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Chicago Atlantic Real Estate Finance Announces First Quarter 2026 Financial Results

CHICAGO, May 07, 2026 (GLOBE NEWSWIRE) — Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) (“Chicago Atlantic” or the “Company”), a commercial mortgage real estate investment trust, today announced its financial results for the first quarter ended March 31, 2026.

Peter Sack, Co-Chief Executive Officer, noted, “Chicago Atlantic delivered stable results for the first quarter of 2026 in an unstable macro environment by continuing to differentiate ourselves from other capital providers. Sourcing loans with shorter durations that are not broadly marketed and backed by operators and facilities that are profitable and diversified across geographies and distribution channels has kept our portfolio relatively insulated from the current pressures impacting the broader private credit markets. With 100% of our loans protected by either fixed rates or floating rates with floors at or above the Prime rate, we have been able to generate a consistent weighted average portfolio yield. We remain encouraged by opportunities for the cannabis industry, and the rescheduling of medical cannabis from Schedule I to Schedule III by an order of the Federal government last month marks the most significant federal policy for the industry in its history. We expect this order, when implemented, to strengthen operator balance sheets and improve cash flows which would improve the credit profiles of our borrowers. We look forward to the establishment of a framework in upcoming months for the new policy.”

Quarterly Results of Operations

    For the three months ended  
    March 31, 2026     December 31, 2025     March 31, 2025  
    Total Amount     Per Share     Total Amount     Per Share     Total Amount     Per Share  
OPERATING RESULTS                                    
Net interest income   $ 13,124,086     $ 0.61     $ 14,238,203     $ 0.66     $ 13,041,933     $ 0.61  
Total expenses before provision for expected credit losses   $ 4,239,871     $ 0.20     $ 5,981,137     $ 0.28     $ 4,073,897     $ 0.19  
Net income   $ 4,840,364     $ 0.23     $ 8,157,249     $ 0.38     $ 10,041,312     $ 0.47  
(Benefit) provision for current expected credit losses   $ 3,837,851     $ 0.18     $ 99,817     $ 0.00     $ (1,073,276 )   $ (0.05 )
Distributable earnings – basic   $ 9,833,020     $ 0.47     $ 9,251,310     $ 0.44     $ 9,727,657     $ 0.47  
Distributable earnings – diluted   $ 9,833,020     $ 0.46     $ 9,251,310     $ 0.43     $ 9,727,657     $ 0.46  
Diluted weighted average shares of common stock outstanding     21,484,118     –       21,485,739     –       21,264,891     –  
Regular dividends declared   $ 9,907,728     $ 0.47     $ 9,907,728     $ 0.47       9,820,079     $ 0.47  
                                     
PORTFOLIO PERFORMANCE                                    
Total loan principal outstanding   $ 413,589,833           $ 411,075,088           $ 407,011,816        
Portfolio companies     25             26             30        
Unfunded commitments   $ 4,450,293           $ 31,116,960           $ 19,795,000        
Gross unlevered weighted average yield to maturity     15.8 %           16.3 %           16.9 %      
Aggregate loan portfolio bearing a variable interest rate     64.8 %           62.4 %           58.5 %      
Book value per share   $ 14.39           $ 14.60           $ 14.87        
Debt/equity ratio     38.4 %           32.0 %           28.0 %      
                                           

Portfolio Activity

The following table summarizes the Company’s primary investment activities:

Three months ended March 31, 2026  
    Principal   Portfolio Companies  
Loans Outstanding December 31, 2025   $ 411,075,088     26  
Principal Advances

1
 		         
New portfolio companies     16,211,500     1  
Existing portfolio companies     37,868,649     4  
      54,080,149      
Scheduled Principal Repayments          
New portfolio companies     –      
Existing portfolio companies     (3,349,541 )   11  
      (3,349,541 )    
Unscheduled Principal Repayments          
New portfolio companies     –      
Existing portfolio companies     (48,215,862 )   5  
      (48,215,862 )    
           
Net change in principal outstanding     2,514,745      
Loans Outstanding March 31, 2026   $ 413,589,833     25  
               

1 Principal advances include capitalized paid-in-kind (“PIK”) interest and/or other fees, if any, that were capitalized to the outstanding loan balance of the subject loan(s).

Capital Activity

  • As of March 31, 2026, the Company had approximately $117.1 million of total drawn leverage, comprised of $67.1 million drawn on the secured revolving credit facility and $50.0 million of outstanding senior unsecured notes due 2028.
  • As of May 7, 2026, the Company has $59.0 million available on its secured revolving credit facility, and total liquidity, net of estimated liabilities, of approximately $54 million.

2026 Outlook

Chicago Atlantic offered the following outlook for full year 2026:

  • The Company expects to maintain a dividend payout ratio based on Distributable Earnings per weighted average diluted share of approximately 90% to 100% on a full year basis.
  • If the Company’s taxable income requires additional distribution in excess of the regular quarterly dividend, in order to meet its 2026 taxable income distribution requirements, the Company expects to meet that requirement with a special dividend in the fourth quarter of 2026.

Conference Call and Quarterly Earnings Supplemental Details

Chicago Atlantic will host a conference call and live audio webcast, both open for the general public to hear, later today at 9:00 a.m. Eastern Time. The number to call for this interactive teleconference is (833) 630-1956 (international callers: 412-317-1837). The live audio webcast of the Company’s quarterly conference call will be available online in the Investor Relations section of the Company’s website at www.refi.reit. The online replay will be available approximately one hour after the end of the call and archived for one year.

Chicago Atlantic posted its First Quarter 2026 Earnings Supplemental on the Investor Relations page of its website. Chicago Atlantic routinely posts important information for investors on its website, www.refi.reit. The Company intends to use this website as a means of disclosing material information, for complying with our disclosure obligations under Regulation FD and to post and update investor presentations and similar materials on a regular basis. The Company encourages investors, analysts, the media and others interested in Chicago Atlantic to monitor the Investor Relations page of its website, in addition to following its press releases, SEC filings, publicly available earnings calls, presentations, webcasts and other information posted from time to time on the website. Please visit the IR Resources section of the website to sign up for email notifications.

About Chicago Atlantic Real Estate Finance, Inc.


Chicago Atlantic Real Estate Finance, Inc.
 (NASDAQ: REFI) is a market-leading commercial mortgage REIT utilizing significant real estate, credit and cannabis expertise to originate senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States. REFI is part of the Chicago Atlantic platform, which has offices in Chicago, Miami, New York, and London.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views and projections with respect to, among other things, future events and financial performance. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward- looking statements. These forward-looking statements, including statements about our future growth and strategies for such growth, are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. More information on these risks and other potential factors that could affect our business and financial results is included in our filings with the SEC. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact:

Tripp Sullivan
Lisa Kampf
SCR Partners
[email protected]

CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.

CONSOLIDATED BALANCE SHEETS
             
    March 31,
2026 		    December 31,
2025 		 
    (unaudited)        
Assets            
Loans held for investment   $ 332,462,151     $ 332,772,244  
Loans held for investment – related party     76,775,335       76,183,323  
Loans held for investment, at carrying value     409,237,486       408,955,567  
Current expected credit loss reserve     (8,680,583 )     (5,062,785 )
Loans held for investment at carrying value, net     400,556,903       403,892,782  
Cash and cash equivalents     27,855,945       14,948,884  
Interest receivable     4,907,288       4,009,800  
Other receivables and assets, net     2,562,700       874,245  
Related party receivables     65,776       1,189,937  
Total Assets   $ 435,948,612     $ 424,915,648  
             
Liabilities            
Revolving loan   $ 67,050,000     $ 49,100,000  
Notes payable, net     49,393,248       49,334,459  
Dividend payable     11,347,028       11,157,220  
Related party payables     1,453,942       2,214,920  
Management and incentive fees payable     1,719,495       3,098,576  
Interest payable     310,106       1,348,334  
Accounts payable and other liabilities     1,242,135       834,977  
Interest reserve     10,000       12,686  
Total Liabilities     132,525,954       117,101,172  
Commitments and contingencies            
             
Stockholders’ equity            
Common stock, par value $0.01 per share, 100,000,000 shares authorized and 21,080,272 and 21,080,272 shares issued and outstanding, respectively     210,803       210,803  
Additional paid-in-capital     323,991,208       323,125,854  
Accumulated deficit     (20,779,353 )     (15,522,181 )
Total stockholders’ equity     303,422,658       307,814,476  
             
Total liabilities and stockholders’ equity   $ 435,948,612     $ 424,915,648  

CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)
       
    For the three months ended March 31,  
    2026     2025  
Revenues            
Interest income   $ 15,164,688     $ 15,107,315  
Interest expense     (2,040,602 )     (2,065,382 )
Net interest income     13,124,086       13,041,933  
             
Expenses            
Management and incentive fees, net     1,719,495       1,735,533  
General and administrative expense     1,151,474       1,196,106  
Professional fees     503,548       492,946  
Stock based compensation     865,354       649,312  
Provision (benefit) for current expected credit losses     3,837,851       (1,073,276 )
Total expenses     8,077,722       3,000,621  
Change in unrealized loss on investment     (206,000 )     –  
Realized gain on debt securities, at fair value     –       –  
Net income before income taxes     4,840,364       10,041,312  
Income tax expense     –       –  
Net income   $ 4,840,364     $ 10,041,312  
             
Earnings per common share:            
Basic earnings per common share   $ 0.23     $ 0.48  
Diluted earnings per common share   $ 0.23     $ 0.47  
             
Weighted average number of common shares outstanding:            
Basic weighted average shares of common stock outstanding     21,080,272       20,858,466  
Diluted weighted average shares of common stock outstanding     21,484,118       21,264,891  
                 


Distributable Earnings

In addition to using certain financial metrics prepared in accordance with GAAP to evaluate our performance, we also use Distributable Earnings to evaluate our performance. Distributable Earnings is a measure that is not prepared in accordance with GAAP. We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss); provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for current expected credit losses and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors. We believe providing Distributable Earnings on a supplemental basis to our net income as determined in accordance with GAAP is helpful to stockholders in assessing the overall performance of our business. As a REIT, we are required to distribute at least 90% of our annual REIT taxable income and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of such taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons that stockholders invest in our common stock, we generally intend to attempt to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our Board. Distributable Earnings is one of many factors considered by our Board in authorizing dividends and, while not a direct measure of net taxable income, over time, the measure can be considered a useful indicator of our dividends.

In our Annual Report on Form 10-K for the year ended December 31, 2025, we defined Distributable Earnings so that, in addition to the exclusions noted above, the term also excluded from net income Incentive Compensation paid to our Manager. We believe that revising the term Distributable Earnings so that it is presented net of Incentive Compensation, while not a direct measure of net taxable income, over time, can be considered a more useful indicator of our ability to pay dividends. This adjustment to the calculation of Distributable Earnings has no impact on period-to-period comparisons. Distributable Earnings should not be considered as substitutes for GAAP net income. We caution readers that our methodology for calculating Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our reported Distributable Earnings may not be comparable to similar measures presented by other REITs.

    Three months ended  
    March 31, 2026

(unaudited) 		    March 31, 2025

(unaudited) 		 
Net Income   $ 4,840,364     $ 10,041,312  
Adjustments to net income            
Stock based compensation     865,354       649,312  
Amortization of debt issuance costs     83,451       110,309  
Provision (benefit) for current expected credit losses     3,837,851       (1,073,276 )
Change in unrealized loss on investment     206,000       –  
Distributable Earnings   $ 9,833,020     $ 9,727,657  
Basic weighted average shares of common stock outstanding (in shares)     21,080,272       20,858,466  
Basic Distributable Earnings per Weighted Average Share   $ 0.47     $ 0.47  
Diluted weighted average shares of common stock outstanding (in shares)     21,484,118       21,264,891  
Diluted Distributable Earnings per Weighted Average Share   $ 0.46     $ 0.46  



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Zoetis Announces First Quarter 2026 Results

Zoetis Announces First Quarter 2026 Results

  • Revenue of $2.3 Billion, Growing 3%, and Net Income of $601 Million, or $1.42 per Diluted Share, Flat and Increasing 6%, Respectively, on a Reported Basis
  • Adjusted Net Income of $646 Million, or Adjusted Diluted EPS of $1.53
  • Flat Organic Operational Growth in Revenue and 1% Organic Operational Growth in Adjusted Net Income
  • Revises Full Year 2026 Revenue Guidance to $9.680 – $9.960 Billion with Organic Operational Revenue Growth of 2% to 5%
  • Revises Full Year 2026 Guidance for Organic Operational Growth in Adjusted Net Income to 2% to 6%
  • Revises Guidance for Diluted EPS on an Adjusted Basis to $6.85 to $7.00

PARSIPPANY, N.J.–(BUSINESS WIRE)–Zoetis Inc. (NYSE:ZTS), the world’s leading animal health company, today reported its financial results for the first quarter of 2026.

The company reported revenue of $2.3 billion for the first quarter of 2026, an increase of 3% compared with the first quarter of 2025 and flat on an organic operational1 basis. Net income for the first quarter of 2026 was $601 million, or $1.42 per diluted share, reflecting flat performance and growth of 6%, respectively, on a reported basis.

Adjusted net income2 for the first quarter of 2026 was $646 million, or $1.53 per diluted share, an increase of 2% and 9%, respectively, on a reported basis, and an increase of 1% and 7%, respectively, on an organic operational basis. Adjusted net income for the first quarter of 2026 excludes the net impact of $45 million for purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

“The first quarter unfolded in a more challenging operating environment than we anticipated. Pet owners demonstrated increased price sensitivity, resulting in a decline in veterinary visits and softer demand for premium innovative products, where Zoetis leads. At the same time, competition intensified across key pet care categories, including dermatology and parasiticides. We are taking decisive action to sharpen commercial execution, unlock revenue and continue to drive disciplined cost management. The breadth of our portfolio remains a strength, reflected in the performance of International, livestock, and diagnostics in the quarter,” said Kristin Peck, Chief Executive Officer of Zoetis. “With a robust pipeline of more than 12 potential blockbusters, a proven science-to-scale model that has consistently enabled us to compete and win, and a resilient, diversified business supported by strong industry fundamentals, we are well positioned to deliver our next wave of innovation and remain confident in our ability to deliver sustained value for shareholders.”

SEGMENT HIGHLIGHTS

Zoetis organizes and manages its commercial operations across two segments: United States (U.S.) and International. Within these segments, the company delivers a diverse portfolio of products for companion animals and livestock, tailored to local trends and customer needs. In the first quarter of 2026:

  • Revenue in the U.S. segment was $1.1 billion, reflecting a decrease of 8% on both a reported and an organic operational basis relative to the first quarter of 2025. Companion animal product sales decreased 11% due to softer end-market demand and an increasingly competitive landscape. The company’s key dermatology franchise and Simparica Trio® faced heightened competitive pressure and persistent macroeconomic-driven price sensitivity. Also contributing to the decline was the impact of generic competition on the Convenia® and Cerenia® brands, as well as lower sales of Librela®,the company’s monoclonal antibody (mAb) product for osteoarthritis (OA) pain. Sales of livestock products increased 7% on both a reported and organic operational basis in the quarter, supported by broad-based strength across cattle, poultry and swine. Cattle performance was driven primarily by favorable producer economics in beef cattle, supply timing and expanded targeted use of parasiticides in response to New World screwworm. Poultry performance benefited from increased vaccine sales tied to disease outbreak activity, while swine growth reflected improved supply for a key antibiotic product.

  • Revenue in the International segment was $1.1 billion, a 17% increase on a reported basis and a 10% increase on an organic operational basis compared with the first quarter of 2025. Companion animal product sales grew 15% on a reported basis and 7% on an organic operational basis, led by the company’s parasiticides portfolio, including Simparica Trio, along with contributions from diagnostics, vaccines, and the timing of price increases. These gains were partially offset by lower sales of key dermatology products, driven primarily by competitive dynamics. Sales of livestock products grew 19% on a reported basis and 14% on an organic operational basis, driven by broad-based growth across all core species including cattle, swine, poultry and fish reflecting strong end-market demand, supply recovery and the timing of price increases.

    Revenue in the International segment was positively impacted by operational changes made in connection with the company’s Fiscal Year Alignment (as defined below), which contributed an estimated $100 million in revenue to the quarter, driven by the timing of price increases in certain international markets and the delayed processing of customer orders both referenced in the company’s full year 2025 results, as well as changes in the performance of the business when comparing Q4 2025 to a strong Q4 2024.

INVESTMENTS IN GROWTH

Zoetis’ pipeline has more than 12 potential blockbuster3 candidates across areas of significant unmet medical need including chronic kidney disease, oncology, cardiology, anxiety and obesity. The company remains on track to receive a significant approval in a major market every year for the next several years.

Zoetis continues to drive innovation by advancing lifecycle innovation, developing new formulations that deepen the value of proven therapies, and expanding geographically to new markets, providing access to industry-leading treatments where few previously existed. Together, these efforts improve the lives of companion animals and livestock around the world. Recent approvals include:

  • Approval in Canada for a new formulation of Convenia, an antibiotic for the treatment of bacterial skin infections and urinary tract infections for dogs. Suitable for all dogs and an especially cost-effective option for larger dogs, Convenia RTU is a ready-to-use formula that offers a canine-specific antibiotic in a single, concentrated dose administered in-clinic, ensuring 100% compliance for veterinarians. This approval was received ahead of internal estimates and is anticipated to contribute to the brand’s 15-year blockbuster status.

  • Apoquel® Chewable, the first and only chewable treatment for the relief of allergic itch in dogs, received approval in Thailand.
  • ALPHA JECT® micro 4 is the company’s first fish vaccine approved in Japan, reinforcing the continued demand for fish as a protein.
  • Ketofen® was also approved in Japan for cattle pain management.

Advancing Livestock Innovation

As previously announced on March 2, Zoetis has entered into a definitive agreement with Neogen Corporation to acquire Neogen’s animal genomics business. This acquisition aligns with Zoetis’ strategy to drive future livestock innovation through genomics, reinforcing its commitment to livestock producers worldwide and accelerating its livestock genetics portfolio. With Neogen’s genomic technologies and data solutions, Zoetis will expand its capabilities to deliver predictive insights, individualized care, and greater value to customers across major livestock and companion animal species. Zoetis expects to complete the acquisition in the second half of 2026.

Zoetis further demonstrated its commitment to innovation by equipping dairy producers with enhanced tools to improve profitability, animal well-being and environmental stewardship. The company launched additional traits for CLARIFIDE® Plus and made updates available in the Dairy Wellness Profit Index® (DWP$®). New traits include measuring environmental stewardship and heat resilience, enabling dairy producers to continue driving production efficiency and overall herd profitability while understanding and improving their herd’s genetic potential for sustainability.

FISCAL YEAR ALIGNMENT

Effective January 1, 2026, Zoetis eliminated the one-month financial reporting lag by its subsidiaries operating outside of the U.S. and adjusted its year-end for all subsidiaries to December 31 (the “Fiscal Year Alignment”). Zoetis has retroactively applied the new accounting principle to prior financial statement periods, which will allow for a comparison of the financial results to historical operations.

For additional information on the Fiscal Year Alignment, including the recast of certain line items of the company’s consolidated financial statements for the quarterly periods of 2025 and annual periods of 2024 and 2025, refer to the presentation of supplemental financial information by visiting the Zoetis website at https://investor.zoetis.com/financials/quarterly-results.

FINANCIAL GUIDANCE

Zoetis is providing updated guidance based on the current operating environment and the presentation of its financials for Fiscal Year Alignment.

  • Revenue of $9.680 billion to $9.960 billion (organic operational growth of 2% to 5%)
  • Reported net income of $2.680 billion to $2.760 billion

  • Adjusted net income of $2.870 billion to $2.950 billion (organic operational growth of 2% to 6%)

  • Reported diluted EPS of $6.35 to $6.50

  • Adjusted diluted EPS of $6.85 to $7.00

This guidance reflects foreign exchange rates as of April 24, 2026. Additional details on guidance are included in the financial tables and will be discussed on the company’s conference call.

WEBCAST & CONFERENCE CALL DETAILS

Zoetis will host a webcast and conference call today at 8:30 a.m. ET to review first quarter 2026 results, discuss financial guidance and respond to questions from financial analysts. The live webcast and corresponding slides can be accessed by visiting https://investor.zoetis.com/events-presentations. A replay of the webcast will be available following the event.

About Zoetis

Zoetis is the world’s leading animal health company, driven by a singular purpose: to nurture our world and humankind by advancing care for animals. With a legacy of nearly 75 years, Zoetis continues to pioneer ways to predict, prevent, detect, and treat animal illness, supporting veterinarians, livestock producers, and pet owners in over 100 countries. We integrate deep scientific expertise, data-driven R&D, advanced manufacturing, and commercial excellence to deliver meaningful innovation across medicines, vaccines, diagnostics, biopharmaceuticals, and digital solutions. Guided by our vision to be the most trusted and valued animal health company, Zoetis is committed to setting new standards for the future of animal care through innovation, customer obsession, and purpose-driven colleagues. To learn more, visit Zoetis.com.

1 Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

2 Adjusted net income and its components and adjusted diluted earnings per share (non-GAAP financial measures) are defined as reported net income and reported diluted earnings per share, excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

3 A blockbuster has annual sales of at least $100 million.

DISCLOSURE NOTICES

Forward-Looking Statements: This press release contains forward-looking statements, which reflect the current views of Zoetis with respect to: business plans or prospects, future operating or financial performance, future guidance, future operating models; R&D costs; timing and likelihood of success; expectations regarding products, product approvals or products under development and expected timing of product launches; expectations regarding competing products; expectations regarding financial impact of divestitures; disruptions in our global supply chain; expectations regarding the performance of acquired companies and our ability to integrate new businesses; expectations regarding the financial impact of acquisitions; future use of cash, dividend payments and share repurchases; foreign exchange rates, tax rates, tariffs, changes in tax regimes and laws and any changes thereto; possible impacts of the Fiscal Year Alignment; and other future events. These statements are not guarantees of future performance or actions. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management’s underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Zoetis expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our most recent Annual Report on Form 10-K, including in the sections thereof captioned “Forward-Looking Statements and Factors That May Affect Future Results” and “Item 1A. Risk Factors,” in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K. These filings and subsequent filings are available online at www.sec.gov, www.zoetis.com, or on request from Zoetis.

Use of Non-GAAP Financial Measures: We use non-GAAP financial measures, such as adjusted net income, adjusted diluted earnings per share, operational results (which exclude the impact of foreign exchange) and organic operational results (which exclude the impact of foreign exchange and certain acquisitions and divestitures), to assess and analyze our results and trends and to make financial and operational decisions. We believe these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this press release should not be considered alternatives to measurements required by GAAP, such as net income, operating income, and earnings per share, and should not be considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliations of non-GAAP financial measures and the most directly comparable GAAP financial measures are included in the tables accompanying this press release and are posted on our website at www.zoetis.com.

Internet Posting of Information: We routinely post information that may be important to investors on the ‘Investor Relations’ section of our website at www.zoetis.com, as well as on LinkedIn, Facebook, X (formerly Twitter) and YouTube. We encourage investors and potential investors to consult our website regularly and to follow us on social media for company news and information.

ZTS-COR

ZTS-IR

ZTS-FIN

ZOETIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(millions of dollars, except per share data)

 

 

 

Three Months Ended

 

 

 

 

 

March 31,

 

 

 

 

 

 

2026

 

 

 

2025

 

 

% Change

Revenue

$

2,262

 

 

$

2,198

 

 

3

 

Costs and expenses:

 

 

 

 

 

Cost of sales

 

641

 

 

 

618

 

 

4

 

Selling, general and administrative expenses

 

588

 

 

 

574

 

 

2

 

Research and development expenses

 

180

 

 

 

162

 

 

11

 

Amortization of intangible assets

 

31

 

 

 

32

 

 

(3

)

Restructuring charges and certain acquisition and divestiture-related costs

 

22

 

 

 

—

 

 

*

Interest expense, net of capitalized interest

 

62

 

 

 

54

 

 

15

 

Other (income)/deductions–net

 

(20

)

 

 

(15

)

 

33

 

Income before provision for taxes on income

 

758

 

 

 

773

 

 

(2

)

Provision for taxes on income

 

157

 

 

 

171

 

 

(8

)

Net income before allocation to noncontrolling interests

 

601

 

 

 

602

 

 

—

 

Less: Net income/(loss) attributable to noncontrolling interests

 

—

 

 

 

—

 

 

*

Net income attributable to Zoetis Inc.

$

601

 

 

$

602

 

 

—

 

 

 

 

 

 

 

Earnings per share attributable to Zoetis—basic

$

1.42

 

 

$

1.34

 

 

6

 

 

 

 

 

 

 

Earnings per share attributable to Zoetis—diluted

$

1.42

 

 

$

1.34

 

 

6

 

 

 

 

 

 

 

Weighted-average shares used to calculate earnings per share

 

 

 

 

 

Basic

 

422.1

 

 

 

447.6

 

 

 

Diluted

 

422.4

 

 

 

448.0

 

 

 

 

 

 

 

 

 

* Calculation not meaningful.
 

