Market Newsdesk

February 6, 2025 4:38 pm

WK Kellogg Co Announces Dividend Increase

PR Newswire

BATTLE CREEK, Mich.
, Feb. 6, 2025 /PRNewswire/ — WK Kellogg Co (NYSE: KLG) today announced that its Board of Directors has approved an increase in its quarterly dividend to $0.165 per share on the common stock of WK Kellogg Co, an increase of 3% from the prior quarterly dividend of $0.16 per share. The quarterly dividend is payable on March 14, 2025, to shareowners of record at the close of business on February 28, 2025. The ex-dividend date is February 28, 2025.

About WK Kellogg Co
At WK Kellogg Co, we bring our best to everyone, every day through our trusted foods and brands. Our journey began in 1894, when our founder W.K. Kellogg reimagined the future of food with the creation of Corn Flakes, changing breakfast forever. Our iconic brand portfolio includes Kellogg’sFrosted Flakes®, Rice Krispies®, Froot Loops®, Kashi®, Special K®, Kellogg’s Raisin Bran®, and Bear Naked®. With a presence in the majority of households across North America, our brands play a key role in enhancing the lives of millions of consumers every day, promoting a strong sense of physical, emotional and societal wellbeing. Our beloved brand characters, including Tony the Tiger® and Toucan Sam®, represent our deep connections with the consumers and communities we serve. Through our sustainable business strategy – Feeding Happiness^TM – we aim to build healthier and happier futures for families, kids and communities. We are making a positive impact, while creating foods that bring joy and nourishment to consumers. For more information about WK Kellogg Co and Feeding Happiness, visit www.wkkellogg.com.

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SOURCE WK Kellogg Co

February 6, 2025 4:38 pm

Genpact Reports Full Year and Fourth Quarter 2024 Results

PR Newswire

2024 Net Revenues of $4.77 billion, Up 6.5% (6.7% constant currency)^1,2

2024 Data-Tech-AI Net Revenues of $2.23 billion, Up 6.9%^1,2,3,4

2024 Digital Operations Net Revenues of $2.53 billion, Up 6.1% (6.5% constant currency)^1,4

2024 Diluted EPS of $2.85, Down 16%; Adjusted Diluted EPS of $3.28, Up 10%^5,6

Increases Quarterly Dividend by 11% and Share Repurchase Authorization by $500 million

NEW YORK
, Feb. 6, 2025 /PRNewswire/ — Genpact Limited (NYSE: G), a global advanced technology services and solutions company, today announced financial results for the fourth quarter and full year ended December 31, 2024.

“We delivered another strong quarter to close out what has been an outstanding year for Genpact. Q4 revenue grew 9% with Data-Tech-AI up 12%, driving accelerating revenue growth. For the full year, revenue grew 6.5%, with adjusted EPS growth of 10%, consistent with our long-term objective of growing adjusted EPS faster than revenue. We also delivered record new bookings of $5.7 billion, up 15%, building on exceptionally strong new bookings in 2023,” said Balkrishan “BK” Kalra, Genpact’s President and CEO. “Looking ahead, we are incredibly excited about the future as we accelerate the pace of innovation and change at Genpact. Building on our industry-specific domain expertise, our investment in Data, AI and Agentic Solutions is positioning us as a clear leader in AI-driven transformation and driving superior value for our clients.”

Key Financial Highlights – Full Year 2024

Net revenues were $4.77 billion, up 6.5% year-over-year on an as reported basis, and 6.7% on a constant currency basis.^1,2
Data-Tech-AI net revenues were $2.23 billion, up 6.9% year-over-year, both on an as reported and constant currency basis,^1,2,4 representing 47% of total revenue.
Digital Operations net revenues were $2.53 billion, up 6.1% year-over-year on an as reported basis, and 6.5% on a constant currency basis,^1,4 representing 53% of total revenue.
Gross profit was $1.69 billion, up 8% year-over-year, with a corresponding margin of 35.5%.
Net income was $514 million, down 19% year-over-year, with a corresponding margin of 10.8%.⁶
Income from operations was $702 million, up 11% year-over-year, with a corresponding margin of 14.7%.
Adjusted income from operations was $814 million, up 7% year-over-year, with a corresponding margin of 17.1%.^6,7
Diluted earnings per share was $2.85, down 16% year-over-year.⁶
Adjusted diluted earnings per share was $3.28, up 10% year-over-year.^5,6
New bookings were approximately $5.7 billion, up 15% year-over-year.⁸
Cash generated from operations was $615 million, up 25% year-over-year.
Genpact repurchased approximately 7 million of its common shares during the year for total consideration of approximately $253 million at an average price per share of $38.31.

Key Financial Highlights – Fourth Quarter 2024

Net revenues were $1.25 billion, up 8.9% year-over-year on an as reported basis and 8.7% on a constant currency basis.¹
Data-Tech-AI net revenues were $595 million, up 11.9% year-over-year on an as reported basis, and 11.7% on a constant currency basis,^1,4 representing 48% of total revenue.
Digital Operations net revenues were $654 million, up 6.4% year-over-year on an as reported and 6.1% on a constant currency basis,^1,4 representing 52% of total revenue.
Gross profit was $446 million, up 9% year-over-year, with a corresponding margin of 35.7%.
Net income was $142 million, down 51% year-over-year, with a corresponding margin of 11.4%.⁶
Income from operations was $190 million, up 17% year-over-year, with a corresponding margin of 15.2%.
Adjusted income from operations was $221 million, up 9% year-over-year, with a corresponding margin of 17.7%.^6,7
Diluted earnings per share was $0.79, down 50% year-over-year.⁶
Adjusted diluted earnings per share was $0.91, up 11% year-over-year.^5,6
Cash generated from operations was $203 million, compared to $192 million in the fourth quarter of 2023.
Genpact repurchased approximately 2 million of its common shares during the quarter for total consideration of approximately $85 million at an average price per share of $45.41.

Capital Allocation

Genpact’s Board of Directors declared a quarterly cash dividend for the first quarter of 2025 of $0.17 per common share, an 11% increase, payable on March 26, 2025 to shareholders of record as of the close of business on March 11, 2025, and approved a $500 million increase to the Company’s existing share repurchase authorization. The newly approved quarterly dividend represents a planned annual dividend of $0.68 per common share, increased from $0.61 per common share in 2024.

Outlook

Genpact’s outlook for the full year 2025 is as follows:

Net revenues in the range of $5.029 billion to $5.125 billion, representing year-over-year growth of approximately 5.5% to 7.5% as reported, or 6.2% to 8.2% on a constant currency basis.¹
- Data-Tech-AI net revenues growth of approximately 6.2% year-over-year and Digital Operations net revenues growth of approximately 6.8% year-over-year as reported at the midpoint of the range.
- Data-Tech-AI net revenues growth of approximately 6.4% year-over-year and Digital Operations net revenues growth of approximately 7.9% year-over-year on a constant currency basis¹at the midpoint of the range.
Gross margin of approximately 36.0%.
Adjusted income from operations margin⁹ of approximately 17.3%.
Adjusted diluted EPS¹⁰ in the range of $3.52 to $3.59.

Genpact’s outlook for the first quarter of 2025 is as follows:

Net revenues in the range of $1.202 billion to $1.213 billion, representing year-over-year growth of approximately 6.2% to 7.2% as reported, or 7.1% to 8.1% on a constant currency basis.¹
- Data-Tech-AI net revenues growth of approximately 9.8% year-over-year and Digital Operations net revenues growth of approximately 4.1% year-over-year as reported at the midpoint of the range.
- Data-Tech-AI net revenues growth of approximately 10.0% year-over-year and Digital Operations net revenues growth of approximately 5.4% year-over-year on a constant currency basis¹at the midpoint of the range.
Gross margin of approximately 35.0%.
Adjusted income from operations margin⁹ of approximately 16.5%.
Adjusted diluted EPS¹⁰ in the range of $0.79 to $0.80.

Our outlook for the first quarter and full year 2025 reflects foreign currency exchange rates as of January 30, 2025.


¹ Revenue growth on a constant currency basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.
² Net revenues and Data-Tech-AI net revenues for the full year 2023 include $0.5 million of revenue associated with a business classified as held for sale.
³ Both on an as reported and constant currency basis.
⁴ Genpact updated the classification of certain revenues from Digital Operations to Data-Tech-AI in the quarter ended March 31, 2024 to more accurately reflect the nature of, and mode of delivery for, the services provided, which have evolved over time. As a result, the revenue from Digital Operations and Data-Tech-AI for the full year 2023 originally reported was $2.48 billion and $1.99 billion, respectively, which is $2.39 billion and $2.09 billion, respectively, in accordance with the updated classification. The numbers presented in this release for Data-Tech-AI net revenues and Digital Operations net revenues may not add up precisely to the total net revenues provided due to rounding.
⁵ Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per share is attached to this release.
⁶ During the quarter and full year ended December 31, 2023, Genpact completed an intercompany transfer of certain intellectual property rights from non-US to US wholly-owned subsidiaries, which resulted in a non-recurring tax benefit of $170 million. Net income and diluted earnings per share for the quarter and full year ended December 31, 2023 included this benefit. This benefit was excluded from adjusted diluted earnings per share and adjusted income from operations for the quarter and year ended December 31, 2023.
⁷ Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. Reconciliations of each of GAAP income from operations and GAAP net income to adjusted income from operations and GAAP income from operations margin and GAAP net income margin to adjusted income from operations margin are attached to this release. Adjusted income from operations margin for the full year 2023 was derived by adjusting total revenue to exclude $0.5 million of revenue associated with a business previously classified as held for sale.
⁸ New bookings, an operating measure, represents the total contract value of new contracts and certain renewals, extensions and changes to existing contracts. Regular renewals of contracts with no change in scope are not counted as new bookings. Prior to 2024, new bookings of contracts with longer than five-year terms were limited to the total contract value of the initial five-year term. In 2024, Genpact updated its definition of new bookings to eliminate the five-year limitation. New bookings as reported for the full year 2023 were $4.9 billion and would have been $5.0 billion in accordance with the new definition. New bookings for the full year 2024 as reported are $5.7 billion and would have been $5.4 billion in accordance with the prior definition.
⁹ Adjusted income from operations margin is a non-GAAP measure. A reconciliation of the outlook for each of GAAP income from operations margin and GAAP net income margin to adjusted income from operations margin is attached to this release.
¹⁰ Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of the outlook for GAAP diluted earnings per share to adjusted diluted earnings per share is attached to this release.

Conference Call to Discuss Financial Results

Genpact’s management will host a conference call on February 6, 2025, at 5:00 PM ET to discuss the company’s performance for the fourth quarter and full year ended December 31, 2024. Participants are encouraged to register here to receive a dial-in number and unique PIN for seamless access. It is recommended to join 10 minutes before the call starts, although registration and dial-in will be available at any time. A live webcast will be available on the Genpact Investor Relations website. For those unable to attend the live call, an archived replay and transcript will be available on the website shortly after the call.

About Genpact
Genpact (NYSE: G) is a global professional services and solutions firm delivering outcomes that shape the future. Our 125,000+ people across 30+ countries are driven by our innate curiosity, entrepreneurial agility, and desire to create lasting value for clients. Powered by our purpose – the relentless pursuit of a world that works better for people – we serve and transform leading enterprises, including the Fortune Global 500, with our deep business and industry knowledge, digital operations services, and expertise in data, technology, and AI.

