Market Newsdesk

February 6, 2025 4:49 pm

PROS Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results

PROS Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results

Total revenue of $85.0 million in the fourth quarter, up 10% year-over-year.
Subscription revenue of $69.3 million in the fourth quarter, up 14% year-over-year.
Subscription gross margin of 79% and non-GAAP subscription gross margin of 81% in the fourth quarter, an improvement of more than 270 basis points year-over-year.
Operating cash flow of $24.0 million in the fourth quarter, up 73% year-over-year.

HOUSTON–(BUSINESS WIRE)–PROS Holdings, Inc. (NYSE: PRO), a leading provider of AI-powered SaaS pricing and selling solutions, today announced financial results for the fourth quarter and full year ended December 31, 2024.

“I’m incredibly proud of our team for finishing the year strong – in 2024, we achieved 14% subscription revenue growth, delivered a 400% improvement in adjusted EBITDA, won exceptional new customers, and deepened our relationships across our expanding customer base,” stated CEO Andres Reiner. “These results, combined with being ranked a Leader in every key industry analyst evaluation specific to our solutions, highlight our market momentum and position us for continued growth in 2025 and beyond.”

Fourth Quarter and Full Year 2024 Financial Highlights

Key financial results for the fourth quarter and full year 2024 are shown below. Throughout this press release all dollar figures are in millions, except net earnings (loss) per share. Unless otherwise noted, all results are on a reported basis and are compared with the prior-year period.

	GAAP									Non-GAAP
	Q4 2024			Q4 2023			Change			Q4 2024		Q4 2023		Change
*Revenue:*
Total Revenue	$	85.0		$	77.5			10	%		n/a		n/a		n/a
Subscription Revenue	$	69.3		$	60.8			14	%		n/a		n/a		n/a
Subscription and Maintenance Revenue	$	72.4		$	65.2			11	%		n/a		n/a		n/a
*Profitability:*
Gross Profit	$	57.6		$	48.7			18	%	$	59.4	$	50.8		17	%
Operating (Loss) Income	$	(1.6	)	$	(10.6	)	$	9.0		$	9.9	$	1.5		580	%
Net (Loss) Income	$	(2.0	)	$	(10.2	)	$	8.2		$	7.5	$	1.1		608	%
Net (Loss) Earnings Per Share	$	(0.04	)	$	(0.22	)	$	0.18		$	0.16	$	0.02	$	0.14
Adjusted EBITDA		n/a			n/a			n/a		$	10.9	$	2.5		333	%
*Cash:*
Net Cash Provided by Operating Activities	$	24.0		$	13.8			73	%		n/a		n/a		n/a
Free Cash Flow		n/a			n/a			n/a		$	23.5	$	13.6		73	%

	GAAP									Non-GAAP
	FY 2024			FY 2023			Change			FY 2024		FY 2023		Change
*Revenue:*
Total Revenue	$	330.4		$	303.7			9	%		n/a		n/a		n/a
Subscription Revenue	$	266.3		$	234.0			14	%		n/a		n/a		n/a
Subscription and Maintenance Revenue	$	279.8		$	254.0			10	%		n/a		n/a		n/a
Subscription Annual Recurring Revenue (“ARR”)		n/a			n/a			n/a		$	281.5	$	259.0		9	%
Subscription ARR in constant currency		n/a			n/a			n/a		$	283.7	$	259.0		10	%
*Profitability:*
Gross Profit	$	217.0		$	188.4			15	%	$	224.9	$	197.7		14	%
Operating (Loss) Income	$	(19.0	)	$	(50.6	)	$	31.6		$	26.4	$	1.5		1,641	%
Net (Loss) Income	$	(20.5	)	$	(56.4	)	$	35.9		$	19.3	$	2.2		761	%
Net (Loss) Earnings Per Share	$	(0.43	)	$	(1.22	)	$	0.79		$	0.41	$	0.05	$	0.36
Adjusted EBITDA		n/a			n/a			n/a		$	30.0	$	6.0		400	%
*Cash:*
Net Cash Provided by Operating Activities	$	27.4		$	9.9			177	%		n/a		n/a		n/a
Free Cash Flow		n/a			n/a			n/a		$	26.2	$	11.4		130	%

The attached table provides a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP metrics.

Recent Business Highlights

Welcomed many new customers who are adopting the PROS Platform such as Arco, BradyPLUS, Cooper Machinery, Fastjet, HBK, Pipeline Packaging, and Werner Electric, among others.
Expanded adoption of the PROS Platform within existing customers including Adobe, Air Canada, Averitt, BASF, Flydubai, Henkel, Hertz, Holcim, Lufthansa Group, and Manitou, among others.
Earned recognition as a Leader in the 2025 Gartner® Magic Quadrant™ for Configure, Price, and Quote (CPQ) Applications for the third time, achieving PROS highest leadership ranking in the evaluation to date, a testament to PROS leadership in innovation and expanding market presence.
Received the Leader designation in the IDC MarketScape: Worldwide Configure Price Quote (CPQ) Applications for Commerce 2024-2025, in recognition of PROS AI-driven innovations including our advanced pricing capabilities and seamless ecosystem integrations.
Received the IDC 2024 CX CPQ Customer Satisfaction Award, ranking among the highest in a survey from 2,500 organizations globally across approximately 40 customer satisfaction metrics, with recognition for ease of implementation and user experience.
Released over 560 new features in the PROS Platform in 2024 that drove new customer acquisition and customer expansion throughout the year, including new solutions such as Smart Rebate Management and generative AI-powered Fare Finder Genie.
Processed 4.4 trillion transactions in our platform in 2024, a 29% increase in volume year-over-year, underscoring the PROS Platform’s significant market value and increasing customer adoption.

Financial Outlook

PROS currently anticipates the following based on an estimated 47.9 million diluted weighted average shares outstanding for the first quarter of 2025 and a 22% non-GAAP estimated tax rate for the first quarter and full year 2025.

	Q1 2025 Guidance	v. Q1 2024 at Mid-Point	Full Year 2025 Guidance	v. Prior Year at Mid-Point
Total Revenue	$85.0 to $86.0	6%	$360.0 to $362.0	9%
Subscription Revenue	$70.25 to $70.75	10%	$294.0 to $296.0	11%
Subscription ARR	n/a	n/a	$308.0 to $311.0	10%
Non-GAAP Earnings Per Share	$0.10 to $0.12	$0.07	n/a	n/a
Adjusted EBITDA	$7.5 to $8.5	74%	$42.0 to $44.0	43%
Free Cash Flow	n/a	n/a	$40.0 to $44.0	61%

Conference Call

In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Thursday, February 6, 2025, at 4:45 p.m. ET to discuss the Company’s financial results and business outlook. To access this call, dial 1-877-407-9039 (toll-free) or 1-201-689-8470. The live and archived webcasts of this call can be accessed under the “Investor Relations” section of the Company’s website at www.pros.com.

A telephone replay will be available until Thursday, February 13, 2025, 11:59 PM ET at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code 13750860.

About PROS

PROS Holdings, Inc. (NYSE: PRO) is a leading provider of AI-powered SaaS pricing and selling solutions. Our vision is to optimize every shopping and selling experience. With 40 years of industry expertise and a proven track record of success, PROS helps B2B and B2C companies across the globe, in a variety of industries, including airlines, manufacturing, distribution, and services, drive profitable growth. The PROS Platform leverages AI to provide real-time predictive insights that enable businesses to drive revenue and margin improvements. To learn more about PROS and our innovative SaaS solutions, please visit our website at www.pros.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial outlook; expectations; ability to achieve future growth and profitability goals; management’s confidence and optimism; positioning; customer successes; demand for our software solutions; pipeline; business expansion; revenue; subscription revenue; subscription ARR; non-GAAP earnings (loss) per share; adjusted EBITDA; free cash flow; shares outstanding and effective tax rate. The forward-looking statements contained in this press release are based upon our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include, among others, risks related to: (a) cyberattacks, data breaches and breaches of security measures within our products, systems and infrastructure or products, systems and infrastructure of third parties upon whom we rely, (b) the macroeconomic environment and geopolitical uncertainty and events, (c) increasing business from customers, maintaining subscription renewal rates and capturing customer IT spend, (d) managing our growth and profit objectives effectively, (e) disruptions from our third party data center, software, data, and other unrelated service providers, (f) implementing our solutions, (g) cloud operations, (h) intellectual property and third-party software, (i) acquiring and integrating businesses and/or technologies, (j) catastrophic events, (k) operating globally, including economic and commercial disruptions, (l) potential downturns in sales and lengthy sales cycles, (m) software innovation, (n) competition, (o) market acceptance of our software innovations, (p) maintaining our corporate culture, (q) personnel risks including loss of any key employees and competition for talent, (r) expanding and training our direct and indirect sales force, (s) evolving data privacy, cyber security, data localization and AI laws, (t) the rapid adoption, evolution, and understanding of AI, (u) our debt repayment obligations, (v) the timing of revenue recognition and cash flow from operations, and (w) returning to profitability. Additional information relating to the risks and uncertainties affecting our business is contained in our filings with the SEC. These forward-looking statements represent our expectations as of the date hereof. Subsequent events may cause these expectations to change, and PROS disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

PROS has provided in this release certain non-GAAP financial measures, including non-GAAP gross profit and margin, non-GAAP subscription margin, non-GAAP income (loss) from operations or non-GAAP operating income (loss), subscription annual recurring revenue, adjusted EBITDA, free cash flow, non-GAAP tax rate, non-GAAP net income (loss), and non-GAAP earnings (loss) per share. PROS uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating PROS ongoing operational performance and cloud transition. Non-GAAP gross margin can be compared to gross margin which can be calculated from the condensed consolidated statements of income (loss) by dividing gross profit by total revenue. Non-GAAP gross margin is similarly calculated but first adds back to gross profit the portion of certain of the non-GAAP adjustments described below attributable to cost of revenue. Non-GAAP subscription margin can be compared to subscription margin which can be calculated from the condensed consolidated statements of income (loss) by dividing subscription gross profit (subscription revenue minus subscription cost) by subscription revenue. Non-GAAP subscription margin is similarly calculated but first subtracts out from subscription cost the portion of certain of the non-GAAP adjustments described below attributable to cost of subscription. These items and amounts are presented in the Supplemental Schedule of Non-GAAP Financial Measures.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. A reconciliation of GAAP financial measures to the non-GAAP financial measures has been provided in the tables included as part of this press release, and can be found, along with other financial information, in the investor relations portion of our website. PROS use of non-GAAP financial measures may not be consistent with the presentations by similar companies in PROS industry. PROS has also provided in this release certain forward-looking non-GAAP financial measures, including non-GAAP income (loss) from operations, subscription annual recurring revenue, non-GAAP earnings (loss) per share, adjusted EBITDA, free cash flow, non-GAAP tax rates, and calculated billings (collectively the “non-GAAP financial measures”) as follows:

Non-GAAP income (loss) from operations:Non-GAAP income (loss) from operations excludes the impact of share-based compensation, amortization of acquisition-related intangibles and severance. Non-GAAP income (loss) from operations excludes the following items from non-GAAP estimates:

Share-Based Compensation: Although share-based compensation is an important aspect of compensation for our employees and executives, our share-based compensation expense can vary because of changes in our stock price and market conditions at the time of grant, varying valuation methodologies, and the variety of award types. Since share-based compensation expense can vary for reasons that are generally unrelated to our performance during any particular period, we believe this could make it difficult for investors to compare our current financial results to previous and future periods. Therefore, we believe it is useful to exclude share-based compensation in order to better understand our business performance and allow investors to compare our operating results with peer companies.

