴⁾	Starting with the quarter ended June 30, 2026, we have updated our non-GAAP financial measures to adjust for certain non-cash interest expenses, including interest related to the loss on early extinguishment of debt and amortization of deferred debt financing costs, discounts and premiums. The impact to historical non-GAAP financial measures is immaterial.

Reconciliation of U.S. GAAP Income (Loss) per share to Adjusted Net Income (Loss) per share

	Three Months Ended June 30,						Six Months Ended June 30,
*$ per share (unaudited)*		2026			2025			2026			2025

Reported diluted net income (loss) per share	$	2.71		$	(1.76	)	$	(0.52	)	$	(4.55	)
Adjusting items, after tax (per share) ^{(1) (2)}
Net inventory and other LCM valuation (benefit) loss		0.05			—			(0.05	)		—
Other inventory impact ⁽³⁾		(1.95	)		0.54			(2.23	)		0.86
Loss on extinguishment of debt and other non-cash interest ⁽⁵⁾		0.38			—			0.39			—
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		(0.29	)		0.08			0.01			0.06
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		2.61			0.09			4.99			0.09
Transaction related expenses		—			0.05			0.03			0.09
Restructuring costs ⁽³⁾		0.13			0.32			0.17			0.43
Renewable volume obligation short related to small refinery exemptions ⁽⁴⁾		1.84			—			2.94			—
Impairment of investments held at cost and other assets		—			0.11			—			0.11
DPG inventory adjustment, net		—			0.01			—			0.01
Total Adjusting items ⁽¹⁾		2.77			1.20			6.25			1.65
Adjusted net income (loss) per share	$	5.48		$	(0.56	)	$	5.73		$	(2.90	)

⁽¹⁾	The adjustments have been tax effected using the estimated marginal tax rate, as applicable.
⁽²⁾	For periods of Adjusted net loss, Adjustments (Adjusting items) and Adjusted net loss per share are presented using basic weighted average shares outstanding.
⁽³⁾	See further discussion in the “Significant Transactions During the Quarter Impacting Results” section.
⁽⁴⁾	Starting with the quarter ended September 30, 2025, we have updated our non-GAAP financial measures to include the benefit related to small refinery exemptions expected to be received specific to the current year obligation based on current laws and regulations. Consistent with our historical accounting practice, we have recorded the full amount of our Consolidated Net RINs Obligation assuming no future exemptions are granted. However, based on our history of being granted the exemptions and expected future activity, we have adjusted the non-GAAP measure to include the benefit of receiving exemptions equal to approximately 50% of our recorded current-period obligation.
⁽⁵⁾	Starting with the quarter ended June 30, 2026, we have updated our non-GAAP financial measures to adjust for certain non-cash interest expenses, including interest related to the loss on early extinguishment of debt and amortization of deferred debt financing costs, discounts and premiums. The impact to historical non-GAAP financial measures is immaterial.

Reconciliation of Net Income (Loss) attributable to Delek US to Adjusted EBITDA
	Three Months Ended June 30,						Six Months Ended June 30,
*$ in millions (unaudited)*		2026			2025			2026			2025
Reported net income (loss) attributable to Delek US	$	169.5		$	(106.4	)	$	(31.8	)	$	(279.1	)
Add:
Interest expense, net		100.1			85.9			184.6			170.0
Income tax expense (benefit)		41.8			(14.3	)		(16.5	)		(51.2	)
Depreciation and amortization		115.7			94.1			219.0			195.4
Proportional interest, taxes, depreciation and amortization from equity-method investments		6.8			7.7			14.1			14.8
EBITDA attributable to Delek US		433.9			67.0			369.4			49.9
Adjusting items
Net inventory and other LCM valuation (benefit) loss		4.5			(0.1	)		(4.2	)		0.1
Other inventory impact ⁽¹⁾		(157.3	)		41.9			(174.9	)		68.1
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		(23.1	)		6.3			0.8			4.7
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		210.5			7.6			391.3			7.4
Transaction related expenses		0.1			3.9			2.2			7.4
Restructuring costs ⁽¹⁾		10.9			25.5			13.6			33.9
Renewable volume obligation short related to small refinery exemptions⁽²⁾		148.6			—			230.9			—
Impairment of investments held at cost and other assets		—			8.6			—			8.6
DPG inventory adjustment		—			0.9			0.3			0.9
Net income attributable to non-controlling interest		10.6			16.3			21.0			30.5
Total Adjusting items		204.8			110.9			481.0			161.6
Adjusted EBITDA	$	638.7		$	177.9		$	850.4		$	211.5