Safe Harbor
This press release contains certain statements concerning our future growth prospects, including our outlook for 2025, financial results and other forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties, and other factors include but are not limited to general economic conditions, any deterioration in the global economic environment and its impact on our clients, our ability to develop and successfully execute our business strategies, technological innovation, including AI technology and future uses of agentic AI, generative AI and large language models, and our ability to invest in new technologies and adapt to industry developments at sufficient speed and scale, our ability to effectively price our services and maintain pricing and employee utilization rates, general inflationary pressures and our ability to share increased costs with our clients, wage increases in locations in which we have operations, our ability to attract and retain skilled professionals, our ability to protect our and our clients’ data from security incidents or cyberattacks, the economic and other impacts of geopolitical conflicts and any related sanctions and other measures that have been or may be implemented or imposed in response thereto, as well as any potential expansion or escalation of existing conflicts or economic disruption beyond their current scope, a slowdown in the economies and sectors in which our clients operate, a slowdown in the sectors in which we operate, the risks and uncertainties arising from our past and future acquisitions, our ability to convert bookings to revenues, our ability to manage growth, factors which may impact our cost advantage, changes in tax rates and tax legislation and other laws and regulations, our ability to effectively execute our tax planning strategies, risks and uncertainties regarding fluctuations in our earnings, foreign currency fluctuations, political, economic or business conditions in countries in which we operate, as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These filings are available at www.sec.gov. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes that these forward-looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management’s current analysis of future events and should not be relied upon as representing management’s expectations or beliefs as of any date subsequent to the time they are made. Genpact undertakes no obligation to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.

Contacts

Investors		Tyra Whelton
		+1 (908) 418-2995
		[email protected]

Media		Alexia Taxiarchos
		+1 (617) 259-8172
		[email protected]

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share data and share count)

	As of December 31, 2023	As of December 31, 2024
Assets
Current assets
Cash and cash equivalents	$ 583,670	$ 648,246
Short-term investments	—	23,359
Accounts receivable, net of allowance for credit losses of $18,278 and $12,094 as of December 31, 2023 and 2024, respectively	1,116,273	1,198,606
Prepaid expenses and other current assets	191,566	209,893
Total current assets	$ 1,891,509	$ 2,080,104

Property, plant and equipment, net	189,803	207,943
Operating lease right-of-use assets	186,167	182,190
Deferred tax assets	298,921	269,476
Intangible assets, net	53,028	26,950
Goodwill	1,683,782	1,669,769
Contract cost assets	202,543	200,900
Other assets, net of allowance for credit losses of $4,096 and $7,320 as of December 31, 2023 and December 31, 2024, respectively	299,960	349,821
Total assets	$ 4,805,713	$ 4,987,153

Liabilities and equity
Current liabilities
Short-term borrowings	$ 10,000	$ —
Current portion of long-term debt	432,242	26,173
Accounts payable	27,739	36,469
Income taxes payable	38,458	35,431
Accrued expenses and other current liabilities	759,180	812,994
Operating leases liability	50,313	52,672
Total current liabilities	$ 1,317,932	$ 963,739

Long-term debt, less current portion	824,720	1,195,267
Operating leases liability	168,015	153,587
Deferred tax liabilities	11,706	15,908
Other liabilities	234,948	269,041
Total liabilities	$ 2,557,321	$ 2,597,542

Shareholders’ equity
Preferred shares, $0.01 par value, 250,000,000 authorized, none issued	—	—
Common shares, $0.01 par value, 500,000,000 authorized, 179,494,132 and 174,661,953, issued and outstanding as of December 31, 2023 and 2024, respectively	1,789	1,740
Additional paid-in capital	1,883,944	1,945,261
Retained earnings	1,085,209	1,236,696
Accumulated other comprehensive income (loss)	(722,550)	(794,086)
Total equity	$ 2,248,392	$ 2,389,611

Total liabilities and equity	$ 4,805,713	$ 4,987,153

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data and share count)

	Three months ended December 31,
	2022	2023	2024
Net revenues	$ 1,102,545	$ 1,146,253	$ 1,248,741
Cost of revenue	717,337	738,699	802,969
Gross profit	$ 385,208	$ 407,554	$ 445,772
Operating expenses:
Selling, general and administrative expenses	236,557	237,419	249,157
Amortization of acquired intangible assets	9,862	7,454	6,496
Other operating (income) expense, net	11,038	(51)	(55)
Income from operations	$ 127,751	$ 162,732	$ 190,174
Foreign exchange gains (losses), net	6,080	576	(1,487)
Interest income (expense), net	(15,513)	(12,915)	(11,047)
Other income (expense), net	4,799	8,081	4,908
Income before income tax expense	$ 123,117	$ 158,474	$ 182,548
Income tax expense/(benefit)	33,405	(132,835)	40,633
Net income	$ 89,712	$ 291,309	$ 141,915
Earnings per common share
Basic	$ 0.49	$ 1.61	$ 0.81
Diluted	$ 0.48	$ 1.59	$ 0.79
Weighted average number of common shares used in computing earnings per common share
Basic	183,371,581	180,956,638	175,880,251
Diluted	187,525,698	183,354,187	179,183,557

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data and share count)

	Year ended December 31,
	2022	2023	2024
Net revenues	$ 4,371,172	$ 4,476,888	$ 4,767,139
Cost of revenue	2,834,774	2,906,223	3,077,073
Gross profit	$ 1,536,398	$ 1,570,665	$ 1,690,066
Operating expenses:
Selling, general and administrative expenses	938,385	913,061	967,145
Amortization of acquired intangible assets	42,667	31,463	26,476
Other operating (income) expense, net	53,195	(4,716)	(5,616)
Income from operations	$ 502,151	$ 630,857	$ 702,061
Foreign exchange gains (losses), net	15,392	4,274	2,937
Interest income (expense), net	(52,204)	(47,935)	(47,214)
Other income (expense), net	(103)	15,028	19,036
Income before income tax expense	$ 465,236	$ 602,224	$ 676,820
Income tax expense/(benefit)	111,832	(29,031)	163,150
Net income	$ 353,404	$ 631,255	$ 513,670
Earnings per common share
Basic	$ 1.92	$ 3.46	$ 2.88
Diluted	$ 1.88	$ 3.41	$ 2.85
Weighted average number of common shares used in computing earnings per common share
Basic	184,184,930	182,345,548	178,385,972
Diluted	188,087,240	185,141,843	180,436,900

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

	Year ended December 31,
	2022		2023	2024
Operating activities
Net income	$ 353,404		$ 631,255	$ 513,670
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	86,849		72,530	69,778
Amortization of debt issuance costs (including loss on extinguishment of debt)	2,376		1,967	2,412
Amortization of acquired intangible assets	42,667		31,463	26,476
Write-down of intangible assets and property, plant and equipment	1,377		—	—
Impairment charge on assets classified as held for sale	32,575		—	—
Loss on sale of business classified as held for sale	—		802	—
Write-down of operating lease right-of-use assets and other assets	20,307		—	—
Allowance for credit losses	1,583		3,979	13,806
Unrealized loss/(gain) on revaluation of foreign currency asset/liability	525		(1,061)	(11,354)
Stock-based compensation expense	77,373		88,576	66,383
Deferred tax expense (benefit)	(29,151)		(157,932)	36,610
Others, net	863		1,477	(2,179)
Change in operating assets and liabilities:
(Increase) in accounts receivable	(112,341)		(130,791)	(96,555)
(Increase) decrease in prepaid expenses, other current assets, contract cost assets, operating lease right-of-use assets and other assets	3,822		(39,075)	(73,512)
Increase (decrease) in accounts payable	14,185		(8,215)	8,733
Increase (decrease) in accrued expenses, other current liabilities, operating lease liabilities and other liability	(54,329)		1,862	63,340
Increase (decrease) in income taxes payable	1,585		(6,025)	(2,184)
Net cash provided by operating activities	$ 443,670		$ 490,812	$ 615,424
Investing activities
Purchase of property, plant and equipment	(50,614)		(55,421)	(82,766)
Payment for internally generated intangible assets (including intangibles under development)	(3,775)		(3,356)	(2,469)
Purchase of short term investments	—	—	—	(23,359)
Proceeds from sale of property, plant and equipment and intangible assets	60		25	2,635
Payment for business acquisitions, net of cash acquired	(33)		(682)	—
Proceeds from / (payment) for divestiture of business	17,769		(19,510)	—
Net cash used for investing activities	$ (36,593)		$ (78,944)	$ (105,959)
Financing activities
Repayment of finance lease obligations	(12,810)		(12,165)	(11,358)
Payment of debt issuance costs	(3,045)		—	(4,165)
Proceeds from long-term debt	239,130		—	400,000
Repayment of long-term debt	(620,130)		(19,875)	(433,125)
Proceeds from short-term borrowings	261,000		148,000	50,000
Repayment of short-term borrowings	(110,000)		(289,000)	(60,000)
Proceeds from issuance of common shares under stock-based compensation plans	27,751		39,485	17,215
Payment for net settlement of stock-based awards	(44,942)		(21,529)	(22,278)
Payment of earn-out consideration	(2,437)		(2,399)	—
Dividend paid	(91,837)		(100,014)	(108,466)
Payment for stock repurchased and retired (including expenses related to stock repurchased)	(214,082)		(225,499)	(252,671)
Net cash used for financing activities	$ (571,402)		$ (482,996)	$ (424,848)
Effect of exchange rate changes	(88,368)		8,033	(20,041)
Net increase (decrease) in cash and cash equivalents	(164,325)		(71,128)	84,617
Cash and cash equivalents at the beginning of the period	899,458		646,765	583,670
Cash and cash equivalents at the end of the period	$ 646,765		$ 583,670	$ 648,246
Supplementary information
Cash paid during the period for interest (including interest rate swaps)	$ 51,147		$ 47,989	$ 68,913
Cash paid during the period for income taxes, net of refunds	$ 145,979		$ 156,733	$ 113,629
Property, plant and equipment acquired under finance lease obligations	$ 7,078		$ 2,459	$ 11,483

Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following non-GAAP financial measures:

Adjusted income from operations;
Adjusted income from operations margin;
Adjusted diluted earnings per share; and
Revenue growth on a constant currency basis.

These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, these non-GAAP financial measures, the financial statements prepared in accordance with GAAP and the reconciliations of Genpact’s GAAP financial statements to such non-GAAP financial measures should be carefully evaluated.

Given Genpact’s acquisitions of varying scale and size, and the difficulty in predicting expenses relating to acquisitions and the amortization of acquired intangibles thereof, since July 2012 Genpact’s management has used financial statements that exclude all acquisition-related expenses and amortization of acquired intangibles for its internal management reporting, budgeting and decision-making purposes, including comparing Genpact’s operating results to those of its competitors. For the same reasons, since April 2016, Genpact’s management has excluded the impairment of acquired intangible assets from the financial statements it uses for internal management purposes. Acquisition-related expenses are excluded in the period in which an acquisition is consummated. Genpact’s management also uses financial statements that exclude stock-based compensation expense. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting ASC 718 “Compensation-Stock Compensation,” Genpact’s management believes that providing non-GAAP financial measures that exclude such expenses allows investors to make additional comparisons between Genpact’s operating results and those of other companies.

During the second quarter of 2022, Genpact approved a plan to divest a business that was no longer deemed strategic. Given the specialized nature of this business, we anticipated completing a transaction within twelve months after the end of the second quarter of 2022, and therefore, we classified the revenues and expenses related to this business as held for sale with effect from April 1, 2022. During the first quarter of 2023, the Company consummated this transaction and recorded a loss on the sale of the business. During the second quarter of 2023, the Company terminated a lease for office property which was fully impaired as part of a restructuring in the second quarter of 2022 and recorded a gain on such lease termination as restructuring income in the second quarter of 2023. During the fourth quarter of 2023, Genpact completed an intercompany transfer of certain intellectual property rights from non-US to US wholly-owned subsidiaries, which resulted in a non-recurring tax benefit of $170 million. Genpact’s management believes that excluding the loss on the sale of the business previously classified as held for sale, the revenues and expenses associated with such business, the gain on the lease termination and the non-recurring tax benefit on the transfer of intellectual property rights in calculating its non-GAAP financial measures provides useful information to both management and investors regarding the Company’s financial performance and underlying business trends. Additionally, in its calculations of non-GAAP financial measures, Genpact’s management has adjusted foreign exchange gains and losses, interest income and expense and income tax expenses from GAAP net income, and other income and expenses, and certain gains from GAAP income from operations, because management believes that the Company’s results after taking into account these adjustments more accurately reflect the Company’s ongoing operations. In its calculations of adjusted diluted earnings per share, Genpact’s management adds back stock-based compensation expense, amortization and impairment of acquired intangible assets, and acquisition-related expenses along with the related tax impact of other adjustments and excludes the non-recurring tax benefit on the transfer of intellectual property rights from GAAP diluted earnings per share. For the purpose of calculating adjusted diluted earnings per share, the combined current and deferred tax effect is determined by multiplying each pre-tax adjustment by the applicable statutory income tax rate.