Amortization of Acquisition-Related Intangibles: We view amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, customer lists and customer relationships, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.

Severance:Severance related to costs incurred as the Company reprioritized its investments to focus on supporting key growth areas of its business. As a result of this reprioritization, the Company incurred severance, employee benefits, outplacement and related costs. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Non-GAAP earnings (loss) per share: Non-GAAP net income (loss) excludes the items listed above as excluded from non-GAAP income (loss) from operations and also excludes amortization of debt premium and issuance costs, (gain) loss on equity investments, net, loss on derivatives, loss on debt extinguishment and the taxes related to these items and the items excluded from non-GAAP income (loss) from operations. Estimates of non-GAAP earnings (loss) per share are calculated by dividing estimates for non-GAAP net income (loss) by our estimate of weighted average shares outstanding for the future period. In addition to the items listed above as excluded from non-GAAP income (loss) from operations, non-GAAP net income (loss) excludes the following items from non-GAAP estimates:

Amortization of Debt Premium and Issuance Costs:Amortization of debt premium and issuance costs are related to our convertible notes. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

(Gain) Loss on Equity Investments, net: (Gain) loss on equity investments, net relate to observable price changes for equity investments without a readily determinable fair value identified during the quarter ended December 31, 2023, including other-than temporary loss. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Loss on Derivatives:Loss on derivatives relates to mark to market features identified as part of the exchange of certain of our convertible notes (the “Exchange”) and related capped call, non-recurring transactions, during the quarter ended September 30, 2023. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Loss on Debt Extinguishment: Loss on debt extinguishment relates to the Exchange, a non-recurring transaction, during the quarter ended September 30, 2023. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Taxes: We exclude the tax consequences associated with non-GAAP items to provide investors with a useful comparison of our operating results to prior periods and to our peer companies because such amounts can vary significantly. In the fourth quarter of 2014, we concluded that it is more likely than not that we will be unable to fully realize our deferred tax assets and accordingly, established a valuation allowance against those assets. The ongoing impact of the valuation allowance on our non-GAAP effective tax rate has been eliminated to allow investors to better understand our business performance and compare our operating results with peer companies.

Subscription Annual Recurring Revenue: Subscription Annual Recurring Revenue (“subscription ARR”) is used to assess the trajectory of our cloud business. Subscription ARR means, as of a specified date, the contracted subscription revenue, including contracts with a future start date, together with annualized overage fees incurred above contracted minimum transactions. Subscription ARR should be viewed independently of revenue and any other GAAP measure.

Non-GAAP Tax Rate: The estimated non-GAAP effective tax rate adjusts the tax effect to quantify the impact of the excluded non-GAAP items.

Adjusted EBITDA:Adjusted EBITDA is defined as GAAP net income (loss) before interest expense, provision for income taxes, depreciation and amortization, as adjusted to eliminate the effect of stock-based compensation cost, severance, amortization of acquisition-related intangibles, depreciation and amortization, and capitalized internal-use software development costs. Adjusted EBITDA should not be considered as an alternative to net income (loss) as an indicator of our operating performance.

Free Cash Flow:Free cash flow is a non-GAAP financial measure which is defined as net cash provided by (used in) operating activities, excluding severance payments, less capital expenditures and capitalized internal-use software development costs.

Calculated Billings:Calculated billings is defined as total subscription, maintenance and support revenue plus the change in recurring deferred revenue in a given period.

These non-GAAP estimates are not measurements of financial performance prepared in accordance with GAAP, and we are unable to reconcile these forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information described above which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

PROS Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

December 31, 2024

December 31, 2023

Assets:

Current assets:

Cash and cash equivalents

$

161,983

$

168,747

Trade and other receivables, net of allowance of $922 and $574, respectively

64,982

49,058

Deferred costs, current

4,634

4,856

Prepaid and other current assets

7,517

12,013

Total current assets

239,116

234,674

Restricted cash

10,000

10,000

Property and equipment, net

19,745

23,051

Operating lease right-of-use assets

16,066

14,801

Deferred costs, noncurrent

11,515

10,292

Intangibles, net

7,044

11,678

Goodwill

107,278

107,860

Other assets, noncurrent

9,138

9,477

Total assets

$

419,902

$

421,833

Liabilities and Stockholders’ (Deficit) Equity:

Current liabilities:

Accounts payable and other liabilities

$

8,589

$

3,034

Accrued liabilities

14,085

13,257

Accrued payroll and other employee benefits

27,117

32,762

Operating lease liabilities, current

6,227

5,655

Deferred revenue, current

130,977

120,955

Current portion of convertible debt, net

—

21,668

Total current liabilities

186,995

197,331

Deferred revenue, noncurrent

5,438

3,669

Convertible debt, net, noncurrent

270,797

272,324

Operating lease liabilities, noncurrent

23,870

25,118

Other liabilities, noncurrent

1,505

1,264

Total liabilities

488,605

499,706

Stockholders’ (deficit) equity:

Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued

—

—

Common stock, $0.001 par value, 75,000,000 shares authorized; 52,083,732

and 51,184,584 shares issued, respectively; 47,403,009 and 46,503,861 shares outstanding, respectively

52

51

Additional paid-in capital

634,212

604,084

Treasury stock, 4,680,723 common shares, at cost

(29,847

)

(29,847

)

Accumulated deficit

(667,727

)

(647,252

)

Accumulated other comprehensive loss

(5,393

)

(4,909

)

Total stockholders’ (deficit) equity

(68,703

)

(77,873

)

Total liabilities and stockholders’ (deficit) equity

$

419,902

$

421,833

PROS Holdings, Inc.

Condensed Consolidated Statements of Loss

(In thousands, except per share data)

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Revenue:

Subscription

$

69,255

$

60,764

$

266,272

$

234,024

Maintenance and support

3,153

4,460

13,494

19,958

Total subscription, maintenance and support

72,408

65,224

279,766

253,982

Services

12,561

12,260

50,606

49,726

Total revenue

84,969

77,484

330,372

303,708

Cost of revenue:

Subscription

14,229

14,550

57,882

57,212

Maintenance and support

1,716

1,776

7,027

7,703

Total cost of subscription, maintenance and support

15,945

16,326

64,909

64,915

Services

11,434

12,410

48,420

50,398

Total cost of revenue

27,379

28,736

113,329

115,313

Gross profit

57,590

48,748

217,043

188,395

Operating expenses:

Selling and marketing

21,755

21,175

88,048

92,389

Research and development

22,445

23,018

89,725

89,361

General and administrative

14,957

15,164

58,292

57,247

Loss from operations

(1,567

)

(10,609

)

(19,022

)

(50,602

)

Convertible debt interest and amortization

(1,125

)

(1,233

)

(4,596

)

(5,882

)

Other income, net

1,145

2,109

4,457

1,063

Loss before income tax provision

(1,547

)

(9,733

)

(19,161

)

(55,421

)

Income tax provision

420

462

1,314

933

Net loss

$

(1,967

)

$

(10,195

)

$

(20,475

)

$

(56,354

)

Net loss per share:

Basic and diluted

$

(0.04

)

$

(0.22

)

$

(0.43

)

$

(1.22

)

Weighted average number of shares:

Basic and diluted

47,349

46,370

47,116

46,155

PROS Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Operating activities:

Net loss

$

(1,967

)

$

(10,195

)

$

(20,475

)

$

(56,354

)

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

Depreciation and amortization

1,932

2,406

8,303

10,707

Amortization of debt premium and issuance costs

(307

)

(233

)

(1,203

)

861

Share-based compensation

10,535

10,768

40,754

42,357

Deferred income tax, net

(11

)

(63

)

(11

)

(63

)

Provision for credit losses

247

(107

)

299

(19

)

Gain on lease modification

—

—

(697

)

—

Loss on disposal of assets

10

6

784

57

(Gain) loss on equity investments, net

—

(828

)

—

(828

)

Loss on derivatives

—

146

—

4,489

Loss on debt extinguishment

—

—

—

1,779

Changes in operating assets and liabilities:

Trade and other receivables

(16,999

)

674

(16,211

)

(899

)

Deferred costs

(1,011

)

(1,055

)

(1,001

)

(351

)

Prepaid expenses and other assets

3,741

(1,378

)

4,899

(1,347

)

Operating lease right-of-use assets and liabilities

(288

)

(1,100

)

(2,126

)

(2,786

)

Accounts payable and other liabilities

3,940

(1,664

)

6,131

(5,039

)

Accrued liabilities

711

(766

)

1,798

723

Accrued payroll and other employee benefits

4,243

9,192

(5,663

)

8,950

Deferred revenue

19,237

8,041

11,802

7,640

Net cash provided by operating activities

24,013

13,844

27,383

9,877

Investing activities:

Purchases of property and equipment

(497

)

(375

)

(1,166

)

(2,543

)

Capitalized internal-use software development costs

—

(48

)

(58

)

(48

)

Investment in equity securities, net

118

—

5

(113

)

Net cash used in investing activities

(379

)

(423

)

(1,219

)

(2,704

)

Financing activities:

Proceeds from employee stock plans

—

—

2,079

2,170

Tax withholding related to net share settlement of stock awards

(1,408

)

(2,468

)

(12,704

)

(9,299

)

Debt issuance costs related to convertible debt

—

(2,198

)

—

(2,198

)

Purchase of Capped Call

—

578

—

(22,193

)

Repayment of convertible debt

—

—

(21,713

)

—

Debt issuance costs related to Credit Agreement

—

—

—

(837

)

Net cash used in financing activities

(1,408

)

(4,088

)

(32,338

)

(32,357

)

Effect of foreign currency rates on cash

(807

)

334

(590

)

304

Net change in cash, cash equivalents and restricted cash

21,419

9,667

(6,764

)

(24,880

)

Cash, cash equivalents and restricted cash:

Beginning of period

150,564

169,080

178,747

203,627

End of period

$

171,983

$

178,747

$

171,983

$

178,747

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets

Cash and cash equivalents

$

161,983

$

168,747

$

161,983

$

168,747

Restricted cash

10,000

10,000

10,000

10,000

Total cash, cash equivalents and restricted cash

$

171,983

$

178,747

$

171,983

$

178,747

PROS Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

We use these non-GAAP financial measures to assist in the management of the Company because we believe that this information provides a more consistent and complete understanding of the underlying results and trends of the ongoing business due to the uniqueness of these charges.

See breakdown of the reconciling line items on page 11.