ZOETIS INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

CERTAIN LINE ITEMS

(UNAUDITED)

(millions of dollars, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2026

 

 

GAAP Reported

 

Purchase Accounting Adjustments

 

Acquisition and Divestiture- Related Costs(1)

 

Certain Significant Items(2)

 

Non-GAAP Adjusted(a)

Cost of sales

 

$

641

 

 

$

(1

)

 

$

—

 

 

$

(2

)

 

$

638

 

Gross profit

 

 

1,621

 

 

 

1

 

 

 

—

 

 

 

2

 

 

 

1,624

 

Selling, general and administrative expenses

 

 

588

 

 

 

1

 

 

 

—

 

 

 

(4

)

 

 

585

 

Research and development expenses

 

 

180

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

179

 

Amortization of intangible assets

 

 

31

 

 

 

(27

)

 

 

—

 

 

 

—

 

 

 

4

 

Restructuring charges and certain acquisition and divestiture-related costs

 

 

22

 

 

 

—

 

 

 

(2

)

 

 

(20

)

 

 

—

 

Other (income)/deductions–net

 

 

(20

)

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

(21

)

Income before provision for taxes on income

 

 

758

 

 

 

28

 

 

 

2

 

 

 

27

 

 

 

815

 

Provision for taxes on income

 

 

157

 

 

 

7

 

 

 

1

 

 

 

4

 

 

 

169

 

Net income attributable to Zoetis

 

 

601

 

 

 

21

 

 

 

1

 

 

 

23

 

 

 

646

 

Earnings per common share attributable to Zoetis–diluted

 

 

1.42

 

 

 

0.05

 

 

 

—

 

 

 

0.06

 

 

 

1.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2025

 

 

GAAP Reported

 

Purchase Accounting Adjustments

 

Acquisition and Divestiture- Related Costs(1)

 

Certain Significant Items(2)

 

Non-GAAP Adjusted(a)

Cost of sales

 

$

618

 

 

$

(1

)

 

$

—

 

 

$

—

 

 

$

617

 

Gross profit

 

 

1,580

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1,581

 

Selling, general and administrative expenses

 

 

574

 

 

 

(3

)

 

 

—

 

 

 

(6

)

 

 

565

 

Research and development expenses

 

 

162

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

162

 

Amortization of intangible assets

 

 

32

 

 

 

(28

)

 

 

—

 

 

 

—

 

 

 

4

 

Restructuring charges and certain acquisition and divestiture-related costs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other (income)/deductions–net

 

 

(15

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(15

)

Income before provision for taxes on income

 

 

773

 

 

 

32

 

 

 

—

 

 

 

6

 

 

 

811

 

Provision for taxes on income

 

 

171

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

178

 

Net income attributable to Zoetis

 

 

602

 

 

 

25

 

 

 

—

 

 

 

6

 

 

 

633

 

Earnings per common share attributable to Zoetis–diluted

 

 

1.34

 

 

 

0.06

 

 

 

—

 

 

 

0.01

 

 

 

1.41

 

 

 

 

 

 

 

 

 

 

 

 

(a) Non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Non-GAAP adjusted net income and its components, and non-GAAP adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.

See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).

ZOETIS INC.

NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

CERTAIN LINE ITEMS

(UNAUDITED)

(millions of dollars)
 

(1) Acquisition and divestiture-related costs include the following:

 

Three Months Ended

 

March 31,

 

 

2026

 

 

 

2025

 

Acquisition-related costs

$

2

 

$

—

Total acquisition and divestiture-related costs—pre-tax

 

2

 

 

—

Income taxes(a)

 

1

 

 

—

Total acquisition and divestiture-related costs—net of tax

$

1

 

$

—
 

(a) Included in Provision for taxes on income. Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

(2) Certain significant items include the following:

 

Three Months Ended

 

March 31,

 

 

2026

 

 

 

2025

 

Other restructuring charges and cost-reduction/productivity initiatives(a)

$

20

 

$

—

 

Business process transformation program(b)

 

5

 

 

7

 

Other

 

2

 

 

(1

)

Total certain significant items—pre-tax

 

27

 

 

6

 

Income taxes(c)

 

4

 

 

—

 

Total certain significant items—net of tax

$

23

 

$

6

 
 

(a) For the three months ended March 31, 2026, primarily related to employee termination costs due to organizational structure refinements.

(b) Represents costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs, included in Selling, general and administrative expenses and Cost of sales. This comprehensive program is a major global and cross-functional company-wide effort that we believe will transform how we work across our business and contribute to all of our strategic priorities. Due to the nature, scope and magnitude of this investment, these costs are incremental transformational costs that are far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future.

(c) Included in Provision for taxes on income. Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

ZOETIS INC.

ADJUSTED SELECTED COSTS, EXPENSES AND INCOME(a)

(UNAUDITED)

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

% Change

 

 

 

2026

 

 

 

2025

 

 

Total

 

 

Foreign Exchange

 

Operational(b)

 

 

Divestitures

 

Organic Operational(c)

Adjusted cost of sales

 

$

638

 

 

$

617

 

 

3

%

 

 

8

%

 

(5

)%

 

 

 

 

 

as a percent of revenue

 

 

28.2

%

 

 

28.1

%

 

NA

 

 

NA

 

NA

 

 

 

 

 

Adjusted SG&A expenses

 

 

585

 

 

 

565

 

 

4

%

 

 

3

%

 

1

%

 

 

 

 

 

Adjusted R&D expenses

 

 

179

 

 

 

162

 

 

10

%

 

 

1

%

 

9

%

 

 

 

 

 

Adjusted net income

 

 

646

 

 

 

633

 

 

2

%

 

 

1

%

 

1

%

 

 

—

%

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Adjusted cost of sales, adjusted selling, general, and administrative (SG&A) expenses, adjusted research and development (R&D) expenses, and adjusted net income (non-GAAP financial measures) are defined as the corresponding reported U.S. GAAP income statement line items excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. These adjusted income statement line item measures are not, and should not be viewed as, substitutes for the corresponding U.S. GAAP line items. The corresponding GAAP line items and reconciliations of reported to adjusted information are provided in Condensed Consolidated Statements of Income and Reconciliation of GAAP Reported to Non-GAAP Adjusted Information.

(b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange.

(c) Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

ZOETIS INC.

2026 GUIDANCE
 

Selected Line Items

(millions of dollars, except per share amounts)

Full Year 2026

as of May 7, 2026

Revenue

$9,680 to $9,960

Organic operational growth(a)

2% to 5%

Adjusted cost of sales as a percentage of revenue(b)

Approximately 28.5%

Adjusted SG&A expenses(b)

$2,350 to $2,400

Adjusted R&D expenses(b)

$735 to $745

Adjusted interest expense and other (income)/deductions-net(b)

Approximately $215

Effective tax rate on adjusted income(b)

Approximately 20.5%

Adjusted diluted EPS(b)

$6.85 to $7.00

Adjusted net income(b)

$2,870 to $2,950

Organic operational growth(a)(c)

2% to 6%

Certain significant items and acquisition and divestiture-related costs(d)

Approximately $100

Reported diluted EPS

$6.35 to $6.50
 

The guidance reflects foreign exchange rates as of April 24, 2026.

Reconciliations of 2026 reported guidance to 2026 adjusted guidance follows:
(millions of dollars, except per share amounts)

Reported

Certain significant items and acquisition and divestiture-related costs(d)

Purchase accounting

Adjusted(b)

Cost of sales as a percentage of revenue

~ 28.7%

~ (0.2%)

 

~ 28.5%

SG&A expenses

$2,373 to $2,423

~ $(12)

~ $(11)

$2,350 to $2,400

R&D expenses

$737 to $747

 

~ $(2)

$735 to $745

Interest expense and other (income)/deductions-net

~ $215

 

 

~ $215

Effective tax rate

~ 20.7%

~ (0.2%)

 

~ 20.5%

Diluted EPS

$6.35 to $6.50

~ $0.28

~ $0.22

$6.85 to $7.00

Net income attributable to Zoetis

$2,680 to $2,760

~ $100

~ $90

$2,870 to $2,950
 

(a) Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures.

(b) Adjusted net income and its components and adjusted diluted EPS are defined as reported U.S. GAAP net income and its components and reported diluted EPS excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. Adjusted cost of sales, adjusted SG&A expenses, adjusted R&D expenses, and adjusted interest expense and other (income)/deductions-net are income statement line items prepared on the same basis, and, therefore, components of the overall adjusted income measure. Despite the importance of these measures to management in goal setting and performance measurement, adjusted net income and its components and adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, adjusted net income and its components and adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Adjusted net income and its components and adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance. Adjusted net income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

(c) We do not provide a reconciliation of forward-looking non-GAAP adjusted net income operational results to the most directly comparable U.S. GAAP reported financial measure because we are unable to calculate with reasonable certainty the foreign exchange impact of unusual gains and losses, acquisition and divestiture-related expenses, potential future asset impairments and other certain significant items, without unreasonable effort. The foreign exchange impacts of these items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period.

(d) Primarily includes certain nonrecurring costs related to acquisitions, divestitures and other charges.

ZOETIS INC.

CONSOLIDATED REVENUE BY SEGMENT(a) AND SPECIES

(UNAUDITED)

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31,

 

% Change

 

 

2026

 

2025

 

Total

 

 

Foreign Exchange

 

Operational(b)

 

 

Divestitures

 

Organic Operational(c)

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Companion Animal

 

$

1,519

 

$

1,541

 

(1

)%

 

 

3

%

 

(4

)%

 

 

—

%

 

(4

)%

Livestock

 

 

720

 

 

627

 

15

%

 

 

5

%

 

10

%

 

 

(2

)%

 

12

%

Contract Manufacturing & Human Health

 

 

23

 

 

30

 

(23

)%

 

 

1

%

 

(24

)%

 

 

—

%

 

(24

)%

Total Revenue

 

$

2,262

 

$

2,198

 

3

%

 

 

4

%

 

(1

)%

 

 

(1

)%

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Companion Animal

 

$

865

 

$

973

 

(11

)%

 

 

—

%

 

(11

)%

 

 

—

%

 

(11

)%

Livestock

 

 

225

 

 

210

 

7

%

 

 

—

%

 

7

%

 

 

—

%

 

7

%

Total U.S. Revenue

 

$

1,090

 

$

1,183

 

(8

)%

 

 

—

%

 

(8

)%

 

 

—

%

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Companion Animal

 

$

654

 

$

568

 

15

%

 

 

8

%

 

7

%

 

 

—

%

 

7

%

Livestock

 

 

495

 

 

417

 

19

%

 

 

7

%

 

12

%

 

 

(2

)%

 

14

%

Total International Revenue

 

$

1,149

 

$

985

 

17

%

 

 

8

%

 

9

%

 

 

(1

)%

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Companion Animal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dogs and Cats

 

$

1,443

 

$

1,477

 

(2

)%

 

 

3

%

 

(5

)%

 

 

 

 

 

Horses

 

 

76

 

 

64

 

19

%

 

 

6

%

 

13

%

 

 

 

 

 

Total Companion Animal Revenue

 

$

1,519

 

$

1,541

 

(1

)%

 

 

3

%

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Livestock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cattle

 

$

392

 

$

341

 

15

%

 

 

4

%

 

11

%

 

 

 

 

 

Swine

 

 

123

 

 

105

 

17

%

 

 

6

%

 

11

%

 

 

 

 

 

Poultry

 

 

118

 

 

106

 

11

%

 

 

3

%

 

8

%

 

 

 

 

 

Fish

 

 

66

 

 

55

 

20

%

 

 

9

%

 

11

%

 

 

 

 

 

Sheep and other

 

 

21

 

 

20

 

5

%

 

 

7

%

 

(2

)%

 

 

 

 

 

Total Livestock Revenue

 

$

720

 

$

627

 

15

%

 

 

5

%

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) For a description of each segment, see Zoetis’ most recent Annual Report on Form 10-K.

(b) Operational revenue results (a non-GAAP financial measure) is defined as revenue results excluding the impact of foreign exchange.

(c) Organic operational revenue results (a non-GAAP financial measure) is defined as revenue results excluding the impact of foreign exchange and certain acquisitions and divestitures.

ZOETIS INC.

CONSOLIDATED REVENUE BY KEY INTERNATIONAL MARKETS

(UNAUDITED)

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31,

 

% Change

 

 

2026

 

2025

 

Total

 

 

Foreign Exchange

 

Operational(a)

Total International

 

$

1,149

 

$

985

 

17

%

 

 

8

%

 

9

%

Australia

 

 

89

 

 

79

 

13

%

 

 

11

%

 

2

%

Brazil

 

 

90

 

 

81

 

11

%

 

 

12

%

 

(1

)%

Canada

 

 

73

 

 

70

 

4

%

 

 

4

%

 

—

%

Chile

 

 

38

 

 

35

 

9

%

 

 

6

%

 

3

%

China

 

 

63

 

 

55

 

15

%

 

 

5

%

 

10

%

France

 

 

37

 

 

39

 

(5

)%

 

 

9

%

 

(14

)%

Germany

 

 

59

 

 

55

 

7

%

 

 

11

%

 

(4

)%

Italy

 

 

39

 

 

30

 

30

%

 

 

16

%

 

14

%

Japan

 

 

35

 

 

32

 

9

%

 

 

(4

)%

 

13

%

Mexico

 

 

48

 

 

35

 

37

%

 

 

17

%

 

20

%

Spain

 

 

40

 

 

29

 

38

%

 

 

16

%

 

22

%

United Kingdom

 

 

78

 

 

74

 

5

%

 

 

7

%

 

(2

)%

Other developed markets

 

 

169

 

 

133

 

27

%

 

 

11

%

 

16

%

Other emerging markets

 

 

291

 

 

238

 

22

%

 

 

3

%

 

19

%

 

 

 

 

 

 

 

 

 

 

 

 

(a) Operational revenue results (a non-GAAP financial measure) is defined as revenue results excluding the impact of foreign exchange.

Note: operational revenue results are not reflective of organic operational results.

ZOETIS INC.

SEGMENT(a) EARNINGS

(UNAUDITED)

(millions of dollars)

 

 

Three Months Ended

 

 

      

 

 

March 31,

 

% Change

 

 

 

2026

 

 

 

2025

 

 

Total

 

 

Foreign Exchange

 

Operational(b)

U.S.:

 

 

 

 

 

 

  

 

 

 

  

 

 

  

Revenue

 

$

1,090

 

 

$

1,183

 

 

(8

)%

 

 

—

%

 

(8

)%

Cost of Sales

 

 

194

 

 

 

199

 

 

(3

)%

 

 

—

%

 

(3

)%

Gross Profit

 

 

896

 

 

 

984

 

 

(9

)%

 

 

—

%

 

(9

)%

Gross Margin

 

 

82.2

%

 

 

83.2

%

 

 

  

 

 

 

  

 

 

  

Operating Expenses

 

 

199

 

 

 

205

 

 

(3

)%

 

 

—

%

 

(3

)%

Other (income)/deductions-net

 

 

—

 

 

 

—

 

 

*

  

 

 

*

  

 

*

  

U.S. Earnings

 

$

697

 

 

$

779

 

 

(11

)%

 

 

—

%

 

(11

)%

 

 

 

 

 

 

 

  

 

 

 

  

 

 

  

International:

 

 

 

 

 

 

  

 

 

 

  

 

 

  

Revenue

 

$

1,149

 

 

$

985

 

 

17

%

 

 

8

%

 

9

%

Cost of Sales

 

 

334

 

 

 

295

 

 

13

%

 

 

10

%

 

3

%

Gross Profit

 

 

815

 

 

 

690

 

 

18

%

 

 

7

%

 

11

%

Gross Margin

 

 

70.9

%

 

 

70.1

%

 

 

  

 

 

 

  

 

 

  

Operating Expenses

 

 

175

 

 

 

163

 

 

7

%

 

 

7

%

 

—

%

Other (income)/deductions-net

 

 

1

 

 

 

—

 

 

*

  

 

 

*

  

 

*

  

International Earnings

 

$

639

 

 

$

527

 

 

21

%

 

 

6

%

 

15

%

 

 

 

 

 

 

 

  

 

 

 

  

 

 

  

Total Reportable Segments

 

$

1,336

 

 

$

1,306

 

 

2

%

 

 

2

%

 

—

%

 

 

 

 

 

 

 

  

 

 

 

  

 

 

  

Other business activities(c)

 

 

(141

)

 

 

(133

)

 

6

%

 

 

 

  

 

 

  

Reconciling Items:

 

 

 

 

 

 

  

 

 

 

  

 

 

  

Corporate(d)

 

 

(315

)

 

 

(278

)

 

13

%

 

 

 

  

 

 

  

Purchase accounting adjustments(e)

 

 

(28

)

 

 

(32

)

 

(13

)%

 

 

 

  

 

 

  

Acquisition and divestiture-related costs(f)

 

 

(2

)

 

 

—

 

 

*

  

 

 

 

  

 

 

  

Certain significant items(g)

 

 

(27

)

 

 

(6

)

 

*

  

 

 

 

  

 

 

  

Other unallocated(h)

 

 

(65

)

 

 

(84

)

 

(23

)%

 

 

 

  

 

 

  

Total Earnings(i)

 

$

758

 

 

$

773

 

 

(2

)%

 

 

 

  

 

 

  

 

 

 

 

 

 

 

  

 

 

 

  

 

 

  

(a) For a description of each segment, see Zoetis’ most recent Annual Report on Form 10-K.

(b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange.

(c) Other business activities includes the research and development costs managed by our research and development organization, as well as our contract manufacturing business and human health business.

(d) Corporate includes, among other things, certain costs associated with information technology, administration expenses, interest income and expense, certain compensation costs and other costs not charged to our operating segments.

(e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment not charged to our operating segments.

(f) Acquisition and divestiture-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs, as well as costs associated with divesting and disintegrating a portion of our business.

(g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include certain asset impairment charges, restructuring charges and implementation costs associated with cost-reduction/productivity initiatives that are not associated with an acquisition, costs related to our business process transformation program, as well as the impact of divestiture gains and losses.

(h) Includes overhead expenses associated with our global manufacturing and supply operations not directly attributable to an operating segment, as well as certain procurement costs.

(i) Defined as income before provision for taxes on income.

* Calculation not meaningful.

      
     

 

Media Contacts:

Jennifer Albano

1-862-399-0810 (o)

[email protected]

Laura Panza

1-973-975-5176 (o)

[email protected]

Investor Contacts:

Steve Frank

1-973-822-7141 (o)

[email protected]

Nick Soonthornchai

1-973-443-2792 (o)

[email protected]

KEYWORDS: New Jersey United States North America

INDUSTRY KEYWORDS: General Health Consumer Health Pets Veterinary

MEDIA:

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Posted on

Beam Therapeutics Reports First Quarter 2026 Financial Results and Recent Business Updates

Recent BEAM-302 Topline Data in Alpha-1 Antitrypsin Deficiency (AATD) Demonstrate Strong Single-dose Safety and Efficacy Profile, with 60 mg Selected as Optimal Biological Dose; Global Pivotal Cohort Expected to Initiate in Second Half of 2026

Data from Phase 1/2 BEACON Clinical Trial of Risto-cel in Sickle Cell Disease Published in April 1 Issue of the New England Journal of Medicine; U.S. Biologics License Application (BLA) Submission Expected as Early as Year-End 2026

Investigational New Drug (IND) Application for BEAM-304 in PKU and Data from BEAM-301 in GSDIa Anticipated in 2026

Ended First Quarter 2026 with $1.2 Billion in Cash, Cash Equivalents and Marketable Securities; Cash Runway Expected to Support Operating Plans into mid-2029

CAMBRIDGE, Mass., May 07, 2026 (GLOBE NEWSWIRE) —  Beam Therapeutics Inc. (Nasdaq: BEAM), a biotechnology company developing precision genetic medicines through base editing, today reported first quarter 2026 financial results and provided updates across the company’s hematology and genetic disease franchises.

“The first quarter of 2026 was a defining period for Beam, marked by meaningful clinical advances across our portfolio and key steps toward becoming a commercial-stage company. The updated topline data from BEAM-302 – including robust increases in total AAT and a well-tolerated safety profile – give us high confidence in the 60 mg optimal biological dose and a clear path to initiating the pivotal cohort in the second half of this year,” said John Evans, chief executive officer of Beam Therapeutics. “Publication of the BEACON trial data in the New England Journal of Medicine underscores the differentiated profile of risto-cel, and we remain on track to submit our BLA as early as year-end 2026, a milestone toward bringing a potentially transformative treatment to patients with sickle cell disease. With BEAM-304 in PKU, we are extending the reach of our clinically validated base editing platform to directly correct disease-causing mutations in a new indication, further demonstrating the breadth of what precision genetic medicine can achieve. With a strong cash position extending our runway into mid-2029, we have the financial foundation to execute across all of these priorities and deliver on our mission to bring precision genetic medicines to patients who need them most.”

First Quarter 2026 and Recent Progress and Anticipated Milestones


Corporate

  • Beam Therapeutics has been selected for the TIME100 Most Influential Companies list by TIME Magazine, highlighting 100 companies making an extraordinary impact around the world. In February, John Evans, chief executive officer of Beam, was recognized as part of the TIME100 Health list, TIME’s list honoring leaders who are advancing care, shaping policy and driving innovations that transform lives.


Liver-targeted Genetic Disease Franchise

BEAM-302: Beam’s lead genetic disease program is designed to be a best-in-class and first-in-class liver-targeting therapy for alpha-1 antitrypsin deficiency (AATD) that addresses the underlying pathophysiology of both liver and lung disease.

  • In March, Beam announced updated safety and efficacy data from the ongoing Phase 1/2 trial of BEAM-302. Treatment with BEAM-302 led to rapid and durable increases of total and functional AAT, decreases in mutant Z-AAT, and new production of corrected M-AAT, with a well-tolerated safety profile across single doses up to 75 mg.
  • Amy Simon, M.D., chief medical officer of Beam, will give a presentation on translating scientific discovery in gene editing to clinical progress for patients with lung disease, featuring the recent clinical data from the BEAM-302 trial, at the upcoming American Thoracic Society (ATS) International Conference 2026, being held in Orlando, Florida, May 15-20. The presentation will be included in the scientific symposium titled “Rewriting the Code: Precision Delivery Vectors and Gene Therapy for Pulmonary Vascular Diseases” at 3:30 p.m. ET on Monday, May 18, 2026.
  • Based on feedback from the U.S. Food and Drug Administration (FDA), Beam intends to pursue an accelerated approval pathway for BEAM-302. To support a future biologics licensing application (BLA) submission, the company anticipates enrolling approximately 50 additional patients with AATD-associated lung disease, with or without liver disease, in an expansion of the ongoing open-label Phase 1/2 trial. Beam expects to initiate this pivotal cohort in the second half of 2026.
  • In addition, Beam expects to present detailed and updated BEAM-302 data at a medical congress in 2026.

BEAM-304: BEAM-304 leverages Beam’s proprietary and clinically validated base editing technology and lipid nanoparticle (LNP) delivery capabilities to directly and durably correct mutations in the phenylalanine hydroxylase (PAH) gene that cause phenylketonuria (PKU).

  • A planned Phase 1/2 trial will initially evaluate safety, tolerability, and reduction of blood Phe levels in PKU patients with the R408W mutation, followed thereafter by a base editor for a second mutation, with a goal of establishing clinical proof of concept for base editing in PKU.
  • Beam expects to file an investigational new drug (IND) application with the FDA for BEAM-304 in 2026 following completion of pre-IND activities.

BEAM-301: BEAM-301 aims to correct the most common disease-causing mutation, R83C, in patients with glycogen storage disease type Ia (GSDIa).

  • BEAM-301 is currently being evaluated in an open-label Phase 1/2 dose-exploration trial in patients with GSDIa.
  • Beam expects to report initial clinical data in 2026.


Hematology Franchise

Risto-cel: Ristoglogene autogetemcel (risto-cel, formerly known as BEAM-101) is an investigational autologous cell therapy with a potential best-in-class profile for the treatment of sickle cell disease (SCD). 

  • Data from the ongoing Phase 1/2 BEACON clinical trial evaluating risto-cel for the treatment of SCD with severe vaso-occlusive crises (VOCs) were published in the New England Journal of Medicine. Data demonstrate risto-cel’s differentiated profile, including deep resolution of SCD markers, rapid engraftment, reduced hospitalization, and a predictable manufacturing process that may improve patient experience and treatment center capacity and reduce the length of the transplant process.
  • Beam expects to submit a BLA for risto-cel as early as year-end 2026.

Next-generation Programs in Sickle Cell Disease and Hematology:

  • The ongoing Phase 1 healthy volunteer clinical trial of BEAM-103, an anti-CD117 monoclonal antibody that enables ESCAPE, is expected to complete dosing in the first half of 2026.

First Quarter 2026 Financial Results

  • Cash Position: Cash, cash equivalents and marketable securities were $1.2 billion as of March 31, 2026, compared to $1.2 billion as of December 31, 2025.
  • Research & Development (R&D) Expenses: R&D expenses were $104.5 million for the first quarter of 2026, compared to $98.8 million for the first quarter of 2025.
  • General & Administrative (G&A) Expenses: G&A expenses were $34.4 million for the first quarter of 2026, compared to $27.9 million for the first quarter of 2025.
  • Net Income (Loss): Net loss was $94.3 million, or $0.91 per share, for the first quarter of 2026, compared to net losses of $108.3 million, or $1.23 per share, for the first quarter of 2025.

Cash Runway

Beam expects that its cash, cash equivalents and marketable securities as of March 31, 2026, which includes $100 million from the close of the company’s financing agreement with Sixth Street, along with an anticipated additional $100 million from the Sixth Street facility, will fund anticipated operating expenses and capital expenditure requirements into mid-2029, funding the company through the anticipated launch of risto-cel in SCD, execution of the BEAM-302 pivotal development plan in AATD, and clinical proof of concept for BEAM-304 in PKU.

About Beam Therapeutics

Beam Therapeutics (Nasdaq: BEAM) is a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. To achieve this vision, Beam has assembled a platform with integrated gene editing, delivery and internal manufacturing capabilities. Beam’s suite of gene editing technologies is anchored by base editing, a proprietary technology that is designed to enable precise, predictable and efficient single base changes, at targeted genomic sequences, without making double-stranded breaks in the DNA. This has the potential to enable a wide range of potential therapeutic editing strategies that Beam is using to advance a diversified portfolio of base editing programs. Beam is a values-driven organization committed to its people, cutting-edge science, and a vision of providing lifelong cures to patients suffering from serious diseases.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned not to place undue reliance on these forward-looking statements, including, but not limited to, statements related to: the therapeutic applications and potential of our technology, including with respect to SCD, AATD, PKU, ESCAPE and GSDIa; our plans, and anticipated timing, to advance our programs and present data from ongoing clinical trials; the clinical trial designs and expectations for risto-cel, BEAM-103, BEAM-301, BEAM-302 and BEAM-304; our planned submission of a BLA for risto-cel; our expected presentations at upcoming medical conferences, including at ATS 2026; our anticipated regulatory interactions and filings; the sufficiency of our capital resources to fund operating expenses and capital expenditure requirements and the period in which such resources are expected to be available; and our ability to develop lifelong, curative, precision genetic medicines for patients through base editing. Each forward-looking statement is subject to important risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement, including, without limitation, risks and uncertainties related to: our ability to develop, obtain regulatory approval for, and commercialize our product candidates, which may take longer or cost more than planned; our ability to raise additional funding, which may not be available; our ability to obtain, maintain and enforce patent and other intellectual property protection for our product candidates; the uncertainty that our product candidates will receive regulatory approval necessary to initiate or continue human clinical trials; that preclinical testing of our product candidates and preliminary or interim data from preclinical studies and clinical trials may not be predictive of the results or success of ongoing or later clinical trials; that initiation and enrollment of, and anticipated timing to advance, our clinical trials may take longer than expected; that our product candidates, including the delivery modalities we rely on to administer them, may cause serious adverse events; that our product candidates may experience manufacturing or supply interruptions or failures; risks related to competitive products; and the other risks and uncertainties identified under the headings “Risk Factors Summary” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and in any subsequent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.