Genpact’s management provides information about revenues on a constant currency basis so that the revenues may be viewed without the impact of foreign currency exchange rate fluctuations compared to prior fiscal periods, thereby facilitating period-to-period comparisons of the Company’s true business performance. Revenue growth on a constant currency basis is calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.

Accordingly, Genpact believes that the presentation of adjusted income from operations, adjusted income from operations margin, adjusted diluted earnings per share and revenue growth on a constant currency basis, when read in conjunction with the Company’s reported results, can provide useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

A limitation of using adjusted income from operations and adjusted income from operations margin versus income from operations, income from operations margin, net income and net income margin calculated in accordance with GAAP is that these non-GAAP financial measures exclude certain recurring costs and certain other charges, namely stock-based compensation expense and amortization and impairment of acquired intangible assets. Management compensates for this limitation by providing specific information on the GAAP amounts excluded from adjusted income from operations and adjusted income from operations margin.

The following tables show the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures for the three months and years ended December 31, 2023 and 2024:

Reconciliation of Net Income/Margin to Adjusted Income from Operations/Margin
(In thousands)

	Three months ended December 31,		Year ended December 31,
	2023	2024	2023	2024
Net income	$ 291,309	$ 141,915	$ 631,255	$ 513,670
Foreign exchange (gains) losses, net	(576)	1,487	(4,274)	(2,937)
Interest (income) expense, net	12,915	11,047	47,935	47,214
Income tax expense /(benefit)	(132,835)	40,633	(29,031)	163,150
Stock-based compensation expense	24,726	19,107	88,576	66,383
Amortization and impairment of acquired intangible assets	7,453	6,493	31,348	26,456
Restructuring (income) expense	—	—	(4,874)	—
Operating loss from the business classified as held for sale	—	—	1,201	—
Loss on the sale of business classified as held for sale	—	—	802	—
Adjusted income from operations	$ 202,992	$ 220,682	$ 762,938	$ 813,936
Net income margin	25.4 %	11.4 %	14.1 %	10.8 %
Adjusted income from operations margin	17.7 %	17.7 %	17.0 %	17.1 %

Reconciliation of Income from Operations/Margin to Adjusted Income from Operations/Margin
(In thousands)

	Three months ended December 31,		Year ended December 31,
	2023	2024	2023	2024
Income from operations	$ 162,732	$ 190,174	$ 630,857	$ 702,061
Stock-based compensation expense	24,726	19,107	88,576	66,383
Amortization and impairment of acquired intangible assets	7,453	6,493	31,348	26,456
Other income (expense), net	8,081	4,908	15,028	19,036
Restructuring (income) expense	—	—	(4,874)	—
Operating loss from the business classified as held for sale	—	—	1,201	—
Loss on the sale of business classified as held for sale	—	—	802	—
Adjusted income from operations	$ 202,992	$ 220,682	$ 762,938	$ 813,936
Income from operations margin	14.2 %	15.2 %	14.1 %	14.7 %
Adjusted income from operations margin	17.7 %	17.7 %	17.0 %	17.1 %

Reconciliation of Diluted EPS to Adjusted Diluted EPS¹¹
(Per share data)

	Three months ended December 31,		Year ended December 31,
	2023	2024	2023	2024
Diluted EPS	$ 1.59	$ 0.79	$ 3.41	$ 2.85
Stock-based compensation expense	0.13	0.11	0.48	0.37
Amortization and impairment of acquired intangible assets	0.04	0.04	0.17	0.15
Restructuring (income) expense	—	—	(0.03)	—
Operating loss from the business classified as held for sale	—	—	0.01	—
Loss on the sale of business classified as held for sale	—	—	0.00	—
Tax impact on stock-based compensation expense	(0.01)	(0.02)	(0.10)	(0.05)
Tax impact on amortization and impairment of acquired intangible assets	(0.01)	(0.01)	(0.04)	(0.04)
Tax impact on restructuring (income) expense	—	—	0.01	—
Tax impact on operating loss from the business classified as held for sale	—	—	—	—
Tax benefit on intercompany transfer of intellectual property rights	(0.93)	—	(0.92)	—
Adjusted diluted EPS	$ 0.82	$ 0.91	$ 2.98	$ 3.28


¹¹ Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

The following tables show the reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the year ending December 31, 2025:

Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin¹²

		Year ending December 31, 2025
Net income margin		10.7 %
Estimated interest (income) expense, net		1.0 %
Estimated income tax expense		3.5 %
Estimated stock-based compensation expense		1.6 %
Estimated amortization and impairment of acquired intangible assets		0.5 %
Adjusted income from operations margin		17.3 %

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from
Operations Margin¹²

		Year ending December 31, 2025
Income from operations margin		14.9 %
Estimated stock-based compensation expense		1.6 %
Estimated amortization and impairment of acquired intangible assets		0.5 %
Estimated other income (expense), net		0.3 %
Adjusted income from operations margin		17.3 %

Reconciliation of Outlook for Diluted EPS to Adjusted Diluted EPS¹²
(Per share data)

	Year ending December 31, 2025
	Lower	Upper
Diluted EPS	$ 3.04	$ 3.11
Estimated stock-based compensation expense	0.46	0.46
Estimated amortization and impairment of acquired intangible assets	0.15	0.15
Estimated tax impact on stock-based compensation expense	(0.08)	(0.08)
Estimated tax impact on amortization and impairment of acquired intangible assets	(0.04)	(0.04)
Adjusted diluted EPS	$ 3.52	$ 3.59


¹² Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

The following tables show the reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the quarter ending March 31, 2025:

Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin¹³

		Quarter ending March 31, 2025
Net income margin		10.1 %
Estimated interest (income) expense, net		1.1 %
Estimated income tax expense		3.3 %
Estimated stock-based compensation expense		1.5 %
Estimated amortization and impairment of acquired intangible assets		0.5 %
Adjusted income from operations margin		16.5 %

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from
Operations Margin¹³

		Quarter ending March 31, 2025
Income from operations margin		14.1 %
Estimated stock-based compensation expense		1.5 %
Estimated amortization and impairment of acquired intangible assets		0.5 %
Estimated other income (expense), net		0.3 %
Adjusted income from operations margin		16.5 %

Reconciliation of Outlook for Diluted EPS to Adjusted Diluted EPS¹³
(Per share data)

	Quarter ending March 31, 2025
	Lower	Upper
Diluted EPS	$ 0.68	$ 0.69
Estimated stock-based compensation expense	0.10	0.10
Estimated amortization and impairment of acquired intangible assets	0.04	0.04
Estimated tax impact on stock-based compensation expense	(0.02)	(0.02)
Estimated tax impact on amortization and impairment of acquired intangible assets	(0.01)	(0.01)
Adjusted diluted EPS	$ 0.79	$ 0.80


¹³ Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

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SOURCE Genpact

February 6, 2025 4:38 pm

Illumina Reports Financial Results for Fourth Quarter and Fiscal Year 2024

PR Newswire

Core Illumina revenue of $1.1 billion for Q4 2024, up 1% from Q4 2023 on both a reported and constant currency basis; revenue of $4.3 billion for fiscal year 2024, down 2% from fiscal year 2023 on both a reported and constant currency basis
Core Illumina GAAP operating margin of 15.8% and non-GAAP operating margin of 19.7% for Q4 2024; GAAP operating margin of 34.0% and non-GAAP operating margin of 21.3% for fiscal year 2024
Core Illumina GAAP diluted earnings per share (EPS) of $0.73 and non-GAAP diluted EPS of $0.95 for Q4 2024; GAAP diluted EPS of $5.61 and non-GAAP diluted EPS of $4.16 for fiscal year 2024
Core Illumina cash provided by operations of $1.2 billion and free cash flow of $1.1 billion for fiscal year 2024
Fiscal year 2025 guidance does not attempt to reflect any impact from the recent China Ministry of Commerce announcement and assumes a continuation of the current macroeconomic and political environments
For fiscal year 2025, continue to expect Core Illumina constant currency revenue growth in the low single digits (reported revenue in the range of approximately $4.28 billion to $4.4 billion) and non-GAAP operating margin of approximately 23%; expect non-GAAP diluted EPS in the range of $4.50 to $4.65

SAN DIEGO
, Feb. 6, 2025 /PRNewswire/ — Illumina, Inc. (Nasdaq: ILMN) (“Illumina” or the “company”) today announced its financial results for the fourth quarter and fiscal year 2024. The financial results for fiscal year 2024 and Q4 2023 and fiscal year 2023 include the financial results for GRAIL which was spun off on June 24, 2024.

“The Illumina team delivered fourth quarter revenue that exceeded our expectations, and we made significant progress in 2024 toward our goals to drive customer-centric innovation, margin expansion, and EPS growth,” said Jacob Thaysen, Chief Executive Officer. “For 2025, we will continue our transformation, executing our refreshed strategy that prioritizes a sharp focus on customers and our own operational excellence in order to drive Illumina forward.”

Fourth quarter Core Illumina segment results

	GAAP		Non-GAAP (a)
Dollars in millions, except per share amounts	Q4 2024	Q4 2023	Q4 2024	Q4 2023
Revenue (b)	$ 1,104	$ 1,097	$ 1,104	$ 1,097
Gross margin (c)	65.9 %	63.3 %	67.4 %	64.7 %
Research and development (R&D) expense	$ 256	$ 260	$ 255	$ 248
Selling, general and administrative (SG&A) expense	$ 279	$ 391	$ 271	$ 259
Goodwill and intangible impairment	$ —	$ 6	$ —	$ —
Legal contingency and settlement	$ 18	$ 6	$ —	$ —
Operating profit	$ 175	$ 33	$ 218	$ 203
Operating margin	15.8 %	3.0 %	19.7 %	18.5 %
Tax provision	$ 70	*	$ 47	*
Tax rate	37.9 %	*	23.7 %	*
Net income	$ 117	*	$ 152	*
Diluted EPS	$ 0.73	*	$ 0.95	*

* Prior year information not provided.

(a)	See tables in “Results of Operations – Non-GAAP” section below for GAAP and non-GAAP reconciliations.
(b)	Core Illumina revenue for Q4 2023 included intercompany revenue of $5 million which, prior to the spin-off of GRAIL in Q2 2024, was eliminated in consolidation.
(c)	The increase in gross margin was driven by execution of our operational excellence priorities that delivered cost savings, as well as a more favorable revenue mix toward sequencing consumables.

Fourth quarter consolidated results

	GAAP		Non-GAAP (a)
Dollars in millions, except per share amounts	Q4 2024	Q4 2023	Q4 2024	Q4 2023
Revenue	$ 1,104	$ 1,122	$ 1,104	$ 1,122
Gross margin	65.9 %	60.1 %	67.4 %	64.4 %
R&D expense	$ 256	$ 341	$ 255	$ 329
SG&A expense	$ 279	$ 485	$ 271	$ 342
Goodwill and intangible impairment	$ —	$ 6	$ —	$ —
Legal contingency and settlement	$ 18	$ 6	$ —	$ —
Operating profit (loss)	$ 175	$ (164)	$ 218	$ 51
Operating margin	15.8 %	(14.6) %	19.7 %	4.6 %
Tax provision	$ 1	$ 8	$ 62	$ 26
Tax rate (b)	0.6 %	(4.9) %	31.1 %	55.4 %
Net income (loss)	$ 187	$ (176)	$ 138	$ 22
Diluted earnings (loss) per share	$ 1.17	$ (1.11)	$ 0.86	$ 0.14

(a)	See tables in “Results of Operations – Non-GAAP” section below for GAAP and non-GAAP reconciliations.
(b)	In accordance with U.S. GAAP, the tax rate is determined on a full-year forecast basis. This resulted in GRAIL-related activity impacting the consolidated tax rate in Q3 2024 and Q4 2024 even though GRAIL was divested in Q2 2024.