Three Months Ended

December 31,

Quarter

over

Quarter

Year Ended December 31,

Year over

Year

2024

2023

% change

2024

2023

% change

GAAP gross profit

$

57,590

$

48,748

18

%

$

217,043

$

188,395

15

%

Non-GAAP adjustments:

Amortization of acquisition-related intangibles

629

953

3,273

4,632

Severance

—

—

—

749

Share-based compensation

1,180

1,073

4,576

3,923

Non-GAAP gross profit

$

59,399

$

50,774

17

%

$

224,892

$

197,699

14

%

Non-GAAP gross margin

69.9

%

65.5

%

68.1

%

65.1

%

GAAP loss from operations

$

(1,567

)

$

(10,609

)

(85

)%

$

(19,022

)

$

(50,602

)

(62

)%

Non-GAAP adjustments:

Amortization of acquisition-related intangibles

953

1,301

4,628

6,173

Severance

—

—

—

3,586

Share-based compensation

10,535

10,768

40,754

42,357

Total non-GAAP adjustments

11,488

12,069

45,382

52,116

Non-GAAP income from operations

$

9,921

$

1,460

580

%

$

26,360

$

1,514

1,641

%

Non-GAAP income from operations % of total revenue

11.7

%

1.9

%

8.0

%

0.5

%

GAAP net loss

$

(1,967

)

$

(10,195

)

(81

)%

$

(20,475

)

$

(56,354

)

(64

)%

Non-GAAP adjustments:

Total non-GAAP adjustments affecting loss from operations

11,488

12,069

45,382

52,116

Amortization of debt premium and issuance costs

(377

)

(303

)

(1,482

)

737

(Gain) loss on equity investments, net

—

(828

)

—

(828

)

Loss on derivatives

—

146

—

4,489

Loss on debt extinguishment

—

—

—

1,779

Tax impact related to non-GAAP adjustments

(1,685

)

164

(4,129

)

301

Non-GAAP net income

$

7,459

$

1,053

608

%

$

19,296

$

2,240

761

%

Non-GAAP earnings per share

$

0.16

$

0.02

$

0.41

$

0.05

Shares used in computing non-GAAP earnings per share

47,534

47,786

47,579

47,139

PROS Holdings, Inc.

Supplemental Schedule of Non-GAAP Financial Measures

Increase (Decrease) in GAAP Amounts Reported

(In thousands)

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Cost of Subscription Items

Amortization of acquisition-related intangibles

629

953

3,273

4,632

Severance

—

—

—

125

Share-based compensation

239

208

920

703

Total cost of subscription items

$

868

$

1,161

$

4,193

$

5,460

Cost of Maintenance Items

Severance

—

—

—

307

Share-based compensation

102

93

433

364

Total cost of maintenance items

$

102

$

93

$

433

$

671

Cost of Services Items

Severance

—

—

—

317

Share-based compensation

839

772

3,223

2,856

Total cost of services items

$

839

$

772

$

3,223

$

3,173

Sales and Marketing Items

Amortization of acquisition-related intangibles

324

348

1,355

1,541

Severance

—

—

—

1,595

Share-based compensation

2,469

2,811

9,209

11,834

Total sales and marketing items

$

2,793

$

3,159

$

10,564

$

14,970

Research and Development Items

Severance

—

—

—

1,008

Share-based compensation

2,256

2,684

8,799

10,524

Total research and development items

$

2,256

$

2,684

$

8,799

$

11,532

General and Administrative Items

Severance

—

—

—

234

Share-based compensation

4,630

4,200

18,170

16,076

Total general and administrative items

$

4,630

$

4,200

$

18,170

$

16,310

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Adjusted EBITDA

GAAP Loss from Operations

$

(1,567

)

$

(10,609

)

$

(19,022

)

$

(50,602

)

Amortization of acquisition-related intangibles

953

1,301

4,628

6,173

Severance

—

—

—

3,586

Share-based compensation

10,535

10,768

40,754

42,357

Depreciation and other amortization

979

1,105

3,675

4,534

Capitalized internal-use software development costs

—

(48

)

(58

)

(48

)

Adjusted EBITDA

$

10,900

$

2,517

$

29,977

$

6,000

Net Cash Provided by Operating Activities

$

24,013

$

13,844

$

27,383

$

9,877

Severance

—

211

—

4,081

Purchase of property and equipment

(497

)

(375

)

(1,166

)

(2,543

)

Capitalized internal-use software development costs

—

(48

)

(58

)

(48

)

Free Cash Flow

$

23,516

$

13,632

$

26,159

$

11,367

Guidance

Q1 2025 Guidance

Full Year 2025 Guidance

Low

High

Low

High

Adjusted EBITDA

GAAP Loss from Operations

$

(5,400

)

$

(4,400

)

$

(13,300

)

$

(11,300

)

Amortization of acquisition-related intangibles

1,000

1,000

3,700

3,700

Share-based compensation

11,000

11,000

48,000

48,000

Depreciation and other amortization

900

900

3,600

3,600

Adjusted EBITDA

$

7,500

$

8,500

$

42,000

$

44,000

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures (Continued)

(In thousands)

(Unaudited)

Three Months Ended

December 31,

Quarter

over

Quarter

Year Ended December 31,

Year over

Year

2024

2023

% change

2024

2023

% change

GAAP subscription gross profit

$

55,026

$

46,214

19

%

$

208,390

$

176,812

18

%

Non-GAAP adjustments:

Amortization of acquisition-related intangibles

629

953

3,273

4,632

Severance

—

—

—

125

Share-based compensation

239

208

920

703

Non-GAAP subscription gross profit

$

55,894

$

47,375

18

%

$

212,583

$

182,272

17

%

Non-GAAP subscription gross margin

80.7

%

78.0

%

79.8

%

77.9

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206040651/en/

Investor Contact:

PROS Investor Relations

Belinda Overdeput

713-335-5879

[email protected]

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Software Digital Marketing Other Communications Search Engine Marketing Artificial Intelligence Data Management Communications Technology

MEDIA:

Logo

Posted on February 6, 2025 4:48 pm
Powell Industries Announces First Quarter Fiscal 2025 Results

HOUSTON, Feb. 06, 2025 (GLOBE NEWSWIRE) — Powell Industries, Inc. (NASDAQ: POWL), a leading supplier of custom-engineered solutions for the management, control and distribution of electrical energy, today announced results for the first quarter fiscal 2025 ended December 31, 2024. All comparisons are to the first quarter of fiscal 2024, unless otherwise noted.

First Quarter Key Financial Highlights:

Revenues totaled $241 million, an increase of 24%;

Gross profit of $60 million, or 24.7% of revenue;

Net income of $35 million, or $2.86 per diluted share, increased 44%;

New orders⁽¹⁾ totaled $269 million;

Backlog⁽²⁾ as of December 31, 2024 remained at $1.3 billion;

Cash and short-term investments as of December 31, 2024 totaled $373 million.

Brett A. Cope, Powell’s Chairman and Chief Executive Officer, stated, “Powell recorded a strong start to Fiscal 2025 highlighted by new order growth of 36%. We saw strong order activity across each of our market sectors, as our Electric Utility and Oil & Gas markets continue to benefit from robust tailwinds that support our expectation for volume growth in 2025. We were awarded a large LNG project situated along the U.S. Gulf Coast during the quarter as we expect this market sector to see improved activity levels relative to Fiscal 2024. Revenue also grew 24% and we delivered earnings per diluted share of $2.86 despite what is typically a seasonally softer first quarter. Overall, we remain very encouraged by both our backlog as well as the volume and composition of projects in our pipeline.”

First Quarter Fiscal 2025 Results
Revenues totaled $241.4 million, an increase of 24% compared to $194.0 million in the prior year, and a 12% decline compared to $275.1 million in the fourth quarter of Fiscal 2024, as the first quarter has historically been seasonally lower than the remainder of the fiscal year. The increase compared to the prior year was driven by higher revenue levels across all major market sectors. Revenue from the Oil & Gas sector increased 14% to $95.7 million, while revenue from the Electric Utility and Commercial & Other Industrial sectors grew 26% to $51.2 million and 80% to $44.3 million, respectively.

Gross profit of $59.5 million, or 24.7% of revenue, increased 24% compared to $48.2 million, or 24.8% of revenue, in the prior year, but decreased 26% compared to $80.4 million, or 29.2% of revenue, in the fourth quarter. Gross margin improved compared to the prior year, primarily due to higher revenues with the gross profit margin percentage remaining flat, while the sequential decline in gross margin was mainly driven by typical seasonality we have historically experienced during the first fiscal quarter.

New orders totaled $269 million compared to $198 million in the prior year and $267 million in the fourth quarter. The growth compared to the prior year was driven by robust order activity in the Oil & Gas market sector as well as strong bookings within the Electric Utility market sector.

Backlog totaled $1.3 billion as of December 31, 2024, essentially remaining the same as the backlog at both September 30, 2024 and December 31, 2023.

Net income of $34.8 million, or $2.86 per diluted share, increased 44% compared to $24.1 million, or $1.98 per diluted share, in the prior year, and decreased 25% compared to $46.1 million, or $3.77 per diluted share, in the fourth quarter.

Cope added, “Our planned manufacturing capacity upgrades remain on track to be completed during the middle of fiscal 2025, which will help to facilitate organic growth within our targeted markets and commercialize new products. Our diversification efforts continue to present new opportunities and awards for Powell across markets such as data centers, utilities, carbon capture, hydrogen, and more. As a result, our backlog today is more diverse across market sectors than ever before, increasingly comprised of rapidly expanding applications for our custom-engineered products.”

OUTLOOK

Commenting on the Company’s outlook, Michael Metcalf, Powell’s Chief Financial Officer, said, “As we look ahead to the remainder of Fiscal 2025, we are encouraged by the sustained commercial momentum across our end markets through the first fiscal quarter, which has allowed us to maintain both the quality and quantity of our backlog. Combined with our ongoing focus on optimizing margin levers and the strength of our balance sheet, Powell is well-positioned to deliver robust revenue and earnings throughout the rest of Fiscal 2025.”

CONFERENCE CALL

Powell Industries has scheduled a conference call for Friday, February 7, 2025 at 11:00 a.m. Eastern time. To participate in the conference call, dial 1-833-953-2431 (domestic) or 1-412-317-5760 (international) at least 10 minutes before the call begins and ask for the Powell Industries conference call. A telephonic replay of the conference call will be available through February 14, 2025 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using passcode 2987033#.

Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting powellind.com. To listen to the live call on the web, please visit the website at least 15 minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 90 days at powellind.com.

About Powell Industries

Powell Industries, Inc., headquartered in Houston, Texas, develops, designs, manufactures and services custom-engineered equipment and systems that distribute, control and monitor the flow of electrical energy and provide protection to motors, transformers and other electrically powered equipment. Powell Industries, Inc. primarily serves the oil and gas and petrochemical markets, the electric utility market, and commercial and other industrial markets. Beyond these major markets, we also provide products and services to the light rail traction power market and other markets that include universities and government entities. We are continuously developing new channels to electrical markets through original equipment manufacturers and distribution market channels. For more information, please visit powellind.com.

Any forward-looking statements in the preceding paragraphs of this release, including those related to our outlook, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties in that actual results may differ materially from those projected in the forward-looking statements. In the course of operations, we are subject to certain risk factors, competition and competitive pressures, sensitivity to general economic and industrial conditions, international political and economic risks, availability and price of raw materials and execution of business strategy. For further information, please refer to the Company’s filings with the Securities and Exchange Commission, copies of which are available from the Company without charge.

POWELL INDUSTRIES, INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended December 31,

2024 2023

(In thousands, except per share data)

(Unaudited)

Revenues $ 241,431 $ 194,017

Cost of goods sold 181,907 145,823

Gross profit 59,524 48,194

Selling, general and administrative expenses 21,476 20,347

Research and development expenses 2,476 1,967

Operating income 35,572 25,880

Other expenses (income):

Interest income, net (3,865) (3,998)

Income before income taxes 39,437 29,878

Income tax provision 4,674 5,793

Net income $ 34,763 $ 24,085

Earnings per share:

Basic $ 2.89 $ 2.02

Diluted $ 2.86 $ 1.98

Weighted average shares:

Basic 12,037 11,941

Diluted 12,152 12,174

SELECTED FINANCIAL DATA:

Depreciation $ 1,755 $ 1,641

Capital Expenditures $ 2,189 $ 1,235

Dividends Paid $ 3,185 $ 3,124

POWELL INDUSTRIES, INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2024 September 30, 2024

(In thousands)

(Unaudited)

Assets:

Cash, cash equivalents and short-term investments $ 373,397 $ 358,392

Other current assets 388,539 418,089

Property, plant and equipment, net 101,957
103,421

Long-term assets 48,782 48,278

Total assets $ 912,675 $ 928,180

Liabilities and equity:

Current liabilities $ 396,669
$ 428,015

Deferred and other long-term liabilities 19,674 17,092

Stockholders’ equity 496,332 483,073

Total liabilities and stockholders’ equity $ 912,675 $ 928,180

SELECTED FINANCIAL DATA:

Working capital $ 365,267 $ 348,466

^{(1) New orders (bookings) represent the estimated value of contracts added to existing backlog (unsatisfied performance obligations).}

^{(2) The amounts recorded in backlog may not be a reliable indicator of our future operating results and may not be indicative of continuing revenue performance over future fiscal quarters or years primarily due to unexpected contract adjustments, cancellations or scope reductions.}

Contacts: Michael W. Metcalf, CFO

Powell Industries, Inc.