Contacts:

Investors:
Holly Manning
Beam Therapeutics
[email protected]

Media:
Josie Butler
1AB
[email protected]

Condensed Consolidated Balance Sheet Data (unaudited)  
(in thousands)  
             
    March 31,

2026 		    December 31,

2025 		 
Cash, cash equivalents, and marketable securities   $ 1,211,652     $ 1,245,210  
Total assets     1,480,798       1,481,177  
Total liabilities     316,360       242,819  
Total stockholders’ equity     1,164,438       1,238,358  

Condensed Consolidated Statement of Operations (unaudited)  
(in thousands, except share and per share data)  
             
    Three Months Ended March 31,  
    2026     2025  
License and collaboration revenue   $ 31,738     $ 7,470  
Operating expenses:            
Research and development     104,524       98,816  
General and administrative     34,429       27,940  
Total operating expenses     138,953       126,756  
Loss from operations     (107,215 )     (119,286 )
Other income (expense):            
Change in fair value of derivative liabilities     2,500       3,200  
Change in fair value of non-controlling equity investments     16       (2,081 )
Change in fair value of contingent consideration liabilities     514       (27 )
Interest and other income (expense), net     9,867       9,864  
Total other income (expense)     12,897       10,956  
Net loss   $ (94,318 )   $ (108,330 )
Unrealized gain (loss) on marketable securities     (2,181 )     (519 )
Comprehensive loss   $ (96,499 )   $ (108,849 )
Net loss per common share, basic and diluted   $ (0.91 )   $ (1.23 )
Weighted-average common shares outstanding, basic and diluted     103,262,001       87,975,311  



Posted on

Charles River Laboratories Announces First-Quarter 2026 Results

Charles River Laboratories Announces First-Quarter 2026 Results

– Reports First-Quarter Revenue of $995.8 Million, GAAP Loss per Share of $(0.30), and Non-GAAP Earnings per Share of $2.06 –

– Reaffirms 2026 Guidance for Organic Revenue and Non-GAAP Earnings per Share –

– Repurchased $200 Million of Common Stock in First Quarter of 2026 –

– Completed the Divestiture of the CDMO and Cell Solutions Businesses –

WILMINGTON, Mass.–(BUSINESS WIRE)–
Charles River Laboratories International, Inc. (NYSE: CRL) today reported its results for the first quarter of 2026. For the quarter, revenue was $995.8 million, an increase of 1.2% from $984.2 million in the first quarter of 2025.

The impact of foreign currency translation increased reported revenue by 2.8%, while a divestiture reduced reported revenue by 0.1%. Excluding the effect of these items, revenue declined 1.5% on an organic basis. By segment, organic revenue growth in the Manufacturing Solutions (Manufacturing) segment was more than offset by organic revenue declines in the Research Models and Services (RMS) and Discovery and Safety Assessment (DSA) segments.

In the first quarter of 2026, the GAAP operating margin was 12.0%, compared to 7.6% in the first quarter of 2025. The increase in the GAAP operating margin was primarily driven by lower accelerated amortization expense related to certain CDMO client relationships. The GAAP net loss available to common shareholders for the first quarter of 2026 was $(14.8) million, or $(0.30) per diluted share, compared to GAAP net income of $25.5 million, or $0.50 per diluted share for the same period in 2025. The decrease was principally due to a loss on assets held for sale related to the CDMO and Cell Solutions divestiture totaling $118.0 million, or $1.53 per share.

On a non-GAAP basis, the first-quarter operating margin decreased to 16.3% from 19.1% in the first quarter of 2025, primarily as a result of higher study-related direct costs in the DSA segment, unfavorable revenue mix in the RMS segment, and higher stock-based compensation expense related largely to executive transition. Non-GAAP net income was $101.7 million for the first quarter of 2026, a decrease of 14.6% from $119.1 million for the same period in 2025. First-quarter diluted earnings per share on a non-GAAP basis were $2.06, a decrease of 12.0% from $2.34 per share in the first quarter of 2025. The non-GAAP net income and earnings per share decreases were driven primarily by the lower operating margin.

Birgit Girshick, Chief Executive Officer, said, “We are pleased to deliver on our first-quarter financial targets, and remain well positioned to generate improving results over the course of the year. Our confidence is supported by a DSA demand environment that is tracking to our expectations, resulting in solid bookings in the first quarter, as well as the successful execution of our strategy.”

“As we look to the future, our focus remains on enhancing our clients’ experience, strengthening our world-class scientific portfolio, achieving our financial and operational goals, and increasing long‑term shareholder value. We have already established a solid foundation and with a refreshed strategic focus aimed at modernizing the Company and the industry, we intend to continue to evolve and lead the way. By doing so, we will enable the Company to realize its full potential and ensure future success. I am energized to lead this great company into its next chapter of growth and am confident in the path we are taking to create the future for Charles River,” Ms. Girshick concluded.

First-Quarter Segment Results

Research Models and Services (RMS)

Revenue for the RMS segment was $208.4 million in the first quarter of 2026, a decrease of 2.2% from $213.1 million in the first quarter of 2025. The impact of foreign currency translation increased revenue by 3.3%. Organic revenue decreased by 5.5%, due primarily to lower revenue for small research models in North America, as well as for large research models. The decline was partially offset by higher revenue for small research models in China.

In the first quarter of 2026, the RMS segment’s GAAP operating margin increased to 23.9% from 20.5% in the first quarter of 2025, primarily due to a gain on the sale of real estate in Massachusetts. On a non-GAAP basis, the operating margin decreased to 24.7% from 27.1%. The non-GAAP operating margin decrease was primarily driven by the unfavorable revenue mix, principally related to small research models in North America and large research models.

Discovery and Safety Assessment (DSA)

Revenue for the DSA segment was $596.9 million in the first quarter of 2026, an increase of 0.7% from $592.6 million in the first quarter of 2025. The impact of foreign currency translation increased DSA revenue by 2.2%, while a divestiture reduced reported revenue by 0.1%. Organic revenue decreased by 1.4%, driven primarily by lower revenue for discovery services due in part to the impact of prior site consolidation activities.

In the first quarter of 2026, the DSA segment’s GAAP operating margin increased to 17.4% from 15.9% in the first quarter of 2025. The increase was primarily driven by lower third-party legal costs related to a non-human primate (NHP) supply matter, as well as lower costs associated with the Company’s restructuring and efficiency initiatives. On a non-GAAP basis, the operating margin decreased to 21.0% from 23.9% in the first quarter of 2025. The non-GAAP operating margin decrease was primarily driven by higher study-related direct costs associated with large-model sourcing and study starts.

Manufacturing Solutions (Manufacturing)

Revenue for the Manufacturing segment was $190.5 million in the first quarter of 2026, an increase of 6.8% from $178.5 million in the first quarter of 2025. The impact of foreign currency translation increased Manufacturing revenue by 3.9%. Organic revenue increased 2.9%, driven by higher revenue in the Microbial Solutions business, partially offset by lower revenue in the CDMO business.

The Manufacturing segment’s GAAP operating margin was 24.6%, compared to (4.8)% in the first quarter of 2025. The increase was primarily the result of lower accelerated amortization expense related to certain CDMO client relationships. On a non-GAAP basis, the operating margin increased to 25.9% from 23.1% in the first quarter of 2025, driven primarily by the benefit of cost savings resulting from the Company’s restructuring initiatives.

Divestiture Update

On May 6, 2026, the Company completed the previously announced divestiture of the CDMO and Cell Solutions businesses to GI Partners. In addition, the Company expects to complete the sale of certain European Discovery Services sites in May 2026. These strategic transactions will enable Charles River to refine and refocus its comprehensive portfolio on core competencies and drive synergistic growth in areas in which it has differentiated scientific expertise, including regulated drug development testing.

Stock Repurchase Update

During the first quarter of 2026, the Company repurchased 1.1 million shares for a total of $200.0 million. As of March 28, 2026, the Company had $800.0 million remaining under its $1.0 billion stock repurchase authorization that was approved by the Board of Directors on October 29, 2025.

2026 Guidance Update

The Company is reaffirming its 2026 organic revenue and non-GAAP earnings per share guidance, which was last updated on February 25, 2026, and previously included the expected impact of the completed divestiture of the CDMO and Cell Solutions businesses, as well as the planned divestiture of certain European Discovery Services sites in May 2026.

However, the Company is reducing its 2026 reported revenue outlook by approximately 50 basis points to reflect recent changes in assumptions for foreign exchange rates. The Company’s GAAP earnings per share guidance has now been updated to primarily reflect the impact of the divestitures.

The Company’s 2026 guidance for revenue and earnings per share is as follows:

2026 GUIDANCE (1)

CURRENT

PRIOR

Revenue growth/(decrease), reported

(5.5)% – (4.0)%

(5.0)% – (3.5)%

Less: Contribution from acquisitions

0.0% – (0.5)%

0.0% – (0.5)%

Add: Impact from divestitures

~5.0%

~5.0%

Less: Favorable impact of foreign exchange

(0.5)% – (1.0)%

(1.0)% – (1.5)%

Revenue growth/(decrease), organic (2)

(1.5)% – (0.5)%

(1.5)% – (0.5)%

GAAP EPS estimate

$5.35 – $5.85

—

Acquisition-related amortization (3)

~$2.30

—

Acquisition- and divestiture-related costs (4)

~$2.30

 

Costs associated with restructuring and efficiency initiatives (5)

~$0.85

—

Other, net (6)

NM

—

Non-GAAP EPS estimate

$10.80 – $11.30

$10.80 – $11.30

Footnotes to Guidance Table:
   

(1) Revenue and earnings per share guidance assumes the planned divestiture of certain European Discovery Services sites will be completed in May 2026, and that the CDMO and Cell Solutions divestiture was completed on May 6, 2026.

(2) Organic revenue growth is defined as reported revenue growth adjusted for completed acquisitions and both completed and previously announced divestitures (including the CDMO and Cell Solutions businesses, as well as certain European Discovery Services sites), as well as foreign currency translation.

(3) These adjustments primarily include amortization related to intangible assets, as well as the purchase accounting step-up on inventory and certain long-term biological assets.

(4) These adjustments include costs related to the evaluation and integration of acquisitions and divestitures, as well as a loss on assets held for sale related to divestitures and other transaction-related tax adjustments.

(5) These adjustments primarily include site consolidation (including site transition costs), severance, impairment, third-party consulting and professional services, and other costs related to the Company’s restructuring actions and efficiency initiatives. These adjustments also include gains and/or losses on the sale of certain assets and real estate.

(6) These adjustments primarily include immaterial items related to: (i) certain venture capital and other strategic investment losses/(gains), net. This item only includes recognized gains or losses on certain investments. The Company does not forecast the future performance of these investments; and (ii) reductions to a previous $27 million inventory charge associated with an NHP supply matter. As a result of the resolution of the U.S. government investigations during fiscal year 2025, certain NHPs were subsequently utilized.

Webcast

Charles River has scheduled a live webcast on Thursday, May 7th, at 8:30 a.m. ET to discuss matters relating to this press release. To participate, please go to ir.criver.com and select the webcast link. You can also find the associated slide presentation and reconciliations of GAAP financial measures to non-GAAP financial measures on the website.

Non-GAAP Reconciliations

The Company reports non-GAAP results in this press release, which exclude often-one-time charges and other items that are outside of normal operations. A reconciliation of GAAP to non-GAAP results is provided in the schedules at the end of this press release.

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, such as non-GAAP earnings per share, non-GAAP operating income, non-GAAP operating margin, and non-GAAP net income. Non-GAAP financial measures exclude, but are not limited to, the amortization of intangible assets and the purchase accounting step-up adjustment on inventory and certain long term biological assets, and other charges and adjustments related to our acquisitions and divestitures, including expenses associated with evaluating and integrating acquisitions and divestitures, including advisory fees, certain transition costs, and certain other transaction-related costs, as well as fair value adjustments associated with contingent consideration; charges, gains, and losses attributable to businesses or properties we plan to close, consolidate, or divest, including the divestitures of our CDMO and Cell Solutions businesses, the sale of certain of our European Discovery Services sites, and the sale of certain assets including real estate; severance and other costs associated with our restructuring initiatives; investment gains or losses associated with our venture capital and certain other strategic equity investments; certain legal costs and adjustments related to an NHP inventory charge in our DSA segment related to now concluded U.S. government investigations into the NHP supply chain; legal and advisory costs related to entering into a Cooperation Agreement with a shareholder; tax effect of all of the aforementioned matters; and adjustments related to the derecognition of certain deferred tax assets due to the CDMO Gene Therapy intangible asset impairment charge, the recognition of deferred tax assets expected to be utilized as a result of changes to the Company’s international financing structure, and the revaluation of deferred tax liabilities as a result of foreign tax legislation. This press release also refers to our revenue on both a GAAP and non-GAAP basis: on a non-GAAP basis, we define “organic revenue growth” as reported revenue growth adjusted for foreign currency translation, acquisitions, and divestitures. We exclude these items from the non-GAAP financial measures because they are outside our normal operations. There are limitations in using non-GAAP financial measures, as they are not presented in accordance with generally accepted accounting principles, and may be different than non-GAAP financial measures used by other companies. In particular, we believe that the inclusion of supplementary non-GAAP financial measures in this press release helps investors to gain a meaningful understanding of our core operating results and future prospects without the effect of these often-one-time charges, and is consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to prior periods or forecasts. We believe that the financial impact of our acquisitions and divestitures (and in certain cases, the evaluation of such acquisitions and divestitures, whether or not ultimately consummated) is often large relative to our overall financial performance, which can adversely affect the comparability of our results on a period-to-period basis. In addition, certain activities and their underlying associated costs, such as business acquisitions, generally occur periodically but on an unpredictable basis. We calculate non-GAAP integration costs to include third-party integration costs incurred post-acquisition. Presenting revenue on an organic basis allows investors to measure our revenue growth exclusive of acquisitions, divestitures, and foreign currency exchange fluctuations more clearly. Non-GAAP results also allow investors to compare the Company’s operations against the financial results of other companies in the industry who similarly provide non-GAAP results. The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for results of operations presented in accordance with GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules and regulations. Reconciliations of the non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures are set forth in this press release, and can also be found on the Company’s website at ir.criver.com.

Caution Concerning Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “would,” “may,” “estimate,” “plan,” “outlook,” and “project,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements also include statements regarding: the projected and/or anticipated future financial performance of Charles River and our specific businesses, including as delineated in our forward-looking guidance, and particularly our expectations with respect to revenue, the impact of foreign exchange, interest rates, and enhanced efficiency initiatives; our expectations with respect to our ability to gain market share; our ability to create long-term value for our shareholders and successfully execute on our strategic initiatives, including the impact and results of the such initiatives; the Company’s plans or prospects, expectations and long-term goals associated with our business including the timing of previously announced planned divestiture of certain European Discovery Services sites; earnings per share; operating margin; client demand, particularly the future demand for drug discovery and development products and services, including our expectations for future revenue trends; our expectations with respect to booking trends and the impacts thereof; our expectations with respect to pricing of our products and services; our expectations with respect to future tax rates and the impact of such tax rates on our business; our expectations with respect to the impact of acquisitions, including the acquisition of the assets of K.F. (Cambodia) Ltd. and of PathoQuest SAS, and divestitures on the Company, our service offerings, client perception, strategic relationships, revenue, revenue growth rates, revenue growth drivers, and earnings; the development and performance of our services and products, including our investments in our portfolio; market and industry conditions including the outsourcing of services and identification of spending trends by our clients and funding available to them; ability to gain market share and capitalize on business and growth opportunities; the impact of our restructuring initiatives, including annualized savings; and the impact of our stock repurchase authorization. Forward-looking statements are based on Charles River’s current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. Those risks and uncertainties include, but are not limited to: the impact of NHP supply constraints; changes and uncertainties in the global economy and financial markets, including disruptions in the global economy caused by geopolitical conflicts; the ability to successfully integrate businesses we acquire, and risks and uncertainties associated with businesses that we acquire; the timing and magnitude of our share repurchases; negative trends in research and development spending, negative trends in the level of outsourced services, or other cost reduction actions by our clients; the ability to convert backlog to revenue; demand and booking trends; special interest groups; contaminations; industry trends; new displacement technologies; USDA and FDA regulations; changes in law; continued availability of products and supplies; loss of key personnel; interest rate and foreign currency exchange rate fluctuations; changes in tax regulation and laws; changes in generally accepted accounting principles; and any changes in business, political, or economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas. A further description of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in Charles River’s Annual Report on Form 10-K as filed on February 18, 2026, as well as other filings we make with the Securities and Exchange Commission. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by Charles River, and Charles River assumes no obligation and expressly disclaims any duty to update information contained in this press release except as required by law.

About Charles River

Charles River provides essential products and services to help pharmaceutical and biotechnology companies, government agencies and leading academic institutions around the globe accelerate their research and drug development efforts. Our dedicated employees are focused on providing clients with exactly what they need to improve and expedite the discovery, early-stage development and safe manufacture of new therapies for the patients who need them. To learn more about our unique portfolio and breadth of services, visit www.criver.com.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

 

 

 

 

SCHEDULE 1

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(in thousands, except for per share data)

 

 

 

 

 

Three Months Ended

 

March 28, 2026

 

March 29, 2025

 

 

 

 

Service revenue

$

798,152

 

 

$

797,923

 

Product revenue

 

197,678

 

 

 

186,245

 

Total revenue

 

995,830

 

 

 

984,168

 

Costs and expenses:

 

 

 

Cost of services provided (excluding amortization of intangible assets)

 

608,907

 

 

 

577,428

 

Cost of products sold (excluding amortization of intangible assets)

 

92,259

 

 

 

89,008

 

Selling, general and administrative

 

159,422

 

 

 

177,799

 

Amortization of intangible assets

 

15,345

 

 

 

65,264

 

Operating income

 

119,897

 

 

 

74,669

 

Other income (expense):

 

 

 

Interest income

 

1,033

 

 

 

1,404

 

Interest expense

 

(26,742

)

 

 

(27,884

)

Other (expense) income, net

 

(124,130

)

 

 

(12,211

)

Income (loss) before income taxes

 

(29,942

)

 

 

35,978

 

Provision (benefit) for income taxes

 

(15,140

)

 

 

10,100

 

Net income (loss)

 

(14,802

)

 

 

25,878

 

Less: Net income attributable to noncontrolling interests

 

41

 

 

 

409

 

Net income (loss) attributable to common shareholders

$

(14,843

)

 

$

25,469

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share

 

 

 

Basic

$

(0.30

)

 

$

0.50

 

Diluted

$

(0.30

)

 

$

0.50

 

 

 

 

 

Weighted-average number of common shares outstanding

 

 

 

Basic

 

48,951

 

 

 

50,677

 

Diluted

 

48,951

 

 

 

50,853

 

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

 

SCHEDULE 2

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

March 28, 2026

 

December 27, 2025

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

191,830

 

 

$

213,770

 

Trade receivables and contract assets, net of allowances for credit losses of $8,114 and $10,463, respectively

 

700,251

 

 

 

708,856

 

Inventories

 

359,723

 

 

 

299,103

 

Prepaid assets

 

102,146

 

 

 

96,108

 

Other current assets

 

134,856

 

 

 

129,212

 

Total current assets

 

1,488,806

 

 

 

1,447,049

 

Property, plant and equipment, net

 

1,510,154

 

 

 

1,655,219

 

Venture capital and strategic equity investments

 

209,723

 

 

 

206,972

 

Operating lease right-of-use assets, net

 

317,840

 

 

 

361,415

 

Goodwill

 

3,040,032

 

 

 

2,764,253

 

Intangible assets, net

 

248,989

 

 

 

339,995

 

Deferred tax assets

 

88,599

 

 

 

67,334

 

Other assets

 

826,165

 

 

 

293,185

 

Total assets

$

7,730,308

 

 

$

7,135,422

 

 

 

 

 

Liabilities, Redeemable Noncontrolling Interests and Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

133,952

 

 

$

148,800

 

Accrued compensation

 

166,888

 

 

 

268,854

 

Deferred revenue

 

194,330

 

 

 

210,418

 

Accrued liabilities

 

372,397

 

 

 

270,085

 

Other current liabilities

 

226,137

 

 

 

222,158

 

Total current liabilities

 

1,093,704

 

 

 

1,120,315

 

Long-term debt, net and finance leases

 

2,663,133

 

 

 

2,136,360

 

Operating lease right-of-use liabilities

 

393,113

 

 

 

434,048

 

Deferred tax liabilities

 

81,399

 

 

 

95,203

 

Other long-term liabilities

 

510,646

 

 

 

138,302

 

Total liabilities

 

4,741,995

 

 

 

3,924,228

 

Redeemable noncontrolling interests

 

41,900

 

 

 

41,263

 

Equity:

 

 

 

Preferred stock, $0.01 par value; 20,000 shares authorized; no shares issued and outstanding

 

—

 

 

 

—

 

Common stock, $0.01 par value; 120,000 shares authorized; 49,342 shares issued and 48,167 shares outstanding as of March 28, 2026, and 49,217 shares issued and outstanding as of December 27, 2025

 

493

 

 

 

492

 

Additional paid-in capital

 

1,967,356

 

 

 

1,947,301

 

Retained earnings

 

1,373,777

 

 

 

1,388,620

 

Treasury stock, at cost, 1,175 and zero shares, as of March 28, 2026 and December 27, 2025, respectively

 

(209,990

)

 

 

—

 

Accumulated other comprehensive loss

 

(191,042

)

 

 

(171,783

)

Total Charles River Laboratories International, Inc. equity

 

2,940,594

 

 

 

3,164,630

 

Nonredeemable noncontrolling interest

 

5,819

 

 

 

5,301

 

Total equity

 

2,946,413

 

 

 

3,169,931

 

Total liabilities, redeemable noncontrolling interests and equity

$

7,730,308

 

 

$

7,135,422

 

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

 

SCHEDULE 3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

 

 

 

 

Three Months Ended

 

March 28, 2026

 

March 29, 2025

Cash flows relating to operating activities

 

 

 

Net income (loss)

$

(14,802

)

 

$

25,878

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

67,151

 

 

 

120,364

 

Long-lived asset impairments

 

15,863

 

 

 

10,576

 

Stock-based compensation

 

22,381

 

 

 

13,135

 

Deferred income taxes

 

(29,417

)

 

 

(19,041

)

Write down of inventories

 

1,489

 

 

 

6,762

 

Losses and impairments on venture capital and strategic equity investments, net

 

1,138

 

 

 

10,374

 

Provision for credit losses

 

47

 

 

 

2,007

 

(Gain) loss on divestitures, net

 

117,981

 

 

 

(3,376

)

Other, net

 

(34,675

)

 

 

3,731

 

Changes in assets and liabilities:

 

 

 

Trade receivables and contract assets, net

 

(65,319

)

 

 

(29,353

)

Inventories

 

26,004

 

 

 

(21,882

)

Accounts payable

 

20,455

 

 

 

25,251

 

Accrued compensation

 

(83,758

)

 

 

15,263

 

Deferred revenue

 

5,197

 

 

 

(1,213

)

Customer contract deposits

 

(135

)

 

 

9,167

 

Other assets and liabilities, net

 

(8,523

)

 

 

4,054

 

Net cash provided by operating activities

 

41,077

 

 

 

171,697

 

Cash flows relating to investing activities

 

 

 

Acquisition of businesses and assets, net of cash acquired

 

(405,006

)

 

 

—

 

Capital expenditures

 

(55,908

)

 

 

(59,324

)

Purchases of investments and contributions to venture capital investments

 

(8,492

)

 

 

(5,302

)

Proceeds from sale of investments

 

2,922

 

 

 

1,602

 

Proceeds from sale of businesses, net

 

60,096

 

 

 

17,441

 

Other, net

 

(1,457

)

 

 

104

 

Net cash used in investing activities

 

(407,845

)

 

 

(45,479

)

Cash flows relating to financing activities

 

 

 

Proceeds from long-term debt and revolving credit facility

 

912,462

 

 

 

416,341

 

Payments on long-term debt, revolving credit facility, and finance lease obligations

 

(355,676

)

 

 

(149,394

)

Proceeds from exercises of stock options

 

1,223

 

 

 

—

 

Purchase of treasury stock

 

(208,285

)

 

 

(353,132

)

Purchase of remaining equity interests of other redeemable noncontrolling interest

 

—

 

 

 

(19,140

)

Other, net

 

(2,000

)

 

 

—

 

Net cash provided by (used in) financing activities

 

347,724

 

 

 

(105,325

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

1,248

 

 

 

5,265

 

Net change in cash, cash equivalents, and restricted cash

 

(17,796

)

 

 

26,158

 

Cash, cash equivalents, and restricted cash, beginning of period

 

215,997

 

 

 

205,570

 

Cash, cash equivalents, and restricted cash, end of period

$

198,201

 

 

$

231,728

 

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

 

 

 

 

 

SCHEDULE 4

RECONCILIATION OF GAAP TO NON-GAAP

SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1)

(in thousands, except percentages)

 

 

 

 

 

 

 

Three Months Ended

 

 

March 28, 2026

 

March 29, 2025

Research Models and Services

 

 

 

 

Revenue

 

$

208,367

 

 

$

213,073

 

Operating income

 

 

49,773

 

 

 

43,605

 

Operating income as a % of revenue

 

 

23.9

%

 

 

20.5

%

Add back:

 

 

 

 

Amortization related to acquisitions

 

 

7,380

 

 

 

12,687

 

Acquisition, integration, and divestiture-related adjustments (3)

 

 

—

 

 

 

14

 

Severance

 

 

789

 

 

 

229

 

Asset impairment

 

 

15,561

 

 

 

319

 

Cost savings and efficiency initiatives (4)

 

 

(21,964

)

 

 

876

 

Total non-GAAP adjustments to operating income

 

$

1,766

 

 

$

14,125

 

Operating income, excluding non-GAAP adjustments

 

$

51,539

 

 

$

57,730

 

Non-GAAP operating income as a % of revenue

 

 

24.7

%

 

 

27.1

%

 

 

 

 

 

Depreciation and amortization

 

$

16,140

 

 