Capital expenditures for free cash flow purposes were $42 million for Q4 2024. Cash flow provided by operations was $364 million, compared to $224 million in the prior year period. Free cash flow (cash flow provided by operations less capital expenditures) was $322 million for the quarter, compared to $173 million in the prior year period. Depreciation and amortization expenses were $71 million for Q4 2024. At the close of the quarter, the company held $1.22 billion in cash, cash equivalents and short-term investments.

Fiscal year 2024 Core Illumina segment results

	GAAP		Non-GAAP (a)
Dollars in millions, except per share amounts	2024	2023	2024	2023
Revenue (b)	$ 4,332	$ 4,438	4,332	$ 4,438
Gross margin	67.1 %	64.4 %	68.6 %	65.8 %
R&D expense	$ 988	$ 1,030	$ 982	$ 1,001
SG&A expense	$ 900	$ 1,248	$ 1,069	$ 1,032
Goodwill and intangible impairment	$ 3	$ 6	$ —	$ —
Legal contingency and settlement	$ (456)	$ 20	$ —	$ —
Operating profit	$ 1,473	$ 552	$ 922	$ 885
Operating margin	34.0 %	12.4 %	21.3 %	19.9 %
Tax provision	$ 229	$ 224	$ 204	$ 228
Tax rate	20.4 %	45.4 %	23.6 %	26.5 %
Net income	$ 894	$ 269	$ 663	$ 634
Diluted EPS	$ 5.61	$ 1.70	$ 4.16	$ 4.00

(a)	See tables in “Results of Operations – Non-GAAP” section below for GAAP and non-GAAP reconciliations.
(b)	Core Illumina revenue for 2024 and 2023 included intercompany revenue of $15 million and $26 million, respectively, which, prior to the spin-off of GRAIL in Q2 2024, was eliminated in consolidation.

Capital expenditures for free cash flow purposes were $137 million for fiscal year 2024. Cash flow provided by operations was $1.21 billion. Free cash flow was $1.07 billion for the year.

Fiscal year 2024 consolidated results

	GAAP		Non-GAAP (a)
Dollars in millions, except per share amounts	2024	2023	2024	2023
Revenue	$ 4,372	$ 4,504	$ 4,372	$ 4,504
Gross margin	65.4 %	60.9 %	68.4 %	65.3 %
R&D expense	$ 1,169	$ 1,354	$ 1,163	$ 1,325
SG&A expense	$ 1,092	$ 1,612	$ 1,247	$ 1,367
Goodwill and intangible impairment (b)	$ 1,889	$ 827	$ —	$ —
Legal contingency and settlement	$ (456)	$ 20	$ —	$ —
Operating (loss) profit	$ (833)	$ (1,069)	$ 580	$ 247
Operating margin	(19.1) %	(23.7) %	13.3 %	5.5 %
Tax provision	$ 44	$ 44	$ 139	$ 98
Tax rate (c)	(3.8) %	(3.9) %	26.3 %	41.8 %
Net (loss) income	$ (1,223)	$ (1,161)	$ 390	$ 137
Diluted (loss) earnings per share	$ (7.69)	$ (7.34)	$ 2.45	$ 0.86

(a)	See tables in “Results of Operations – Non-GAAP” section below for GAAP and non-GAAP reconciliations.
(b)	The company recognized $1,466 million in goodwill and $420 million in IPR&D impairment related to GRAIL in 2024, and in 2023, recognized $712 million in goodwill and $109 million in IPR&D impairment related to GRAIL.
(c)	In accordance with U.S. GAAP, the tax rate is determined on a full-year forecast basis. This resulted in GRAIL-related activity impacting the consolidated tax rate in Q3 2024 and Q4 2024 even though GRAIL was divested in Q2 2024.

Capital expenditures for free cash flow purposes were $142 million for fiscal year 2024. Cash flow provided by operations was $837 million, compared to $478 million in the prior year. Free cash flow was $695 million, compared to $283 million in the prior year. Depreciation and amortization expenses were $354 million for fiscal year 2024.

Key announcements since our last earnings release

Announced collaboration with NVIDIA to enhance the analysis and interpretation of multiomic data
Launched pilot proteomics program with UK Biobank and biopharma collaborators to analyze 50,000 samples
Announced collaboration with Regeneron and investment in Truveta Genome Project to extend DNA sequence-linked healthcare database to advance scientific innovation and healthcare delivery
Advanced NovaSeq X Series, delivering single-flow-cell system, software upgrade, and new kits to enable multiomic applications
Announced expansion of TruSight Oncology, the latest solution to enable comprehensive genomic profiling of tumors
Presented real-world data with Providence and Microsoft Research finding that cancer patients with early genomic testing received better precision treatment

A full list of recent announcements can be found in the company’s News Center.

Financial outlook and guidance

Fiscal year 2025 guidance does not attempt to reflect any impact from the recent China Ministry of Commerce announcement and assumes a continuation of the current macroeconomic and political environments. For fiscal year 2025, the company continues to expect Core Illumina constant currency revenue growth in the low single digits (reported revenue in the range of approximately $4.28 billion to $4.4 billion) and non-GAAP operating margin of approximately 23%. The company expects non-GAAP diluted EPS in the range of $4.50 to $4.65.

The company provides forward-looking guidance on a non-GAAP basis. The company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP reported financial measures because it is unable to predict with reasonable certainty the impact of items such as acquisition-related expenses, gains and losses from strategic investments, fair value adjustments to contingent consideration, potential future asset impairments, restructuring activities, and the ultimate outcome of pending litigation without unreasonable effort. These items are uncertain, inherently difficult to predict, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the company is unable to address the significance of the unavailable information, which could be material to future results.

Conference call information

The conference call will begin at 1:30 pm Pacific Time (4:30 pm Eastern Time) on Thursday, February 6, 2025. Interested parties may access the live webcast via the Investor Info section of Illumina’s website or directly through the following link – https://illumina-earnings-call-q4-2024.open-exchange.net/. To ensure timely connection, please join at least ten minutes before the scheduled start of the call. A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.

Statement regarding use of non-GAAP financial measures

The company reports non-GAAP results for diluted earnings per share, net income, gross margin, operating expenses, including research and development expense, selling general and administrative expense, legal contingencies and settlement, and goodwill and intangible impairment, operating income, operating margin, gross profit, other income (expense), tax provision, constant currency revenue growth, and free cash flow (on a consolidated and, as applicable, segment basis) in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets among others that are listed in the reconciliations of GAAP and non-GAAP financial measures included in this press release, as well as the effects of currency translation. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Non-GAAP net income, diluted earnings per share and operating margin are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

Use of forward-looking statements

This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors to which our business is subject that could cause actual results to differ materially from those in any forward-looking statements are: (i) changes in the rate of growth in the markets we serve; (ii) the volume, timing and mix of customer orders among our products and services; (iii) our ability to adjust our operating expenses to align with our revenue expectations; (iv) uncertainty regarding the impact of our recent inclusion by the China Ministry of Commerce announcement that Illumina is included on its “unreliable entities list” as well as tariffs recently imposed or threatened by the U.S. government and its trading partners, and other possible tariffs or trade protection measures; (v) our ability to manufacture robust instrumentation and consumables; (vi) the success of products and services competitive with our own; (vii) challenges inherent in developing, manufacturing, and launching new products and services, including expanding or modifying manufacturing operations and reliance on third-party suppliers for critical components; (viii) the impact of recently launched or pre-announced products and services on existing products and services; (ix) our ability to modify our business strategies to accomplish our desired operational goals; (x) our ability to realize the anticipated benefits from prior or future actions to streamline and improve our R&D processes, reduce our operating expenses and maximize our revenue growth; (xi) our ability to further develop and commercialize our instruments, consumables, and products; (xii) to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xiii) the risk of additional litigation arising against us in connection with the GRAIL acquisition; (xiv) our ability to obtain approval by third-party payors to reimburse patients for our products; (xv) our ability to obtain regulatory clearance for our products from government agencies; (xvi) our ability to successfully partner with other companies and organizations to develop new products, expand markets, and grow our business; (xvii) uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth or armed conflict; (xviii) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments and (xix) legislative, regulatory and economic developments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.

About Illumina

Illumina is improving human health by unlocking the power of the genome. Our focus on innovation has established us as a global leader in DNA sequencing and array-based technologies, serving customers in the research, clinical, and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture, and other emerging segments. To learn more, visit www.illumina.com and connect with us on X, Facebook, LinkedIn, Instagram, TikTok, and YouTube.

Illumina, Inc. Condensed Consolidated Balance Sheets (In millions)

	December 29, 2024	December 31, 2023
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$ 1,127	$ 1,048
Short-term investments	93	6
Accounts receivable, net	735	734
Inventory, net	547	587
Prepaid expenses and other current assets	244	234
Total current assets	2,746	2,609
Property and equipment, net	815	1,007
Operating lease right-of-use assets	419	544
Goodwill	1,113	2,545
Intangible assets, net	295	2,993
Deferred tax assets, net	567	56
Other assets	348	357
Total assets	$ 6,303	$ 10,111

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$ 221	$ 245
Accrued liabilities	827	1,325
Term debt, current portion	499	—
Total current liabilities	1,547	1,570
Operating lease liabilities	554	687
Term debt	1,490	1,489
Other long-term liabilities	339	620
Stockholders’ equity	2,373	5,745
Total liabilities and stockholders’ equity	$ 6,303	$ 10,111

Illumina, Inc. Condensed Consolidated Statements of Operations (In millions, except per share amounts) (unaudited)

	Three Months Ended		Year Ended
	December 29, 2024	December 31, 2023	December 29, 2024	December 31, 2023
Revenue:
Product revenue	$ 939	$ 923	$ 3,656	$ 3,787
Service and other revenue	165	199	716	717
Total revenue	1,104	1,122	4,372	4,504
Cost of revenue:
Cost of product revenue (a)	278	293	1,017	1,177
Cost of service and other revenue (a)	82	108	367	392
Amortization of acquired intangible assets	16	47	127	191
Total cost of revenue	376	448	1,511	1,760
Gross profit	728	674	2,861	2,744
Operating expense:
Research and development (a)	256	341	1,169	1,354
Selling, general and administrative (a)	279	485	1,092	1,612
Goodwill and intangible impairment	—	6	1,889	827
Legal contingency and settlement	18	6	(456)	20
Total operating expense	553	838	3,694	3,813
Income (loss) from operations	175	(164)	(833)	(1,069)
Other income (expense), net	13	(4)	(346)	(48)
Income (loss) before income taxes	188	(168)	(1,179)	(1,117)
Provision for income taxes	1	8	44	44
Net income (loss)	$ 187	$ (176)	$ (1,223)	$ (1,161)
Earnings (loss) per share:
Basic	$ 1.17	$ (1.11)	$ (7.69)	$ (7.34)
Diluted	$ 1.17	$ (1.11)	$ (7.69)	$ (7.34)
Shares used in computing earnings (loss) per share:
Basic	159	159	159	158
Diluted	160	159	159	158

(a) Includes stock-based compensation expense for stock-based awards:

	Three Months Ended		Year Ended
	December 29, 2024	December 31, 2023	December 29, 2024	December 31, 2023
Cost of product revenue	$ 6	$ 7	$ 25	$ 29
Cost of service and other revenue	1	2	6	7
Research and development	31	39	146	155
Selling, general and administrative	42	48	194	189
Stock-based compensation expense before taxes	$ 80	$ 96	$ 371	$ 380

Illumina, Inc. Condensed Statements of Cash Flows (In millions) (unaudited)
TABLE 1: CONSOLIDATED STATEMENTS OF CASH FLOWS AND FREE CASH FLOWS:

	Three Months Ended		Year Ended
	December 29, 2024	December 31, 2023	December 29, 2024	December 31, 2023
Net cash provided by operating activities	$ 364	$ 224	$ 837	$ 478
Net cash used in investing activities	(48)	(84)	(178)	(231)
Net cash used in financing activities	(47)	(27)	(570)	(1,210)
Effect of exchange rate changes on cash and cash equivalents	(11)	8	(10)	—
Net increase (decrease) in cash and cash equivalents	258	121	79	(963)
Cash and cash equivalents, beginning of period	869	927	1,048	2,011
Cash and cash equivalents, end of period	$ 1,127	$ 1,048	$ 1,127	$ 1,048

Calculation of free cash flow:
Net cash provided by operating activities	$ 364	$ 224	$ 837	$ 478
Purchases of property and equipment	(42)	(51)	(142)	(195)
Free cash flow (a)	$ 322	$ 173	$ 695	$ 283

TABLE 2: CORE ILLUMINA FREE CASH FLOWS:

	Three Months Ended	Year Ended
	December 29, 2024	December 29, 2024
Net cash provided by operating activities	$ 364	$ 1,207
Purchases of property and equipment	(42)	(137)
Free cash flow (a)	$ 322	$ 1,070

(a)

Free cash flow, which is a non-GAAP financial measure, is calculated as net cash provided by operating activities reduced by purchases of property and equipment. Free cash flow is useful to management as it is one of the metrics used to evaluate our performance and to compare us with other companies in our industry. However, our calculation of free cash flow may not be comparable to similar measures used by other companies.