⁽¹⁾

See further discussion in the “Significant Transactions During the Quarter Impacting Results” section.

⁽²⁾

Starting with the quarter ended September 30, 2025, we have updated our non-GAAP financial measures to include the benefit related to small refinery exemptions expected to be received specific to the current year obligation based on current laws and regulations. Consistent with our historical accounting practice, we have recorded the full amount of our Consolidated Net RINs Obligation assuming no future exemptions are granted. However, based on our history of being granted the exemptions and expected future activity, we have adjusted the non-GAAP measure to include the benefit of receiving exemptions equal to approximately 50% of our recorded current-period obligation.

Reconciliation of Segment EBITDA Attributable to Delek US to Adjusted Segment EBITDA
	Three Months Ended June 30, 2026
*$ in millions (unaudited)*	Refining			Logistics			Segment Total			Corporate, Other and Eliminations			Consolidated
Segment EBITDA Attributable to Delek US	$	556.0		$	120.0		$	676.0		$	(242.1	)	$	433.9
Adjusting items
Net inventory and other LCM valuation (benefit) loss		4.5			—			4.5			—			4.5
Other inventory impact ⁽¹⁾		(157.3	)		—			(157.3	)		—			(157.3	)
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		(22.4	)		(0.7	)		(23.1	)		—			(23.1	)
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		59.3			—			59.3			151.2			210.5
Transaction related expenses		—			0.1			0.1			—			0.1
Restructuring costs ⁽¹⁾		—			—			—			10.9			10.9
Renewable volume obligation short related to small refinery exemptions ⁽²⁾		148.6			—			148.6			—			148.6
DPG inventory adjustment		—			—			—			—			—
Intercompany lease impacts ⁽¹⁾		(22.5	)		24.1			1.6			(1.6	)		—
Net income attributable to non-controlling interest		—			—			—			10.6			10.6
Total Adjusting items		10.2			23.5			33.7			171.1			204.8
Adjusted Segment EBITDA	$	566.2		$	143.5		$	709.7		$	(71.0	)	$	638.7

	Three Months Ended June 30, 2025
*$ in millions (unaudited)*	Refining ⁽³⁾			Logistics		Segment Total			Corporate, Other and Eliminations⁽³⁾			Consolidated
Segment EBITDA Attributable to Delek US	$	96.3		$	96.6	$	192.9		$	(125.9	)	$	67.0
Adjusting items
Net inventory and other LCM valuation (benefit) loss		(0.1	)		—		(0.1	)		—			(0.1	)
Other inventory impact ⁽¹⁾		41.9			—		41.9			—			41.9
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		6.3			—		6.3			—			6.3
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		—			—		—			7.6			7.6
Transaction related expenses		—			2.5		2.5			1.4			3.9
Restructuring costs		—			—		—			25.5			25.5
Impairment of investments held at cost		—			—		—			8.6			8.6
DPG inventory adjustment		—			0.9		0.9			—			0.9
Intercompany lease impacts ⁽¹⁾		(29.6	)		27.4		(2.2	)		2.2			—
Net income attributable to non-controlling interest		—			—		—			16.3			16.3
Total Adjusting items		18.5			30.8		49.3			61.6			110.9
Adjusted Segment EBITDA	$	114.8		$	127.4	$	242.2		$	(64.3	)	$	177.9