$

21,761

 

Capital expenditures

 

$

11,568

 

 

$

7,286

 

 

 

 

 

 

Discovery and Safety Assessment

 

 

 

 

Revenue

 

$

596,923

 

 

$

592,609

 

Operating income

 

 

103,875

 

 

 

93,952

 

Operating income as a % of revenue

 

 

17.4

%

 

 

15.9

%

Add back:

 

 

 

 

Amortization related to acquisitions

 

 

16,497

 

 

 

18,171

 

Acquisition, integration, and divestiture-related adjustments (3)

 

 

2,542

 

 

 

1,061

 

Severance

 

 

2,626

 

 

 

4,979

 

Asset impairment

 

 

—

 

 

 

9,786

 

Cost savings and efficiency initiatives (4)

 

 

4,987

 

 

 

2,777

 

Third-party legal and advisory costs and certain related items (5)

 

 

(5,455

)

 

 

10,970

 

Total non-GAAP adjustments to operating income

 

$

21,197

 

 

$

47,744

 

Operating income, excluding non-GAAP adjustments

 

$

125,072

 

 

$

141,696

 

Non-GAAP operating income as a % of revenue

 

 

21.0

%

 

 

23.9

%

 

 

 

 

 

Depreciation and amortization

 

$

39,914

 

 

$

42,084

 

Capital expenditures

 

$

37,509

 

 

$

34,521

 

 

 

 

 

 

Manufacturing Solutions

 

 

 

 

Revenue

 

$

190,540

 

 

$

178,486

 

Operating income (loss)

 

 

46,839

 

 

 

(8,620

)

Operating income (loss) as a % of revenue

 

 

24.6

%

 

 

(4.8

)%

Add back:

 

 

 

 

Amortization related to acquisitions (2)

 

 

1,945

 

 

 

46,077

 

Severance

 

 

(868

)

 

 

2,204

 

Asset impairment

 

 

—

 

 

 

201

 

Cost savings and efficiency initiatives (4)

 

 

1,371

 

 

 

1,306

 

Total non-GAAP adjustments to operating income

 

$

2,448

 

 

$

49,788

 

Operating income, excluding non-GAAP adjustments

 

$

49,287

 

 

$

41,168

 

Non-GAAP operating income as a % of revenue

 

 

25.9

%

 

 

23.1

%

 

 

 

 

 

Depreciation and amortization

 

$

8,399

 

 

$

54,623

 

Capital expenditures

 

$

6,274

 

 

$

17,279

 

 

 

 

 

 

Unallocated Corporate Overhead

 

$

(80,590

)

 

$

(54,268

)

Add back:

 

 

 

 

Acquisition, integration, and divestiture-related adjustments (3)

 

 

16,589

 

 

 

730

 

Severance

 

 

3,671

 

 

 

1,002

 

Cost savings and efficiency initiatives (4)

 

 

(2,915

)

 

 

166

 

Total non-GAAP adjustments to operating expense

 

$

17,345

 

 

$

1,898

 

Unallocated corporate overhead, excluding non-GAAP adjustments

 

$

(63,245

)

 

$

(52,370

)

 

 

 

 

 

Total

 

 

 

 

Revenue

 

$

995,830

 

 

$

984,168

 

Operating income

 

 

119,897

 

 

 

74,669

 

Operating income as a % of revenue

 

 

12.0

%

 

 

7.6

%

Add back:

 

 

 

 

Amortization related to acquisitions (2)

 

 

25,822

 

 

 

76,935

 

Acquisition, integration, and divestiture-related adjustments (3)

 

 

19,131

 

 

 

1,805

 

Severance

 

 

6,218

 

 

 

8,414

 

Asset impairment

 

 

15,561

 

 

 

10,306

 

Cost savings and efficiency initiatives (4)

 

 

(18,521

)

 

 

5,125

 

Third-party legal and advisory costs and certain related items (5)

 

 

(5,455

)

 

 

10,970

 

Total non-GAAP adjustments to operating income

 

$

42,756

 

 

$

113,555

 

Operating income, excluding non-GAAP adjustments

 

$

162,653

 

 

$

188,224

 

Non-GAAP operating income as a % of revenue

 

 

16.3

%

 

 

19.1

%

 

 

 

 

 

Depreciation and amortization

 

$

67,151

 

 

$

120,364

 

Capital expenditures

 

$

55,908

 

 

$

59,324

 

(1)

Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.

(2)

Amortization related to acquisitions for the three months ended March 29, 2025 includes $35.5 million of accelerated amortization of certain client relationships in the Biologics Solutions reporting unit within the Manufacturing Solutions reportable segment.

(3)

These adjustments are related to the evaluation and integration of acquisitions and divestitures, and primarily include transaction, advisory, certain third-party integration, certain compensation costs, and related costs; as well as fair value adjustments associated with contingent consideration arrangements.

(4)

Cost savings and efficiency initiatives in 2026 primarily include site consolidation charges related to recent site optimization activities, cost of professional services related to certain improvement initiatives, and a pre-tax gain of $38.5 million in connection with the sale of certain assets in Wilmington, Massachusetts. The gain was recognized within RMS reportable segment and unallocated corporate for $23.2 million and $15.3 million, respectively.

(5)

Within the DSA business, third‑party legal and advisory costs incurred during fiscal 2025 relate to U.S. government investigations into the NHP supply chain, which were concluded in fiscal 2025. Also included within DSA results for fiscal 2026 is the utilization of previously written‑down NHP inventory, resulting in partial reversals of the $27 million inventory charge recorded in fiscal 2024 following the resolution of the matter in fiscal 2025.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

 

SCHEDULE 5

RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED)(1)

(in thousands, except per share data)

 

 

 

 

 

Three Months Ended

 

March 28, 2026

 

March 29, 2025

 

 

 

 

Net income (loss) available to Charles River Laboratories International, Inc. common shareholders

$

(14,843

)

 

$

25,469

 

Add back:

 

 

 

Non-GAAP adjustments to operating income (2)

 

41,710

 

 

 

112,393

 

Venture capital and strategic equity investment losses and impairments, net

 

1,752

 

 

 

9,969

 

(Gain) loss on divestitures (3)

 

117,981

 

 

 

(3,376

)

Tax effect of non-GAAP adjustments:

 

 

 

Tax impact of divestitures

 

(43,069

)

 

 

—

 

Interest on acquired uncertain tax positions

 

4,969

 

 

 

—

 

Tax effect of the remaining non-GAAP adjustments

 

(6,804

)

 

 

(25,345

)

Net income available to Charles River Laboratories International, Inc. common shareholders, excluding non-GAAP adjustments

$

101,696

 

 

$

119,110

 

 

 

 

 

Weighted average shares outstanding – Basic

 

48,951

 

 

 

50,677

 

Effect of dilutive securities:

 

 

 

Stock options, restricted stock units and performance share units

 

402

 

 

 

176

 

Weighted average shares outstanding – Diluted

 

49,353

 

 

 

50,853

 

 

 

 

 

Earnings (loss) per share attributable to common shareholders:

 

 

 

Basic

$

(0.30

)

 

$

0.50

 

Diluted (4)

$

(0.30

)

 

$

0.50

 

 

 

 

 

Basic, excluding non-GAAP adjustments

$

2.08

 

 

$

2.35

 

Diluted, excluding non-GAAP adjustments

$

2.06

 

 

$

2.34

 

(1)

Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.

(2)

This amount excludes non-GAAP adjustments attributable to noncontrolling interest holders.

(3)

The amount included in 2026 relates to a pre-tax loss on assets held for sale in connection with the CDMO and Cell Solutions Divestiture while the amount included in 2025 relates to a gain on the sale of a DSA site.

(4)

Net loss available to Charles River Laboratories International, Inc. per common share excludes the effect of dilution and is computed using basic weighted-average number of shares outstanding for the three month period ended March 28, 2026.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

 

SCHEDULE 6

RECONCILIATION OF GAAP REVENUE GROWTH

TO NON-GAAP REVENUE GROWTH, ORGANIC (UNAUDITED) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 28, 2026

 

Total CRL

 

RMS Segment

 

DSA Segment

 

MS Segment

 

 

 

 

 

 

 

 

 

Revenue growth, reported

 

1.2

%

 

(2.2

)%

 

0.7

%

 

6.8

%

(Increase) decrease due to foreign exchange

 

(2.8

)%

 

(3.3

)%

 

(2.2

)%

 

(3.9

)%

Impact of divestitures (2)

 

0.1

%

 

—

%

 

0.1

%

 

—

%

Non-GAAP revenue growth, organic (3)

 

(1.5

)%

 

(5.5

)%

 

(1.4

)%

 

2.9

%

 

 

 

 

 

 

 

 

 

(1)

 

Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.

(2)

 

Impact of divestitures relates to the sale of a site within DSA.

(3)

 

Organic revenue growth is defined as reported revenue growth adjusted for divestitures and foreign exchange.

 

Investor Contact:

Todd Spencer

Corporate Vice President,

Investor Relations

781.222.6455

[email protected]

Media Contact:

Amy Cianciaruso

Corporate Senior Vice President,

Chief Communications Officer

781.222.6168

[email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Health Medical Devices General Health Research Science Pharmaceutical Biotechnology

MEDIA:

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Posted on

Vertex Announces First Quarter 2026 Financial Results

KING OF PRUSSIA, Pa., May 07, 2026 (GLOBE NEWSWIRE) — Vertex, Inc. (NASDAQ: VERX) (“Vertex” or the “Company”), a leading provider of enterprise compliance technology for global commerce, today announced financial results for its first quarter ended March 31, 2026.

“We delivered a strong first quarter, with revenue and adjusted EBITDA above the higher end of our guidance as well as stability across customer demand and retention,” said Chris Young, President and Chief Executive Officer of Vertex. “As we exited the quarter, we were encouraged by consistent customer behavior and solid execution across the business, even within a mixed macro environment.”

Mr. Young continued, “In addition, in the first quarter we acquired Brinta, an AI-first e-invoicing startup in Latin America. The acquisition of Brinta enables us to expedite our country coverage in Latin America while bringing an AI-native architecture built for one of the most complex real-time compliance environments in the world. That capability includes automation with control and speed with auditability which is where global compliance is heading.”

Mr. Young concluded, “In April, we announced our Value Creation Plan, which is expected to further transform Vertex into a more effective, AI-leading organization. The Value Creation Plan is expected to accelerate profitability and free cash flow while providing resources to invest in the opportunities that matter most. This is not a short-term cost exercise—it is a deliberate reset designed to build a stronger, more profitable foundation that gives us greater flexibility to invest in innovation and long-term growth. We remain confident in the strength of our customer relationships, our market position, and the significant opportunity ahead.”

First Quarter 2026 Financial Results

  • Total revenues of $196.6 million, up 11.1% year-over-year.
  • Software subscription revenues of $167.1 million, up 10.9% year-over-year.
  • Cloud revenues of $96.8 million, up 20.7% year-over-year.
  • Annual Recurring Revenue (“ARR”) was $687.6 million, up 11.2% year-over-year.
  • Average Annual Revenue per direct customer (“AARPC”) was $140,464 at March 31, 2026, compared to $126,534 at March 31, 2025, and $137,867 at December 31, 2025.
  • Net Revenue Retention (“NRR”) was 105%, compared to 109% at March 31, 2025, and 105% at December 31, 2025.
  • Gross Revenue Retention (“GRR”) was 95%, compared to 95% at March 31, 2025, and 94% at December 31, 2025.
  • Income (loss) from operations of $(10.6) million, compared to $4.5 million for the same period in the prior year.
  • Non-GAAP operating income of $37.6 million, compared to $31.3 million for the same period in the prior year.
  • Net income (loss) of $(2.5) million, compared to $11.1 million for the same period in the prior year.
  • Net loss per basic and diluted Class A and Class B shares of $0.02, compared to net income per basic and diluted Class A and Class B shares of $0.07 for the same period in the prior year.
  • Non-GAAP net income of $28.7 million and Non-GAAP diluted earnings per share (“EPS”) of $0.17.
  • Adjusted EBITDA of $44.1 million, compared to $37.2 million for the same period in the prior year. Adjusted EBITDA margin of 22.4%, compared to 21.0% for the same period in the prior year.

Definitions of certain key business metrics and the non-GAAP financial measures used in this press release and reconciliations of such measures to the most directly comparable GAAP financial measures are included below under the headings “Definitions of Certain Key Business Metrics” and “Use and Reconciliation of Non-GAAP Financial Measures.”

Financial Outlook

For the second quarter of 2026, the Company currently expects:

  • Revenues of $200.0 million to $204.0 million;
  • Adjusted EBITDA of $47.0 million to $50.0 million.

For the full-year 2026, the Company currently expects:

  • Revenues of $823.5 million to $831.5 million;
  • Cloud revenue growth of 25 percent; and
  • Adjusted EBITDA of $202.0 million to $208.0 million.

John Schwab, Chief Financial Officer added, “The cost actions we took in April due to the Value Creation Plan are expected to significantly increase earnings leverage in 2026 and beyond. Accordingly, we are increasing our Adjusted EBITDA guidance for the full year. On a fully annualized basis we expect the cost actions to save approximately $60 to $70 million dollars of cash spend beginning in 2027.”

The Company is unable to reconcile forward-looking Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact net income (loss) for these periods but would not impact Adjusted EBITDA. Such items may include stock-based compensation expense, depreciation and amortization of capitalized software costs and acquired intangible assets, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, amortization of cloud computing implementation costs, severance expenses, acquisition-related retained employee compensation, transaction costs, and other items. The unavailable information could have a significant impact on the Company’s net income (loss). The foregoing forward-looking statements reflect the Company’s expectations as of today’s date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. The Company does not intend to update its financial outlook until its next quarterly results announcement.

Important disclosures in this earnings release about and reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below under “Use and Reconciliation of Non-GAAP Financial Measures.”

Conference Call and Webcast Information

Vertex will host a conference call at 8:30 a.m. Eastern Time today, May 7, 2026, to discuss its first quarter 2026 financial results.

Those wishing to participate should register in advance for the live conference call at https://vertex-earnings-q1-2026.open-exchange.net/registration.

A live webcast of the call will also be available at the Company’s investor relations website at https://ir.vertexinc.com. An audio-only replay of the conference call will be available on the investor relations website for one year.

About Vertex

Vertex, Inc. is a leading global provider of indirect tax solutions. The Company’s mission is to deliver the most trusted tax technology enabling global businesses to transact, comply and grow with confidence. Vertex provides solutions that can be tailored to specific industries for major lines of indirect tax, including sales and consumer use, value added and payroll. Headquartered in North America, and with offices in South America and Europe, Vertex empowers the world’s leading brands to simplify the complexity of continuous compliance.

For more information, visit www.vertexinc.com; follow us on X and LinkedIn; or subscribe on YouTube.

Forward-Looking Statements

Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies, and our stock repurchase program. Forward-looking statements are based on Vertex management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: our ability to maintain and grow revenue from existing customers and new customers, and expand their usage of our solutions; our ability to maintain and expand our strategic relationships with third parties; our ability to adapt to technological change and successfully introduce new solutions or provide updates to existing solutions; risks related to failures in information technology or infrastructure; risks related to our reliance on government infrastructure to support our e-invoicing services; challenges in using and managing use of Artificial Intelligence in our business; incorrect or improper implementation, integration or use of our solutions; failure to attract and retain qualified technical and tax-content personnel; competitive pressures from other tax software and service providers and challenges of convincing businesses using native enterprise resource planning functions to switch to our software; our ability to accurately forecast our revenue and other future results of operations based on recent success; our ability to offer specific software deployment methods based on changes to customers’ and partners’ software systems; our ability to continue making significant investments in software development and equipment; our ability to sustain and expand revenues, maintain profitability, and to effectively manage our anticipated growth; our ability to successfully diversify our solutions by developing or introducing new solutions or acquiring and integrating additional businesses, products, services, or content; our ability to successfully integrate acquired businesses and to realize the anticipated benefits of such acquisitions; risks related to the fluctuations in our results of operations; risks related to our expanding international operations; our exposure to liability from errors, delays, fraud or system failures, which may not be covered by insurance; our ability to adapt to organizational changes and effectively implement strategic initiatives; risks related to our determinations of customers’ transaction tax and tax payments; risks related to changes in tax laws and regulations or their interpretation or enforcement; our ability to manage cybersecurity and data privacy risks; our involvement in material legal proceedings and audits; risks related to undetected errors, bugs or defects in our software; risks related to utilization of open-source software, business processes and information systems; our ability to effectively protect, maintain, and enhance our brand; changes in application, scope, interpretation or enforcement of laws and regulations; global economic weakness and uncertainties, including the economic uncertainty created by the changing legal, regulatory, or taxation landscape in the United States, and disruption in the capital and credit markets; business disruptions related to natural disasters, epidemic outbreaks, including a global endemic or pandemic, terrorist acts, political events, or other events outside of our control; our ability to comply with anti-corruption, anti-bribery, and similar laws; our ability to protect our intellectual property; changes in interest rates, security ratings and market perceptions of the industry in which we operate, or our ability to obtain capital on commercially reasonable terms or at all; our ability to maintain an effective system of disclosure controls and internal control over financial reporting, or ability to remediate any material weakness in our internal controls; risks related to our Class A common stock and controlled company status; risks related to our stock repurchase program; risks related to our indebtedness and adherence to the covenants under our debt instruments; our expectations regarding the effects of the Capped Call Transactions (as defined in our Form 10-K) and regarding actions of the Option Counterparties (as defined in our Form 10-K) and/or their respective affiliates; risks associated with our Value Creation Plan; and the other factors described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2026, as may be subsequently updated by our other SEC filings. Copies of such filings may be obtained from the Company or the SEC.

All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

Definitions of Certain Key Business Metrics


Annual Recurring Revenue (“ARR”)

We derive the vast majority of our revenues from recurring software subscriptions. We believe ARR provides us with visibility to our projected software subscription revenues in order to evaluate the health of our business. Because we recognize subscription revenues ratably, we believe investors can use ARR to measure our expansion of existing customer revenues, new customer activity, and as an indicator of future software subscription revenues. ARR is based on monthly recurring revenues (“MRR”) from software subscriptions for the most recent month at period end, multiplied by twelve. MRR is calculated by dividing the software subscription price, inclusive of discounts, by the number of subscription covered months. MRR only includes direct customers with MRR at the end of the last month of the measurement period. AARPC represents average annual revenue per direct customer and is calculated by dividing ARR by the number of software subscription direct customers at the end of the respective period.


Net Revenue Retention (“NRR”)

We believe that our NRR provides insight into our ability to retain and grow revenues from our direct customers, as well as their potential long-term value to us. We also believe it demonstrates to investors our ability to expand existing customer revenues, which is one of our key growth strategies. Our NRR refers to the ARR expansion during the 12 months of a reporting period for all direct customers who were part of our customer base at the beginning of the reporting period. Our NRR calculation takes into account any revenues lost from departing direct customers or those who have downgraded or reduced usage, as well as any revenue expansion from migrations, new licenses for additional products or contractual and usage-based price changes.


Gross Revenue Retention (“GRR”)

We believe our GRR provides insight into and demonstrates to investors our ability to retain revenues from our existing direct customers. Our GRR refers to how much of our MRR we retain each month after reduction for the effects of revenues lost from departing direct customers or those who have downgraded or reduced usage. GRR does not take into account revenue expansion from migrations, new licenses for additional products or contractual and usage-based price changes. GRR does not include revenue reductions resulting from cancellations of customer subscriptions that are replaced by new subscriptions associated with customer migrations to a newer version of the related software solution.


Customer Count

The following table shows Vertex’s direct customers, as well as indirect small business customers sold and serviced through the Company’s one-to-many channel strategy.

Customers Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026
Direct 4,888 4,862 4,856 4,867 4,895
Indirect 481 504 516 515 530
Total 5,369 5,366 5,372 5,382 5,425



Use and Reconciliation of Non-GAAP Financial Measures

In addition to our results determined in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and key business metrics described above, we have calculated non-GAAP cost of revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling and marketing expense, non-GAAP general and administrative expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and free cash flow margin, which are each non-GAAP financial measures. We have provided tabular reconciliations of each of these non-GAAP financial measures to its most directly comparable GAAP financial measure.

Management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate financial performance and liquidity. Our non-GAAP financial measures are presented as supplemental disclosure as we believe they provide useful information to investors and others in understanding and evaluating our results, prospects, and liquidity period-over-period without the impact of certain items that do not directly correlate to our operating performance and that may vary significantly from period to period for reasons unrelated to our operating performance, as well as comparing our financial results to those of other companies. Our definitions of these non-GAAP financial measures may differ from similarly titled measures presented by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, and should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 24, 2026 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, to be filed with the SEC.

We calculate these non-GAAP financial measures as follows:

  • Non-GAAP cost of revenues, software subscriptions is determined by adding back to GAAP cost of revenues, software subscriptions, the stock-based compensation expense, and depreciation and amortization of capitalized software and acquired intangible assets included in cost of subscription revenues for the respective periods.
  • Non-GAAP cost of revenues, services is determined by adding back to GAAP cost of revenues, services, the stock-based compensation expense included in cost of revenues, services for the respective periods.
  • Non-GAAP gross profit is determined by adding back to GAAP gross profit the stock-based compensation expense, and depreciation and amortization of capitalized software and acquired intangible assets included in cost of subscription revenues for the respective periods.
  • Non-GAAP gross margin is determined by dividing non-GAAP gross profit by total revenues for the respective periods.
  • Non-GAAP research and development expense is determined by adding back to GAAP research and development expense the stock-based compensation expense and transaction costs related to acquired technology included in research and development expense for the respective periods.
  • Non-GAAP selling and marketing expense is determined by adding back to GAAP selling and marketing expense the stock-based compensation expense and the amortization of acquired intangible assets included in selling and marketing expense for the respective periods.
  • Non-GAAP general and administrative expense is determined by adding back to GAAP general and administrative expense the stock-based compensation expense, amortization of cloud computing implementation costs, severance expense, acquisition-related retained employee compensation, and transaction costs included in general and administrative expense for the respective periods.
  • Non-GAAP operating income is determined by adding back to GAAP loss or income from operations the stock-based compensation expense, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP loss or income from operations for the respective periods.
  • Non-GAAP net income is determined by adding back to GAAP net income or loss income tax benefit or expense, stock-based compensation expense, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP loss or income from operations for the respective periods, to determine non-GAAP income or loss before income taxes. Non-GAAP income or loss before income taxes is then adjusted for income taxes calculated using the respective statutory tax rates for applicable jurisdictions, which for purposes of this determination were assumed to be 25.5%.
  • Non-GAAP net income per diluted share of Class A and Class B common stock (“Non-GAAP diluted EPS”) is determined by dividing non-GAAP net income by the weighted average shares outstanding of all classes of common stock, inclusive of the impact of dilutive common stock equivalents to purchase such common stock, including stock options, restricted stock awards, restricted stock units and employee stock purchase plan shares. Additionally, the dilutive effect of shares issuable upon conversion of the senior convertible notes is included in the calculation of Non-GAAP diluted EPS by application of the if-converted method.
  • Adjusted EBITDA is determined by adding back to GAAP net income or loss the net interest income or expense, income tax expense or benefit, depreciation and amortization of property and equipment, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP net income or loss for the respective periods.
  • Adjusted EBITDA margin is determined by dividing Adjusted EBITDA by total revenues for the respective periods.
  • Free cash flow is determined by adjusting net cash provided by (used in) operating activities by purchases of property and equipment and capitalized software additions for the respective periods.
  • Free cash flow margin is determined by dividing free cash flow by total revenues for the respective periods.