Illumina, Inc. Results of Operations – Constant Currency Revenue (Dollars in millions) (unaudited)
TABLE 1: CORE ILLUMINA – CONSTANT CURRENCY REVENUE:

	Three Months Ended			Year Ended
	December 29, 2024	December 31, 2023	% Change	December 29, 2024	December 31, 2023	% Change
Revenue	$ 1,104	$ 1,097	1 %	$ 4,332	$ 4,438	(2) %
Less: Hedge gains	5	10		15	18
Revenue, excluding hedge effect	1,099	1,087		4,317	4,420
Less: Exchange rate effect	—	—		(8)	—
Constant currency revenue (a)	$ 1,099	$ 1,087	1 %	$ 4,325	$ 4,420	(2) %

TABLE 2: CONSOLIDATED – CONSTANT CURRENCY REVENUE:

	Three Months Ended			Year Ended
	December 29, 2024	December 31, 2023	% Change	December 29, 2024	December 31, 2023	% Change
Revenue	$ 1,104	$ 1,122	(2) %	$ 4,372	$ 4,504	(3) %
Less: Hedge gains	5	10		15	18
Revenue, excluding hedge effect	1,099	1,112		4,357	4,486
Less: Exchange rate effect	—	—		(8)	—
Constant currency revenue (a)	$ 1,099	$ 1,112	(1) %	$ 4,365	$ 4,486	(3) %

(a)	Constant currency revenue growth, which is a non-GAAP financial measure, is calculated using comparative prior period foreign exchange rates to translate current period revenue, net of the effects of hedges.

Illumina, Inc. Results of Operations – Non-GAAP (In millions, except per share amounts) (unaudited)
TABLE 1: CORE ILLUMINA – RECONCILIATION OF GAAP AND NON-GAAP DILUTED EARNINGS PER SHARE:

	Three Months Ended	Year Ended
	December 29, 2024	December 29, 2024	December 31, 2023
GAAP earnings per share – diluted	$ 0.73	$ 5.61	$ 1.70
Cost of revenue (b)	0.10	0.40	0.39
R&D expense (b)	0.01	0.04	0.18
SG&A expense (b)	0.04	(1.06)	1.36
Goodwill and intangible impairment (b)	—	0.02	0.04
Legal contingency and settlement (b)	0.11	(2.87)	0.13
Other (income) expense, net (b)	(0.19)	1.86	0.23
GILTI, US foreign tax credits, and global minimum top-up tax (c)	(0.03)	0.52	0.28
Incremental non-GAAP tax expense (d)	0.10	(0.46)	(0.54)
Income tax provision (e)	0.08	0.10	0.23
Non-GAAP earnings per share – diluted (a)	$ 0.95	$ 4.16	$ 4.00

TABLE 2: CORE ILLUMINA – RECONCILIATION OF GAAP AND NON-GAAP NET INCOME:

	Three Months Ended	Year Ended
	December 29, 2024	December 29, 2024	December 31, 2023
GAAP net income	$ 117	$ 894	$ 269
Cost of revenue (b)	17	64	62
R&D expense (b)	1	6	29
SG&A expense (b)	7	(168)	216
Goodwill and intangible impairment (b)	—	3	6
Legal contingency and settlement (b)	18	(456)	20
Other (income) expense, net (b)	(31)	295	36
GILTI, US foreign tax credits, and global minimum top-up tax (c)	(5)	82	45
Incremental non-GAAP tax expense (d)	15	(73)	(86)
Income tax provision (e)	13	16	37
Non-GAAP net income (a)	$ 152	$ 663	$ 634

Illumina, Inc. Results of Operations – Non-GAAP (continued) (In millions, except per share amounts) (unaudited)
TABLE 3: CONSOLIDATED – RECONCILIATION OF GAAP AND NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE:

	Three Months Ended		Year Ended
	December 29, 2024	December 31, 2023	December 29, 2024	December 31, 2023
GAAP earnings (loss) per share – diluted	$ 1.17	$ (1.11)	$ (7.69)	$ (7.34)
Cost of revenue (b)	0.10	0.30	0.81	1.24
R&D expense (b)	0.01	0.08	0.04	0.18
SG&A expense (b)	0.04	0.90	(0.97)	1.54
Goodwill and intangible impairment (b)	—	0.04	11.88	5.23
Legal contingency and settlement (b)	0.11	0.03	(2.87)	0.13
Other (income) expense, net (b)	(0.19)	0.01	1.85	0.23
GILTI, US foreign tax credits, and global minimum top-up tax (c)	(0.32)	(0.01)	0.57	0.38
Incremental non-GAAP tax expense (d)	(0.14)	(0.28)	(1.26)	(0.96)
Income tax provision (e)	0.08	0.18	0.09	0.23
Non-GAAP earnings per share – diluted (a)	$ 0.86	$ 0.14	$ 2.45	$ 0.86

TABLE 4: CONSOLIDATED – RECONCILIATION OF GAAP AND NON-GAAP NET INCOME (LOSS):

	Three Months Ended		Year Ended
	December 29, 2024	December 31, 2023	December 29, 2024	December 31, 2023
GAAP net income (loss)	$ 187	$ (176)	$ (1,223)	$ (1,161)
Cost of revenue (b)	17	48	129	196
R&D expense (b)	1	12	6	29
SG&A expense (b)	7	143	(155)	244
Goodwill and intangible impairment (b)	—	6	1,889	827
Legal contingency and settlement (b)	18	6	(456)	20
Other (income) expense, net (b)	(31)	1	295	36
GILTI, US foreign tax credits, and global minimum top-up tax (c)	(51)	(2)	90	61
Incremental non-GAAP tax expense (d)	(23)	(44)	(201)	(152)
Income tax provision (e)	13	28	16	37
Non-GAAP net income (a)	$ 138	$ 22	$ 390	$ 137

Amounts in tables are rounded to the nearest millions. As a result, certain amounts may not recalculate.

(a)	Non-GAAP net income and diluted earnings per share exclude the effects of the pro forma adjustments detailed above. Non-GAAP net income and diluted earnings per share are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing our past and future operating performance.
(b)	Refer to Reconciliations between GAAP and Non-GAAP Results of Operations for details of amounts.
(c)	Amounts represent the impact of GRAIL pre-acquisition net operating losses on GILTI, the utilization of US foreign tax credits, and the Pillar Two global minimum top-up tax, which became effective in Q1 2024.
(d)	Incremental non-GAAP tax expense reflects the tax impact of the non-GAAP adjustments listed.
(e)	Amounts represent the difference between book and tax accounting related to stock-based compensation cost.

Illumina, Inc. Results of Operations – Non-GAAP (continued) (Dollars in millions) (unaudited)
TABLE 5: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:

	Three Months Ended
	December 29, 2024		December 31, 2023
	Core/Consolidated		Core Illumina		GRAIL	Elims	Consolidated
GAAP gross profit (loss) (b)	$ 728	65.9 %	$ 695	63.3 %	$ (19)	$ (2)	$ 674	60.1 %
Amortization of acquired intangible assets	17	1.5 %	14	1.3 %	33	—	47	4.2 %
Restructuring (g)	—	—	1	0.1 %	—	—	1	0.1 %
Non-GAAP gross profit (a)	$ 745	67.4 %	$ 710	64.7 %	$ 14	$ (2)	$ 722	64.4 %

GAAP R&D expense	$ 256	23.2 %	$ 260	23.7 %	$ 84	$ (3)	$ 341	30.4 %
Acquisition-related expenses (d)	(1)	(0.1) %	(1)	(0.1) %	—	—	(1)	(0.1) %
Restructuring (g)	—	—	(11)	(1.0) %	—	—	(11)	(1.0) %
Non-GAAP R&D expense	$ 255	23.1 %	$ 248	22.6 %	$ 84	$ (3)	$ 329	29.3 %

GAAP SG&A expense	$ 279	25.2 %	$ 391	35.6 %	$ 94	$ —	$ 485	43.2 %
Amortization of acquired intangible assets	—	—	—	—	(1)	—	(1)	(0.1) %
Contingent consideration liabilities (c)	11	1.0 %	(58)	(5.2) %	—	—	(58)	(5.1) %
Acquisition-related expenses (d)	(4)	(0.3) %	(26)	(2.4) %	(9)	—	(35)	(3.1) %
Restructuring (g)	(15)	(1.3) %	(48)	(4.4) %	(1)	—	(49)	(4.4) %
Non-GAAP SG&A expense	$ 271	24.6 %	$ 259	23.6 %	$ 83	$ —	$ 342	30.5 %

GAAP goodwill and intangible impairment	$ —	—	$ 6	0.5 %	$ —	$ —	$ 6	0.5 %
Intangible (IPR&D) impairment (i)	—	—	(6)	(0.5) %	—	—	(6)	(0.5) %
Non-GAAP goodwill and intangible impairment	$ —	—	$ —	—	$ —	$ —	$ —	—

GAAP legal contingency and settlement	$ 18	1.7 %	$ 6	0.5 %	$ —	$ —	$ 6	0.5 %
Legal contingency and settlement (h)	(18)	(1.7) %	(6)	(0.5) %	—	—	(6)	(0.5) %
Non-GAAP legal contingency and settlement	$ —	—	$ —	—	$ —	$ —	$ —	—

GAAP operating profit (loss)	$ 175	15.8 %	$ 33	3.0 %	$ (197)	$ —	$ (164)	(14.6) %
Cost of revenue	17	1.5 %	15	1.4 %	33	—	48	4.3 %
R&D costs	1	0.1 %	12	1.1 %	—	—	12	1.1 %
SG&A costs	7	0.6 %	131	12.0 %	12	—	143	12.8 %
Goodwill and intangible impairment	—	—	6	0.5 %	—	—	6	0.5 %
Legal contingency and settlement	18	1.7 %	6	0.5 %	—	—	6	0.5 %
Non-GAAP operating profit (loss) (a)	$ 218	19.7 %	$ 203	18.5 %	$ (152)	$ —	$ 51	4.6 %

GAAP other income (expense), net	$ 13	1.2 %	$ (6)	(0.5) %	$ 2	$ —	$ (4)	(0.4) %
Strategic investment related gain, net (e)	(31)	(2.9) %	—	—	—	—	—	—
Gain on Helix contingent value right (f)	—	—	(2)	(0.2) %	—	—	(2)	(0.2) %
Acquisition-related expenses (d)	—	—	3	0.3 %	—	—	3	0.3 %
Non-GAAP other (expense) income, net (a)	$ (18)	(1.7) %	$ (5)	(0.4) %	$ 2	$ —	$ (3)	(0.3) %