713-947-4422

Robert Winters or Ryan Coleman

Alpha IR Group

[email protected]

312-445-2870

Posted on February 6, 2025 4:48 pm
Cloudflare Announces Fourth Quarter and Fiscal Year 2024 Financial Results

Cloudflare Announces Fourth Quarter and Fiscal Year 2024 Financial Results

Fourth quarter revenue totaled $459.9 million, representing an increase of 27% year-over-year; fiscal year 2024 revenue totaled $1,669.6 million, representing an increase of 29% year-over-year

GAAP loss from operations of $34.7 million, or 7.5% of total revenue, and non-GAAP income from operations of $67.2 million, or 14.6% of total revenue

Customers spending more than $1 million grew to 173, representing a 47% increase year-over-year

SAN FRANCISCO–(BUSINESS WIRE)–
Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced financial results for its fourth quarter and fiscal year ended December 31, 2024.

“We had a very strong end of 2024. We saw record growth in our largest customers, those that spend more than $1 million with Cloudflare per year—closing the year with 173. We added 55 of those customers in 2024, and more than half of these new additions came in during fourth quarter alone,” said Matthew Prince, co-founder & CEO of Cloudflare. “I’m proud of how our team continued to deliver ground-breaking innovation, especially in AI, and remained focused on delivering real ROI for customers. We drove the record results in the fourth quarter while ensuring we’re well-positioned to capture the demand we see lined up in 2025 to reaccelerate Cloudflare’s growth.”

Fourth Quarter 2024 Financial Highlights

Revenue: Total revenue of $459.9 million representing an increase of 27% year-over-year.

Gross Profit: GAAP gross profit was $351.3 million, or 76.4% gross margin, compared to $279.2 million, or 77.0%, in the fourth quarter of 2023. Non-GAAP gross profit was $356.8 million, or 77.6% gross margin, compared to $286.0 million, or 78.9%, in the fourth quarter of 2023.

Operating Income (Loss): GAAP loss from operations was $34.7 million, or 7.5% of total revenue, compared to $42.8 million, or 11.8% of total revenue, in the fourth quarter of 2023. Non-GAAP income from operations was $67.2 million, or 14.6% of total revenue, compared to $39.8 million, or 11.0% of total revenue, in the fourth quarter of 2023.

Net Income (Loss): GAAP net loss was $12.8 million, compared to $27.9 million in the fourth quarter of 2023. GAAP net loss per basic and diluted share was $0.04 compared to $0.08 in the fourth quarter of 2023. Non-GAAP net income was $68.8 million, compared to $53.5 million in the fourth quarter of 2023. Non-GAAP net income per diluted share was $0.19, compared to $0.15 in the fourth quarter of 2023.

Cash Flow: Net cash flow from operating activities was $127.3 million, compared to $85.4 million for the fourth quarter of 2023. Free cash flow was $47.8 million, or 10% of total revenue, compared to $50.7 million, or 14% of total revenue, in the fourth quarter of 2023.

Cash, cash equivalents, and available-for-sale securities were $1,855.9 million as of December 31, 2024.

Full Year 2024 Financial Highlights

Revenue: Total revenue of $1,669.6 million representing an increase of 29% year-over-year.

Gross Profit: GAAP gross profit was $1,290.9 million, or 77.3% gross margin, compared to $989.7 million, or 76.3%, in fiscal 2023. Non-GAAP gross profit was $1,313.6 million, or 78.7% gross margin, compared to $1,015.8 million, or 78.3%, in fiscal 2023.

Operating Income (Loss): GAAP loss from operations was $154.8 million, or 9.3% of total revenue, compared to $185.5 million or 14.3% of total revenue, in fiscal 2023. Non-GAAP income from operations was $230.1 million, or 13.8% of total revenue, compared to $122.0 million, or 9.4% of total revenue, in fiscal 2023.

Net Income (Loss): GAAP net loss was $78.8 million compared to $183.9 million for fiscal 2023. GAAP net loss per basic and diluted share was $0.23, compared to $0.55 for fiscal 2023. Non-GAAP net income was $269.0 million compared to $169.7 million for fiscal 2023. Non-GAAP net income per diluted share was $0.75, compared to $0.49 for fiscal 2023.

Cash Flow: Net cash flow from operating activities was $380.4 million, compared to $254.4 million for fiscal 2023. Free cash flow was $166.9 million, or 10% of total revenue, compared to $119.5 million, or 9% of total revenue, for fiscal 2023.

The section titled “Non-GAAP Financial Information” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

Financial Outlook

For the first quarter of 2025, we expect:

Total revenue of $468.0 to $469.0 million

Non-GAAP income from operations of $54.0 to $55.0 million

Non-GAAP net income per share of $0.16, utilizing weighted average common shares outstanding of approximately 362 million

For the full year 2025, we expect:

Total revenue of $2,090.0 to $2,094.0 million

Non-GAAP income from operations of $272.0 to $276.0 million

Non-GAAP net income per share of $0.79 to $0.80, utilizing weighted average common shares outstanding of approximately 366 million

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Conference Call Information

Cloudflare will host an investor conference call to discuss its fourth quarter and fiscal year ended December 31, 2024 earnings results today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). Interested parties can access the call by dialing (877) 400-4517 from the United States or (332) 251-2620 internationally with conference ID 3723782. A live webcast of the conference call will be accessible from the investor relations website at https://cloudflare.NET. A replay will be available approximately two hours after the conclusion of the live event and will remain available for approximately one year.

Supplemental Financial and Other Information

Supplemental financial and other information can be accessed through the Company’s investor relations website at https://cloudflare.NET.

Non-GAAP Financial Information

Cloudflare believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future. For further information regarding why Cloudflare believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section at the end of this press release.

Available Information

Cloudflare intends to use its press releases, website, investor relations website, news site, blog, X account, Facebook account, and Instagram account, in addition to filings made with the Securities and Exchange Commission (SEC) and public conference calls, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release 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, which statements involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “explore,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. However, not all forward-looking statements contain these identifying words. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements regarding our future financial and operating performance, our reputation and performance in the market, general market trends, our estimated and projected revenue, non-GAAP income from operations and non-GAAP net income per share, shares outstanding, the benefits to customers from using our products, the expected functionality and performance of our products, the demand by customers for our products, our plans and objectives for future operations, growth, initiatives, or strategies, our market opportunity, and comments made by our CEO and others. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the impact of adverse macroeconomic conditions on our and our customers’, vendors’, and partners’ operations and future financial performance; the impact of the conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world, or any potential worsening or expansion of those conflicts or geopolitical tensions and other geopolitical events such as elections and other governmental changes; our history of net losses; risks associated with managing our growth; our ability to attract and retain new customers (including new large customers); our ability to retain and upgrade paying customers and convert free customers to paying customers; our ability to expand the number of products we sell to paying customers; our ability to effectively increase sales to large customers; our ability to increase brand awareness; our ability to continue to innovate and develop new products and product features; our ability to generate demand for our products; our ability to effectively attract, train, and retain our sales force to be able to sell our existing and new products and product features; our sales team’s productivity; our ability to effectively attract, integrate and retain key personnel; problems with our internal systems, network, or data, including actual or perceived breaches or failures; rapidly evolving technological developments in the market, including advancements in AI; length of our sales cycles and the timing of payments by our customers; activities of our paying and free customers or the content of their websites and other Internet properties that use our network and products; foreign currency fluctuations; changes in the legal, tax, and regulatory environment applicable to our business; and other general market, political, economic, and business conditions. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Quarterly Report on Form 10-Q filed on November 7, 2024, as well as other filings that we may make from time to time with the SEC.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

About Cloudflare

Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company on a mission to help build a better Internet. It empowers organizations to make their employees, applications and networks faster and more secure everywhere, while reducing complexity and cost. Cloudflare’s connectivity cloud delivers the most full-featured, unified platform of cloud-native products and developer tools, so any organization can gain the control they need to work, develop, and accelerate their business.

Powered by one of the world’s largest and most interconnected networks, Cloudflare blocks billions of threats online for its customers every day. It is trusted by millions of organizations – from the largest brands to entrepreneurs and small businesses to nonprofits, humanitarian groups, and governments across the globe.

Learn more about Cloudflare’s connectivity cloud at cloudflare.com/connectivity-cloud. Learn more about the latest Internet trends and insights at radar.cloudflare.com.

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Revenue

$

459,946

$

362,473

$

1,669,626

$

1,296,745

Cost of revenue⁽¹⁾⁽²⁾

108,686

83,283

378,702

307,005

Gross profit

351,260

279,190

1,290,924

989,740

Operating expenses:

Sales and marketing^(1)(2)(4)

191,967

165,214

745,791

599,117

Research and development⁽¹⁾

120,213

96,401

421,374

358,143

General and administrative⁽¹⁾⁽³⁾

73,799

60,404

278,520

217,965

Total operating expenses

385,979

322,019

1,445,685

1,175,225

Loss from operations

(34,719

)

(42,829

)

(154,761

)

(185,485

)

Non-operating income (expense):

Interest income

21,988

20,190

87,426

68,167

Interest expense⁽⁵⁾

(1,445

)

(1,069

)

(5,196

)

(5,872

)

Loss on extinguishment of debt

—

—

—

(50,300

)

Other income (expense), net

3,333

(2,103

)

1,660

(4,372

)

Total non-operating income, net

23,876

17,018

83,890

7,623

Loss before income taxes

(10,843

)

(25,811

)

(70,871

)

(177,862

)

Provision for income taxes

2,005

2,054

7,929

6,087

Net loss

$

(12,848

)

$

(27,865

)

$

(78,800

)

$

(183,949

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.04

)

$

(0.08

)

$

(0.23

)

$

(0.55

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

344,003

336,578

341,411

333,656

____________

(1) Includes stock-based compensation and related employer payroll taxes as follows:

Cost of revenue

$

2,821

$

2,064

$

11,597

$

8,360

Sales and marketing

24,682

19,435

95,763

76,711

Research and development

45,391

36,932

151,936

140,074

General and administrative

25,528

18,873

97,127

62,355

Total stock-based compensation and related employer payroll taxes

$

98,422

$

77,304

$

356,423

$

287,500

(2) Includes amortization of acquired intangible assets as follows:

Cost of revenue

$

2,720

$

4,764

$

11,084

$

17,702

Sales and marketing

362

575

1,663

2,300

Total amortization of acquired intangible assets

$

3,082

$

5,339

$

12,747

$

20,002

(3) Includes acquisition-related and other expenses as follows:

General and administrative

$

462

$

—

$

702

$

—

Total acquisition-related and other expenses

$

462

$

—

$

702

$

—

(4) Includes one-time compensation charge as follows:

Sales and marketing

$

—

$

—

$

15,000

$

—

Total one-time compensation charge

$

—

$

—

$

15,000

$

—

(5) Includes amortization of debt issuance costs as follows:

Interest expense

$

989

$

990

$

3,959

$

4,519

Total amortization of debt issuance costs

$

989

$

990

$

3,959

$

4,519

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)

December 31,

2024

December 31,

2023

Assets

Current assets:

Cash and cash equivalents

$

147,691

$

86,864

Available-for-sale securities

1,708,228

1,586,880

Accounts receivable, net

316,753

248,268

Contract assets

16,568

11,041

Restricted cash short-term

4,273

2,522

Prepaid expenses and other current assets

75,484

47,502

Total current assets

2,268,997

1,983,077

Property and equipment, net

467,420

322,813

Goodwill

181,087

148,047

Acquired intangible assets, net

21,865

19,564

Operating lease right-of-use assets

168,379

138,556

Deferred contract acquisition costs, noncurrent

172,217

133,236

Restricted cash

2,250

1,838

Other noncurrent assets

18,947

12,636

Total assets

$

3,301,162

$

2,759,767

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

105,807

$

53,727

Accrued expenses and other current liabilities

81,602

63,597

Accrued compensation

80,854

63,801

Operating lease liabilities

47,626

38,351

Deferred revenue

477,765

347,608

Total current liabilities

793,654

567,084

Convertible senior notes, net

1,287,321

1,283,362

Operating lease liabilities, noncurrent

128,266

113,490

Deferred revenue, noncurrent

22,095

17,244

Other noncurrent liabilities

23,625

15,540

Total liabilities

2,254,961

1,996,720

Stockholders’ Equity

Class A common stock; $0.001 par value; 2,250,000 shares authorized as of December 31, 2024 and 2023; 307,892 and 298,089 shares issued and outstanding as of December 31, 2024 and 2023, respectively

307

297

Class B common stock; $0.001 par value; 315,000 shares authorized as of December 31, 2024 and 2023; 36,963 and 39,443 shares issued and outstanding as of December 31, 2024 and 2023, respectively

37

40

Additional paid-in capital

2,152,750

1,784,566

Accumulated deficit

(1,102,640

)

(1,023,840

)

Accumulated other comprehensive income (loss)

(4,253

)

1,984

Total stockholders’ equity

1,046,201

763,047

Total liabilities and stockholders’ equity

$

3,301,162

$

2,759,767

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Year ended December 31,

2024

2023

Cash Flows from Operating Activities

Net loss

$

(78,800

)

$

(183,949

)

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

Depreciation and amortization expense

127,722

135,820

Non-cash operating lease costs

49,476

44,792

Amortization of deferred contract acquisition costs

77,822

61,374

Stock-based compensation expense

338,461

273,989

Amortization of debt issuance costs

3,959

4,519

Net accretion of discounts and amortization of premiums on available-for-sale securities

(42,081

)

(44,441

)

Deferred income taxes

2,111

2,264

Provision for bad debt

10,038

13,637

Loss on extinguishment of debt

—

50,300

Other

643

829

Changes in operating assets and liabilities, net of effect of asset acquisitions and business combinations:

Accounts receivable, net

(78,523

)

(113,361

)

Contract assets

(5,527

)

(2,749

)

Deferred contract acquisition costs

(116,803

)

(101,465

)

Prepaid expenses and other current assets

(38,227

)

(22,125

)

Other noncurrent assets

2,170

1,018

Accounts payable

18,626

11,781

Accrued expenses and other current liabilities

9,900

4,001

Accrued compensation

18,742

21,787

Operating lease liabilities

(55,248

)

(40,046

)

Deferred revenue

135,008

134,473

Other noncurrent liabilities

960

1,958

Net cash provided by operating activities

380,429

254,406

Cash Flows from Investing Activities

Purchases of property and equipment

(185,037

)

(114,396

)

Capitalized internal-use software

(28,477

)

(20,546

)

Asset acquisitions and business combinations, net of cash acquired

(37,991

)

(6,083

)

Purchases of available-for-sale securities

(1,572,113

)

(1,877,513

)

Sales of available-for-sale securities

—

20,248

Maturities of available-for-sale securities

1,493,356

1,812,015

Other investing activities

38

74

Net cash used in investing activities

(330,224

)

(186,201

)

Cash Flows from Financing Activities

Repayments of convertible senior notes

—

(207,649

)

Cash paid for issuance costs on revolving credit facility

(2,148

)

—

Proceeds from the exercise of stock options

12,905

14,851

Proceeds from the early exercise of stock options

6

—

Repurchases of unvested common stock

—

(34

)

Proceeds from the issuance of common stock for employee stock purchase plan

19,796

19,083

Payment of tax withholding obligation on RSU settlement

(16,774

)

(7,953

)

Payment of indemnity holdback

(1,000

)

(10,483

)

Net cash provided by (used in) financing activities

12,785

(192,185

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

62,990

(123,980

)

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

91,224

215,204

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

$

154,214

$

91,224

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Reconciliation of cost of revenue:

GAAP cost of revenue

$

108,686

$

83,283

$

378,702

$

307,005

Less: Stock-based compensation and related employer payroll taxes

(2,821

)

(2,064

)

(11,597

)

(8,360

)

Less: Amortization of acquired intangible assets

(2,720

)

(4,764

)

(11,084

)

(17,702

)

Non-GAAP cost of revenue

$

103,145

$

76,455

$

356,021

$

280,943

Reconciliation of gross profit:

GAAP gross profit

$

351,260

$

279,190

$

1,290,924

$

989,740

Add: Stock-based compensation and related employer payroll taxes

2,821

2,064

11,597

8,360

Add: Amortization of acquired intangible assets

2,720

4,764

11,084

17,702

Non-GAAP gross profit

$

356,801

$

286,018

$

1,313,605

$

1,015,802

GAAP gross margin

76.4

%

77.0

%

77.3

%

76.3

%

Non-GAAP gross margin

77.6

%

78.9

%

78.7

%

78.3

%

Reconciliation of operating expenses:

GAAP sales and marketing

$

191,967

$

165,214

$

745,791

$

599,117

Less: Stock-based compensation and related employer payroll taxes

(24,682

)

(19,435

)

(95,763

)

(76,711

)

Less: Amortization of acquired intangible assets

(362

)

(575

)

(1,663

)

(2,300

)

Less: One-time compensation charge

—

—

(15,000

)

—

Non-GAAP sales and marketing

$

166,923

$

145,204

$

633,365

$

520,106

GAAP research and development

$

120,213

$

96,401

$

421,374

$

358,143

Less: Stock-based compensation and related employer payroll taxes

(45,391

)

(36,932

)

(151,936

)

(140,074

)

Non-GAAP research and development

$

74,822

$

59,469

$

269,438

$

218,069

GAAP general and administrative

$

73,799

$

60,404

$

278,520

$

217,965

Less: Stock-based compensation and related employer payroll taxes

(25,528

)

(18,873

)

(97,127

)

(62,355

)

Less: Acquisition-related and other expenses

(462

)

—

(702

)

—

Non-GAAP general and administrative

$

47,809

$

41,531

$

180,691

$

155,610

Reconciliation of income (loss) from operations:

GAAP loss from operations

$

(34,719

)

$

(42,829

)

$

(154,761

)

$

(185,485

)

Add: Stock-based compensation and related employer payroll taxes

98,422

77,304

356,423

287,500

Add: Amortization of acquired intangible assets

3,082

5,339

12,747

20,002

Add: Acquisition-related and other expenses

462

—

702

—

Add: One-time compensation charge

—

—

15,000

—

Non-GAAP income from operations

$

67,247

$

39,814

$

230,111

$

122,017

GAAP operating margin

(7.5

)%

(11.8

)%

(9.3

)%

(14.3

)%

Non-GAAP operating margin

14.6

%

11.0

%

13.8

%

9.4

%

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Reconciliation of interest expense:

GAAP interest expense

$

(1,445

)

$

(1,069

)

$

(5,196

)

$

(5,872

)

Add: Amortization of debt issuance costs

989

990

3,959

4,519

Non-GAAP interest expense

$

(456

)

$

(79

)

$

(1,237

)

$

(1,353

)

Reconciliation of loss on extinguishment of debt:

GAAP loss on extinguishment of debt

$

—

$

—

$

—

$

(50,300

)

Add: Loss on extinguishment of debt

—

—

—

50,300

Non-GAAP loss on extinguishment of debt

$

—

$

—

$

—

$

—

Reconciliation of provision for income taxes:

GAAP provision for income taxes

$

2,005

$

2,054

$

7,929

$

6,087

Income tax effect of non-GAAP adjustments

21,300

2,244

41,018

8,698

Non-GAAP provision for income taxes

$

23,305

$

4,298

$

48,947

$

14,785

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Reconciliation of net income (loss) and net income (loss) per share:

GAAP net loss attributable to common stockholders

$

(12,848

)

$

(27,865

)

$

(78,800

)

$

(183,949

)

Add: Stock-based compensation and related employer payroll taxes

98,422

77,304

356,423

287,500

Add: Amortization of acquired intangible assets

3,082

5,339

12,747

20,002

Add: Acquisition-related and other expenses

462

—

702

—

Add: One-time compensation charge

—

—

15,000

—

Add: Amortization of debt issuance costs

989

990

3,959

4,519

Add: Loss on extinguishment of debt

—

—

—

50,300

Income tax effect of non-GAAP adjustments

(21,300

)

(2,244

)

(41,018

)

(8,698

)

Non-GAAP net income

$

68,807

$

53,524

$

269,013

$

169,674

GAAP net loss per share, basic

$

(0.04

)

$

(0.08

)

$

(0.23

)

$

(0.55

)

GAAP net loss per share, diluted

$

(0.04

)

$

(0.08

)

$

(0.23

)

$

(0.55

)

Add: Stock-based compensation and related employer payroll taxes

0.29

0.23

1.04

0.86

Add: Amortization of acquired intangible assets

0.01

0.02

0.04

0.06

Add: Acquisition-related and other expenses

—

—

—

—

Add: One-time compensation charge

—

—

0.04

—

Add: Amortization of debt issuance costs

—

—

0.01

0.01

Add: Loss on extinguishment of debt

—

—

—

0.15

Income tax effect of non-GAAP adjustments

(0.06

)

(0.01

)

(0.12

)

(0.03

)

Effect of dilutive shares

(0.01

)

(0.01

)

(0.03

)

(0.01

)

Non-GAAP net income per share, diluted⁽¹⁾⁽²⁾

$

0.19

$

0.15

$

0.75

$

0.49

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic

344,003

336,578

341,411

333,656

Weighted-average shares used in computing non-GAAP net income per share attributable to common stockholders, diluted

359,255

353,558

357,686

344,483

____________

(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Free cash flow

Net cash provided by operating activities

$

127,308

$

85,441

$

380,429

$

254,406

Less: Purchases of property and equipment

(73,153

)

(30,816

)

(185,037

)

(114,396

)

Less: Capitalized internal-use software

(6,401

)

(3,909

)

(28,477

)

(20,546

)

Free cash flow

$

47,754

$

50,716

$

166,915

$

119,464

Net cash used in investing activities

$

(167,032

)

$

(101,647

)

$

(330,224

)

$

(186,201

)

Net cash provided by (used in) financing activities

$

8,032

$

9,790

$

12,785

$

(192,185

)

Net cash provided by operating activities

(percentage of revenue)

28

%

24

%

23

%

20

%

Less: Purchases of property and equipment

(percentage of revenue)

(16

)%

(9

)%

(11

)%

(9

)%

Less: Capitalized internal-use software

(percentage of revenue)

(2

)%

(1

)%

(2

)%

(2

)%

Free cash flow margin⁽¹⁾

10

%

14

%

10

%

9

%

____________

(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States (U.S. GAAP), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided above for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Items Excluded from Non-GAAP Measures. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. We exclude employer payroll tax expenses related to stock-based compensation, which is a cash expense, from certain of our non-GAAP financial measures because such expenses are dependent on the price of our Class A common stock and other factors that are beyond our control and do not correlate to the operation of our business. We exclude amortization of acquired intangible assets, which is a non-cash expense, related to business combinations from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. We exclude acquisition-related and other expenses from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. Acquisition-related and other expenses can be cash or non-cash expenses and include third-party transaction costs and compensation expense for key acquired personnel. We also excluded the one-time cash compensation charge incurred during the three months ended March 31, 2024 from certain of our non-GAAP financial measures because it was not attributable to services provided and did not correlate to the ongoing operation of our business. We exclude amortization of debt issuance costs and loss on extinguishment of debt, which are non-cash expenses, from certain of our non-GAAP financial measures because such expenses have no direct correlation to the operation of our business.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit and non-GAAP gross margin as U.S. GAAP gross profit and U.S. GAAP gross margin, respectively, excluding stock-based compensation and related employer payroll taxes and amortization of acquired intangible assets.