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

 
Vertex, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)
 
    As of March 31,   As of December 31,
(In thousands, except per share data)   2026
   2025
    (unaudited)      
Assets            
Current assets:            
Cash and cash equivalents   $ 252,455     $ 314,009  
Funds held for customers     17,698       24,286  
Accounts receivable, net of allowance of $13,225 and $11,466, respectively     158,998       183,446  
Prepaid expenses and other current assets     59,358       38,966  
Total current assets     488,509       560,707  
Property and equipment, net of accumulated depreciation     220,407       209,727  
Capitalized software, net of accumulated amortization     35,253       35,480  
Goodwill and other intangible assets     405,355       396,006  
Deferred commissions     30,879       31,907  
Deferred income tax asset     129       85  
Operating lease right-of-use assets     8,830       9,678  
Long-term investment     15,000       15,000  
Other assets     10,006       12,245  
Total assets   $ 1,214,368     $ 1,270,835  
Liabilities and Stockholders’ Equity            
Current liabilities:            
Accounts payable   $ 35,630     $ 37,557  
Accrued expenses     36,607       43,642  
Customer funds obligations     15,180       21,802  
Accrued salaries and benefits     32,199       23,992  
Accrued variable compensation     16,682       34,593  
Deferred revenue, current     393,107       382,839  
Current portion of operating lease liabilities     4,327       4,283  
Current portion of finance lease liabilities     44       55  
Purchase commitment and contingent consideration liabilities, current     32,800       25,900  
Total current liabilities     566,576       574,663  
Deferred revenue, net of current portion     5,290       5,209  
Debt, net of current portion     338,041       337,477  
Operating lease liabilities, net of current portion     7,686       8,903  
Finance lease liabilities, net of current portion     46       54  
Purchase commitment and contingent consideration liabilities, net of current portion     41,300       79,600  
Deferred income tax liabilities     8,925       5,664  
Deferred other liabilities     —       345  
Total liabilities     967,864       1,011,915  
Stockholders’ equity:            
Preferred shares, $0.001 par value, 30,000 shares authorized; no shares issued and outstanding     —       —  
Class A voting common stock, $0.001 par value, 300,000 shares authorized; 78,882 and 77,580 shares issued and outstanding, respectively     79       77  
Class B voting common stock, $0.001 par value, 150,000 shares authorized; 82,156 and 82,156 shares issued and outstanding, respectively     82       82  
Treasury stock, at cost, 1,875 and 504 shares, respectively     (30,135 )     (10,094 )
Additional paid in capital     332,910       316,327  
Accumulated deficit     (48,614 )     (46,104 )
Accumulated other comprehensive loss     (7,818 )     (1,368 )
Total stockholders’ equity     246,504       258,920  
Total liabilities and stockholders’ equity   $ 1,214,368     $ 1,270,835  
             

 
Vertex, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)
 
  Three months ended
  March 31,
(In thousands, except per share data) 2026   2025
  (unaudited)
Revenues:          
Software subscriptions $ 167,146     $ 150,761  
Services   29,500       26,301  
Total revenues   196,646       177,062  
Cost of revenues:          
Software subscriptions   51,176       44,245  
Services   20,601       19,823  
Total cost of revenues   71,777       64,068  
Gross profit   124,869       112,994  
Operating expenses:          
Research and development   24,550       20,886  
Selling and marketing   52,635       48,155  
General and administrative   54,339       45,028  
Depreciation and amortization   6,442       5,880  
Change in fair value of acquisition contingent earn-outs   (5,738 )     (14,700 )
Other operating expense, net   3,247       3,259  
Total operating expenses   135,475       108,508  
Income (loss) from operations   (10,606 )     4,486  
Interest income, net   (957 )     (1,539 )
Income (loss) before income taxes   (9,649 )     6,025  
Income tax benefit   (7,139 )     (5,105 )
Net income (loss)   (2,510 )     11,130  
Other comprehensive (income) loss:          
Foreign currency translation adjustments, net of tax   6,450       (15,105 )
Unrealized loss on investments, net of tax   —       9  
Total other comprehensive income (loss), net of tax   6,450       (15,096 )
Total comprehensive income (loss) $ (8,960 )   $ 26,226  
           
Net income (loss) per share of Class A and Class B, basic $ (0.02 )   $ 0.07  
Net income (loss) per share of Class A and Class B, diluted $ (0.02 )   $ 0.07  

 
Vertex, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)
 
      Three months ended
      March 31,
(In thousands)     2026   2025
      (unaudited)
Cash flows from operating activities:              
Net income (loss)     $ (2,510 )   $ 11,130  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:              
Depreciation and amortization       27,053       22,266  
Amortization of cloud computing implementation costs       1,037       1,006  
Provision for subscription cancellations and non-renewals       936       192  
Amortization of deferred financing costs       680       680  
Change in fair value of contingent consideration liabilities       (5,738 )     (14,700 )
Stock-based compensation expense       18,508       21,044  
Deferred income taxes       1,810       (929 )
Non-cash operating lease costs       1,773       779  
Other       1       (7 )
Changes in operating assets and liabilities, net of the effects of business acquisition(s):              
Accounts receivable       23,396       11,772  
Prepaid expenses and other current assets       (21,449 )     (13,169 )
Deferred commissions       1,028       (56 )
Accounts payable       (1,968 )     (11,279 )
Accrued expenses       (7,341 )     2,956  
Accrued and deferred compensation       (10,562 )     (26,785 )
Deferred revenue       11,247       11,156  
Operating lease liabilities       (2,083 )     (1,068 )
Other       2,157       (183 )
Net cash provided by operating activities       37,975       14,805  
Cash flows from investing activities:              
Acquisition of businesses and assets, net of cash acquired       (21,968 )     —  
Property and equipment additions       (24,660 )     (21,394 )
Capitalized software additions       (5,656 )     (5,661 )
Purchase of investment securities, available-for-sale       —       (2,398 )
Proceeds from sales and maturities of investment securities, available-for-sale       —       11,607  
Net cash used in investing activities       (52,284 )     (17,846 )
Cash flows from financing activities:              
Net increase (decrease) in customer funds obligations       (6,621 )     3,227  
Repurchases of shares       (20,041 )     —  
Payments for taxes related to net share settlement of stock-based awards       (7,143 )     (25,034 )
Proceeds from exercise of stock options       97       1,166  
Payments for acquisition contingent cash earn-out       (19,600 )     —  
Payments of finance lease liabilities       (20 )     (12 )
Net cash used in financing activities       (53,328 )     (20,653 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash       (505 )     1,310  
Net decrease in cash, cash equivalents and restricted cash       (68,142 )     (22,384 )
Cash, cash equivalents and restricted cash, beginning of period       338,295       326,066  
Cash, cash equivalents and restricted cash, end of period     $ 270,153     $ 303,682  
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period:              
Cash and cash equivalents     $ 252,455     $ 270,395  
Restricted cash—funds held for customers       17,698       33,287  
Total cash, cash equivalents and restricted cash, end of period     $ 270,153     $ 303,682  

   
Summary of Non-GAAP Financial Measures

(Unaudited) 		 
   
    Three months ended    
    March 31,    
(Dollars in thousands, except per share data)   2026   2025  
Non-GAAP cost of revenues, software subscriptions   $ 29,345     $ 26,163    
Non-GAAP cost of revenues, services   $ 18,930     $ 18,127    
Non-GAAP gross profit   $ 148,371     $ 132,772    
Non-GAAP gross margin     75.5   %   75.0   %
Non-GAAP research and development expense   $ 20,684     $ 16,534    
Non-GAAP selling and marketing expense   $ 46,767     $ 41,818    
Non-GAAP general and administrative expense   $ 37,044     $ 36,602    
Non-GAAP operating income   $ 37,621     $ 31,339    
Non-GAAP net income   $ 28,741     $ 24,494    
Non-GAAP diluted EPS   $ 0.17     $ 0.15    
Adjusted EBITDA   $ 44,063     $ 37,219    
Adjusted EBITDA margin     22.4   %   21.0   %
Free cash flow   $ 7,659     $ (12,250 )  
Free cash flow margin     3.9   %   (6.9 ) %

 
Vertex, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)
 
    Three months ended  
    March 31,  
(Dollars in thousands)   2026
   2025
  
Non-GAAP Cost of Revenues, Software Subscriptions:              
Cost of revenues, software subscriptions   $ 51,176     $ 44,245    
Stock-based compensation expense     (1,745 )     (2,227 )  
Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues     (20,086 )     (15,855 )  
Non-GAAP cost of revenues, software subscriptions   $ 29,345     $ 26,163    
               
Non-GAAP Cost of Revenues, Services:              
Cost of revenues, services   $ 20,601     $ 19,823    
Stock-based compensation expense     (1,671 )     (1,696 )  
Non-GAAP cost of revenues, services   $ 18,930     $ 18,127    
               
Non-GAAP Gross Profit:              
Gross profit   $ 124,869     $ 112,994    
Stock-based compensation expense     3,416       3,923    
Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues     20,086       15,855    
Non-GAAP gross profit   $ 148,371     $ 132,772    
               
Non-GAAP Gross Margin:              
Total Revenues   $ 196,646     $ 177,062    
Non-GAAP gross margin     75.5   %   75.0   %
               
Non-GAAP Research and Development Expense:              
Research and development expense   $ 24,550     $ 20,886    
Stock-based compensation expense     (3,866 )     (4,352 )  
Non-GAAP research and development expense   $ 20,684     $ 16,534    
               
Non-GAAP Selling and Marketing Expense:              
Selling and marketing expense   $ 52,635     $ 48,155    
Stock-based compensation expense     (5,343 )     (5,806 )  
Amortization of acquired intangible assets – selling and marketing expense     (525 )     (531 )  
Non-GAAP selling and marketing expense   $ 46,767     $ 41,818    
               
Non-GAAP General and Administrative Expense:              
General and administrative expense   $ 54,339     $ 45,028    
Amortization of cloud computing implementation costs – general and administrative expense     (1,037 )     (1,006 )  
Stock-based compensation expense     (5,883 )     (6,963 )  
Severance expense(1)     (7,408 )     (457 )  
Acquisition-related retained employee compensation(2)     (417 )     —    
Transaction costs(3)     (2,550 )     —    
Non-GAAP general and administrative expense   $ 37,044     $ 36,602    

 
Vertex, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)
 
    Three months ended
    March 31,
(In thousands, except per share data)   2026   2025
Non-GAAP Operating Income:            
Income (loss) from operations   $ (10,606 )   $ 4,486  
Stock-based compensation expense     18,508       21,044  
Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues     20,086       15,855  
Amortization of acquired intangible assets – selling and marketing expense     525       531  
Amortization of cloud computing implementation costs – general and administrative expense     1,037       1,006  
Severance expense(1)     7,408       457  
Change in fair value of acquisition contingent earn-outs     (5,738 )     (14,700 )
Acquisition-related retained employee compensation(2)     417       —  
Transaction costs(3)     5,984       2,660  
Non-GAAP operating income   $ 37,621     $ 31,339  
             
             
Non-GAAP Net Income:            
Net income (loss)   $ (2,510 )   $ 11,130  
Income tax benefit     (7,139 )     (5,105 )
Stock-based compensation expense     18,508       21,044  
Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues     20,086       15,855  
Amortization of acquired intangible assets – selling and marketing expense     525       531  
Amortization of cloud computing implementation costs – general and administrative expense     1,037       1,006  
Severance expense(1)     7,408       457  
Change in fair value of acquisition contingent earn-outs     (5,738 )     (14,700 )
Acquisition-related retained employee compensation(2)     417       —  
Transaction costs(3)     5,984       2,660  
Non-GAAP income before income taxes     38,578       32,878  
Income tax adjustment at statutory rate(4)     (9,837 )     (8,384 )
Non-GAAP net income   $ 28,741     $ 24,494  
             
Non-GAAP Diluted EPS:            
Non-GAAP net income   $ 28,741     $ 24,494  
Interest expense (net of tax), convertible senior notes(5)     903       903  
Non-GAAP net income used in dilutive per share computation   $ 29,644     $ 25,397  
             
Weighted average Class A and B common stock, diluted     161,283       162,724  
Dilutive effect of convertible senior notes(5)     9,498       9,498  
Total average Class A and B shares used in dilutive per share computation     170,781       172,222  
Non-GAAP diluted EPS   $ 0.17     $ 0.15  

(1) The three months ended March 31, 2026 includes $6,170 in severance costs related to the Value Creation Plan.

(2) The three months ended March 31, 2026 includes compensation expense recognized related to the additional cash consideration payments of $10,000 to the sellers in connection with the acquisition of Brinta (the “Additional Cash Consideration”).

(3) The three months ended March 31, 2026 and 2025 include legal expenses associated with pending litigation related to claims the Company has made against a competitor. The three months ended March 31, 2026 also includes $2,550 in costs incurred to support the execution of our Value Creation Plan.

(4) Non-GAAP income before income taxes is adjusted for income taxes using the respective statutory tax rates for applicable jurisdictions, which for purposes of this determination were assumed to be 25.5%.

(5) We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. Interest expense and additional dilutive shares related to the notes are added back to the calculation when their impact is dilutive. In periods when the impact is anti-dilutive, there is no add-back of interest expense or additional dilutive shares related to the notes.

 
Vertex, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)
 
    Three months ended  
    March 31,  
(Dollars in thousands)   2026     2025    
Adjusted EBITDA:              
Net income (loss)   $ (2,510 )   $ 11,130    
Interest income, net     (957 )     (1,539 )  
Income tax benefit     (7,139 )     (5,105 )  
Depreciation and amortization – property and equipment     6,442       5,880    
Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues     20,086       15,855    
Amortization of acquired intangible assets – selling and marketing expense     525       531    
Amortization of cloud computing implementation costs – general and administrative expense     1,037       1,006    
Stock-based compensation expense     18,508       21,044    
Severance expense(1)     7,408       457    
Change in fair value of acquisition contingent earn-outs     (5,738 )     (14,700 )  
Acquisition-related retained employee compensation(2)     417       —    
Transaction costs(3)     5,984       2,660    
Adjusted EBITDA   $ 44,063     $ 37,219    
               
Adjusted EBITDA Margin:              
Total revenues   $ 196,646     $ 177,062    
Adjusted EBITDA margin     22.4   %   21.0   %

(1) The three months ended March 31, 2026 includes $6,170 in severance costs related to the Value Creation Plan.

(2) The three months ended March 31, 2026 includes compensation expense recognized related to the Additional Cash Consideration obligation associated with the acquisition of Brinta.

(3) The three months ended March 31, 2026 and 2025 include legal expenses associated with pending litigation related to claims the Company has made against a competitor. The three months ended March 31, 2026 also includes $2,550 in costs incurred to support the execution of our Value Creation Plan.

    Three months ended  
    March 31,  
(Dollars in thousands)   2026   2025  
Free Cash Flow:              
Cash provided by operating activities   $ 37,975     $ 14,805    
Property and equipment additions     (24,660 )     (21,394 )  
Capitalized software additions     (5,656 )     (5,661 )  
Free cash flow   $ 7,659     $ (12,250 )  
               
Free Cash Flow Margin:              
Total revenues   $ 196,646     $ 177,062    
Free cash flow margin     3.9   %   (6.9 ) %



Investor Relations Contact:

Joe Crivelli
Vertex, Inc.
[email protected]

Media Contact:

Rachel Litcofsky
Vertex, Inc.
[email protected]



Posted on

Nexstar Media Group Reports First Quarter Results

Nexstar Media Group Reports First Quarter Results

Closed acquisition of TEGNA Inc. on March 19, 2026, following FCC and DOJ regulatory approvals

Transaction positions Nexstar to compete more aggressively with Big Tech and legacy media conglomerates ensuring the preservation of high-quality local journalism and a diversity of viewpoints – upholding the standard Nexstar has set in every prior transaction

Achieved record first quarter net revenue

Returned $56 million to shareholders in dividends in Q1 2026 and repaid $182 million of debt through April 30

IRVING, Texas–(BUSINESS WIRE)–
Nexstar Media Group, Inc. (NASDAQ: NXST) (“Nexstar” or the “Company”) today reported financial results for the first quarter ended March 31, 2026 as summarized below. Please visit Nexstar’s website to view the full press release.

STATEMENT FROM PERRY A. SOOK, FOUNDER, CHAIRMAN AND CEO

“Next month marks the thirtieth anniversary of Nexstar’s founding – a journey that began with a single station in Scranton, Pennsylvania. While the media landscape has shifted dramatically since then, my conviction that local journalism is vital to democracy remains unchanged. Throughout its history and to this day, Nexstar’s mission is to provide communities of all sizes with premier programming, fact-based news reporting, and innovative digital solutions for our viewers and advertisers. As we have grown, the reach of Big Tech and legacy media conglomerates has expanded exponentially. Today, we still do not match their ubiquitous reach, and we operate with only a fraction of their resources, which directly impacts our ability to compete. Our acquisition of TEGNA is a critical step in solidifying our future and ensuring we can continue providing these essential services to the public.

“As we continue to advocate for this transaction, our primary focus remains on operational excellence – the historical hallmark of Nexstar. Our first-quarter performance underscores this commitment as we delivered record net revenue, surpassing consensus expectations. NewsNation once again secured its position as the fastest-growing ad-supported cable network, ranking 35th in primetime household viewership for the first quarter. In addition, The CW continues its trajectory toward profitability, with sports programming composing nearly half of the network’s total programming hours in 2026.”

2026 First Quarter Financial Summary

  

Includes TEGNA results from March 19 – 31, 2026

 

 

 

Three Months Ended March 31,

 

($ in millions)

 

 

 

 

 

 

 

 

2026

 

2025

 

% Change

 

Distribution

 

 

 

 

 

 

 

 

$837

 

$762

 

9.8

 

Advertising

 

 

 

 

 

 

 

 

548

 

460

 

19.1

 

Other

 

 

 

 

 

 

 

 

11

 

12

 

(8.3)

 

Net Revenue

 

 

 

 

 

 

 

 

$1,396

 

$1,234

 

13.1

 

Net Income

 

 

 

 

 

 

 

 

$160

 

$97

 

64.9

 

% Margin(1)

 

 

 

 

 

 

 

 

11.5%

 

7.9%

 

3.6

 

Adjusted EBITDA(2)

 

 

 

 

 

 

 

 

$470

 

$381

 

23.4

 

% Margin(1)

 

 

 

 

 

 

 

 

33.7%

 

30.9%

 

2.8

 

Net Cash Provided by Operating Activities

 

 

 

 

$289

 

$337

 

(14.2)

 

Adjusted Free Cash Flow(2)

 

 

 

 

$420

 

$348

 

20.7

 
 (1)

Net Income margin is Net Income as a percentage of Net Revenue. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of Net Revenue.
 (2)

Please refer to the “Definitions and Disclosures Regarding Non-GAAP Financial Information” section herein, the reconciliations at the end of this press release.

Company and Business Highlights

  • Closed the acquisition of TEGNA Inc. (“TEGNA”) following approvals from the Federal Communications Commission and the United States Department of Justice. (March 2026)
    • This transaction enables Nexstar to better weather the intensifying pressures exerted by the unchecked rise of Big Tech platforms and to preserve unbiased local news across every community we serve.

    • Nexstar is presently involved in legal proceedings with parties challenging our acquisition of TEGNA, and during the pendency of those proceedings Nexstar has and will abide by the hold-separate order. As the judicial process moves forward, we are confident that we will prevail.

  • Returned $56 million to shareholders in dividend payments in the first quarter. (January 2026)
  • Announced that Nexstar (excluding TEGNA) increased local programming hours by 18% since 2020. (2025)

  • Consistent validation by independent watchdog groups that all our rated stations’news reporting (including TEGNA stations) and NewsNation programming are unbiased and reliable.

    • AdFontes Media rates (i) our stations’ news programming (including TEGNA stations) to have a bias category of “middle” and reliability rating of “Reliable; Analysis/Fact Reporting” and (ii) NewsNation’s political bias as “Middle or Balance Bias”, the most balanced rating of any news network, and its programming to be reliable with a “Mix of Fact Reporting and Analysis and Analysis or Simple Fact Reporting” (April 2026)

    • AllSides rated NewsNation’s online property as “Center” for media bias (2025)

    • NewsGuard rates NewsNation and The Hill with “Trust Score” of 100, the highest rating of any cable news network (April 2026)

  • NewsNationemerged as the #1 fastest-growing network in primetime across all major broadcast and cable news networks in March 2026, growing 85% in total viewers and 100% among Adults 25-54 compared to March 2025. The network ranked #35 in total household viewership of all primetime ad-supported cable networks for the first quarter. (March 2026)
  • The CW Network announced a multi-year broadcast partnership with the Mountain West Conference beginning with the 2026-27 season and continuing through 2030-31 to air 13 football games, 20 men’s basketball games and 15 women’s basketball games per season. (February 2026)
  • From a pool of 125 extraordinary nominees across the country, Nexstar named Becca Stevens as the 2026 Remarkable Woman of the Year. The announcement was featured in a nationwide telecast on The CW Network, celebrating her profound contributions alongside the achievements of all the nominees. (March 2026)

    • A survivor of childhood trauma, Ms. Stevens has dedicated her life to building safe, loving, and economically empowering pathways for women recovering from trafficking, addiction, and exploitation.

    • In total, Nexstar awarded $937,500 to the year’s local, regional, and national Remarkable Women winners. This contribution consists of direct cash donations to the winners’ chosen non-profit organizations plus a series of public service announcements to amplify their respective missions.

Financial Results

  • Net Revenue. First quarter net revenue of $1.40 billion, increased $162 million year-over-year, or 13.1%, primarily due to $106 million of incremental revenue from our acquisition of TEGNA and higher advertising and distribution revenue from our legacy business units.
  • Distribution Revenue. First quarter distribution revenue of $837 million, increased $75 million, or 9.8%, versus the comparable prior year quarter, primarily reflecting $54 million of incremental revenue from the acquisition of TEGNA and higher revenue from our legacy business units due to increased rates, growth in vMVPD subscribers, and the addition of CW affiliations on certain of our stations, partially offset by MVPD subscriber attrition.
  • Advertising Revenue. First quarter advertising revenue of $548 million, increased $88 million, or 19.1%, from the comparable prior year quarter, primarily reflecting $51 million of incremental revenue from the acquisition of TEGNA and a $35 million increase in political advertising at our legacy business units to $41 million, as 2026 is an election year. Non-political advertising at our legacy business units increased 0.4% as growth in digital advertising offset declines in non-political television advertising.
  • Net Income. First quarter net income of $160 million increased $63 million, or 64.9%, compared to the prior year quarter, primarily due to increased operating income from the acquisition of TEGNA, a tax benefit of approximately $47 million related to the revaluation of net deferred tax liabilities in connection with the acquisition of TEGNA, and increased political advertising revenue generated at our legacy business units, offset, in part, by $42 million of one-time expenses and increased interest expense, both in connection with the TEGNA transaction. Net Income margin increased to 11.5% from 7.9% in the comparable prior year period.
  • Adjusted EBITDA. First quarter Adjusted EBITDA of $470 million, increased $89 million, or 23.4%, compared to the prior year quarter primarily reflecting $31 million of incremental Adjusted EBITDA from the acquisition of TEGNA and increased revenue at our legacy business units and lower amortization of broadcast rights at The CW. Adjusted EBITDA margin was 33.7% compared to 30.9% in the comparable prior year period.
  • Net Cash Provided by Operating Activities. First quarter Net Cash Provided by Operating Activities of $289 million, decreased $48 million, or (14.2%), compared to the prior year quarter, due primarily to an increase in net income, offset, in part, by changes in operating assets and liabilities reflecting the timing of receipts and payments and a reduction in cash distributions from our 31.3% ownership stake in Television Food Network, G.P. (“TVFN”).
  • Adjusted Free Cash Flow. First quarter Adjusted Free Cash Flow of $420 million, increased $72 million, or 20.7%, compared to the prior year quarter, due primarily to increased Adjusted EBITDA, reduced payments for broadcast rights at The CW, and lower capital expenditures due to delayed timing of spending, offset, in part, by a reduction in cash distributions from TVFN.

Capital Allocation

  • In the first quarter of 2026, the Company used cash on hand and cash flow from operations to repay $28 million of debt, acquire TEGNA for $3,657 million and pay $56 million in dividends.

($ in millions, shares in thousands)

 

Three Months Ended March 31,

 

 

 

2026

 

2025

 

Cash Used For

 

 

 

 

 

Debt repayment

 

$28

 

$31

 

Acquisitions

 

3,657

 

22

 

Stockholder return

 

56

 

132

 

Common stock dividends

 

56

 

57

 

Stock repurchases

 

–

 

75

 

Shares Outstanding

 

 

 

 

 

End of period

 

30,538

 

30,358

 

Less: Beginning of period

 

30,328

 

30,621

 

Change in shares outstanding

 

210

 

(263)

 

% Change

0.7%

(0.9%)

  

Debt, Cash and Leverage

  • As of March 31, 2026, the consolidated debt of Nexstar and Mission Broadcasting, Inc., an independently owned variable interest entity, was $12.2 billion, including senior secured debt of $9.4 billion.

  • As of March 31, 2026, the Company’s pro forma first lien net leverage ratio was 2.94x compared to a covenant ratio test of 4.75x(1) and its total net leverage ratio was 3.84x, both calculated in accordance with the terms of its credit agreements(2)(3).

  • The table below summarizes the Company’s cash balances and debt obligations (net of financing costs, discounts and/or premiums) as of March 31, 2026 and December 31, 2025.

($ in millions)

 

March 31, 2026

 

December 31, 2025

 

Cash on Hand

 

$379

 

$280

 

Secured Credit Facilities

 

$5,578

 

$3,622

 

Secured Notes(4)

 

3,798

 

–

 

Unsecured Notes

 

2,776

 

2,711

 

Total Debt

 

$12,152

 

$6,333

 

(1)

Pursuant to the terms of our credit agreement, in connection with the acquisition of TEGNA in the first quarter, we elected to increase our covenant ratio test to 4.75x (from 4.25x previously).  This increased covenant ratio will remain in effect for the next three consecutive fiscal quarters.

(2)

The Company calculates its leverage ratios in accordance with the terms of its credit agreements which, among other adjustments:  (i) exclude The CW Network’s operations and cash balance, (ii) beginning in the second quarter of 2025, reflect the average of the last two years of EBITDA to better reflect its business cycle which benefits from additional political advertising revenue in election years, (iii) are calculated on a pro forma basis assuming the TEGNA acquisition occurred on the first day of the period measured, (iv) adjusts for any one-time costs associated with transactions, operational restructurings and costs to achieve cost savings, and (v) adjusts for the run rate costs savings and contractual retransmission revenues expected to be realized within 18 months from the date of any transaction. 

(3)

As described further in our 10-Q expected to be filed today, we are currently involved in legal proceedings with various parties seeking to enjoin our acquisition of TEGNA.   Any adverse outcome in such lawsuits and any other lawsuits or legal challenges could have an adverse impact, which may be material, on the Company and could, among other things, require the Company to (i) divest assets (with no guarantee that such divestitures would be completed on commercially reasonable terms), (ii) continue to hold TEGNA or certain TEGNA assets separate, (iii) incur substantial additional costs, (iv) modify, restrict or terminate certain aspects of the Company’s integration plans with respect to TEGNA and/or (v) take other remedial actions. Such remedies could adversely affect the Company’s business, financial condition, results of operations and ability to realize anticipated benefits and synergies from the Merger.

(4)

Includes certain senior notes assumed in connection with the TEGNA acquisition which are in the process of being secured in accordance with the indenture governing the terms thereof.

First Quarter Conference Call

Nexstar will host a conference call at 10:00 a.m. ET today. Senior management will discuss the financial results and host a question-and-answer session. To access the conference call, interested parties may dial 1-877-407-9208 or 1-201-493-6784, conference ID 13759681 (domestic and international callers). Participants can also listen to a live webcast of the call through the “Events and Presentations” section under “Investor Relations” on Nexstar’s website at nexstar.tv. A webcast replay will be available for 90 days following the live event at nexstar.tv.

Forward-Looking Statements

This communication includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words “guidance,” “believes,” “expects,” “anticipates,” “could,” or similar expressions. For these statements, Nexstar claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this communication, concerning, among other things, future financial performance, including changes in net revenue, operating expenses and cash flow and the Company’s ability to integrate TEGNA and realize anticipated synergies, involve risks and uncertainties, and are subject to change based on various important factors, including the impact of changes in national and regional economies, the ability to service and refinance our outstanding debt, successful integration of business acquisitions (including achievement of synergies and cost reductions), the outcome of the pending litigations related to the TEGNA acquisition, pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations’ operating areas, competition from others in the broadcast television markets, volatility in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this communication might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see Nexstar’s other filings with the Securities and Exchange Commission.

Definitions and Disclosures Regarding Non-GAAP Financial Information

Adjusted EBITDA is calculated as net income, plus or (minus): transaction, other one-time and restructuring expenses, stock-based compensation expense, depreciation and amortization expense (excluding amortization of broadcast rights), amortization of basis difference of equity method investments, (gain) loss on asset disposal, impairment charges, interest expense, net, pension and other postretirement plans costs (credit), income tax expense (benefit) and other operating and non-operating expense (income). We consider Adjusted EBITDA to be an indicator of our assets’ operating performance.

Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures.

Adjusted Free Cash Flow is calculated as Free Cash Flow plus or (minus): transaction, other one-time and restructuring expenses, changes in operating assets and liabilities, net of acquisitions (excluding changes in income tax payable), taxes paid on sale of assets, pension and other postretirement plans costs (credit), (payments) for capitalized software obligations, proceeds from disposal of assets and insurance recoveries and other expense (income), cash contribution from (distribution to) noncontrolling interests and other items. We consider Adjusted Free Cash Flow to be an indicator of our liquidity. We consider Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be available for use in ongoing operations, debt payments, pension contributions, dividends, share repurchases, acquisitions and other items. Adjusted Free Cash Flow is not intended to represent the amount of cash flow available for discretionary expenditures as certain items and non-discretionary expenditures, such as changes in working capital, mandatory debt service requirements and pension contributions, are not deducted from this measure.

For a reconciliation of these non-GAAP financial measurements to the GAAP financial results cited in this news announcement, please see the supplemental tables at the end of this release.

About Nexstar Media Group, Inc.

Nexstar Media Group, Inc. (NASDAQ: NXST) is a leading diversified media company that produces and distributes engaging local and national news, sports and entertainment content across its television and digital platforms. For more information, please visit nexstar.tv

Nexstar Media Group, Inc.

Condensed Consolidated Statements of Operations

(in millions, except for share and per share amounts, unaudited)

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2026

 

 

 

 

2025

 

Net revenue

 

 

 

$

1,396

 

 

 

$

1,234

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Direct operating

 

 

 

 

611

 

 

 

 

551

 

Selling, general and administrative

 

 

 

 

221

 

 

 

 

205

 

Corporate

 

 

 

 

106

 

 

 

 

52

 

Amortization of broadcast rights

 

 

 

 

72

 

 

 

 

88

 

Depreciation and amortization of intangible assets

 

 

 

 

121

 

 

 

 

117

 

Other

 

 

 

 

–

 

 

 

 

1

 

Total operating expenses

 

 

 

 

1,131

 

 

 

 

1,014

 

Income from operations

 

 

 

 

265

 

 

 

 

220

 

Income from equity method investments, net

 

 

 

 

4

 

 

 

 

8

 

Interest expense, net

 

 

 

 

(120

)

 

 

 

(97

)

Pension and other postretirement plans credit, net

 

 

 

 

7

 

 

 

 

8

 

Other expenses, net

 

 

 

 

(3

)

 

 

 

(1

)

Income before income taxes

 

 

 

 

153

 

 

 

 

138

 

Income tax benefit (expense)

 

 

 

 

7

 

 

 

 

(41

)

Net income

 

 

 

 

160

 

 

 

 

97

 

Net loss attributable to noncontrolling interests

 

 

 

 

4

 

 

 

 

11

 

Net income attributable to Nexstar Media Group, Inc.

 

 

 

$

164

 

 

 

$

108

 

 

 

 

 

 

 

 

 

Net income per share available to common stockholders:

 

 

 

 

 

Basic

 

 

 

$

5.22

 

 

 

$

3.41

 

Diluted

 

 

 

$

5.09

 

 

 

$

3.37

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic (in thousands)

 

 

 

 

30,371

 

 

 

 

30,532

 

Diluted (in thousands)

 

 

 

 

31,166

 

 

 

 

30,927

 

 

Nexstar Media Group, Inc.

Condensed Consolidated Statements of Cash Flows

($ in millions, unaudited)

 

Three Months Ended March 31,

 

 

2026

 

 

 

 

2025

 

Cash flows from operating activities:

 

 

 

 

Net income

$

160

 

 

 

$

97

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Amortization of broadcast rights

 

72

 

 

 

 

88

 

Depreciation and amortization of intangible assets

 

121

 

 

 

 

117

 

Stock-based compensation expense

 

20

 

 

 

 

18

 

Deferred income taxes

 

(51

)

 

 

 

(16

)

Payments for broadcast rights

 

(62

)

 

 

 

(80

)

Income from equity method investments, net

 

(4

)

 

 

 

(8

)

Distribution from equity method investments – return on capital

 

84

 

 

 

 

114

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

Accounts receivable

 

34

 

 

 

 

(2

)

Prepaid and other current assets

 

(6

)

 

 

 

(8

)

Other noncurrent assets

 

(5

)

 

 

 

3

 

Accounts payable

 

(31

)

 

 

 

(16

)

Accrued expenses and other current liabilities

 

(78

)

 

 

 

(21

)

Income tax payable

 

43

 

 

 

 

54

 

Other noncurrent liabilities

 

(13

)

 

 

 

(13

)

Other

 

5

 

 

 

 

10

 

Net cash provided by operating activities

 

289

 

 

 

 

337

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

(22

)

 

 

 

(35

)

Payments for acquisitions, net of cash acquired

 

(3,341

)

 

 

 

(22

)

Proceeds received from life insurance policies

 

51

 

 

 

 

–

 

Other investing activities, net

 

(1

)

 

 

 

(4

)

Net cash used in investing activities

 

(3,313

)

 

 

 

(61

)

Cash flows from financing activities:

 

 

 

 

Proceeds from debt issuance, net of debt discounts

 

9,381

 

 

 

 

–

 

Repayments of long-term debt

 

(6,026

)

 

 

 

(31

)

Payments for debt financing costs

 

(85

)

 

 

 

–

 

Premium paid on debt extinguishment

 

(13

)

 

 

 

–

 

Purchase of treasury stock

 

–

 

 

 

 

(75

)

Common stock dividends paid

 

(56

)

 

 

 

(57

)

Cash paid for shares withheld for taxes

 

(18

)

 

 

 

–

 

Other financing activities, net

 

(3

)

 

 

 

(4

)

Net cash provided by (used in) financing activities

 

3,180

 

 

 

 

(167

)

Net increase in cash, cash equivalents and restricted cash

 

156

 

 

 

 

109

 

Cash, cash equivalents and restricted cash at beginning of period

 

280

 

 

 

 

144

 

Cash, cash equivalents and restricted cash at end of period

$

436

 

 

 

$

253

 

Nexstar Media Group, Inc.

Reconciliation of Adjusted EBITDA (Non-GAAP Measure)

($ in millions, unaudited)

 

Three Months Ended March 31,

 

 

2026

 

 

 

2025

Net income

$

160

 

 

 

$

97

 

Add (Less):

 

 

 

 

Transaction, other one-time and restructuring expenses(1)

 

42

 

 

 

 

–

 

Stock-based compensation expense

 

20

 

 

 

 

18

 

Depreciation and amortization of intangible assets

 

121

 

 

 

 

117

 

Amortization of basis difference of equity method investments

 

18

 

 

 

 

18

 

Interest expense, net

 

120

 

 

 

 

97

 

Pension and other postretirement plans (credit), net

 

(7

)

 

 

 

(8

)

Income tax (benefit) expense

 

(7

)

 

 

 

41

 

Other

 

3

 

 

 

 

1

 

Adjusted EBITDA

$

470

 

 

 

$

381

 

 (1)

Primarily includes legal and other direct expenses associated with our acquisition of TEGNA, direct expenses associated with financing transactions, severance and other direct expenses associated with restructuring activities.

Nexstar Media Group, Inc.

Reconciliation of Free Cash Flow and Adjusted Free Cash Flow (Non-GAAP Measure)

($ in millions, unaudited)

 

Three Months Ended March 31,

 

 

2026

 

 

 

 

2025

 

 

 

 

 

 

Net cash provided by operating activities

$

289

 

 

 

$

337

 

Add (Less):

 

 

 

 

Capital expenditures

 

(22

)

 

 

 

(35

)

Free Cash Flow

$

267

 

 

 

$

302

 

 

 

 

 

 

Add (Less):

 

 

 

 

Transaction, other one-time and restructuring expenses(1)

 

64

 

 

 

 

–

 

Changes in operating assets and liabilities(2)

 

56

 

 

 

 

3

 

Changes in income tax payable(3)

 

43

 

 

 

 

54

 

Pension and other postretirement plans (credit), net

 

(7

)

 

 

 

(8

)

Payments for capitalized software obligations

 

(3

)

 

 

 

(3

)

Adjusted Free Cash Flow

$

420

 

 

 

$

348

 
(1)

Primarily includes legal and other direct expenses associated with our acquisition of TEGNA, direct expenses associated with financing transactions, severance and other direct expenses associated with restructuring activities.
(2)

Removes the impact of changes in operating assets and liabilities (including changes in income tax payable), net of acquisitions.
(3) Includes changes in income tax payable to reflect all tax payments.

 

Investor Contacts:

Lee Ann Gliha

EVP and Chief Financial Officer

Nexstar Media Group, Inc.

972/373-8800

Joe Jaffoni, Jennifer Neuman

JCIR

212/835-8500 or [email protected]

Media Contact:

Gary Weitman

EVP and Chief Communications Officer

Nexstar Media Group, Inc.

972/373-8800 or [email protected]

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Advertising Entertainment Communications Technology TV and Radio Audio/Video Media

MEDIA:

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Posted on

Quantum Reports Strengthened Liquidity, Reduced Cash Burn, and Disciplined Cost Management in First Quarter 2026

 Investigational New Drug (IND) Application Filed to United States Food and Drug Administration (FDA) for Lucid-MS Phase Two Clinical Trial in Multiple Sclerosis

TORONTO, May 07, 2026 (GLOBE NEWSWIRE) — Quantum BioPharma Ltd. (NASDAQ: QNTM) (CSE: QNTM) (FRA: 0K91) (“Quantum” or the “Company”), has reported its financial and operational results for the first quarter of 2026, ended March 31, 2026.

First Quarter 2026 Financial Results

As of March 31, 2026, the Company’s combined cash and cash equivalents, and digital assets, totaled US$9.8 million, more than doubled from US$4.1 million as of December 31, 2025. Management confirms that current liquidity is sufficient to fund planned operations to approximately July 2027.

As of the date of this press release, the fair market value of the Company’s cryptocurrency portfolio is US$6.5 million, further strengthening the Company’s overall liquidity position, and increasing the Company’s total cash and cash equivalents to US$11.2 million.

Cash used in operating activities decreased to US$1.66 million during the first quarter of 2026, a reduction of 60% compared to same period the previous year, mainly driven by a decrease in R&D fees following the successful completion of Phase 1 clinical trials.

First Quarter & Subsequent 2026 Corporate Highlights

Unbuzzd

Unbuzzd has completed its corporate reorganization, including hiring a new Chief Executive Officer with significant capital markets and company leadership experience to launch Unbuzzd’s IPO financing and lead nationwide commercialization.

Multiple Sclerosis Drug Candidate Lucid-21-302 (“Lucid-MS”) Advances

The Company announced that it has formally submitted an IND application to the U.S. FDA for Lucid-MS, its new drug candidate for the treatment of multiple sclerosis (MS). This milestone IND submission supports Quantum’s planned Phase 2 clinical trial evaluating its first-in-class therapeutic treatment targeting demyelination, advancing Quantum’s strategic growth in the global neurological market.

The Company announced the appointment of Dr. Salvatore Napoli as the principal investigator for its planned Phase Two clinical trial evaluating novel drug Lucid-MS in MS.

The Company announced that it has entered a binding Letter of Intent (LOI) with Allucent, a global contract research organization with extensive experience supporting central nervous system clinical trials, to conduct the planned Phase 2 clinical trial of Lucid-MS for the treatment of multiple sclerosis.

Update on Lawsuit Launched by Quantum Against CIBC World Markets (CIBC) and RBC Dominion Securities (RBC) in Relation to Alleged Stock Market Manipulation

The Company filed a Memorandum of Law in opposition to defendants’ CIBC and RBC joint motion to dismiss in the United States District Court for the Southern District of New York. The United States District Court for the Southern District of New York has ruled against CIBC and RBC joint motion to dismiss Quantum Biopharma’s lawsuit alleging illegal market manipulation.

The reply, original, and amended complaints can be viewed and downloaded from the Quantum versus Banks page on the Company’s website, or from the following link: https://www.quantumbiopharma.com/quantum-biopharma-vs-banks.

Management Commentary

“We significantly reduced our operating cash outflows while maintaining strategic progress, including the formal submission of our IND application to the FDA for Lucid-MS,” said Zeeshan Saeed, CEO of Quantum.

“Q1 2026 was a quarter of disciplined execution. We reduced our operating cash burn by over 60% year-over-year, brought operating expenses down 13%, repaid in full the BitGo loan, and reduced payables. At the same time, we strengthened our treasury to US$9.8 million between cash and digital assets, giving us a runway to approximately July 2027 at our current budgeted spend. We did all of this without sacrificing momentum, as evidenced by our IND submission for Lucid-MS,” said Donal Carroll, CFO of Quantum.

“The IND Application was filed to the FDA for Quantum’s Lucid-MS Phase Two clinical trial. We also signed a binding LOI with Allucent, a global contract research organization with extensive experience supporting central nervous system clinical trials,” stated Mr. Carroll. “We are now looking to begin our Phase 2 clinical trial as we work towards our goals of drug approval and commercialization.”

“In addition, Unbuzzd hired a new CEO, Mr. Richard Buzbuzian, to launch an IPO financing and lead nationwide commercialization. We look forward to his progress which could help us monetize without any shareholder dilution,” Mr. Carroll concluded.

The Company has entered into an agreement dated May 4, 2026 with InvestorBrandNetwork of 1108 Lavaca Street, Suite 110-IBN, Austin, Texas 78701, Tel: (512) 354-7000, to provide corporate communications and investor awareness for a six month period with a total US$77,400 that has a 10 day written termination notice.

About Quantum BioPharma Ltd.

Quantum is a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions for the treatment of challenging neurodegenerative and metabolic disorders and alcohol misuse disorders with drug candidates in different stages of development. Through its wholly owned subsidiary, Lucid Psycheceuticals Inc. (“Lucid”), Quantum is focused on the research and development of its lead compound, Lucid-MS. Lucid-MS is a patented new chemical entity shown to prevent and reverse myelin degradation, the underlying mechanism of multiple sclerosis, in preclinical models. Quantum invented UNBUZZD™ and spun out its OTC version to a company, Unbuzzd Wellness Inc. (“Unbuzzd”) (formerly, Celly Nutrition Corp.), led by industry veterans. Quantum retains ownership of 19.84% (as of March 31, 2026) of Unbuzzd at www.unbuzzd.com. The agreement with Unbuzzd also includes royalty payments of 7% of sales from unbuzzd™ until payments to Quantum total $250 million. Once $250 million is reached, the royalty drops to 3% in perpetuity. Quantum retains 100% of the rights to develop similar products or alternative formulations specifically for pharmaceutical and medical uses.

Forward Looking Information

Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend” or the negative of these terms and similar expressions. Forward-looking statements in this news release include statements relating to: the closing of the Offering and the Debt Settlement; the use of proceeds from the Offering; and the Shares issued pursuant to the Debt Settlement, and potential issuance of Shares and Debenture Units.

Forward-looking information in this press release is based on certain assumptions and expected future events, including but not limited to: the Company has the ability to complete additional tranches of the Offering and the Debt Settlement.

These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: risks relating to the Company’s business and operations generally; and the reader is urged to refer to additional information relating to Quantum BioPharma, including its annual information form, which can be located on the SEDAR+ website at www.sedarplus.ca and on the EDGAR section of the United States Securities and Exchange Commission’s website at www.sec.gov for a more complete discussion of such risk factors and their potential effects.

Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

Forward-looking statements contained in this press release are expressly qualified by this cautionary statement and reflect the Company’s expectations as of the date hereof and are subject to change thereafter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.

Contacts:

Quantum BioPharma Ltd.

Zeeshan Saeed, Founder, CEO and Executive Co-Chairman of the Board
Email: [email protected]
Telephone: (833) 571-1811



Posted on

Pagaya Reports First Quarter 2026 Results & Raising Full-Year Net Income Guidance

Pagaya Reports First Quarter 2026 Results & Raising Full-Year Net Income Guidance

Reported solid performance across key metrics

  • $25 million GAAP net income; up $17 million YoY
  • $94 million Adjusted EBITDA; up 18% YoY
  • $318 million Total revenue and other income; up 10% YoY
  • $2.6 billion Network volume; up 9% YoY

NEW YORK & TEL AVIV, Israel–(BUSINESS WIRE)–
Pagaya Technologies Ltd. (NASDAQ: PGY) (“Pagaya”, the “Company” or “we”), a global technology company delivering artificial intelligence infrastructure for the financial ecosystem, today announced financial results for the first quarter 2026.

For additional information, view Pagaya’s first quarter 2026 letter to shareholders here.

“Our results this quarter demonstrate, once again, that at Pagaya, profitability and disciplined risk management are not in tension — they are the same strategy. As we expand our partner network and deepen product adoption, we are building the durable, through-the-cycle business that will bridge Wall Street and Main Street for the long run.”

The company also announced a leadership transition. Evangelos Perros, Chief Financial Officer, is stepping down and will be succeeded by Jon Dobres, Chief Strategy Officer effective June 15. Mr. Perros will remain with the Company serving as a Strategic Executive Advisor to Gal Krubiner, Chief Executive Officer, through December 31.

First Quarter 2026 Highlights

All comparisons are made versus the same period in 2025 and on a year-over-year basis unless otherwise stated.

  • GAAP Net income attributable to Pagaya shareholders of $25 million in 1Q’26 (compared to the outlook of $15 million – $35 million), improved by $17 million compared to the prior year period, reflecting revenue growth, lower expenses, and normalized impairments.
  • Operating income of $80 million in 1Q’26 increased 68% year-over-year driven by network volume growth and stable operating expenses.
  • Network volume of $2.6 billion in 1Q’26 (compared to the outlook of $2.5 billion to $2.7 billion), grew by 9% year-over-year, or up 23% ex-SFR, driven by growth in our Auto and Point-of-Sale verticals, while maintaining our focus on prudent underwriting.
  • Total revenue and other income of $318 million in 1Q’26 (compared to the outlook of $315 – $335 million), increased 10% year-over-year, driven by 130% growth in interest income.
  • Revenue from fees less production costs (“FRLPC”) of $121 million in 1Q’26, increased by 5% year-over-year, FRLPC as a % of network volume (“FRLPC %”) contracted by 19 basis points year-over-year to 4.6% driven by asset class mix, new partner contributions and tighter pricing on our ABS transactions reflecting higher cost of capital and a tighter pricing in light of market conditions.
  • Adjusted EBITDA of $94 million in 1Q’26 (compared to the outlook of $80 million to $95 million), grew by 18% year-over-year benefiting from growth in FRLPC and operating leverage as the business scales.
  • Closed the first ~$450 million RPM resecuritization ABS highlighting demand for seasoned collateral from both new and existing RPM capital partners. This quarter we raised $2.1 billion in ABS funding across 4 transactions despite market volatility.
  • First AAA Fitch Rating on $368 million PAID resecuritization; a step-change improvement in our ABS program. The expansion to a major rating agency reflects consistent credit performance, enhances secondary market liquidity, and opens up additional pockets of institutional capital.
  • Year-to-date, onboarded 4 partners across all three asset classes while maintaining a disciplined risk posture. We expect to onboard additional partners this year, as we already have more prospective partners in our onboarding phase, with a mix of regional banks & non-banks.

Second Quarter 2026 Outlook

 

2Q26

Network Volume

Expected to be between $2.875 billion and $3.075 billion

Total Revenue and Other Income

Expected to be between $345 million and $365 million

Adjusted EBITDA

Expected to be between $100 million and $115 million

GAAP Net Income

Expected to be between $25 million and $45 million

Full-Year 2026 Outlook

 

FY26

Network Volume

Expected to be between $11.45 billion and $13 billion

Total Revenue and Other Income

Expected to be between $1.4 billion and $1.575 billion

Adjusted EBITDA

Expected to be between $420 million and $460 million

GAAP Net Income

Expected to be between $110 million and $160 million

Webcast

The Company will hold a webcast and conference call today, May 7, 2026 at 8:30 a.m. Eastern Time. A live webcast of the call will be available via the Investor Relations section of the Company’s website at investor.pagaya.com. To listen to the live webcast, please go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly before the call, the accompanying materials will be made available on the Company’s website. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.

The conference call can also be accessed by dialing 1-833-316-2483 or 1-785-838-9284. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 11161536. The telephone replay will be available starting shortly after the call until Thursday, May 21, 2026. A replay will also be available on the Investor Relations website following the call.

About Pagaya Technologies

Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide, as it reshapes the financial services ecosystem. By using machine learning, a vast data network and an AI-driven approach, Pagaya provides comprehensive consumer credit and other products for its partners, their customers, and investors. Its proprietary API and capital solutions integrate into its network of partners to deliver seamless user experiences and greater access to the mainstream economy. Pagaya has offices in New York and Tel Aviv. For more information, visit pagaya.com.

Cautionary Note About Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. These forward-looking statements generally are identified by the words “anticipate,” “believe,” “continue,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “future,” “strategy,” “might,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. All statements other than statements of historical fact are forward-looking statements, including statements regarding: the Company’s strategy and future operations, including expanding its partner network and deepening product adoption; the strength of our operating model; navigating the current macro environment; building a durable, through-the-cycle business for the long-term; the Company’s plans to onboard additional partners in 2026; our proactive risk management strategy; our funding strategy and attracting new capital; leveraging public ABS markets in the near-term; growth in 2026 driven by product expansion and new partners; drawing on and repaying our revolving credit facility; expected management transitions; and the Company’s financial outlook for Network Volume, Total Revenue and Other Income, Adjusted EBITDA, and GAAP Net Income in the second quarter and for the full year 2026, and for FRLPC as a % of Network Volume for the full year 2026.

These forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and assumptions include factors relating to: our rapid growth and our ability to effectively manage our growth and maintain profitability; adverse global economic conditions and other catastrophic events; adverse developments impacting the banking and financial services industries, consumer credit activity, and the availability of equity and debt financing; our reliance on services provided by third-party vendors; our dependence on our AI technology; our reliance on a limited number of partners which presents concentration risk for Network Volume and Revenue; retaining and attracting new partners by improving our platform and offering new and relevant products; our ability to raise capital from investors; developing and maintaining robust and diverse funding sources; the competitive nature of our industry; changes to our accounting policies or financial reporting standards; maintaining our brand image and reputation; managing risks related to fraudulent activity; our reliance on key employees including our founders; effectively managing conflicts of interest related to our financing vehicles; legal proceedings, investigations, or claims; maintaining adequate insurance coverage; the effectiveness of our risk management processes; realizing the intended benefits of any strategic transactions; the regulation of AI technologies by the FTC, CFPB, and other governmental agencies; enforcing our intellectual property rights; our use of open-source software components; our ability to continue receiving accurate data from our partners; cyberattacks and other security breaches; risks related to our single-family rental operations including volatility in the single-family rental market, lease renewal and default rates, HOA regulations, the accuracy of resident-supplied information, leasing fraud, renovation and maintenance costs, and regulations impacting the single-family rental business; our compliance with laws related to consumer protection, consumer finance, lending, fair lending, data protection and privacy, cybersecurity, and investment advisory services, and maintaining required licenses to operate; heightened regulation of the financial services industry; the risks that we are deemed to be an investment company or that we cannot rely on exemptions under various laws to conduct the funding component of our business; our ability to continue accessing the securitization market; our compliance with anti-corruption, anti-bribery, anti-money laundering, economic and trade sanctions and similar laws; the risk that we would be deemed the true lender for loans originated by our partners; the enforceability of assets we acquire from our partners; risks related to ongoing conflicts including between Russia and Ukraine and Israel, the United States, and Iran; risks related to our operations in Israel including regional hostilities and our employees’ required military service; risks related to being a public company including limited management experience and increased costs; covenants in our indebtedness arrangements that could limit our ability to operate our business; changes in tax laws and the outcome of potential tax audits; and other risks that are described in the Company’s Annual Report on Form 10-K filed on March 2, 2026 and our subsequent filings with the U.S. Securities and Exchange Commission.

These forward-looking statements reflect the Company’s views with respect to future events as of the date hereof and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. The forward-looking statements are made as of the date hereof, reflect the Company’s current beliefs and are based on information currently available as of the date they are made, and the Company assumes no obligation and does not intend to update these forward-looking statements.

Financial Information; Non-GAAP Financial Measures

Some of the unaudited financial information and data contained in this press release, our shareholder letter and Form 8-K, such as Fee Revenue Less Production Costs (“FRLPC”), FRLPC as a % of Network Volume, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), Core Operating Expenses and Core Operating Expenses as a % of FRLPC, have not been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). To supplement the unaudited consolidated financial statements prepared and presented in accordance with U.S. GAAP, management uses the non-GAAP financial measures FRLPC, FRLPC as a % of Network Volume, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), Core Operating Expenses, and Core Operating Expenses as a % of FRLPC to provide investors with additional information about our financial performance and to enhance the overall understanding of the results of operations by highlighting the results from ongoing operations and the underlying profitability of our business. Management believes these non-GAAP measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods. However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by U.S. GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our unaudited consolidated financial statements prepared and presented in accordance with U.S. GAAP. To address these limitations, management provides a reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to net income (loss) attributable to Pagaya Technologies Ltd., a reconciliation of FRLPC to operating income, and a reconciliation of Core Operating Expenses to operating expenses, and calculations of Adjusted EBITDA Margin, FRLPC as a % of Network Volume and Core Operating Expenses as a % of FRLPC. Management encourages investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view the non-GAAP financial measures in conjunction with the respective related GAAP financial measures.

Non-GAAP financial measures include the following items:

Fee Revenue Less Production Costs (“FRLPC”) is defined as operating income plus technology, data and product development, sales and marketing, and general and administrative costs, and less interest income and net investment income (loss). FRLPC as a % of Network Volume is defined as FRLPC divided by network volume.

Adjusted Net Income (Loss) is defined as net income (loss) attributable to Pagaya Technologies Ltd. excluding share-based compensation expense, change in fair value of contingent liability, change in fair value of warrant liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, and non-recurring expenses associated with mergers and acquisitions and other one-time expenses.

Adjusted EBITDA is defined as net income (loss) attributable to Pagaya Technologies Ltd. excluding share-based compensation expense, change in fair value of contingent liability, change in fair value of warrant liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, non-recurring expenses associated with mergers and acquisitions and other one-time expenses, interest expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Total Revenue and Other Income.