Illumina, Inc. Results of Operations – Non-GAAP (continued) (Dollars in millions) (unaudited)
TABLE 5: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:

	Year Ended
	December 29, 2024
	Core Illumina		GRAIL	Elims	Consolidated
GAAP gross profit (loss) (b)	$ 2,909	67.1 %	$ (38)	$ (10)	$ 2,861	65.4 %
Amortization of acquired intangible assets	63	1.5 %	65	—	128	3.0 %
Restructuring (g)	1	—	—	—	1	—
Non-GAAP gross profit (a)	$ 2,973	68.6 %	$ 27	$ (10)	$ 2,990	68.4 %

GAAP R&D expense	$ 988	22.8 %	$ 189	$ (8)	$ 1,169	26.7 %
Acquisition-related expenses (d)	(4)	(0.1) %	—	—	(4)	(0.1) %
Restructuring (g)	(2)	—	—	—	(2)	—
Non-GAAP R&D expense	$ 982	22.7 %	$ 189	$ (8)	$ 1,163	26.6 %

GAAP SG&A expense	$ 900	20.7 %	$ 192	$ —	$ 1,092	25.0 %
Amortization of acquired intangible assets	(1)	—	(2)	—	(3)	(0.1) %
Contingent consideration liabilities (c)	315	7.2 %	—	—	315	7.2 %
Acquisition-related expenses (d)	(87)	(2.0) %	(11)	—	(98)	(2.3) %
Restructuring (g)	(58)	(1.3) %	(1)	—	(59)	(1.3) %
Non-GAAP SG&A expense	$ 1,069	24.6 %	$ 178	$ —	$ 1,247	28.5 %

GAAP goodwill and intangible impairment	$ 3	0.1 %	$ 1,886	$ —	$ 1,889	43.2 %
Goodwill impairment (i)	—	—	(1,466)	—	(1,466)	(33.5) %
Intangible (IPR&D) impairment (i)	(3)	(0.1) %	(420)	—	(423)	(9.7) %
Non-GAAP goodwill and intangible impairment	$ —	—	$ —	$ —	$ —	—

GAAP legal contingency and settlement	$ (456)	(10.5) %	$ —	$ —	$ (456)	(10.4) %
Legal contingency and settlement (h)	456	10.5 %	—	—	456	10.4 %
Non-GAAP legal contingency and settlement	$ —	—	$ —	$ —	$ —	—

GAAP operating profit (loss)	$ 1,473	34.0 %	$ (2,305)	$ (1)	$ (833)	(19.1) %
Cost of revenue	64	1.5 %	65	—	129	3.0 %
R&D costs	6	0.1 %	—	—	6	0.1 %
SG&A costs	(168)	(3.9) %	13	—	(155)	(3.5) %
Goodwill and intangible impairment	3	0.1 %	1,886	—	1,889	43.2 %
Legal contingency and settlement	(456)	(10.5) %	—	—	(456)	(10.4) %
Non-GAAP operating profit (loss) (a)	$ 922	21.3 %	$ (341)	$ (1)	$ 580	13.3 %

GAAP other (expense) income, net	$ (350)	(8.1) %	$ 5	$ (1)	$ (346)	(7.9) %
Strategic investment related loss, net (e)	308	7.1 %	—	—	308	7.1 %
Gain on Helix contingent value right (f)	(15)	(0.3) %	—	—	(15)	(0.3) %
Acquisition-related expenses (d)	2	—	—	—	2	—
Non-GAAP other (expense) income, net (a)	$ (55)	(1.3) %	$ 5	$ (1)	$ (51)	(1.1) %

Illumina, Inc. Results of Operations – Non-GAAP (continued) (Dollars in millions) (unaudited)
TABLE 5: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:

	Year Ended
	December 31, 2023
	Core Illumina		GRAIL	Elims	Consolidated
GAAP gross profit (loss) (b)	$ 2,856	64.4 %	$ (96)	$ (16)	$ 2,744	60.9 %
Amortization of acquired intangible assets	57	1.3 %	134	—	191	4.3 %
Restructuring (g)	5	0.1 %	—	—	5	0.1 %
Non-GAAP gross profit (a)	$ 2,918	65.8 %	$ 38	$ (16)	$ 2,940	65.3 %

GAAP R&D expense	$ 1,030	23.2 %	$ 338	$ (14)	$ 1,354	30.1 %
Acquisition-related expenses (d)	(2)	—	—	—	(2)	—
Restructuring (g)	(27)	(0.6) %	—	—	(27)	(0.7) %
Non-GAAP R&D expense	$ 1,001	22.6 %	$ 338	$ (14)	$ 1,325	29.4 %

GAAP SG&A expense	$ 1,248	28.1 %	$ 366	$ (2)	$ 1,612	35.8 %
Amortization of acquired intangible assets	(1)	—	(4)	—	(5)	(0.1) %
Contingent consideration liabilities (c)	24	0.5 %	—	—	24	0.5 %
Acquisition-related expenses (d)	(88)	(1.9) %	(21)	—	(109)	(2.4) %
Restructuring (g)	(119)	(2.7) %	(4)	—	(123)	(2.7) %
Proxy contest	(32)	(0.7) %	—	—	(32)	(0.7) %
Non-GAAP SG&A expense	$ 1,032	23.3 %	$ 337	$ (2)	$ 1,367	30.4 %

GAAP goodwill and intangible impairment	$ 6	0.1 %	$ 821	$ —	$ 827	18.3 %
Goodwill impairment (i)	—	—	(712)	—	(712)	(15.7) %
Intangible (IPR&D) impairment (i)	(6)	(0.1) %	(109)	—	(115)	(2.6) %
Non-GAAP goodwill and intangible impairment	$ —	—	$ —	$ —	$ —	—

GAAP legal contingency and settlement	$ 20	0.4 %	$ —	$ —	$ 20	0.4 %
Legal contingency and settlement (h)	(20)	(0.4) %	—	—	(20)	(0.4) %
Non-GAAP legal contingency and settlement	$ —	—	$ —	$ —	$ —	—

GAAP operating profit (loss)	$ 552	12.4 %	$ (1,621)	$ —	$ (1,069)	(23.7) %
Cost of revenue	62	1.5 %	134	—	196	4.4 %
R&D costs	29	0.6 %	—	—	29	0.7 %
SG&A costs	216	4.9 %	28	—	244	5.4 %
Goodwill and intangible impairment	6	0.1 %	821	—	827	18.3 %
Legal contingency and settlement	20	0.4 %	—	—	20	0.4 %
Non-GAAP operating profit (loss) (a)	$ 885	19.9 %	$ (638)	$ —	$ 247	5.5 %

GAAP other (expense) income, net	$ (58)	(1.3) %	$ 10	$ —	$ (48)	(1.1) %
Strategic investment related loss, net (e)	35	0.8 %	—	—	35	0.8 %
Gain on Helix contingent value right (f)	(10)	(0.2) %	—	—	(10)	(0.2) %
Acquisition-related expenses (d)	11	0.2 %	—	—	11	0.2 %
Non-GAAP other (expense) income, net (a)	$ (22)	(0.5) %	$ 10	$ —	$ (12)	(0.3) %

Amounts in tables are rounded to the nearest millions. As a result, certain amounts may not recalculate.
Percentages of revenue are calculated based on the revenue of the respective segment.

(a)	Non-GAAP gross profit, included within non-GAAP operating profit (loss), is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and the average selling prices of our products and services. Non-GAAP operating profit (loss) and non-GAAP other income (expense), net exclude the effects of the pro forma adjustments as detailed above. Non-GAAP operating margin is a key component of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing past and future operating performance.
(b)	Reconciling amounts are recorded in cost of revenue.
(c)	Amounts consist primarily of fair value adjustments for our contingent consideration liability related to GRAIL.
(d)	Amounts consist primarily of legal and other expenses related to the acquisition and divestiture of GRAIL. Amounts in other income (expense), net relate to unrealized gains/losses for foreign currency balance sheet remeasurement of the EC fine liability, which was reversed in Q3 2024, and mark-to-market gains/losses on hedge for the EC fine.
(e)	Amounts consist primarily of mark-to-market adjustments and impairments from strategic investments. Amount for FY 2024 primarily relates to impairment recorded on our retained investment in GRAIL post spin-off.
(f)	Amounts consist of fair value adjustments related to our Helix contingent value right, which was settled in Q3 2024.
(g)	Amounts consist primarily of lease and other asset impairments and employees severance costs.
(h)	Amount for FY 2024 primarily consists of the reversal of the accrued EC fine, including accrued interest. Amount for FY 2023 primarily consists of an adjustment recorded to our accrual for the EC fine.
(i)	Amounts for FY 2024 and FY 2023 consist of goodwill and IPR&D intangible asset impairments related to GRAIL and IPR&D intangible asset impairments related to Core Illumina.

Illumina, Inc. Results of Operations – Non-GAAP (continued) (Dollars in millions) (unaudited)
TABLE 6: CORE ILLUMINA – RECONCILIATION OF GAAP AND NON-GAAP TAX PROVISION:

	Three Months Ended		Year Ended
	December 29, 2024		December 29, 2024
GAAP tax provision	$ 70	37.9 %	$ 229	20.4 %
Incremental non-GAAP tax expense (b)	(15)		73
Income tax provision (c)	(13)		(16)
GILTI, US foreign tax credits, and global minimum top-up tax (d)	5		(82)
Non-GAAP tax provision (a)	$ 47	23.7 %	$ 204	23.6 %

	Year Ended
	December 31, 2023
GAAP tax provision	$ 224	45.4 %
Incremental non-GAAP tax expense (b)	86
Income tax provision (c)	(37)
GILTI and US foreign tax credits (d)	(45)
Non-GAAP tax provision (a)	$ 228	26.5 %

TABLE 7: CONSOLIDATED – RECONCILIATION OF GAAP AND NON-GAAP TAX PROVISION:

	Three Months Ended		Year Ended
	December 29, 2024		December 29, 2024
GAAP tax provision	$ 1	0.6 %	$ 44	(3.8) %
Incremental non-GAAP tax expense (b)	23		201
Income tax provision (c)	(13)		(16)
GILTI, US foreign tax credits, and global minimum top-up tax (d)	51		(90)
Non-GAAP tax provision (a)	$ 62	31.1 %	$ 139	26.3 %

	Three Months Ended		Year Ended
	December 31, 2023		December 31, 2023
GAAP tax provision	$ 8	(4.9) %	$ 44	(3.9) %
Incremental non-GAAP tax expense (b)	44		152
Income tax provision (c)	(28)		(37)
GILTI and US foreign tax credits (d)	2		(61)
Non-GAAP tax provision (a)	$ 26	55.4 %	$ 98	41.8 %

(a)	Non-GAAP tax provision excludes the effects of the pro forma adjustments detailed above, which have been excluded to assist investors in analyzing and assessing past and future operating performance.
(b)	Incremental non-GAAP tax expense reflects tax impact of the non-GAAP adjustments listed in Table 2 and 4.
(c)	Amounts represent the difference between book and tax accounting related to stock-based compensation cost.
(d)	Amounts represent the impact of GRAIL pre-acquisition net operating losses on GILTI, the utilization of US foreign tax credits, and the Pillar Two global minimum top-up tax, which became effective in Q1 2024.

Investors:
Salli Schwartz
+1.858.291.6421
[email protected]

Media:
Bonny Fowler
+1.740.641.5579
[email protected]

View original content:https://www.prnewswire.com/news-releases/illumina-reports-financial-results-for-fourth-quarter-and-fiscal-year-2024-302370616.html

SOURCE Illumina, Inc.