Non-GAAP Income from Operations and Non-GAAP Operating Margin. We define non-GAAP income from operations and non-GAAP operating margin as U.S. GAAP loss from operations and U.S. GAAP operating margin, respectively, excluding stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses.

Non-GAAP Net Income and Non-GAAP Net Income per Share, Diluted. We define non-GAAP net income as GAAP net income (loss) adjusted for stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, amortization of issuance costs, loss on extinguishment of debt, and a non-GAAP provision for (benefit from) income taxes. Generally, the difference between our GAAP and non-GAAP income tax expense (benefit) is primarily due to adjustments in stock-based compensation and related employer payroll taxes, amortization of acquired intangibles associated with business combinations, acquisition-related and other expenses, and amortization of issuance costs. We define non-GAAP net income per share, diluted, as non-GAAP net income divided by the weighted-average common shares outstanding, adjusted for dilutive potential shares that were assumed outstanding during period. Currently, potential dilutive effect mainly consists of employee equity incentive plans and convertible senior notes. We believe that excluding these items from non-GAAP net income per share, diluted, provides management and investors with greater visibility into the underlying performance of our core business operating results.

Free Cash Flow and Free Cash Flow Margin. Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. Free cash flow margin is calculated as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property and equipment and capitalized internal-use software, can be used for strategic initiatives, including investing in our business, and strengthening our financial position. We believe that historical and future trends in free cash flow and free cash flow margin, even if negative, provide useful information about the amount of cash generated by our operating activities that is available (or not available) to be used for strategic initiatives. For example, if free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. One limitation of free cash flow and free cash flow margin is that they do not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206602406/en/

Investor Relations Information

Phil Winslow

[email protected]

Press Contact Information

Daniella Vallurupalli

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Security Technology Software Networks Artificial Intelligence Internet

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Posted on February 6, 2025 4:48 pm
Advance Auto Parts Appoints Jeff Vining as General Counsel

Advance Auto Parts Appoints Jeff Vining as General Counsel

RALEIGH, N.C.–(BUSINESS WIRE)–
Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installers and do-it-yourself customers, today announced that it has appointed Jeff Vining as executive vice president, general counsel and corporate secretary, effective March 2, 2025. In this role, Mr. Vining will be responsible for all aspects of the Company’s legal, corporate governance, and compliance functions. Jeff will report directly to Shane O’Kelly, president and chief executive officer.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250206973321/en/

Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installers and do-it-yourself customers, today announced that it has appointed Jeff Vining as executive vice president, general counsel and corporate secretary, effective March 2, 2025. (Photo: Business Wire)

Tammy Finley, who currently serves in this role, is retiring and will stay with Advance in an advisory capacity to support the transition. Tammy spent 27 years at Advance in the legal, human resources, and communications functions. She was vital in leading the company through almost three decades of growth and change management, and most recently, the divestiture of the Worldpac business.

“Jeff’s experience in supporting successful business transformations and driving efficiencies is critical for the success of our strategic action plan,” O’Kelly said. “We are thankful for Tammy’s many contributions over the years along with her passion for Advance and our team members. We wish her all the best as she retires.”

Mr. Vining brings more than 20 years of deep legal expertise within publicly traded companies, including key areas such as corporate governance, M&A, risk management, labor and employment, and litigation. Most recently, Mr. Vining served as general counsel and secretary at Unifi, Inc., where he was responsible for the company’s global legal functions and ensuring compliance with corporate governance requirements. A significant portion of his career was spent at Lowe’s Companies, Inc., where he served in senior roles including senior vice president, deputy general counsel, chief compliance officer, and assistant secretary. At Lowe’s, Mr. Vining’s passion for protecting the brand played a critical role in managing litigation, complex transactions, compliance, and enterprise risk management, while leading a team of more than 75 professionals.

Mr. Vining received his Doctorate of Jurisprudence at the University of Richmond School of Law in Richmond, Virginia, and his Bachelor of Science from James Madison University in Harrisonburg, Virginia.

About Advance Auto Parts

Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installers and do-it-yourself customers. As of October 5, 2024, Advance operated 4,781 stores primarily within the United States, with additional locations in Canada, Puerto Rico, and the U.S. Virgin Islands. The company also served 1,125 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com.

Forward-Looking Statements

Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast, “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about anticipated service of executives, the company’s strategic initiatives, operational plans and objectives, future business and financial performance, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect the company’s views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, the company’s ability to hire, train and retain qualified employees, the timing and implementation of strategic initiatives, deterioration of general macroeconomic conditions, geopolitical conflicts, the highly competitive nature of the industry, demand for the company’s products and services, access to financing on favorable terms, complexities in the company’s inventory and supply chain and challenges with transforming and growing its business. Please refer to “Item 1A. Risk Factors” of the company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by the company’s subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206973321/en/

Investor Relations Contact:

Lavesh Hemnani

T: (919) 227-5466

E: [email protected]

Media Contact:

Nicole Ducouer

T: (984)-389-7207

E: [email protected]

KEYWORDS: West Virginia Virginia North Carolina New York Florida District of Columbia United States North America Canada

INDUSTRY KEYWORDS: Aftermarket Retail Automotive Automotive Manufacturing General Automotive Manufacturing Specialty

MEDIA:

Photo

Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installers and do-it-yourself customers, today announced that it has appointed Jeff Vining as executive vice president, general counsel and corporate secretary, effective March 2, 2025. (Photo: Business Wire)

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Posted on February 6, 2025 4:46 pm
Eagle Point Income Company Inc. Schedules Release of Fourth Quarter 2024 and Year-End 2024 Financial Results on Thursday, February 20, 2025

Eagle Point Income Company Inc. Schedules Release of Fourth Quarter 2024 and Year-End 2024 Financial Results on Thursday, February 20, 2025

GREENWICH, Conn.–(BUSINESS WIRE)–
Eagle Point Income Company Inc. (the “Company”) (NYSE: EIC, EICA, EICB, EICC) today announced that it plans to report financial results for the quarter and fiscal year ended December 31, 2024 on Thursday, February 20, 2025.

The Company will discuss its financial results on a conference call on that day at 11:30 a.m. (Eastern Time). Thomas P. Majewski, Chairman and Chief Executive Officer, will host the call along with Lena Umnova, the Investment Adviser’s Chief Accounting Officer, and Daniel Ko, Portfolio Manager.

All interested parties are welcome to participate in the conference call via one of the following methods:

PHONE:

Dial (877) 704-4453 (domestic) or (201) 389-0920 (international), and reference Conference ID 13750807. All participants are asked to dial-in to the conference call 10 to 15 minutes prior to the call so that their name and company information can be collected.

INTERNET:

Please go to the Investor Relations section of the Company’s website (www.eaglepointincome.com) at least 15 minutes prior to the call to register for the call and download and install any necessary audio software.

REPLAY:

An archived replay of the call will be made available shortly after the call on the Investor Relations section of the Company’s website, and will remain available for approximately 30 days. A replay will also be available following the end of the call through Friday, March 21, 2025, by telephone at (844) 512-2921 (toll-free) or (412) 317-6671 (international), replay pin number 13750807.

ABOUT EAGLE POINT INCOME COMPANY

The Company is a diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in junior debt tranches of CLOs. In addition, the Company may invest up to 35% of its total assets (at the time of investment) in CLO equity securities. The Company is externally managed and advised by Eagle Point Income Management LLC.

The Company makes certain unaudited portfolio information available each month on its website in addition to making certain other unaudited financial information available on its website (www.eaglepointincome.com). This information includes (1) an estimated range of the Company’s NII and realized capital gains or losses per share of common stock for each calendar quarter end, generally made available within the first fifteen days after the applicable calendar month end, (2) an estimated range of the Company’s NAV per share of common stock for the prior month end and certain additional portfolio-level information, generally made available within the first fifteen days after the applicable calendar month end and (3) during the latter part of each month, an updated estimate of NAV, if applicable, and, with respect to each calendar quarter end, an updated estimate of the Company’s NII and realized capital gains or losses per share for the applicable quarter, if available.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the prospectus and the Company’s other filings with the SEC. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206122245/en/

Investor and Media Relations:

ICR

203-340-8510

[email protected]

www.eaglepointincome.com

KEYWORDS: Connecticut United States North America

INDUSTRY KEYWORDS: Asset Management Professional Services Finance

MEDIA:

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Posted on February 6, 2025 4:46 pm
Pathward AppointsAnjana Berde as Executive Vice President and Chief People and Culture Officer

Pathward AppointsAnjana Berde as Executive Vice President and Chief People and Culture Officer

Berde brings more than three decades of human resource experience to Pathward.

SIOUX FALLS, S.D.–(BUSINESS WIRE)–
Pathward Financial, Inc. (Nasdaq: CASH) through its subsidiary, Pathward^®, N.A. (“Pathward” or “company”), a U.S.-based financial empowerment company driven by its purpose to power financial inclusion, announced that Anjana Berde has joined the company as the Executive Vice President and Chief People and Culture Officer.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250206832670/en/

Anjana Berde joins Pathward as Executive Vice President and Chief People and Culture Officer. (Photo: Business Wire)

In this role, she reports to Pathward CEO Brett Pharr and leads Pathward’s People and Culture department, which includes recruiting and hiring, talent development and engagement, employee benefits and well-being, and employee information systems and analytics.

“Anjana brings expertise from 30 years’ experience in human resource roles in banking, technology and other industries, and we are pleased to have her join Pathward as the executive leader of People and Culture. As a Great Place to Work^® certified^™ company, we have a collaborative and passionate employee base across the country dedicated to fulfilling our purpose of financial inclusion, and I’m confident Anjana will help us further evolve to meet our talent needs as we continue to build our culture and deliver on our strategy,” said Pharr.

Berde joins the company after serving as Chief People Officer for Accion Opportunity Fund, a national non-profit lender focused on advancing economic mobility for underserved small businesses and low-income communities through access to capital, knowledge resources, and networks. Before that, she served as Managing Director at MUFG Union Bank, N.A., where she led the bank’s Talent Development and Learning function, driving the enterprise-wide talent strategy. Berde previously led Human Resources (HR) in community banking and residential construction firms. She started her career in technology at Digital Equipment Corporation and later Intel Corporation, where she served in a variety of HR positions.