Reconciliation of Segment EBITDA Attributable to Delek US to Adjusted Segment EBITDA
	Six Months Ended June 30, 2026
*$ in millions (unaudited)*	Refining			Logistics			Segment Total			Corporate, Other and Eliminations			Consolidated
Segment EBITDA Attributable to Delek US	$	635.2		$	214.9		$	850.1		$	(480.7	)	$	369.4
Adjusting items
Net inventory and other LCM valuation (benefit) loss		(4.2	)		—			(4.2	)		—			(4.2	)
Other inventory impact ⁽¹⁾		(174.9	)		—			(174.9	)		—			(174.9	)
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		0.9			(0.1	)		0.8			—			0.8
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		81.6			—			81.6			309.7			391.3
Restructuring costs ⁽¹⁾		—			—			—			13.6			13.6
Transaction related expenses		—			1.3			1.3			0.9			2.2
Renewable volume obligation short related to small refinery exemptions ⁽²⁾		230.9			—			230.9			—			230.9
DPG inventory adjustment		—			0.3			0.3			—			0.3
Intercompany lease impacts ⁽¹⁾		(48.0	)		59.5			11.5			(11.5	)		—
Net income attributable to non-controlling interest		—			—			—			21.0			21.0
Total Adjusting items		86.3			61.0			147.3			333.7			481.0
Adjusted Segment EBITDA	$	721.5		$	275.9		$	997.4		$	(147.0	)	$	850.4


	Six Months Ended June 30, 2025
*$ in millions (unaudited)*	Refining			Logistics		Segment Total			Corporate, Other and Eliminations			Consolidated
Segment EBITDA Attributable to Delek US	$	80.5		$	188.8	$	269.3		$	(219.4	)	$	49.9
Adjusting items
Net inventory and other LCM valuation (benefit) loss		0.1			—		0.1			—			0.1
Other inventory impact ⁽¹⁾		68.1			—		68.1			—			68.1
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		4.7			—		4.7			—			4.7
Unrealized changes in fair value of the net RINs obligation due to price of underlying RINs and related hedging on forward RIN contracts		(5.5	)		—		(5.5	)		12.9			7.4
Restructuring costs		0.3			—		0.3			33.6			33.9
Transaction related expenses		—			5.8		5.8			1.6			7.4
Impairment of investments held at cost		—			—		—			8.6			8.6
DPG inventory adjustment		—			0.9		0.9			—			0.9
Intercompany lease impacts ⁽¹⁾		(60.4	)		59.4		(1.0	)		1.0			—
Net income attributable to non-controlling interest		—			—		—			30.5			30.5
Total Adjusting items		7.3			66.1		73.4			88.2			161.6
Adjusted Segment EBITDA	$	87.8		$	254.9	$	342.7		$	(131.2	)	$	211.5

⁽¹⁾

See further discussion in the “Significant Transactions During the Quarter Impacting Results” section.

⁽²⁾

Refining Segment Selected Financial Information	Three Months Ended June 30,						Six Months Ended June 30,
Refining Segment Selected Financial Information		2026			2025			2026			2025
Total Refining Segment	(Unaudited)						(Unaudited)
Days in period		91			91			181			181
Total sales volume – refined product (average barrels per day (“bpd”)) ⁽¹⁾		313,791			315,259			294,192			305,132
Total production (average bpd)		312,410			311,298			285,192			298,505

Crude oil		302,530			304,831			270,611			288,597
Other feedstocks		13,025			11,494			17,336			14,241
Total throughput (average bpd)		315,555			316,325			287,947			302,838

Total refining production margin per bbl total throughput	$	19.84		$	8.03		$	16.37		$	6.95
Total refining operating expenses per bbl total throughput	$	5.32		$	5.17		$	5.70		$	5.57

Total refining production margin ($ in millions)	$	569.6		$	231.1		$	853.4		$	380.8
Supply, marketing and other^{($ millions) ⁽²⁾}		(0.5	)		25.7			(61.8	)		1.9
Total adjusted refining margin ($ in millions)	$	569.1		$	256.8		$	791.6		$	382.7