February 6, 2025 4:37 pm

EastGroup Properties Announces Fourth Quarter and Full Year 2024 Results

PR Newswire

Fourth Quarter 2024 Highlights

Net Income Attributable to Common Stockholders of $1.16 Per Diluted Share for Fourth Quarter 2024 Compared to $1.35 Per Diluted Share for Fourth Quarter 2023 (Gains on Sales of Real Estate Investments Were $13 Million, or $0.28 Per Diluted Share, in Fourth Quarter 2023; There Were No Sales in Fourth Quarter 2024)
Funds from Operations (“FFO”) Excluding Gain on Involuntary Conversion and Business Interruption Claims of $2.15 Per Diluted Share for Fourth Quarter 2024 Compared to $2.03 Per Diluted Share for Fourth Quarter 2023, an Increase of 5.9%
Same Property Net Operating Income for the Same Property Pool Excluding Income From Lease Terminations Increased 3.6% on a Straight-Line Basis and 3.4% on a Cash Basis for Fourth Quarter 2024 Compared to the Same Period in 2023
Operating Portfolio was 97.1% Leased and 96.1% Occupied as of December 31, 2024; Average Occupancy of Operating Portfolio was 95.8% for Fourth Quarter 2024 as Compared to 98.1% for Fourth Quarter 2023
Rental Rates on New and Renewal Leases Increased an Average of 46.6% on a Straight-Line Basis
Acquired Three Operating Properties Containing 1,790,000 Square Feet and 26.8 Acres of Development Land for Approximately $257 Million
Started Construction of Five Development Projects Totaling 802,000 Square Feet with Projected Total Costs of Approximately $125 Million
Transferred One Development Project Containing 357,000 Square Feet to the Operating Portfolio

Full Year 2024 Highlights

Net Income Attributable to Common Stockholders of $4.66 Per Diluted Share for 2024 Compared to $4.42 Per Diluted Share for 2023 (Gains on Sales of Real Estate Investments Were $9 Million, or $0.18 Per Diluted Share, in 2024 Compared to $18 Million, or $0.40 Per Diluted Share, in 2023)
FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims of $8.31 Per Diluted Share for 2024 Compared to $7.70 Per Diluted Share for 2023, an Increase of 7.9%
Same Property Net Operating Income for the Same Property Pool Excluding Income From Lease Terminations Increased 4.8% on a Straight-Line Basis and 5.6% on a Cash Basis for 2024 Compared to 2023
Average Occupancy of Operating Portfolio was 96.8% for 2024 as Compared to 98.0% for 2023
Rental Rates on New and Renewal Leases Increased an Average of 53.0% on a Straight-Line Basis
Acquired Six Operating Properties Containing 2,474,000 Square Feet and 61.1 Acres of Development Land for Approximately $404 Million
Started Construction of 10 Development Projects Totaling 1,585,000 Square Feet with Projected Total Costs of Approximately $230 Million
Transferred Seven Development Projects Containing 1,519,000 Square Feet to the Operating Portfolio

JACKSON, Miss.
, Feb. 6, 2025 /PRNewswire/ — EastGroup Properties, Inc. (NYSE: EGP) (the “Company”, “we”, “us” or “EastGroup”) announced today the results of its operations for the three and twelve months ended December 31, 2024.

Commenting on EastGroup’s performance, Marshall Loeb, CEO, stated, “Our consistent, positive performance continues as evidenced by FFO per share excluding gain on involuntary conversion and business interruption claims rising 5.9% for the quarter and 7.9% for the year. The industrial market remains resilient as supported by our Company’s record amount of square footage leased last quarter. Further, the operating landscape is improving with a materially shrinking industrial supply pipeline, while customer demand is showing early signs of recovery. In addition to our operational progress, we made strides to strengthen our balance sheet during the year. Long term, I remain bullish on the continuing external secular trends which benefit our shallow bay, last mile Sunbelt market portfolio.”

EARNINGS PER SHARE

Three Months Ended December 31, 2024
On a diluted per share basis, earnings per common share (“EPS”) were $1.16 for the three months ended December 31, 2024, compared to $1.35 for the same period of 2023. The decrease in EPS was primarily due to the following:

EastGroup recognized gains on sales of real estate investments of $13,156,000 ($0.28 per share) during the three months ended December 31, 2023. There were no sales during the three months ended December 31, 2024.
Depreciation and amortization expense was $49,662,000 ($0.99 per diluted share) for the three months ended December 31, 2024, as compared to $45,248,000 ($0.96 per diluted share) for the same period of 2023.
Weighted average shares increased by 3,359,000 on a diluted basis during the three months ended December 31, 2024, as compared to the same period of 2023.

The decrease in EPS was partially offset by the following:

The Company’s property net operating income (“PNOI”) was $120,867,000 ($2.40 per diluted share) for the three months ended December 31, 2024, as compared to $109,952,000 ($2.34 per diluted share) for the same period of 2023.
Interest expense was $9,192,000 ($0.18 per diluted share) for the three months ended December 31, 2024, as compared to $11,108,000 ($0.24 per diluted share) for the same period of 2023.

Twelve Months Ended December 31, 2024
Diluted EPS for the twelve months ended December 31, 2024 was $4.66 compared to $4.42 for the same period of 2023. The increase in EPS was primarily due to the following:

PNOI was $464,995,000 ($9.51 per diluted share) for the twelve months ended December 31, 2024, as compared to $413,321,000 ($9.12 per diluted share) for the same period of 2023.
Interest expense was $38,956,000 ($0.80 per diluted share) for the twelve months ended December 31, 2024, as compared to to $47,996,000 ($1.06 per diluted share) for the same period of 2023.

The increase in EPS was partially offset by the following:

Depreciation and amortization expense was $189,411,000 ($3.87 per diluted share) for the twelve months ended December 31, 2024, as compared to $171,078,000 ($3.77 per diluted share) for the same period of 2023.
EastGroup recognized gains on sales of real estate investments of $8,751,000 ($0.18 per share) during the twelve months ended December 31, 2024, compared to $17,965,000 ($0.40 per share) during the twelve months ended December 31, 2023.
Weighted average shares increased by 3,580,000 on a diluted basis during the twelve months ended December 31, 2024, as compared to the same period of 2023.

FUNDS FROM OPERATIONS AND PROPERTY NET OPERATING INCOME

Three Months Ended December 31, 2024
For the three months ended December 31, 2024, funds from operations attributable to common stockholders (“FFO”) were $2.15 per diluted share compared to $2.03 per diluted share during the same period of 2023, an increase of 5.9%.

PNOI increased by $10,915,000, or 9.9%, during the three months ended December 31, 2024, compared to the same period of 2023. PNOI increased $4,816,000 from 2023 and 2024 acquisitions, $3,555,000 from newly developed and value-add properties, and $3,396,000 from same property operations (based on the same property pool), and decreased $686,000 from operating properties sold in 2023 and 2024.

Same PNOI Excluding Income from Lease Terminations increased 3.6% on a straight-line basis for the three months ended December 31, 2024, compared to the same period of 2023; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 3.4%.

On a straight-line basis, rental rates on new and renewal leases (representing 4.7% of our total square footage) increased an average of 46.6% during the three months ended December 31, 2024.

Twelve Months Ended December 31, 2024
FFO for the twelve months ended December 31, 2024, was $8.35 per diluted share compared to $7.79 per diluted share during the same period of 2023, an increase of 7.2%.

FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims was $8.31 per diluted share for the twelve months ended December 31, 2024, compared to $7.70 per diluted share for the same period of 2023, an increase of 7.9%.

PNOI increased by $51,674,000, or 12.5%, during the twelve months ended December 31, 2024, compared to the same period of 2023. PNOI increased $20,089,000 from same property operations (based on the same property pool), $18,354,000 from newly developed and value-add properties, and $15,915,000 from 2023 and 2024 acquisitions, and decreased $2,642,000 from operating properties sold in 2023 and 2024.

Same PNOI Excluding Income from Lease Terminations increased 4.8% on a straight-line basis for the twelve months ended December 31, 2024, compared to the same period of 2023; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 5.6%.

On a straight-line basis, rental rates on new and renewal leases (representing 15.9% of our total square footage) increased an average of 53.0% during the twelve months ended December 31, 2024.

The same property pool for the three and twelve months ended December 31, 2024 includes properties which were included in the operating portfolio for the entire period from January 1, 2023 through December 31, 2024; this pool is comprised of properties containing 51,668,000 square feet.

FFO, FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims, PNOI and Same PNOI are non-GAAP financial measures, which are defined under Definitions later in this release. Reconciliations of Net Income to PNOI and Same PNOI, and Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO and FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims are presented in the attached schedule “Reconciliations of GAAP to Non-GAAP Measures.”

ACQUISITIONS AND DISPOSITIONS

As previously announced, during the three months ended December 31, 2024, EastGroup acquired three operating properties containing 1,790,000 square feet for approximately $246,426,000.

In November, the Company acquired three business distribution buildings, known as Riverpoint Industrial Park, totaling 779,000 square feet, in Atlanta for approximately $87,576,000. This property, which was developed in 2020, is 100% leased to six tenants, and increased the Company’s ownership in Atlanta to approximately 2,246,000 square feet.

Also in November, EastGroup acquired DFW Global Logistics Centre 5-8, four multi-tenant business distribution buildings totaling 492,000 square feet, for approximately $75,852,000. These buildings are located near the Dallas-Fort Worth Airport and are currently 100% leased to 13 tenants.

In December, the Company acquired Akimel Gateway, which contains four business distribution buildings totaling 519,000 square feet in Southeast Phoenix, for approximately $82,998,000. This property was developed in 2022 and is 100% leased to four tenants.

EastGroup also acquired 26.8 acres of development land in the Nashville market for approximately $10,460,000 during the fourth quarter. The site, known as Station 24 Commerce Center Land, is expected to accommodate the future development of four buildings totaling approximately 350,000 square feet.

In aggregate, during the twelve months ended December 31, 2024, EastGroup acquired 2,474,000 square feet of operating properties for $390,011,000 and 61.1 acres of development land for $13,762,000.

For the twelve months ended December 31, 2024, the Company sold a portfolio of properties in the Jackson, MS market totaling 159,000 square feet, for $14,050,000. The sale generated a gain of $8,751,000, which is included in Gain on sales of real estate investments; the gain is excluded from FFO. During the twelve months ended December 31, 2024, EastGroup also sold two land parcels, containing 5.4 acres, for $4,261,000. The land sales generated gains of $362,000, which are not included in FFO.

DEVELOPMENT AND VALUE-ADD PROPERTIES

During the fourth quarter of 2024, EastGroup began construction of five new development projects in four markets, which are expected to contain a total of 802,000 square feet and have projected total costs of $124,700,000.

The development projects started during 2024 are detailed in the table below:

Development Projects Started in 2024

Location

Size

Anticipated Conversion
Date

Projected Total Costs

(Square feet)

(In thousands)

Horizon West 5

Orlando, FL

85,000

12/2025

12,800

Northeast Trade Center 1

San Antonio, TX

264,000

04/2025

32,100

Crossroads 1

Tampa, FL

124,000

06/2025

20,000

Texas Avenue 1 & 2

Austin, TX

129,000

05/2026

22,500

World Houston 46

Houston, TX

181,000

06/2026

17,900

Crossroads 2

Tampa, FL

203,000

07/2026

32,300

Grand West Crossing 2

Houston, TX

97,000

08/2026

12,900

Hillside 2

Greenville, SC

141,000

10/2026

15,300

Gateway Interchange A & B

Phoenix, AZ

137,000

01/2027

26,200

Gateway Interchange F & G

Phoenix, AZ

224,000

01/2027

38,000

Total Development Projects Started

1,585,000

230,000

At December 31, 2024, EastGroup’s development and value-add program consisted of 21 projects (4,143,000 square feet) in 14 markets. The projects, which were collectively 22% leased as of February 5, 2025, have a projected total cost of $608,700,000, of which $184,632,000 remained to be funded as of December 31, 2024.

During the fourth quarter of 2024, EastGroup transferred one project, known as Horizon West 10, to the operating portfolio. The Company transfers projects to the portfolio at the earlier of 90% occupancy or one year after completion. The project, which is located in Orlando, contains 357,000 square feet and is 100% leased as of February 5, 2025.