Berde earned a Bachelor of Business Administration from the University of Massachusetts at Amherst. She provides people strategy related guidance to nonprofit organizations through board leadership positions.

Learn more about Pathward’s People and Culture at Pathward.com.

About Pathward^®

Pathward^®, N.A., a national bank, is a subsidiary of Pathward Financial, Inc. (Nasdaq: CASH). Pathward is a U.S.-based financial empowerment company driven by its purpose to power financial inclusion. Pathward strives to increase financial availability, choice and opportunity across our Partner Solutions and Commercial Finance business lines. The strategic business lines provide support to individuals and businesses. Learn more at Pathward.com.

About Pathward Financial, Inc.

Pathward Financial, Inc. (Nasdaq: CASH) is a U.S.-based financial holding company driven by its purpose to power financial inclusion. Through our subsidiary, Pathward®, N.A., we strive to increase financial availability, choice and opportunity across our Partner Solutions and Commercial Finance business lines. These strategic business lines provide support to individuals and businesses. Learn more at PathwardFinancial.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206832670/en/

Media contact:

Courtney Heidelberg

605.291.7044

[email protected]

Investor Relations contact:

Darby Schoenfeld, CPA

877-497-7497

[email protected]

KEYWORDS: United States North America South Dakota

INDUSTRY KEYWORDS: Banking Professional Services Human Resources Finance

MEDIA:

Photo

Anjana Berde joins Pathward as Executive Vice President and Chief People and Culture Officer. (Photo: Business Wire)

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Posted on February 6, 2025 4:46 pm
APA Corporation Declares Cash Dividend on Common Shares

HOUSTON, Feb. 06, 2025 (GLOBE NEWSWIRE) — The board of directors of APA Corporation (Nasdaq: APA) has declared a regular cash dividend on the company’s common shares.

The dividend on common shares is payable May 22, 2025, to stockholders of record on April 22, 2025, at a rate of 25 cents per share on the corporation’s common stock.

About APA

APA Corporation owns consolidated subsidiaries that explore for and produce oil and natural gas in the United States, Egypt and the United Kingdom and that explore for oil and natural gas offshore Suriname and elsewhere. APA posts announcements, operational updates, investor information and press releases on its website, www.apacorp.com.

Contacts

Investor: (281) 302-2286 Ben Rodgers
Media: (713) 296-7276 Alexandra Franceschi
Website: www.apacorp.com

APA-F

Posted on February 6, 2025 4:46 pm
Natural Grocers by Vitamin Cottage, Inc. Declares Quarterly Dividend

PR Newswire

LAKEWOOD, Colo.
, Feb. 6, 2025 /PRNewswire/ — Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) today announced that the Company’s Board of Directors has declared a quarterly cash dividend of $0.12 per common share. The dividend will be paid on March 19, 2025 to all stockholders of record at the close of business on March 3, 2025.

About Natural Grocers by Vitamin Cottage

Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an expanding specialty retailer of natural and organic groceries, body care products and dietary supplements. The grocery products sold by Natural Grocers must meet strict quality guidelines and may not contain artificial flavors, preservatives, or sweeteners (as defined in its standards), synthetic colors, or partially hydrogenated or hydrogenated oils. The Company sells only USDA certified organic produce and exclusively pasture-raised, non-confinement dairy products, and free-range eggs. Natural Grocers’ flexible smaller-store format allows it to offer affordable prices in a shopper-friendly, clean and convenient retail environment. The Company also provides extensive free science-based nutrition education programs to help customers make informed health and nutrition choices. The Company, founded in 1955, has 168 stores in 21 states.

Visit www.NaturalGrocers.com for more information and store locations.

Forward-Looking Statements

The following constitutes a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, statements in this release are “forward-looking statements” and are based on management’s current expectations and are subject to uncertainty and changes in circumstances. All statements that are not statements of historical fact are forward-looking statements. Actual results could differ materially from these expectations due to changes in global, national, regional or local political, economic, inflationary, deflationary, recessionary, business, interest rate, labor market, competitive, market, regulatory, trade policy and other factors, and other risks detailed in the Company’s Annual Report on Form 10-K and the Company’s subsequent quarterly reports on Form 10-Q. The information contained herein speaks only as of the date of this release and the Company undertakes no obligation to publicly update forward-looking statements, except as may be required by the securities laws.

For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the Form 10-K and the Company’s subsequent quarterly reports on Form 10-Q, copies of which may be obtained by contacting Investor Relations at 303-986-4600 or by visiting the Company’s website at http://Investors.NaturalGrocers.com.

Investor Contact:

Reed Anderson, ICR, 646-277-1260, [email protected]

View original content to download multimedia:https://www.prnewswire.com/news-releases/natural-grocers-by-vitamin-cottage-inc-declares-quarterly-dividend-302370575.html

SOURCE Natural Grocers by Vitamin Cottage, Inc.

Posted on February 6, 2025 4:45 pm
DTE Energy names Casey Santos to board of directors

Detroit, Feb. 06, 2025 (GLOBE NEWSWIRE) — DTE Energy (NYSE: DTE) has named Casey Santos to its board of directors effective Feb. 6. Santos recently joined Caliber as chief technology officer. Prior to Caliber, Santos led Asurion’s global technology and procurement teams as their chief information officer. She has more than 25 years of experience as an executive leader, an independent board director for public and private organizations, and advisor with expertise across a diverse range of industries, business lines and functions.

“We are pleased to welcome Casey to DTE Energy’s board of directors,” said Jerry Norcia, chairman and CEO of DTE Energy. “Her deep expertise in leading innovation, digital transformation, artificial intelligence and cybersecurity will be invaluable to DTE as we work to build the grid of the future and deliver safe, reliable, affordable and cleaner energy to our customers now and in the years to come.”

“DTE Energy’s mission to improve people’s lives with their energy directly aligns with my values,” Santos said. “Energy is essential to modern life, and I look forward to contributing my personal energy to serve millions of people in Michigan and across the United States.”

Prior to her work at Asurion, Santos held technology leadership roles in the finance industry and was a strategy consultant with McKinsey serving clients in the United States and Europe. Santos began her career as a NASA Flight Controller supporting over 20 space shuttle missions, including the first MIR docking and Hubble Telescope repair missions.

Santos earned a Bachelor of Science degree in aeronautics and astronautics from Massachusetts Institute of Technology and holds dual master’s degrees from the University of Pennsylvania, including a Master of Business Administration from the Wharton School and a Master of Arts in management from the Lauder Institute. She has been recognized for her contributions to the industry and community, most recently as a Top 100 Chief in Tech Leaders to Watch in 2024 by WomenTech Network, Nashville Technology Council’s CIO of the Year in 2023, and a HiTec 100 Leader in 2019 and 2023. She is a member of Latino Corporate Directors Association, Women Corporate Directors, NACD, and T200. She is the Board Chair of the Nashville Technology Council and works with non-profits to help advance STEM education and technology leadership.

About DTE Energy

DTE Energy (NYSE:DTE) is a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide. Its operating units include an electric company serving 2.3 million customers in Southeast Michigan and a natural gas company serving 1.3 million customers across Michigan. The DTE portfolio also includes energy businesses focused on custom energy solutions, renewable energy generation, and energy marketing and trading. DTE has continued to accelerate its carbon reduction goals to meet aggressive targets and is committed to serving with its energy through volunteerism, education and employment initiatives, philanthropy, emission reductions and economic progress. Information about DTE is available at dteenergy.com, empoweringmichigan.com, x.com/DTE_Energy and facebook.com/dteenergy.

Attachment

Casey Santos

Sallie Justice DTE Energy 313.235.5555

Posted on February 6, 2025 4:45 pm
Natural Grocers by Vitamin Cottage Announces First Quarter Fiscal 2025 Results

PR Newswire

Raises Fiscal 2025 Outlook

LAKEWOOD, Colo.
, Feb. 6, 2025 /PRNewswire/ — Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) today announced results for its first quarter of fiscal 2025 ended December 31, 2024.

Highlights for First Quarter Fiscal 2025 Compared to First Quarter Fiscal 2024

Net sales increased 9.4% to $330.2 million;

Daily average comparable store sales increased 8.9%, and increased 15.1% on a two-year basis;

Net income increased 28.1% to $9.9 million, with diluted earnings per share of $0.43;

Adjusted EBITDA was $22.8 million; and

Relocated two stores.

“We are very pleased with the strong start to our fiscal year 2025. Our first quarter results saw accelerating growth and a continuation of the positive trends we experienced over the past two years including broad-based growth across categories and geographic regions. Natural Grocers’ differentiated offering of carefully vetted natural and organic products and compelling value proposition continue to resonate with consumers’ increasing prioritization of products that support health and sustainability,” said Kemper Isely, Co-President. “Our daily average comparable store sales increase accelerated to 8.9% for the first quarter, and 15.1% on a two-year basis. Moreover, comparable store sales growth remained balanced with transaction counts, transaction size and items per basket all higher year-over-year. Daily average transaction count was up 5.3%, representing our eighth consecutive quarter of increases, and daily average transaction size increased 3.4%. For the fourth consecutive quarter, items per basket increased and we continued to experience modest inflation.”

Mr. Isely added, “Robust and balanced sales growth, combined with effective expense management, drove significant operating leverage and generated a 26.5% year-over-year increase in diluted earnings per share. Based on the strong start to fiscal 2025, coupled with confidence in our business trends and execution, we are increasing our fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share. We believe Natural Grocers is well aligned with consumer and product category tailwinds, helping to fuel our momentum and putting us in a strong position for the remainder of the fiscal year.”

In addition to presenting the financial results of Natural Grocers by Vitamin Cottage, Inc. and its subsidiaries (collectively, the Company) in conformity with U.S. generally accepted accounting principles (GAAP), the Company is also presenting EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The reconciliation from GAAP to these non-GAAP financial measures is provided at the end of this earnings release.

Operating Results — First Quarter Fiscal 2025 Compared to First Quarter Fiscal 2024

Net sales during the first quarter of fiscal 2025 increased $28.5 million, or 9.4%, to $330.2 million, compared to the first quarter of fiscal 2024, due to a $26.7 million increase in comparable store sales and a $2.9 million increase in new store sales, partially offset by a $1.1 million decrease in net sales related to closed stores. Daily average comparable store sales increased 8.9% in the first quarter of fiscal 2025, comprised of a 5.3% increase in daily average transaction count and a 3.4% increase in daily average transaction size. Sales growth was driven by enhanced customer engagement with our {N}power® rewards program, compelling offers, marketing initiatives, and increased sales of Natural Grocers® brand products.

Gross profit during the first quarter of fiscal 2025 increased $10.1 million, or 11.3%, to $98.8 million, compared to $88.8 million in the first quarter of fiscal 2024. Gross profit reflects earnings after product and store occupancy costs. Gross margin increased 50 basis points to 29.9% during the first quarter of fiscal 2025, compared to 29.4% in the first quarter of fiscal 2024. The increase in gross margin was driven by store occupancy cost leverage and higher product margin.

Store expenses during the first quarter of fiscal 2025 increased 8.1% to $73.5 million, primarily driven by higher compensation expenses. Store expenses as a percentage of net sales were 22.3% during the first quarter of fiscal 2025, down from 22.5% in the first quarter of fiscal 2024. The decrease in store expenses as a percentage of net sales reflects expense leverage.