Total crude slate details
Total crude slate: (% based on amount received in period)
WTI crude oil		74.0	%		77.5	%		76.9	%		72.2	%
Gulf Coast Sweet crude		8.4	%		6.5	%		6.7	%		7.5	%
Local Arkansas crude oil		3.4	%		3.3	%		3.5	%		3.5	%
Other		14.2	%		12.7	%		12.9	%		16.8	%

Crude utilization (% based on nameplate capacity) ⁽⁴⁾		100.2	%		100.9	%		89.6	%		95.6	%

Tyler, TX Refinery
Days in period		91			91			181			181
Products manufactured (average bpd):
Gasoline		37,565			36,369			37,760			35,297
Diesel/Jet		34,378			33,370			32,318			31,901
Petrochemicals, LPG, NGLs		2,091			2,044			1,954			1,953
Other		2,226			662			1,131			1,031
Total production		76,260			72,445			73,163			70,182
Throughput (average bpd):
Crude oil		75,525			73,249			71,801			70,868
Other feedstocks		2,362			1,177			2,985			974
Total throughput		77,887			74,426			74,786			71,842

Tyler refining production margin ($ in millions)	$	165.1		$	67.4		$	270.1		$	116.1
Per barrel of throughput:
Tyler refining production margin	$	23.30		$	9.95		$	19.95		$	8.93
Operating expenses	$	4.86		$	4.58		$	5.23		$	5.11
Crude Slate: (% based on amount received in period)
WTI crude oil		77.7	%		74.1	%		78.6	%		73.9	%
East Texas crude oil		22.0	%		22.8	%		20.4	%		23.9	%
Other		0.3	%		3.1	%		1.0	%		2.2	%

Capture rate ⁽³⁾		50.4	%		49.3	%		50.7	%		48.0	%
El Dorado, AR Refinery
Days in period		91			91			181			181
Products manufactured (average bpd):
Gasoline		41,851			38,263			39,704			37,809
Diesel/Jet		33,105			30,987			29,599			29,472
Petrochemicals, LPG, NGLs		1,247			1,018			1,276			980
Asphalt		6,333			7,871			5,850			7,360
Other		737			1,266			1,127			1,417
Total production		83,273			79,405			77,556			77,038
Throughput (average bpd):
Crude oil		82,910			78,592			76,445			75,275
Other feedstocks		1,596			2,829			2,261			3,331
Total throughput		84,506			81,421			78,706			78,606

Refining Segment Selected Financial Information (continued)	Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
El Dorado refining production margin ($ in millions)	$	126.1		$	38.6		$	187.9		$	64.7
Per barrel of throughput:
El Dorado refining production margin	$	16.40		$	5.21		$	13.19		$	4.55
Operating expenses	$	4.74		$	4.38		$	5.17		$	4.75
Crude Slate: (% based on amount received in period)
WTI crude oil		86.8	%		83.1	%		86.2	%		76.3	%
Local Arkansas crude oil		12.3	%		12.9	%		12.6	%		13.6	%
Other		0.9	%		4.0	%		1.2	%		10.1	%

Capture rate ⁽³⁾		35.4	%		25.8	%		33.5	%		24.5	%
Big Spring, TX Refinery
Days in period		91			91			181			181
Products manufactured (average bpd):
Gasoline		33,373			35,506			24,592			32,469
Diesel/Jet		26,651			27,884			18,602			23,478
Petrochemicals, LPG, NGLs		2,919			4,901			2,040			4,027
Asphalt		2,720			2,009			1,976			2,274
Other		3,552			4,003			2,682			3,941
Total production		69,215			74,303			49,892			66,189
Throughput (average bpd):
Crude oil		68,924			71,449			48,932			62,435
Other feedstocks		1,213			4,210			1,513			5,147
Total throughput		70,137			75,659			50,445			67,582