Core Operating Expenses is defined as operating expenses less share-based compensation, depreciation and amortization, whole loan allowance for losses, transaction-related expenses, restructuring expenses and non-recurring expenses associated with mergers and acquisitions and other one-time expenses. Core Operating Expenses as a % of FRLPC is defined as Core Operating Expenses divided by FRLPC.

The foregoing items are excluded from our FRLPC, FRLPC as a % of Network Volume, Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, Core Operating Expenses, and Core Operating Expenses as a % of FRLPC measures because they are noncash in nature, or because the amount and timing of these items is unpredictable, is not driven by core results of operations and renders comparisons with prior periods and competitors less meaningful.

We believe these non-GAAP measures provide useful information to investors and others in understanding and evaluating our results of operations, as well as providing useful measures for period-to-period comparisons of our business performance. Moreover, we have included these non-GAAP measures because these are key measurements used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting. However, these non-GAAP measures are presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with U.S. GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. The tables below provide reconciliations of these non-GAAP measures to the most directly comparable U.S. GAAP measures.

In addition, Pagaya provides an outlook for the second quarter and full year 2026 on a non-GAAP basis. The Company cannot reconcile its expected Adjusted EBITDA to expected net income (loss) attributable to Pagaya Technologies Ltd. or its expected FRLPC as a % of Network Volume to expected operating income without unreasonable effort because certain items that impact net income (loss) attributable to Pagaya Technologies Ltd., operating income, and other reconciling items are out of the Company’s control and/or cannot be reasonably predicted at this time, which unavailable information could have a significant impact on the Company’s U.S. GAAP financial results.

PAGAYA TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except share and per share data)
 

 

Three Months Ended March 31,

​

 

2026

 

 

 

2025

 

Revenue

​

 

​

Revenue from fees

$

298,991

 

 

$

282,704

 

Other Income

 

 

 

Interest income

 

17,666

 

 

 

7,676

 

Investment income (loss), net

 

1,287

 

 

 

(391

)

Total Revenue and Other Income

 

317,944

 

 

 

289,989

 

Production costs

 

177,561

 

 

 

167,083

 

Technology, data and product development (1)

 

15,940

 

 

 

19,444

 

Sales and marketing (1)

 

11,132

 

 

 

9,594

 

General and administrative (1)

 

33,306

 

 

 

46,183

 

Total Costs and Operating Expenses

 

237,939

 

 

 

242,304

 

Operating Income

 

80,005

 

 

 

47,685

 

Gains and (losses) on investments in loans and securities

 

(37,996

)

 

 

(29,024

)

Other expense, net

 

(15,466

)

 

 

(18,709

)

Gains from extinguishment of debt

 

767

 

 

 

—

 

Income (Loss) Before Income Taxes

 

27,310

 

 

 

(48

)

Income tax expense (benefit)

 

3,149

 

 

 

(2,540

)

Net Income Including Noncontrolling Interests

 

24,161

 

 

 

2,492

 

Less: Net loss attributable to noncontrolling interests

 

(533

)

 

 

(5,401

)

Net Income Attributable to Pagaya Technologies Ltd.

$

24,694

 

 

$

7,893

 

 

 

 

 

Earnings per share attributable to Pagaya Technologies Ltd.’s ordinary shareholders:

 

 

 

Basic

$

0.29

 

 

$

0.10

 

Diluted

$

0.28

 

 

$

0.10

 

Non-GAAP adjusted net income (2)

$

67,496

 

 

$

53,189

 

Non-GAAP adjusted net income per share:

 

 

 

Basic

$

0.82

 

 

$

0.70

 

Diluted

$

0.73

 

 

$

0.69

 

Weighted average shares outstanding:

 

 

 

Basic

 

82,717,374

 

 

 

75,765,080

 

Diluted

 

96,745,000

 

 

 

77,043,464

 

(1) The following table sets forth share-based compensation for the periods indicated below:

 

Three Months Ended March 31,

 

 

2026

 

 

2025

Technology, data and product development

$

1,194

 

$

1,097

Sales and marketing

 

1,531

 

 

4,780

General and administrative

 

4,471

 

 

7,295

Total

$

7,196

 

$

13,172

(2) See “Reconciliation of Non-GAAP Financial Measures.”

PAGAYA TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands)
 

 

March 31,

 

December 31,

 

 

2026

 

 

 

2025

 

Assets

 

 

 

Cash and cash equivalents

$

317,813

 

 

$

235,329

 

Restricted cash and cash equivalents

 

62,218

 

 

 

53,020

 

Fees receivables

 

170,688

 

 

 

153,250

 

Investments in loans and securities at fair value

 

941,367

 

 

 

945,269

 

Equity method and other investments

 

14,805

 

 

 

13,518

 

Right-of-use assets

 

28,965

 

 

 

30,578

 

Property, equipment and software, net

 

31,413

 

 

 

30,221

 

Goodwill

 

22,903

 

 

 

22,903

 

Intangible assets, net

 

6,231

 

 

 

7,661

 

Other assets

 

52,240

 

 

 

54,165

 

Total Assets

$

1,648,643

 

 

$

1,545,914

 

Liabilities and Shareholders’ Equity

 

 

 

Liabilities:

 

 

 

Accounts payable

$

3,796

 

 

$

3,931

 

Accrued expenses and other liabilities

 

63,472

 

 

 

74,635

 

Operating lease liabilities

 

32,619

 

 

 

34,212

 

Income taxes payable and other tax liabilities

 

23,561

 

 

 

18,687

 

Warrant liability

 

561

 

 

 

4,723

 

Revolving credit facility

 

114,700

 

 

 

—

 

Secured borrowing

 

156,275

 

 

 

193,892

 

Exchangeable notes

 

149,416

 

 

 

148,782

 

Long-term debt

 

474,988

 

 

 

481,598

 

Total Liabilities

 

1,019,388

 

 

 

960,460

 

Redeemable convertible preferred shares

 

30,103

 

 

 

30,103

 

Shareholders’ equity:

 

 

 

Ordinary shares

 

—

 

 

 

—

 

Additional paid-in capital

 

1,399,545

 

 

 

1,390,990

 

Accumulated other comprehensive loss

 

(32,276

)

 

 

(48,319

)

Accumulated deficit

 

(837,960

)

 

 

(862,654

)

Total Pagaya Technologies Ltd. shareholders’ equity

 

529,309

 

 

 

480,017

 

Noncontrolling interests

 

69,843

 

 

 

75,334

 

Total shareholders’ equity

 

599,152

 

 

 

555,351

 

Total Liabilities, Redeemable Convertible Preferred Shares, and Shareholders’ Equity

$

1,648,643

 

 

$

1,545,914

 

PAGAYA TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)
 

​

Three Months Ended March 31,

​

 

2026

 

 

 

2025

 

Cash flows from operating activities

​

 

 

Net income including noncontrolling interests

$

24,161

 

 

$

2,492

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

Equity method and other investments (income) loss

 

(1,287

)

 

 

391

 

Depreciation and amortization

 

3,862

 

 

 

7,722

 

Share-based compensation

 

7,196

 

 

 

13,172

 

Fair value adjustment to warrant liability

 

(4,162

)

 

 

1,099

 

(Gains) and losses on investments in loans and securities

 

37,995

 

 

 

31,186

 

Amortization of deferred costs

 

5,190

 

 

 

2,396

 

Gains from extinguishment of debt

 

(767

)

 

 

—

 

Write-off of capitalized software and other assets

 

1,866

 

 

 

—

 

Losses on foreign exchange

 

176

 

 

 

32

 

Change in operating assets and liabilities:

 

 

 

Fee receivables

 

(17,448

)

 

 

(8,844

)

Accrued interest on investments

 

(9,263

)

 

 

(6,088

)

Right-of-use assets

 

1,613

 

 

 

1,505

 

Other assets

 

1,646

 

 

 

1,652

 

Accounts payable

 

598

 

 

 

3,016

 

Accrued expenses and other liabilities

 

(11,263

)

 

 

(11,615

)

Operating lease liability

 

(1,822

)

 

 

(1,415

)

Income taxes

 

4,893

 

 

 

(2,274

)

Net cash provided by operating activities

 

43,184

 

 

 

34,427

 

Cash flows from investing activities

 

 

 

Proceeds from the maturity and prepayment of investments in loans and securities

 

196,329

 

 

 

58,674

 

Cash and restricted cash acquired from Theorem Technology, Inc.

 

—

 

 

 

159

 

Purchases of investments in loans and securities

 

(209,069

)

 

 

(81,943

)

Purchases of property, equipment and software

 

(3,176

)

 

 

(3,776

)

Net cash used in investing activities

 

(15,916

)

 

 

(26,886

)

Cash flows from financing activities

 

 

 

Proceeds from secured borrowing

 

49,316

 

 

 

49,162

 

Proceeds from revolving credit facility

 

114,700

 

 

 

—

 

Proceeds from exercise of stock options, warrants and contributions to ESPP

 

802

 

 

 

2,859

 

Distributions made to noncontrolling interests

 

(6,126

)

 

 

(4,442

)

Payments made to secured borrowing

 

(87,994

)

 

 

(46,919

)

Payments made to long-term debt

 

(6,463

)

 

 

(4,439

)

Net cash provided by (used in) financing activities

 

64,235

 

 

 

(3,779

)

Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents

 

179

 

 

 

(646

)

Net increase in cash and cash equivalents, and restricted cash and cash equivalents

 

91,682

 

 

 

3,116

 

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period

 

288,349

 

 

 

226,518

 

Cash and cash equivalents, and restricted cash and cash equivalents, end of period

$

380,031

 

 

$

229,634

 

PAGAYA TECHNOLOGIES LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

($ in thousands, unless otherwise noted)
 

 

Three Months Ended March 31,

​

 

2026

 

 

 

2025

 

Net Income Attributable to Pagaya Technologies Ltd.

$

24,694

 

 

$

7,893

 

Adjusted to exclude the following:

 

 

 

Share-based compensation

 

7,196

 

 

 

13,172

 

Fair value adjustment to contingent liability

 

—

 

 

 

(3,184

)

Fair value adjustment to warrant liability

 

(4,162

)

 

 

1,099

 

Impairment loss on certain investments, net

 

36,376

 

 

 

27,803

 

Write-off of capitalized software and other assets

 

1,866

 

 

 

1,708

 

Restructuring expenses

 

—

 

 

 

962

 

Transaction-related expenses

 

—

 

 

 

14

 

Non-recurring expenses

 

1,526

 

 

 

3,722

 

Adjusted Net Income

$

67,496

 

 

$

53,189

 

Adjusted to exclude the following:

 

 

 

Interest expenses

 

19,659

 

 

 

21,212

 

Income tax expense (benefit)

 

3,149

 

 

 

(2,540

)

Depreciation and amortization

 

3,862

 

 

 

7,722

 

Adjusted EBITDA

$

94,166

 

 

$

79,583

 

Adjusted EBITDA Margin %

 

30

%

 

 

27

%

 

Three Months Ended March 31,

​

 

2026

 

 

 

2025

 

Operating Income

$

80,005

 

 

$

47,685

 

Add: Technology, data and product development

 

15,940

 

 

 

19,444

 

Add: Sales and marketing

 

11,132

 

 

 

9,594

 

Add: General and administrative

 

33,306

 

 

 

46,183

 

Less: Interest income

 

17,666

 

 

 

7,676

 

Less: Investment income (loss), net

 

1,287

 

 

 

(391

)

Fee Revenue Less Production Costs (FRLPC)

$

121,430

 

 

$

115,621

 

Network Volume (in millions)

 

2,624

 

 

 

2,400

 

Fee Revenue Less Production Costs % (FRLPC %)

 

4.6

%

 

 

4.8

%

 

Three Months Ended March 31,

​

 

2026

 

 

 

2025

 

Operating expenses

$

60,378

 

 

$

75,221

 

Adjusted to exclude the following:

 

 

 

Share-based compensation

 

7,196

 

 

 

13,172

 

Depreciation and amortization

 

3,862

 

 

 

7,722

 

Whole loan allowance for losses

 

—

 

 

 

5,620

 

Write-off of capitalized software

 

109

 

 

 

—

 

Transaction-related expenses

 

—

 

 

 

14

 

Restructuring expenses

 

—

 

 

 

962

 

Non-recurring expenses

 

2,293

 

 

 

3,722

 

Core operating expenses

$

46,918

 

 

$

44,009

 

Core operating expenses as a % of FRLPC

 

39

%

 

 

38

%

 

Investors & Analysts

Craig Smyth

Investor Relations

[email protected]

Media & Press

Emily Scheer

Public Relations

[email protected]

KEYWORDS: New York United States North America Israel Middle East

INDUSTRY KEYWORDS: Software Finance Artificial Intelligence Banking Data Management Professional Services Technology Fintech

MEDIA:

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Aclaris Therapeutics Reports First Quarter 2026 Financial Results and Provides Corporate and Clinical Update

– Full Top Line Results from Phase 1a SAD/MAD Trial of ATI-052 Exceed Aclaris’ Target Profile, Validating Potential Best-in-Class Potency Advantage and Opportunity for Extended Dosing –

– Unique Dual Mechanism of ATI-2138 Supports Planned Phase 2b Clinical Trial in Lichen Planus –

– Strong Cash Runway Expected to Enable Development of Pipeline Through 2028 –

WAYNE, Pa., May 07, 2026 (GLOBE NEWSWIRE) — Aclaris Therapeutics, Inc. (NASDAQ: ACRS), a clinical-stage biopharmaceutical company focused on developing novel product candidates for immuno-inflammatory diseases, today announced its financial results for the first quarter of 2026 and provided a corporate and clinical update.

“Since the start of 2026, we have made great progress toward our goal of developing best-in-class compounds to address a variety of immuno-inflammatory diseases,” stated Dr. Neal Walker, Chief Executive Officer and Chair of the Board of Directors of Aclaris. “Most recently, the positive results from our Phase 1a SAD/MAD trial of our bispecific antibody ATI-052 confirmed its potential as having a best-in-class PK/PD profile with an extended dosing schedule of up to every three months. We look forward to an exciting rest of the year with expected milestones including delivery of placebo-controlled top line results from our Phase 1b proof-of-concept trials of ATI-052 in both asthma and atopic dermatitis and the Phase 2 trial of our anti-TSLP monoclonal antibody bosakitug in atopic dermatitis.”

First Quarter 2026 Highlights and Recent Updates

Pipeline:

Biologics: Antibody Franchise

  • Provided Positive Full Top Line Results of Phase 1a Single (SAD) and Multiple Ascending Dose (MAD) Trial of Investigational Bispecific Anti-TSLP/IL-4R
    α
    Antibody ATI-052 Confirming Potency and Potential for Extended Dosing: ATI-052 exhibited a potential best-in-class pharmacokinetic (PK) profile, including an estimated half-life of approximately 45 days. The pharmacodynamic (PD) results validate the potency of ATI-052, including robust target engagement demonstrated by complete and sustained inhibition through at least week 20 of ex vivo TSLP stimulated CCL17 (TARC) and at least week 12 of ex vivo IL-4 stimulated CCL17 in the 480 mg MAD cohort. The combination of the strong and sustained PK duration and PD effect supports the potential for up to every three-month dosing. ATI-052 was well tolerated and demonstrated a favorable safety profile. (press release here)
  • Confirmed Expectation of Top Line Results
    in the Second Half of 2026
    from Two Ongoing Phase 1b Proof-of-Concept (POC) Trials of ATI-
    052: In January, the Company announced initiation of a POC trial in patients with atopic dermatitis (AD). In February, Aclaris initiated a POC trial in patients with asthma. Dosing is ongoing in both trials, and top line results from both are expected in the second half of 2026. (press releases here and here)
  • Announced Phase 2b Program for ATI-052: Given the data developed to date and its unique mechanism of action, the Company announced its intent to initiate a Phase 2b program with ATI-052, initially targeting asthma, in the fourth quarter of 2026.
  • Completed Enrollment in Phase 2
    Trial of Investigational Anti-TSLP Monoclonal Antibody Bosakitug
    ; Confirmed Expectation of Top Line Results
    in the Fourth Quarter of 2026: Enrollment is complete in this randomized, double-blind, placebo-controlled Phase 2 trial designed to evaluate bosakitug in 109 patients with AD. The Company expects to provide top line results in the fourth quarter of 2026. (press release here)

Oral Inhibitors: ITK Franchise

  • Announced Lichen Planus Development Strategy for ATI-2138, a Potent and Selective Investigational Inhibitor of ITK and JAK3: Aclaris intends to initiate a phased Phase 2b basket study of ATI-2138 comprising the three most common subtypes of lichen planus (LP), an unaddressed chronic, inflammatory, CD8-driven interface dermatitis: erosive mucosal, cutaneous, and lichen planopilaris, a rare form of LP that causes permanent hair loss. There are currently no approved therapies. Aclaris expects to initiate Part A (erosive mucosal; cutaneous) of this trial in the second half of 2026 and intends to move into Part B (LPP) soon thereafter. (press release here)
  • Presented Additional Phase 2a Results at 2026 American Academy of Dermatology (AAD) Annual Meeting Providing Additional Support for the Therapeutic Potential of ATI-2138: Additional week 12 results included a 70% improvement in the affected percentage of Body Surface Area (BSA) score, a 50% improvement in worst itch intensity as measured by Peak Pruritus Numerical Rating Scale (PP-NRS), a 55% improvement in AD severity over the past week as measured by patient-oriented eczema measure (POEM), and a 65% improvement in quality of life as measured by the Dermatology Life Quality Index (DLQI). (press release here)
  • Confirmed Intent to File Investigational New Drug (IND) Application for Lead ITK Inhibitor ATI-9494 in the Second Half of 2026: Aclaris’ lead preclinical ITK inhibitor candidate ATI-9494 has demonstrated potent blockade of Th1 and Th2 responses, a prolonged half-life, and high potency against ITK, potentially enabling low drug burden, dosing flexibility, and once daily (QD) administration across a broad range of disease indications. Aclaris intends to file an IND for ATI-9494 in the second half of 2026.

Financial Results

Liquidity and Capital Resources

In March 2026, the Company sold 18.4 million shares of its common stock for aggregate gross proceeds of $59.8 million, pursuant to the Company’s amended and restated sales agreement with Leerink Partners LLC and Cantor Fitzgerald & Co., as sales agents.

As of March 31, 2026, Aclaris had cash, cash equivalents and marketable securities of $190.8 million compared to $151.4 million as of December 31, 2025. The Company believes that its cash, cash equivalents and marketable securities will be sufficient to fund its operations through the end of 2028, without giving effect to any potential business development transactions or financing activities.

First quarter 2026

Net loss was $19.8 million for the first quarter of 2026 compared to $15.1 million for the first quarter of 2025.

Total revenue was $2.0 million for the first quarter of 2026 compared to $1.5 million for the first quarter of 2025. The increase was primarily driven by higher royalties earned under the Lilly and Sun Pharma license agreements.

Research and development (R&D) expenses were $15.7 million for the quarter ended March 31, 2026 compared to $11.6 million for the prior year period. The increase was primarily driven by expenses related to ATI-052, including clinical development expenses associated with a Phase 1a program and Phase 1b programs in AD and asthma, as well as product candidate manufacturing costs for ATI-9494. The increase was partially offset by a reduction in preclinical and clinical development expenses for ATI-2138.

General and administrative (G&A) expenses were $6.7 million for the quarter ended March 31, 2026 compared to $6.1 million for the prior year period. The increase was primarily due to an increase in professional and legal expenses as well as personnel expenses.

About Aclaris Therapeutics, Inc.

Aclaris Therapeutics, Inc. is a clinical-stage biopharmaceutical company developing a pipeline of novel product candidates to address the needs of patients with immuno-inflammatory diseases who lack satisfactory treatment options. The company has a multi-stage portfolio of product candidates powered by a robust R&D engine. For additional information, please visit www.aclaristx.com and follow Aclaris on LinkedIn.

Cautionary Note Regarding Forward-Looking Statements

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “anticipate,” “believe,” “expect,” “intend,” “may,” “plan,” “potential,” “will,” and similar expressions, and are based on Aclaris’ current beliefs and expectations. These forward-looking statements include expectations regarding its plans for its development programs for bosakitug, ATI-052, ATI-2138 and ATI-9494, including the timing of reporting top line results from its Phase 2 trial of bosakitug in AD and its Phase 1b trials of ATI-052 in asthma and AD, the timing of initiating a Phase 2b program for ATI-052, the timing of initiating a Phase 2b trial in lichen planus with ATI-2138, the timing to file an IND for ATI-9494, the potential for ATI-052 to have extended dosing, the therapeutic potential of its product candidates and the potential for such candidates to be best-in-class, and the sufficiency of its cash, cash equivalents and marketable securities to fund its operations through the end of 2028. These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. Risks and uncertainties that may cause actual results to differ materially include uncertainties inherent in the conduct of clinical trials, Aclaris’ reliance on third parties over which it may not always have full control, Aclaris’ ability to enter into strategic partnerships on commercially reasonable terms, the uncertainty regarding the macroeconomic environment and other risks and uncertainties that are described in the “Risk Factors” section of Aclaris’ Annual Report on Form 10-K for the year ended December 31, 2025, and other filings Aclaris makes with the U.S. Securities and Exchange Commission from time to time. These documents are available under the “SEC Filings” page of the “Investors” section of Aclaris’ website at www.aclaristx.com. Any forward-looking statements speak only as of the date of this press release and are based on information available to Aclaris as of the date of this release, and Aclaris assumes no obligation to, and does not intend to, update any forward-looking statements, whether as a result of new information, future events or otherwise.

Aclaris Therapeutics Contacts:

Kevin Balthaser

Chief Financial Officer
(484) 329-2178
[email protected]

Will Roberts

Senior Vice President
Corporate Communications and Investor Relations
(484) 329-2125
[email protected]

           
Aclaris Therapeutics, Inc.

Condensed Consolidated Statements of Operations
(unaudited, in thousands, except share and per share data)
           
  Three Months Ended
  March 31,
  2026
   2025
           
Revenues:          
Contract research $ 537     $ 445  
Licensing   1,459       1,010  
Total revenue   1,996       1,455  
           
Costs and expenses:          
Cost of revenue(1)   395       506  
Research and development(1)   15,657       11,584  
General and administrative(1)   6,743       6,139  
Licensing   1,393       1,010  
Revaluation of contingent consideration   —       300  
Total costs and expenses   24,188       19,539  
Loss from operations   (22,192 )     (18,084 )
           
Other income:          
Interest income   1,514       2,166  
Non-cash royalty income   854       833  
Total other income   2,368       2,999  
Net loss $ (19,824 )   $ (15,085 )
Net loss per share, basic and diluted $ (0.15 )   $ (0.12 )
Weighted average common shares outstanding, basic and diluted   128,810,050       122,390,303  
           
(1) Amounts include stock-based compensation expense as follows:          
Cost of revenue $ 28     $ 219  
Research and development   1,162       1,185  
General and administrative   2,008       2,131  
Total stock-based compensation expense $ 3,198     $ 3,535  
               

Aclaris Therapeutics, Inc.

Selected Consolidated Balance Sheet Data
(unaudited, in thousands, except share data)
           
  March 31,   December 31,
  2026   2025
           
Cash, cash equivalents and marketable securities $ 190,788   $ 151,363
Total assets $ 198,720   $ 160,460
Total current liabilities $ 27,370   $ 28,645
Total liabilities $ 55,071   $ 57,378
Total stockholders’ equity $ 143,649   $ 103,082
Common stock outstanding   139,652,849     120,499,433
           

Aclaris Therapeutics, Inc.

Selected Consolidated Cash Flow Data
(unaudited, in thousands)
           
  Three Months Ended
  March 31,
  2026
   2025
           
Net loss $ (19,824 )   $ (15,085 )
Depreciation and amortization   102       128  
Stock-based compensation expense   3,198       3,535  
Revaluation of contingent consideration   —       300  
Changes in operating assets and liabilities   (1,625 )     (1,935 )
Net cash used in operating activities $ (18,149 )   $ (13,057 )
               



Posted on

Liquidity Services Announces Second Quarter Fiscal Year 2026 Financial Results

Industry Breadth, Robust Buyer Demand and Platform Operating Leverage Drive Growth and Profitability

BETHESDA, Md., May 07, 2026 (GLOBE NEWSWIRE) — Liquidity Services (NASDAQ:LQDT; www.liquidityservices.com), the leading global provider of e-commerce marketplaces and software solutions powering the circular economy, today announced its financial results for its fiscal quarter ended March 31, 2026, as compared to the corresponding prior year quarter:

  • Gross Merchandise Volume (GMV) of $389.9 million, up 6%, and Revenue of $120.7 million, up 4%
  • GAAP Net Income of $7.5 million, up 7%, and GAAP Diluted Earnings Per Share (EPS) of $0.23, up 5%
  • Non-GAAP Adjusted EBITDA of $16.7 million, up 37%, and Non-GAAP Adjusted Diluted EPS of $0.35, up 13%
  • Cash balances of $204.0 million1 with zero financial debt

“Our broad industry coverage, robust buyer liquidity and operating leverage drove a strong second quarter with expanded profitability. By dynamically matching increased product flows to the right buyer channels, RSCG improved recovery and drove meaningful operating leverage. In GovDeals, we continued to expand service levels for sellers and buyers, supporting growth despite the impact of significant winter weather events in certain regions. Our CAG segment remained focused on deepening its recurring revenue base from heavy equipment sellers and driving greater buyer participation for high-value equipment categories. With our disciplined execution, a strong pipeline, and continued platform investments, we are building a more scalable and attractive marketplace business which will create long-term value for both customers and shareholders,” said Bill Angrick, CEO of Liquidity Services.

Second Quarter Financial Highlights

GMV for the fiscal second quarter of 2026 was $389.9 million, a 6% increase from $367.4 million in the second fiscal quarter of 2025.

  • GMV in our RSCG segment increased 10%, driven by robust buyer demand across our consignment programs, including our rapidly growing direct-to-consumer channel, while purchase GMV was relatively flat.
  • GMV in our GovDeals segment increased 5%, reflecting continued demand for our services, partially offset by lower real estate transaction activity and disruptions to agency client operations from significant winter weather events.
  • GMV in our CAG segment increased 3%, including continued strength in our heavy equipment category’s recurring seller base, with industrial category results subject to variability in project timing. 
  • Consignment sales represented 81% of consolidated GMV for the second fiscal quarter of 2026.

Revenue for the second quarter of 2026 was $120.7 million, a 4% increase from $116.4 million in the second fiscal quarter of 2025.