Administrative expenses during the first quarter of fiscal 2025 increased 22.4% to $11.5 million, driven by higher compensation expenses, including costs related to our Chief Financial Officer transition, and technology expenses. Administrative expenses as a percentage of net sales were 3.5% in the first quarter of fiscal 2025, up from 3.1% in the first quarter of fiscal 2024.

Operating income for the first quarter of fiscal 2025 increased 23.6% to $13.3 million. Operating margin during the first quarter of fiscal 2025 was 4.0%, up from 3.6% in the first quarter of fiscal 2024.

Net income for the first quarter of fiscal 2025 was $9.9 million, or $0.43 diluted earnings per share, compared to net income of $7.8 million, or $0.34 diluted earnings per share, for the first quarter of fiscal 2024.

Adjusted EBITDA for the first quarter of fiscal 2025 was $22.8 million, compared to $18.8 million in the first quarter of fiscal 2024.

Balance Sheet and Cash Flow

As of December 31, 2024, the Company had $6.3 million in cash and cash equivalents, and $8.9 million in outstanding borrowings on its $72.5 million revolving credit facility.

During the first quarter of fiscal 2025, the Company generated $2.7 million in cash from operations and invested $9.4 million in net capital expenditures, primarily for new and relocated/remodeled stores.

Dividend Announcement

Today, the Company announced the declaration of a quarterly cash dividend of $0.12 per common share. The dividend will be paid on March 19, 2025 to stockholders of record at the close of business on March 3, 2025.

Growth and Development

During the first quarter of fiscal 2025, the Company relocated two stores. The Company ended the first quarter with 167 stores in 21 states. Since December 31, 2024, the Company has opened one new store.

Fiscal 2025 Outlook

The Company is raising its fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share. The Company expects:

Fiscal 2025

Prior Outlook

Updated Outlook

Number of new stores

4 to 6

4 to 6

Number of relocations/remodels

2 to 4

2 to 4

Daily average comparable store sales growth

4.0% to 6.0%

5.0% to 7.0%

Diluted earnings per share

$1.52 to $1.60

$1.57 to $1.65

Capital expenditures (in millions)

$36 to $44

$36 to $44

Earnings Conference Call

The Company will host a conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) to discuss this earnings release. The dial-in number is 1-888-347-6606 (US) or 1-412-902-4289 (International). The conference ID is “Natural Grocers Q1 FY 2025 Earnings Call.” A simultaneous audio webcast will be available at http://Investors.NaturalGrocers.com and archived for a minimum of 20 days.

About Natural Grocers by Vitamin Cottage

Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an expanding specialty retailer of natural and organic groceries, body care products and dietary supplements. The grocery products sold by Natural Grocers must meet strict quality guidelines and may not contain artificial flavors, preservatives, or sweeteners (as defined in its standards), synthetic colors, or partially hydrogenated or hydrogenated oils. The Company sells only USDA certified organic produce and exclusively pasture-raised, non-confinement dairy products, and free-range eggs. Natural Grocers’ flexible smaller-store format allows it to offer affordable prices in a shopper-friendly, clean and convenient retail environment. The Company also provides extensive free science-based nutrition education programs to help customers make informed health and nutrition choices. The Company, founded in 1955, has 168 stores in 21 states.

Visit www.NaturalGrocers.com for more information and store locations.

Forward-Looking Statements

The following constitutes a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, statements in this release are “forward-looking statements” and are based on management’s current expectations and are subject to uncertainty and changes in circumstances. All statements that are not statements of historical fact are forward-looking statements. Actual results could differ materially from these expectations due to changes in global, national, regional or local political, economic, inflationary, deflationary, recessionary, business, interest rate, labor market, competitive, market, regulatory, trade policy and other factors, and other risks detailed in the Company’s Annual Report on Form 10-K and the Company’s subsequent quarterly reports on Form 10-Q. The information contained herein speaks only as of the date of this release and the Company undertakes no obligation to publicly update forward-looking statements, except as may be required by the securities laws.

For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the Form 10-K and the Company’s subsequent quarterly reports on Form 10-Q, copies of which may be obtained by contacting Investor Relations at 303-986-4600 or by visiting the Company’s website at http://Investors.NaturalGrocers.com.

Investor Contact:

Reed Anderson, ICR, 646-277-1260, [email protected]

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Statements of Income

(Unaudited)

(Dollars in thousands, except per share data)

Three months ended
December 31,

2024

2023

Net sales

$

330,221

301,750

Cost of goods sold and occupancy costs

231,397

212,990

Gross profit

98,824

88,760

Store expenses

73,526

68,012

Administrative expenses

11,514

9,407

Pre-opening expenses

436

538

Operating income

13,348

10,803

Interest expense, net

(923)

(894)

Income before income taxes

12,425

9,909

Provision for income taxes

(2,487)

(2,154)

Net income

$

9,938

7,755

Net income per share of common stock:

Basic

$

0.43

0.34

Diluted

$

0.43

0.34

Weighted average number of shares of common stock outstanding:

Basic

22,903,569

22,751,524

Diluted

23,168,064

22,979,744

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands, except per share data)

December 31,

2024

September 30,
2024

Assets

Current assets:

Cash and cash equivalents

$

6,316

8,871

Accounts receivable, net

11,895

12,610

Merchandise inventory

121,820

120,672

Prepaid expenses and other current assets

4,494

4,905

Total current assets

144,525

147,058

Property and equipment, net

181,942

178,609

Other assets:

Operating lease assets, net

268,226

275,111

Finance lease assets, net

39,674

40,752

Other assets

1,440

458

Goodwill and other intangible assets, net

13,072

13,488

Total other assets

322,412

329,809

Total assets

$

648,879

655,476

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

75,581

88,397

Accrued expenses

34,560

35,847

Operating lease obligations, current portion

35,974

35,926

Finance lease obligations, current portion

4,012

3,960

Total current liabilities

150,127

164,130

Long-term liabilities:

Revolving loans

8,900

—

Operating lease obligations, net of current portion

256,051

263,404

Finance lease obligations, net of current portion

42,195

43,217

Deferred income tax liabilities, net

9,730

10,471

Total long-term liabilities

316,876

317,092

Total liabilities

467,003

481,222

Stockholders’ equity:

Common stock, $0.001 par value, 50,000,000 shares authorized, 22,931,226 and
22,888,540 shares issued and outstanding at December 31, 2024 and September 30,
2024, respectively

23

23

Additional paid-in capital

60,760

60,327

Retained earnings

121,093

113,904

Total stockholders’ equity

181,876

174,254

Total liabilities and stockholders’ equity

$

648,879

655,476

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

Three months ended

December 31,

2024

2023

Operating activities:

Net income

$

9,938

7,755

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

Depreciation and amortization

7,950

7,451

Loss on impairment of long-lived assets and store closing costs

50

90

Loss on disposal of property and equipment

15

30

Share-based compensation

1,435

406

Deferred income tax benefit

(742)

(430)

Non-cash interest expense

1

4

Changes in operating assets and liabilities:

Decrease (increase) in:

Accounts receivable, net

144

1,135

Merchandise inventory

(1,148)

3,183

Prepaid expenses and other assets

(570)

(319)

Income tax receivable

—

252

Operating lease assets

8,409

8,319

(Decrease) increase in:

Operating lease liabilities

(8,543)

(8,401)

Accounts payable

(12,970)

(1,776)

Accrued expenses

(1,287)

(1,075)

Net cash provided by operating activities

2,682

16,624

Investing activities:

Acquisition of property and equipment

(9,618)

(11,734)

Acquisition of other intangibles

(60)

(111)

Proceeds from sale of property and equipment

25

—

Proceeds from property insurance settlements

236

38

Net cash used in investing activities

(9,417)

(11,807)

Financing activities:

Borrowings under revolving loans

157,000

155,000

Repayments under revolving loans

(148,100)

(136,600)

Repayments under term loan

—

(2,000)

Finance lease obligation payments

(969)

(815)

Dividends to shareholders

(2,749)

(25,028)

Payments of deferred financing costs

—

(18)

Payments on withholding tax for restricted stock unit vesting

(1,002)

(78)

Net cash provided by (used in) financing activities

4,180

(9,539)

Net decrease in cash and cash equivalents

(2,555)

(4,722)

Cash and cash equivalents, beginning of period

8,871

18,342

Cash and cash equivalents, end of period

$

6,316

13,620

Supplemental disclosures of cash flow information:

Cash paid for interest

$

308

441

Cash paid for interest on finance lease obligations, net of capitalized interest of $46
and $130, respectively

496

455

Income taxes paid

163

5

Supplemental disclosures of non-cash investing and financing activities:

Acquisition of property and equipment not yet paid

$

3,828

8,514

Acquisition of other intangibles not yet paid

27

191

Property acquired through operating lease obligations

1,612

4,680

Property acquired through finance lease obligations

—

(52)

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Non-GAAP Financial Measures

(Unaudited)

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. We define EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA as adjusted to exclude the effects of certain income and expense items that management believes make it more difficult to assess the Company’s actual operating performance, including certain items such as impairment charges, store closing costs, share-based compensation and non-recurring items.

The following table reconciles net income to EBITDA and Adjusted EBITDA, dollars in thousands:

Three months ended
December 31,

2024

2023

Net income

$

9,938

7,755

Interest expense, net

923

894

Provision for income taxes

2,487

2,154

Depreciation and amortization

7,950

7,451

EBITDA

21,298

18,254

Impairment of long-lived assets and store closing costs

87

90

Share-based compensation

1,435

406

Adjusted EBITDA

$

22,820

18,750

EBITDA increased 16.7% to $21.3 million for the three months ended December 31, 2024 compared to $18.3 million for the three months ended December 31, 2023. EBITDA as a percentage of net sales was 6.4% and 6.0% for the three months ended December 31, 2024 and 2023, respectively.

Adjusted EBITDA increased 21.7% to $22.8 million for the three months ended December 31, 2024 compared to $18.8 million for the three months ended December 31, 2023. Adjusted EBITDA as a percentage of net sales was 6.9% and 6.2% for the three months ended December 31, 2024 and 2023, respectively.

Management believes some investors’ understanding of our performance is enhanced by including EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe EBITDA and Adjusted EBITDA provide additional information about: (i) our operating performance, because they assist us in comparing the operating performance of our stores on a consistent basis, as they remove the impact of non-cash depreciation and amortization expense as well as items not directly resulting from our core operations, such as interest expense and income taxes and (ii) our performance and the effectiveness of our operational strategies. Additionally, EBITDA is a component of a measure in our financial covenants under our credit facility.

Furthermore, management believes some investors use EBITDA and Adjusted EBITDA as supplemental measures to evaluate the overall operating performance of companies in our industry. Management believes that some investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. By providing these non-GAAP financial measures, together with a reconciliation from net income, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

Our competitors may define EBITDA and Adjusted EBITDA differently, and as a result, our measures of EBITDA and Adjusted EBITDA may not be directly comparable to EBITDA and Adjusted EBITDA of other companies. Items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance. EBITDA and Adjusted EBITDA are supplemental measures of operating performance that do not represent and should not be considered in isolation or as an alternative to, or substitute for, net income or other financial statement data presented in the consolidated financial statements as indicators of financial performance. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

EBITDA and Adjusted EBITDA do not reflect any depreciation or interest expense for leases classified as finance leases;

EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

Adjusted EBITDA does not reflect share-based compensation, impairment charges, and store closing costs;

EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements.

Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA as supplemental information.

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SOURCE Natural Grocers by Vitamin Cottage, Inc.

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