Big Spring refining production margin ($ in millions)	$	130.7		$	66.5		$	152.2		$	92.4
Per barrel of throughput:
Big Spring refining production margin	$	20.47		$	9.65		$	16.67		$	7.56
Operating expenses	$	6.43		$	6.67		$	7.57		$	7.41
Crude Slate: (% based on amount received in period)
WTI crude oil		67.7	%		77.8	%		69.1	%		71.3	%
WTS crude oil		32.3	%		22.2	%		30.9	%		28.7	%

Capture rate ⁽³⁾		46.0	%		48.7	%		44.3	%		42.1	%
Krotz Springs, LA Refinery
Days in period		91			91			181			181
Products manufactured (average bpd):
Gasoline		43,188			40,983			44,941			42,067
Diesel/Jet		31,744			32,908			31,351			32,616
Heavy oils		1,977			4,596			1,773			3,917
Petrochemicals, LPG, NGLs		6,754			6,660			6,512			6,496
Other		—			—			—			—
Total production		83,663			85,147			84,577			85,096
Throughput (average bpd):
Crude oil		75,171			81,541			73,433			80,019
Other feedstocks		7,854			3,278			10,576			4,789
Total throughput		83,025			84,819			84,009			84,808

Krotz Springs refining production margin ($ in millions)	$	147.7		$	58.6		$	243.2		$	107.5
Per barrel of throughput:
Krotz Springs refining production margin	$	19.55		$	7.59		$	15.99		$	7.00
Operating expenses	$	5.39		$	5.13		$	5.48		$	5.24
Crude Slate: (% based on amount received in period)
WTI Crude		62.2	%		74.8	%		70.6	%		67.6	%
Gulf Coast Sweet Crude		33.3	%		25.2	%		24.9	%		27.7	%
Other		4.5	%		—	%		4.5	%		4.7	%

Capture rate ⁽³⁾		51.0	%		51.5	%		48.5	%		51.9	%

⁽¹⁾	Includes sales to other segments which are eliminated in consolidation.
⁽²⁾	Supply, marketing and other activities include refined product wholesale and related marketing activities, asphalt and intermediates marketing activities, optimization of inventory, the execution of risk management programs to capture the physical and financial opportunities that extend from our refining operations and our 50% interest in a joint venture that owns asphalt terminals. Formerly known as Trading & Supply.
⁽³⁾	Defined as refining production margin divided by the respective crack spread. See page 19 for crack spread information.
⁽⁴⁾	Crude throughput as % of total nameplate capacity of 302,000 bpd.

Logistics Segment Selected Information	Three Months Ended June 30,				Six Months Ended June 30,
		2026		2025		2026		2025
	(Unaudited)				(Unaudited)
Gathering & Processing: (average bpd)
Lion Pipeline System:
Crude pipelines (non-gathered)		74,197		71,220		68,068		66,580
Refined products pipelines		52,059		53,597		48,379		54,797
SALA Gathering System		9,737		9,983		9,485		10,151
East Texas Crude Logistics System		34,259		33,101		30,791		30,027
Midland Gathering Assets		209,957		207,183		214,057		209,059
Plains Connection System		176,680		158,881		194,421		169,004
Delaware Gathering Assets:
Natural gas gathering and processing (Mcfd) ⁽¹⁾		80,715		60,940		72,355		60,378
Crude oil gathering (average bpd)		157,156		137,167		143,380		129,737
Water disposal and recycling (average bpd)		105,396		116,504		108,269		122,468
Midland Water Gathering System: ⁽²⁾
Water disposal and recycling (average bpd) ⁽²⁾⁽³⁾		701,435		600,891		679,223		613,817

Wholesale Marketing & Terminalling:
East Texas – Tyler Refinery sales volumes (average bpd) ⁽⁴⁾		—		67,516		—		67,695
West Texas wholesale marketing throughputs (average bpd)		4,191		10,757		7,960		10,791
West Texas wholesale marketing margin per barrel	$	2.88	$	4.12	$	3.65	$	2.88
Terminalling throughputs (average bpd) ⁽⁵⁾		159,363		150,971		147,619		144,030

⁽¹⁾	Mcfd – average thousand cubic feet per day.
⁽²⁾	Consists of volumes of H2O Midstream and Gravity. Includes freshwater sales of 119,653 bpd and 119,383 bpd for the three and six months ended June 30, 2026, respectively, and 14,765 bpd and 13,697 bpd for the three and six months ended June 30, 2025, respectively.
⁽³⁾	Gravity volumes in 2025 are from January 2, 2025 through June 30, 2025.
⁽⁴⁾	Excludes jet fuel and petroleum coke.
⁽⁵⁾	Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, El Dorado and North Little Rock, Arkansas terminals and Memphis and Nashville, Tennessee terminals.