  • Revenue in our RSCG segment increased 1% reflecting increased volume, a relatively stable level of purchase revenue, with robust buyer demand optimized through our multi-channel approach and other operational efficiencies contributing to a 29% increase in segment direct profit.
  • Revenue in our GovDeals segment increased 11%, growing faster than GMV from our expansion of services with selected sellers and a lower mix of real estate transactions drove higher take rates and contributed to a 12% increase in segment direct profit.
  • Revenue and segment direct profit in our CAG segment increased 12%, driven by the mix and timing of transactions, including increased activity in our heavy equipment category. Results can vary by asset category and project cadence in any given period.
  • Revenue in our Machinio & Software Solutions segments increased 12%, driven by subscription growth and pricing, with Machinio continuing to expand into the marine dealer category and our Software Solutions business focusing on initiatives to expand its recurring software-as-a-services business. Segment direct profit increased 10%.

Our combined initiatives to expand market share, increase multi-channel buyer participation, and enhance cost efficiencies contributed to higher GMV, improved transaction margins, and operating leverage across the business.

  • GAAP Net Income of $7.5 million, or $0.23 per share, for the fiscal second quarter of 2026, an increase from $7.1 million, or $0.22 per share, for the same quarter last year.
  • Non-GAAP Adjusted Net Income for the fiscal second quarter of 2026 of $11.2 million, or $0.35 per share, an increase from $10.0 million, or $0.31 per share, for the same quarter last year.
  • Non-GAAP Adjusted EBITDA for the fiscal second quarter of 2026 was $16.7 million, a $4.5 million increase from $12.2 million in the same quarter last year, reflecting the combined impact of leveraging our proprietary technology platform to expand seller market share, deepen multi-channel buyer participation, and strengthen operating leverage. Year-over-year growth in Non-GAAP Adjusted EBITDA outpaced growth in GAAP Net Income and Non-GAAP Adjusted Net Income primarily due to higher income tax expense, reflecting reduced tax benefits from stock-based compensation activity in the second quarter of 2026.

1 Includes $195.3 million of Cash and cash equivalents and $8.7 million of Short-term investments.

Second Quarter Segment Financial Results

We present operating results for our three reportable segments: GovDeals, RSCG, and CAG. Our separate Machinio and Software Solutions operating segments, which do not individually meet the quantitative thresholds to be reportable segments, are combined and presented together as Machinio & Software Solutions for segment reporting purposes. For further information on our reportable segments, see Note 14, Segment Information, to our quarterly report on Form 10-Q for the period ended March 31, 2026. Segment direct profit is calculated as total revenue less cost of goods sold (excluding depreciation and amortization).

Our Q2-FY26 segment results are as follows (unaudited, dollars in thousands):

  Three Months Ended March 31,     Six Months Ended March 31,  
  2026     2025     2026     2025  
GovDeals:                      
GMV $ 213,681     $ 203,329     $ 440,596     $ 415,470  
Total revenue $ 21,291     $ 19,236     $ 43,557     $ 39,758  
Segment direct profit $ 19,881     $ 17,712     $ 41,058     $ 36,528  
% of Total revenue   93 %     92 %     94 %     92 %
                       
RSCG:                      
GMV $ 113,070     $ 102,843     $ 226,561     $ 212,614  
Total revenue $ 83,225     $ 82,692     $ 165,220     $ 170,373  
Segment direct profit $ 21,365     $ 16,569     $ 42,826     $ 35,064  
% of Total revenue   26 %     20 %     26 %     21 %
                       
CAG:                      
GMV $ 63,114     $ 61,181     $ 120,667     $ 125,349  
Total revenue $ 10,776     $ 9,592     $ 22,260     $ 19,443  
Segment direct profit $ 9,654     $ 8,652     $ 19,033     $ 17,448  
% of Total revenue   90 %     90 %     86 %     90 %
                       
Machinio & Software Solutions:                      
Total revenue $ 5,440     $ 4,872     $ 10,915     $ 9,166  
Segment direct profit $ 4,970     $ 4,513     $ 9,987     $ 8,590  
% of Total revenue   91 %     93 %     91 %     94 %
                       
Consolidated:                      
GMV $ 389,865     $ 367,353     $ 787,824     $ 753,433  
Total revenue $ 120,732     $ 116,375     $ 241,952     $ 238,706  
                               

Second Quarter Operational Metrics

  • Registered Buyers — At the end of Q2-FY26, registered buyers, defined as the aggregate number of persons or entities who have registered on one of our marketplaces, totaled approximately 6.3 million, representing an 8% increase over the approximately 5.8 million registered buyers at the end of Q2-FY25.
  • Auction Participants — Auction participants, defined as registered buyers who have bid in an auction during the period (a registered buyer who bids in more than one auction is counted as an auction participant in each auction in which he or she bids), was approximately 985,000 in Q2-FY26, consistent with the approximately 982,000 auction participants in Q2-FY25.
  • Completed Transactions — Completed transactions, defined as the number of auctions in a given period, were approximately 280,000 in Q2-FY26, a 9% increase from the approximately 258,000 completed transactions in Q2-FY25.

Third Quarter Business Outlook

Our guidance for the fiscal third quarter of 2026, overall the seasonally strongest quarter of our fiscal year, is expected to continue to deliver profitable growth year-over-year.

Our GovDeals segment is expected to extend its growth trajectory through ongoing expansion of its seller base and services as we continue to focus on the pace of adoption and on-boarding of new accounts. Within our RSCG segment, we expect consignment GMV growth to continue compared to last year. Relative to the fiscal second quarter of 2026 when RSCG typically experiences strong buyer demand for its seasonal peak in post-holiday retail returns, we expect purchase GMV to remain sequentially consistent with a less favorable product mix. Within our Capital Assets Group segment, we expect continued growth in heavy equipment and a strong pipeline of energy projects. Results are subject to variability in project timing and mix, as well as global economic and geopolitical conditions. Our Machinio and Software Solutions businesses are expected to continue to grow as we expand our service offerings. We expect our overall sales mix that includes our seasonally strong quarter in GovDeals for the fiscal third quarter of 2026 to sequentially produce a slightly higher overall segment direct profit margin than the fiscal second quarter of 2026, partly offset by the anticipated product mix change within our Retail segment.

On a consolidated basis, consignment GMV for the fiscal third quarter is expected in the low-to-mid eighties as a percentage of total GMV. Consolidated revenue as a percentage of GMV is expected to be in the mid-to-high twenties, and total segment direct profit as a percentage of consolidated revenue is expected to again be in the mid-to-high forty percent range. These ratios can vary based on our overall business mix, including asset categories, in any given period.

Our Q3-FY26 guidance is as follows:

$ in millions, except per share data Q3-FY26 Guidance
GMV $425 to $465
GAAP Net Income $7.0 to $10.0
Non-GAAP Adjusted EBITDA $17.0 to $20.0
GAAP Diluted EPS $0.21 to $0.30
Non-GAAP Adjusted Diluted EPS $0.30 to $0.39
   

Our Business Outlook includes forward-looking statements which reflect the following trends and assumptions for Q3-FY26 as compared to the prior year’s period, as well as the other risks and uncertainties set forth in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025, and our subsequent quarterly reports on Form 10-Q:

Potential Impacts to GMV, Revenue, Segment Direct Profits, and ratios calculated using these metrics

  • fluctuations in the mix of purchase and consignment transactions. Generally, when the mix of purchase transactions increases, or when the commercial terms or pricing associated with such transactions change, revenue as a percent of GMV increases, while segment direct profit as a percentage of revenue decreases. When the mix of consignment transactions increases, or when associated economics change, revenue as a percent of GMV decreases, while segment direct profit as a percentage of revenue increases;
  • variability in the inventory product mix handled by our RSCG segment, including changes in asset availability, sourcing, and market pricing, which can cause a change in revenues and/or segment direct profit as a percentage of revenue;
  • real estate transactions in our GovDeals segment can be subject to significant variability due to changes that include postponements or cancellations of scheduled or expected auction events and the value of properties to be included in the auction event;
  • continued variability in project size and timing within our CAG segment, including variability driven by changes in economic and/or geopolitical conditions, which can impact revenues and segment direct profit;
  • continued growth and expansion resulting from the continuing acceleration of broader market adoption of the digital economy, particularly in our GovDeals and RSCG seller accounts and programs, including the execution by RSCG on its business plans for expanded direct-to-consumer sales;
  • changes in economic, political, or international trading conditions could cause variability in our operating results by impacting the priorities or financial stability of our sellers, current or prospective buyers or their end-customers;

Potential Impacts to Operating Expenses

  • continued R&D spending to support delivering software solutions and enhancing our omni-channel behavioral marketing, analytics, and buyer/seller payment optimization;
  • spending in business development activities to capture market opportunities, targeting efficient payback periods;
  • variability in the volumes and sourcing locations of products handled by our RSCG segment, which can cause the capacity and related operating expense requirements for inventory logistics and storage to fluctuate;

Potential Impacts to GAAP Net Income and Diluted EPS and Non-GAAP Adjusted Net Income and Adjusted Diluted EPS

  • our FY26 annual effective tax rate (ETR) is expected to range from approximately 30% to 34%, with a slightly higher rate in the mid thirties for the fiscal third quarter of 2026 due to a decrease in the benefit from stock-based compensation. This range excludes any potential impacts from any legislative changes, and excludes potential impacts that have limited visibility and can be highly variable, such as the discrete effects of stock compensation due to participant stock option exercise activity or changes in our stock price. Year-over-year, we expect that cash paid for income taxes will increase in FY26 as our US federal net operating loss carryforward became fully utilized during FY25.
  • our diluted weighted average number of shares outstanding is expected to be approximately 33.0 million. As of March 31, 2026, we had $15.0 million in remaining authorization to repurchase shares of our common stock.

Reconciliation of GAAP to Non-GAAP Measures

Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA
. Non-GAAP EBITDA is a supplemental non-GAAP financial measure and is equal to Net Income plus interest and other income, net; provision for income taxes; and depreciation and amortization. Our definition of Non-GAAP Adjusted EBITDA differs from Non-GAAP EBITDA because we further adjust Non-GAAP EBITDA for stock compensation expense, acquisition costs such as transaction expenses, business realignment expenses, litigation settlement expenses that are not expected to recur, and goodwill, long-lived and other non-current asset impairment. A reconciliation of Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA is as follows (dollars in thousands):

  Three Months Ended March 31,     Six Months Ended March 31,  
  2026     2025     2026     2025  
Net income $ 7,522     $ 7,051     $ 15,011     $ 12,861  
Interest and other income, net1   (1,103 )     (951 )     (2,300 )     (2,103 )
Provision for income taxes   3,150       655       6,178       3,035  
Depreciation and amortization   2,640       2,568       5,223       5,084  
Non-GAAP EBITDA $ 12,209     $ 9,323     $ 24,112     $ 18,877  
Stock compensation expense   4,350       2,578       10,524       6,010  
Acquisition-related costs2   112       167       112       236  
Business realignment expenses3   —       104       —       159  
Non-GAAP Adjusted EBITDA $ 16,671     $ 12,172     $ 34,748     $ 25,282  


1

Interest and other income, net,
per the Condensed Consolidated Statements of Operations, excludes the non-service components of net periodic pension cost (benefit).


2

Acquisition-related costs are included in Other operating expenses, net on the Condensed Consolidated Statements of Operations.


3

Business realignment expense, included as a component of Other operating expenses, net, on the Condensed Consolidated Statement of Operations, includes the amounts accounted for as exit costs under ASC 420, Exit or Disposal Cost Obligations, and the related impacts of business realignment actions subject to other accounting guidance.



Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Basic and Diluted Earnings Per Share. Non-GAAP Adjusted Net Income is a supplemental non-GAAP financial measure and is equal to Net Income plus stock compensation expense, amortization of intangible assets, acquisition related costs such as transaction expenses and changes in earn-out estimates, business realignment expenses, litigation settlement expenses that are not expected to reoccur, goodwill, long-lived and other non-current asset impairments, and the estimated impact of income taxes on these non-GAAP adjustments as well as non-recurring tax adjustments. Non-GAAP Adjusted Basic and Diluted Earnings Per Share are determined using Non-GAAP Adjusted Net Income. For Q2-FY26 and Q2-FY25, the tax rates used to estimate the impact of income taxes on the non-GAAP adjustments was 29% and 19%, respectively, based upon the GAAP effective tax rates for each year-to-date period. A reconciliation of Net Income to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Basic and Diluted Earnings Per Share is as follows (dollars in thousands, except per share data):

  Three Months Ended March 31,     Six Months Ended March 31,  
  2026     2025     2026     2025  
Net income $ 7,522     $ 7,051     $ 15,011     $ 12,861  
Stock compensation expense   4,350       2,578       10,524       6,010  
Intangible asset amortization   783       815       1,566       1,625  
Acquisition-related costs1   112       167       112       236  
Business realignment expenses1,2   —       104       —       159  
Income tax impact on the adjustment items   (1,532 )     (696 )     (3,563 )     (1,526 )
Non-GAAP Adjusted net income $ 11,235     $ 10,019     $ 23,650     $ 19,365  
Non-GAAP Adjusted basic earnings per common share $ 0.36     $ 0.32     $ 0.77     $ 0.63  
Non-GAAP Adjusted diluted earnings per common share $ 0.35     $ 0.31     $ 0.73     $ 0.60  
Basic weighted average shares outstanding   31,056,892       31,012,087       30,844,713       30,825,231  
Diluted weighted average shares outstanding   32,484,470       32,518,672       32,299,189       32,270,225  


1

Acquisition-related cos
ts, and Business realignment expenses are included in Other operating expenses, net on the Condensed Consolidated Statement of Operations.


2

Business realignment expense, included as a component of Other operating expenses, net, on the Condensed Consolidated Statement of Operations, includes the amounts accounted for as exit costs under ASC 420, Exit or Disposal Cost Obligations, and the related impacts of business realignment actions subject to other accounting guidance.



Conference Call Details

The Company will host a conference call to discuss these results at 10:30 a.m. Eastern Time today. Investors and other interested parties may access the teleconference by registering here to receive the dial-in number and unique conference pin. A live listen-only webcast of the conference call will be provided on the Company’s investor relations website at https://investors.liquidityservices.com. An archive of the webcast will be available on the Company’s website until May 7, 2027. The replay will be available starting at 1:30 p.m. Eastern Time on the day of the call.

Non-GAAP Measures

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP measures of certain components of financial performance. These non-GAAP measures include earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share. These non-GAAP measures are provided to enhance investors’ overall understanding of our current financial performance and prospects for the future. We use EBITDA and Adjusted EBITDA: (a) as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis as they do not reflect the impact of items not directly resulting from our core operations; (b) for planning purposes, including the preparation of our internal annual operating budget; (c) to allocate resources to enhance the financial performance of our business; (d) to evaluate the effectiveness of our operational strategies; and (e) to evaluate our capacity to fund capital expenditures and expand our business. Adjusted Diluted Earnings (Loss) per Share is the result of our Adjusted Net Income (Loss) and diluted shares outstanding.

We prepare Non-GAAP Adjusted EBITDA by eliminating from Non-GAAP EBITDA the impact of items that we do not consider indicative of our core operating performance. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. As an analytical tool, Non-GAAP Adjusted EBITDA is subject to all of the limitations applicable to Non-GAAP EBITDA. Our presentation of Non-GAAP Adjusted EBITDA should not be construed as an implication that our future results will be unaffected by unusual or non-recurring items.

We believe these non-GAAP measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of our core operating measures. In addition, because we have historically reported certain non-GAAP measures to investors, we believe the inclusion of non-GAAP measures provides consistency in our financial reporting. These measures should be considered in addition to financial information prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation of all historical non-GAAP measures included in this press release, to the most directly comparable GAAP measures, may be found in the financial tables included in this press release.

We do not quantitatively reconcile our guidance ranges for our non-GAAP measures to their most comparable GAAP measures in the Business Outlook section of this press release. The guidance ranges for our GAAP and non-GAAP financial measures reflect our assessment of potential sources of variability in our financial results and are informed by our evaluation of multiple scenarios, many of which have interactive effects across several financial statement line items. Providing guidance for individual reconciling items between our non-GAAP financial measures and the comparable GAAP measures would imply a degree of precision and certainty in those reconciling items that is not a consistent reflection of our scenario-based process to prepare our guidance ranges. To the extent that a material change affecting the individual reconciling items between the Company’s forward-looking non-GAAP and comparable GAAP financial measures is anticipated, the Company has provided qualitative commentary in the Business Outlook section of this press release for your consideration. However, as the impact of such factors cannot be predicted with a reasonable degree of certainty or precision, a quantitative reconciliation is not available without unreasonable effort.

Supplemental Operating Data

To supplement our consolidated financial statements presented in accordance with GAAP, we use certain supplemental operating data as a measure of certain components of operating performance. GMV is the total sales value of all transactions for which we earned compensation upon their completion through our marketplaces or other channels during a given period of time. We review GMV because it provides a measure of the volume of goods being sold in our marketplaces and thus the activity of those marketplaces. GMV and our other supplemental operating data, including registered buyers, auction participants and completed transactions, also provide a means to evaluate the effectiveness of investments that we have made and continue to make in the areas of seller and buyer support, value-added services, product development, sales and marketing and operations. Therefore, we believe this supplemental operating data provides useful information to both management and investors. In addition, because we have historically reported certain supplemental operating data to investors, we believe the inclusion of this supplemental operating data provides consistency in our financial reporting. This data should be considered in addition to financial information prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

Forward-Looking Statements

This document contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements include, but are not limited to, statements regarding the Company’s business outlook; expected future results; expected future effective tax rates; and trends and assumptions about future periods. You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continues” or the negative of these terms or other comparable terminology. Our business is subject to a number of risks and uncertainties, and our past performance is no guarantee of our performance in future periods. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

There are several risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements in this document. Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements are set forth in our filings with the SEC from time to time, and include, among others: our ability to source sufficient assets from sellers to attract and retain active professional buyers; our need to successfully react to the increasing importance of mobile commerce and the increasing environmental and social impact aspects of e-commerce in an increasingly competitive environment for our business, including not only risks of disintermediation of our e-commerce services by our competitors but also by our buyers and sellers; the performance of our continuing initiatives; disruptions in our vendor contracts with Amazon.com, Inc., under which we acquire a significant portion of our purchased inventory; our ability to timely upgrade and develop our information technology systems, infrastructure and digital marketing and customer service capabilities at reasonable cost and scale while complying with applicable data privacy and security laws and maintaining site stability and performance to allow our operations to grow in both size and scope; our ability to attract, retain and develop the skilled employees that we need to support our business; competitive pressures from different industries affecting our ability to attract and retain buyers and sellers; retail clients investing in their warehouse operations capacity to handle higher volumes of online returns, resulting in retailers sending the Company a reduced volume of returns merchandise or sending us a product mix lower in value due to the removal of high value returns; system interruptions, a lack of control over third parties software, and dependence on third parties for marketing technology, that could affect our websites or our transaction systems and impair the services we provide to our sellers and buyers; our ability to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally; the operations of customers, project size and timing of auctions, operating costs, seasonality of our business and general economic conditions; the numerous factors that influence the supply of and demand for used merchandise, equipment and surplus assets, and cause volatility in our stock price; our ability to integrate acquired companies, and execute on anticipated business plans such as the efforts underway with local and state governments to advance legislation that allows for online auctions for foreclosed and tax foreclosed real estate; costs of developing and maintaining our international operations; political, business, economic and other conditions in local, regional and global sectors; the continuing impacts of geopolitical events, including armed conflicts in Ukraine, the conflict between the United States, Israel, and Iran and related geopolitical instability; and impacts from escalating interest rates and inflation on our operations; the supply of, demand for or market values of surplus assets, such as shortages in supply of used vehicles; the numerous government regulations of e-commerce and other services, competition, and restrictive governmental actions, including any failure or perceived failure by us, or third parties with which we do business, to comply with applicable data privacy and security laws, and regulations that are applicable to our auction business; and other risks and uncertainties set forth in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025, and our subsequent quarterly reports, all of which is available on the SEC and Company websites. There may be other factors of which we are currently unaware or which we deem immaterial that may cause our actual results to differ materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this document and are expressly qualified in their entirety by the cautionary statements included in this document. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date of this document or to reflect the occurrence of unanticipated events.

About Liquidity Services

Liquidity Services (NASDAQ:LQDT) operates the world’s largest B2B e-commerce marketplace platform for surplus assets with over $15 billion in completed transactions to more than six million qualified buyers and 15,000 corporate and government sellers worldwide. The company supports its clients’ sustainability efforts by helping them extend the life of assets, prevent unnecessary waste and carbon emissions, and reduce the number of products headed to landfills.

Contact:

Investor Relations
[email protected]

Liquidity Services and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(Dollars in Thousands, Except Par Value)
           
  March 31, 2026     September 30, 2025  
  (Unaudited)  
Assets          
Current assets:          
Cash and cash equivalents $ 195,308     $ 174,607  
Short-term investments   8,711       11,212  
Accounts receivable, net of allowance for doubtful accounts of $525 and $777   13,034       11,176  
Inventory, net   20,238       14,180  
Prepaid taxes and tax refund receivable   2,674       1,757  
Prepaid expenses and other current assets   10,240       11,857  
Total current assets   250,205       224,789  
Property and equipment, net   18,890       18,259  
Operating lease assets   12,397       11,499  
Intangible assets, net   11,797       13,340  
Goodwill   102,757       102,875  
Deferred tax assets   546       567  
Other assets   3,819       3,772  
Total assets $ 400,411     $ 375,101  
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable $ 53,321     $ 61,454  
Accrued expenses and other current liabilities   25,025       30,575  
Current portion of operating lease liabilities   4,682       5,071  
Deferred revenue   5,103       5,093  
Payables to sellers   77,176       59,432  
Total current liabilities   165,307       161,625  
Operating lease liabilities   9,855       8,723  
Other long-term liabilities   3,181       1,511  
Total liabilities   178,343       171,859  
Commitments and contingencies (Note 13)          
Stockholders’ equity:          
Common stock, $0.001 par value; 120,000,000 shares authorized; 37,873,724 shares
issued and outstanding at March 31, 2026; 37,317,175 shares issued and
outstanding at September 30, 2025		   38       37  
Additional paid-in capital   291,480       285,721  
Treasury stock, at cost; 6,700,775 shares at March 31, 2026, and 6,640,580 shares at September 30, 2025   (111,618 )     (110,002 )
Accumulated other comprehensive loss   (10,969 )     (10,640 )
Retained earnings   53,137       38,126  
Total stockholders’ equity   222,068       203,242  
Total liabilities and stockholders’ equity $ 400,411     $ 375,101  
Liquidity Services and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(Dollars in Thousands, Except Per Share Data)
           
  Three Months Ended March 31,     Six Months Ended March 31,  
  2026     2025     2026     2025  
Purchase revenues $ 77,852     $ 77,827     $ 155,204     $ 160,642  
Consignment and other fee revenues   42,880       38,548     $ 86,748       78,064  
Total revenue   120,732       116,375       241,952       238,706  
Costs and expenses from operations:                      
Cost of goods sold (excludes depreciation and amortization)   64,862       68,946       129,048       141,110  
Technology and operations   18,320       16,883       36,617       34,290  
Sales and marketing   16,114       13,810       33,132       28,584  
General and administrative   9,072       7,108       18,837       15,375  
Depreciation and amortization   2,640       2,568       5,223       5,084  
Other operating expenses   104       257       104       373  
Total costs and expenses   111,112       109,572       222,961       224,816  
Income from operations   9,620       6,803       18,991       13,890  
Interest and other income, net   (1,052 )     (903 )     (2,198 )     (2,006 )
Income before provision for income taxes   10,672       7,706       21,189       15,896  
Provision for income taxes   3,150       655       6,178       3,035  
Net income $ 7,522     $ 7,051     $ 15,011     $ 12,861  
Basic income per common share $ 0.24     $ 0.23     $ 0.49     $ 0.42  
Diluted income per common share $ 0.23     $ 0.22     $ 0.46     $ 0.40  
Basic weighted average shares outstanding   31,056,892       31,012,087       30,844,713       30,825,231  
Diluted weighted average shares outstanding   32,484,470       32,518,672       32,299,189       32,270,225  
Liquidity Services and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(Dollars in Thousands)
     
  Six Months Ended March 31,  
  2026     2025  
Operating activities          
Net income $ 15,011     $ 12,861  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   5,223       5,084  
Stock compensation expense   10,524       6,010  
Inventory adjustment to net realizable value   170       32  
Provision for doubtful accounts   116       105  
Deferred tax expense   1,727       1,230  
Gain on disposal of property and equipment   2       (53 )
Changes in operating assets and liabilities:          
Accounts receivable   (2,051 )     (9,208 )
Inventory   (2,628 )     (2,889 )
Prepaid taxes and tax refund receivable   (916 )     (3,277 )
Prepaid expenses and other assets   1,425       3,028  
Operating lease assets and liabilities   (155 )     (419 )
Accounts payable   (11,753 )     (2,838 )
Accrued expenses and other current liabilities   (5,523 )     (4,688 )
Deferred revenue   10       69  
Payables to sellers   17,836       4,457  
Net cash provided by operating activities   29,018       9,504  
Investing activities          
Cash paid for business acquisitions, net of cash acquired   —       (6,287 )
Purchases of property and equipment, including capitalized software   (4,411 )     (3,683 )
Purchase of short-term investments   (2,971 )     (13,298 )
Maturities of short-term investments   5,429       4,682  
Other investing activities, net   113       26  
Net cash used in investing activities   (1,840 )     (18,560 )
Financing activities          
Common stock repurchases   (1,513 )     (79 )
Taxes paid associated with net settlement of stock compensation awards   (5,756 )     (4,841 )
Payments of the principal portion of finance lease liabilities   (55 )     (49 )
Proceeds from exercise of stock options, net of tax   889       192  
Net cash used in financing activities   (6,435 )     (4,777 )
Effect of exchange rate differences on cash and cash equivalents   (42 )     (907 )
Net increase (decrease) in cash and cash equivalents   20,701       (14,740 )
Cash and cash equivalents at beginning of period   174,607       153,226  
Cash and cash equivalents at end of period $ 195,308     $ 138,486  
Supplemental disclosure of cash flow information          
Cash paid for income taxes, net $ 5,478     $ 5,146  
Non-cash: Common stock surrendered in the exercise of stock options   104       47  
Non-cash: Acquisition consideration paid in common stock   —       945  
Non-cash: Cash not yet paid for business acquisitions   —       213