Supplemental Information
Schedule of Selected Segment Financial Data, Pricing Statistics Impacting our Refining Segment, and Other Reconciliations of Amounts Reported Under U.S. GAAP

Selected Segment Financial Data	Three Months Ended June 30, 2026
*$ in millions (unaudited)*	Refining		Logistics		Segment Total		Corporate, Other and Eliminations			Consolidated
Net revenues (excluding intercompany fees and revenues)	$	3,907.1	$	179.9	$	4,087.0	$	—		$	4,087.0
Inter-segment fees and revenues		148.9		204.8		353.7		(353.7	)		—
Total revenues	$	4,056.0	$	384.7	$	4,440.7	$	(353.7	)	$	4,087.0
Cost of sales		3,581.2		322.1		3,903.3		(181.4	)		3,721.9
Gross margin	$	474.8	$	62.6	$	537.4	$	(172.3	)	$	365.1

	Three Months Ended June 30, 2025
*$ in millions (unaudited)*	Refining		Logistics		Segment Total		Corporate, Other and Eliminations			Consolidated
Net revenues (excluding intercompany fees and revenues)	$	2,632.3	$	132.3	$	2,764.6	$	—		$	2,764.6
Inter-segment fees and revenues ⁽¹⁾		84.5		114.1		198.6		(198.6	)		—
Total revenues	$	2,716.8	$	246.4	$	2,963.2	$	(198.6	)	$	2,764.6
Cost of sales		2,695.5		185.7		2,881.2		(168.8	)		2,712.4
Gross margin	$	21.3	$	60.7	$	82.0	$	(29.8	)	$	52.2

	Six Months Ended June 30, 2026
*$ in millions (unaudited)*	Refining		Logistics		Segment Total		Corporate, Other and Eliminations			Consolidated
Net revenues (excluding intercompany fees and revenues)	$	6,429.4	$	310.7	$	6,740.1	$	—		$	6,740.1
Inter-segment fees and revenues		257.1		371.5		628.6		(628.6	)		—
Total revenues	$	6,686.5	$	682.2	$	7,368.7	$	(628.6	)	$	6,740.1
Cost of sales		6,198.5		575.7		6,774.2		(269.0	)		6,505.2
Gross margin	$	488.0	$	106.5	$	594.5	$	(359.6	)	$	234.9

	Six Months Ended June 30, 2025
*$ in millions (unaudited)*	Refining			Logistics		Segment Total		Corporate, Other and Eliminations			Consolidated
Net revenues (excluding intercompany fees and revenues)	$	5,150.6		$	255.9	$	5,406.5	$	—		$	5,406.5
Inter-segment fees and revenues		174.5			240.4		414.9		(414.9	)		—
Total revenues	$	5,325.1		$	496.3	$	5,821.4	$	(414.9	)	$	5,406.5
Cost of sales		5,396.4			385.0		5,781.4		(363.4	)		5,418.0
Gross margin	$	(71.3	)	$	111.3	$	40.0	$	(51.5	)	$	(11.5	)

Pricing Statistics	Three Months Ended June 30,				Six Months Ended June 30,
(average for the period presented)		2026		2025		2026		2025

WTI — Cushing crude oil (per barrel)	$	92.79	$	63.81	$	80.64	$	67.61
WTI — Midland crude oil (per barrel)	$	94.69	$	64.42	$	81.78	$	68.44
WTS — Midland crude oil (per barrel)	$	92.00	$	63.72	$	79.23	$	67.80
LLS (per barrel)	$	96.34	$	66.15	$	83.18	$	70.21
Brent (per barrel)	$	96.87	$	66.71	$	85.37	$	70.81

U.S. Gulf Coast 5-3-2 crack spread (per barrel) ⁽¹⁾	$	46.25	$	20.19	$	39.35	$	18.60
U.S. Gulf Coast 3-2-1 crack spread (per barrel) ⁽¹⁾	$	44.55	$	19.81	$	37.67	$	17.97
U.S. Gulf Coast 2-1-1 crack spread (per barrel) ⁽¹⁾	$	38.34	$	14.72	$	32.99	$	13.47

U.S. Gulf Coast Unleaded Gasoline (per gallon)	$	3.07	$	1.95	$	2.62	$	1.96
Gulf Coast Ultra-low sulfur diesel (per gallon)	$	3.68	$	2.08	$	3.22	$	2.19
U.S. Gulf Coast high sulfur diesel (per gallon)	$	3.35	$	1.85	$	2.92	$	1.98
Natural gas (per MMBTU)	$	2.94	$	3.51	$	3.21	$	3.69

⁽¹⁾

For our Tyler and El Dorado refineries, we compare our per barrel refining product margin to the Gulf Coast 5-3-2 crack spread consisting of (Argus pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel. For our Big Spring refinery, we compare our per barrel refining margin to the Gulf Coast 3-2-1 crack spread consisting of (Argus pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel. For our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S. Gulf Coast CBOB gasoline and (Platts pricing) U.S. Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). The Tyler refinery’s crude oil input is primarily WTI Midland and East Texas, while the El Dorado refinery’s crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil. The Big Spring refinery’s crude oil input is primarily comprised of WTS and WTI Midland. The Krotz Springs refinery’s crude oil input is primarily comprised of LLS and WTI Midland.

Other Reconciliations of Amounts Reported Under U.S. GAAP
*$ in millions (unaudited)*
	Three Months Ended June 30,						Six Months Ended June 30,
Reconciliation of gross margin to Refining margin to Adjusted refining margin		2026			2025			2026			2025
Gross margin	$	474.8		$	21.3		$	488.0		$	(71.3	)
Add back (items included in cost of sales):
Operating expenses (excluding depreciation and amortization)		156.1			150.5			306.3			308.6
Depreciation and amortization		76.6			66.5			141.9			138.4
Refining margin	$	707.5		$	238.3		$	936.2		$	375.7
Adjusting items
Net inventory and other LCM valuation loss (benefit)		4.5			(0.1	)		(4.2	)		0.1
Other inventory impact ⁽¹⁾		(157.3	)		41.9			(174.9	)		68.1
Unrealized inventory/commodity hedging (gain) loss where the hedged item is not yet recognized in the financial statements		(22.4	)		6.3			0.9			4.7
Unrealized RINs hedging (gain) loss where the hedged item is not yet recognized in the financial statements		59.3			—			81.6			(5.5	)
Intercompany lease impacts ⁽¹⁾		(22.5	)		(29.6	)		(48.0	)		(60.4	)
Total Adjusting items		(138.4	)		18.5			(144.6	)		7.0
Adjusted refining margin	$	569.1		$	256.8		$	791.6		$	382.7

⁽¹⁾

See further discussion in the “Significant Transactions During the Quarter Impacting Results” section.

Calculation of Net Debt	June 30, 2026		December 31, 2025
Long-term debt – current portion	$	8.5	$	9.5
Long-term debt – non-current portion		3,181.2		3,223.6
Total long-term debt		3,189.7		3,233.1
Less: Cash and cash equivalents		628.6		625.8
Net debt – consolidated		2,561.1		2,607.3
Less: DKL net debt		2,359.0		2,333.5
Net debt, excluding DKL	$	202.1	$	273.8

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KEYWORDS: Tennessee United States North America

INDUSTRY KEYWORDS: Oil/Gas Energy Logistics/Supply Chain Management Transport Other Energy

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