The development projects transferred to the operating portfolio during 2024 are detailed in the table below:


Development and Value-Add Properties Transferred to the Operating Portfolio in 2024	Location	Size	Conversion Date	Cumulative Cost as of 12/31/24		Percent Leased as of 2/5/25
		(Square feet)		(In thousands)

Gateway 2	Miami, FL	133,000	02/2024	$	22,426	100 %
Hillside 1	Greenville, SC	122,000	04/2024	13,184		100 %
McKinney 1 & 2	Dallas, TX	172,000	06/2024	27,522		100 %
MCO Logistics Center	Orlando, FL	167,000	07/2024	24,712		100 %
Stonefield 35 1-3	Austin, TX	276,000	08/2024	36,997		56 %
Springwood 1 & 2	Houston, TX	292,000	09/2024	34,837		93 %
Horizon West 10	Orlando, FL	357,000	10/2024	42,370		100 %
Total Projects Transferred		1,519,000		$	202,048	91 %

Projected Stabilized Yield⁽¹⁾	7.8 %

⁽¹⁾
Weighted average yield based on projected stabilized annual property net operating income on a straight-line basis at 100% occupancy
divided by projected total costs.

DIVIDENDS

EastGroup declared a cash dividend of $1.40 per share of common stock in the fourth quarter of 2024. The fourth quarter dividend, which was paid on January 15, 2025, was the Company’s 180th consecutive quarterly cash distribution to shareholders. The Company has increased or maintained its dividend for 32 consecutive years and has increased it 29 years over that period, including increases in each of the last 13 years. The annualized dividend rate of $5.60 per share represents a dividend yield of 3.3% based on the closing stock price of $172.00 on February 5, 2025.

FINANCIAL STRENGTH AND FLEXIBILITY

EastGroup continues to maintain a strong and flexible balance sheet. Debt-to-total market capitalization was 15.4% at December 31, 2024. The Company’s interest and fixed charge coverage ratio was 12.77x and 11.48x for the three and twelve months ended December 31, 2024, respectively. The Company’s ratio of debt to earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) was 3.20x and 3.36x for the three and twelve months ended December 31, 2024, respectively. EBITDAre and the Company’s interest and fixed charge coverage ratio are non-GAAP financial measures defined under Definitions later in this release. Refer to the schedule “Reconciliations of GAAP to Non-GAAP Measures” attached for the calculation of the Company’s interest and fixed charge coverage ratio, the debt to EBITDAre ratio, and the reconciliation of Net Income to EBITDAre.

In December, EastGroup repaid two senior unsecured notes totaling $120,000,000 at maturity with a weighted average fixed interest rate of 3.47%. For the twelve months ended December 31, 2024, the Company repaid maturing debt totaling $170,000,000 with a weighted average effectively fixed interest rate of 3.65%.

The Company did not enter into any new secured or unsecured debt agreements during the three and twelve months ended December 31, 2024. The Company also had minimal draws on its unsecured credit facilities, with a weighted average balance of $715,000 and $1,776,000 for the three and twelve months ended December 31, 2024, and no borrowings on the facilities as of December 31, 2024.

Subsequent to year end, EastGroup refinanced a $100,000,000 senior unsecured term loan, reducing the credit spread by 30 basis points to a total effectively fixed interest rate of 4.97%. The loan, which previously had five years remaining, now has a three-year maturity with two one-year extension options at the Company’s election.

During the fourth quarter, EastGroup sold 914,780 shares of common stock directly through its sales agents under its continuous common equity offering program at a weighted average price of $174.23 per share, providing aggregate net proceeds to the Company of approximately $157,787,000. During the twelve months ended December 31, 2024, the Company sold 1,373,459 shares of common stock directly through its sales agents under its continuous common equity offering program at a weighted average price of $174.30 per share, providing aggregate net proceeds to the Company of approximately $236,996,000.

During the fourth quarter, EastGroup settled outstanding forward equity sale agreements that were previously entered into under its continuous common equity offering program by issuing 1,704,863 shares of common stock in exchange for net proceeds of approximately $305,517,000. Subsequent to quarter-end, the Company settled additional outstanding forward equity sale agreements by issuing 214,138 shares of common stock in exchange for approximate net proceeds of $37,005,000.

During the three months ended December 31, 2024, the Company entered into forward equity sale agreements with respect to 690,953 shares of common stock with an initial weighted average forward price of $175.05 per share and approximate gross sales proceeds of $120,954,000 based on the initial forward price. The Company did not receive any proceeds from the sale of common shares by the forward purchasers at the time it entered into forward equity sale agreements. As of February 5, 2025, EastGroup had 171,115 shares of common stock available for settlement prior to the expiration of the applicable settlement period in November 2025, for approximate net proceeds of $29,688,000, based on a weighted average forward price of $173.50 per share.

OUTLOOK FOR 2025

We estimate EPS for 2025 to be in the range of $4.71 to $4.91 and FFO per share attributable to common stockholders for 2025 to be in the range of $8.80 to $9.00. The table below reconciles projected net income attributable to common stockholders to projected FFO. The Company is providing a projection of estimated net income attributable to common stockholders solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission.

EastGroup’s projections are based on management’s current beliefs and assumptions about our business, the industry and the markets in which we operate; there are known and unknown risks and uncertainties associated with these projections. We assume no obligation to update publicly any forward-looking statements, including our Outlook for 2025, whether as a result of new information, future events or otherwise. Please refer to the “Forward-Looking Statements” disclosures included in this earnings release and “Risk Factors” disclosed in our annual and quarterly reports filed with the Securities and Exchange Commission for more information.

The following table presents the guidance range for 2025:


	Low Range			High Range
	Q1 2025		Y/E 2025	Q1 2025	Y/E 2025
	(In thousands, except per share data)

Net income attributable to common stockholders	$	55,378	248,094	59,544	258,632
Depreciation and amortization	51,353		215,768	51,353	215,768
Funds from operations attributable to common stockholders*	$	106,731	463,862	110,897	474,400

Weighted average shares outstanding – Diluted	52,070		52,686	52,070	52,686
Per share data (diluted):
Net income attributable to common stockholders	$	1.06	4.71	1.14	4.91
Funds from operations attributable to common stockholders	2.05		8.80	2.13	9.00

*This is a non-GAAP financial measure. Please refer to Definitions.

The following assumptions were used for the mid-point:

Metrics

Initial Guidance for
Year 2025

Actual for Year 2024

FFO per share

$8.80 – $9.00

$8.35

FFO per share increase over prior year

6.6 %

7.2 %

FFO per share increase over prior year excluding gain on
involuntary conversion and business interruption claims

7.1 %

7.9 %

Same PNOI growth: cash basis ⁽¹⁾

5.4% – 6.4% ⁽²⁾

5.6 %

Average month-end occupancy – operating portfolio

95.5% – 96.5%

96.8 %

Development starts:

Square feet

2.5 million

1.6 million

Projected total investment

$300 million

$230 million

Operating property acquisitions

$150 million

$390 million

Operating property dispositions

(Potential gains on dispositions are not included in the projections)

$15 million

$14 million

Capital proceeds

$450 million

$724 million

General and administrative expense ⁽³⁾

$21.1 million

$20.6 million

⁽¹⁾
Excludes straight-line rent adjustments, amortization of market rent intangibles for acquired leases, and income from lease terminations.

⁽²⁾
Includes properties which have been in the operating portfolio since 1/1/24 and are projected to be in the operating portfolio through 12/31/25; includes 54,633,000 square feet.

⁽³⁾
Approximately 37% of the estimated annual general and administrative expense is expected to be incurred in the first quarter of 2025, primarily due to accelerated expense for employees who are retirement-eligible under our equity incentive plans.

DEFINITIONS

The Company’s chief decision maker uses Net income as the primary measure of operating results in making decisions. Investor and industry analysts primarily utilize two supplemental operating performance measures in analyzing operating results, which include: (1) funds from operations attributable to common stockholders (“FFO”), including FFO as adjusted as described below, and (2) property net operating income (“PNOI”), as defined below.

FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit’s guidance allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a real estate investment trust’s (“REIT’s”) business are excluded from the calculation of FFO. EastGroup has made the election to exclude activity related to such assets that are incidental to our business. FFO is calculated as net income (loss) attributable to common stockholders computed in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding gains and losses from sales of real estate property (including other assets incidental to the Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims is calculated as FFO (as defined above), adjusted to exclude gains on involuntary conversion and business interruption claims. The Company believes that this exclusion presents a more meaningful comparison of operating performance across periods.

PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments. EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI” in this press release and the accompanying reconciliation; the Company also presents Same PNOI Excluding Income from Lease Terminations. The Company presents Same PNOI and Same PNOI Excluding Income from Lease Terminations as a property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis. The Company believes it is useful to evaluate Same PNOI Excluding Income from Lease Terminations on both a straight-line and cash basis. The straight-line basis is calculated by averaging the customers’ rent payments over the lives of the leases; GAAP requires the recognition of rental income on a straight-line basis. The cash basis excludes adjustments for straight-line rent and amortization of market rent intangibles for acquired leases; cash basis is an indicator of the rents charged to customers by the Company during the periods presented and is useful in analyzing the embedded rent growth in the Company’s portfolio. “Same Properties” is defined as operating properties owned during the entire current period and prior year reporting period. Operating properties are stabilized real estate properties (land including building and improvements) that make up the Company’s operating portfolio. Properties developed or acquired are excluded from the same property pool until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are also excluded.

FFO and PNOI are supplemental industry reporting measurements used to evaluate the performance of the Company’s investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry’s calculations of PNOI and FFO provides supplemental indicators of the properties’ performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items excluded from or added back to FFO are significant components in understanding and assessing the Company’s financial performance.

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) is also a key performance measure. EBITDAre is computed in accordance with standards established by Nareit and defined as Net Income, adjusted for gains and losses from sales of real estate investments, non-operating real estate and other assets incidental to the Company’s business, interest expense, income tax expense, depreciation and amortization. EBITDAre is a non-GAAP financial measure used to measure the Company’s operating performance and its ability to meet interest payment obligations and pay quarterly stock dividends on an unleveraged basis.

Debt-to-EBITDAre ratio is a non-GAAP financial measure calculated by dividing the Company’s debt by its EBITDAre, and is used in analyzing the financial condition and operating performance of the Company relative to its leverage.

The Company’s interest and fixed charge coverage ratio is a non-GAAP financial measure calculated by dividing the Company’s EBITDAre by its interest expense. We believe this ratio is useful to investors because it provides a basis for analysis of the Company’s leverage, operating performance and its ability to service the interest payments due on its debt.

CONFERENCE CALL

EastGroup will host a conference call and webcast to discuss the results of its fourth quarter, review the Company’s current operations, and present its earnings outlook for 2025 on Friday, February 7, 2025, at 11:00 a.m. Eastern Time. A live broadcast of the conference call is available by dialing 1-800-836-8184 (conference ID: EastGroup) or by webcast through a link on the Company’s website at www.eastgroup.net. If you are unable to listen to the live conference call, a telephone and webcast replay will be available through Friday, February 14, 2025. The telephone replay can be accessed by dialing 1-888-660-6345 (access code 93780#), and the webcast replay can be accessed through a link on the Company’s website at www.eastgroup.net.

SUPPLEMENTAL INFORMATION

Supplemental financial information is available under Quarterly Results in the Investor Relations section of the Company’s website at www.eastgroup.net or upon request by calling the Company at 601-354-3555.

COMPANY INFORMATION

EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 2000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Texas, Florida, California, Arizona and North Carolina. The Company’s goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. The Company’s portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 63.1 million square feet. EastGroup Properties, Inc. press releases are available on the Company’s website at www.eastgroup.net.

The Company announces information about the Company and its business to investors and the public using the Company’s website (eastgroup.net), including the investor relations website (investor.eastgroup.net), filings with the Securities and Exchange Commission, press releases, public conference calls, and webcasts. The Company also uses social media to communicate with its investors and the public. While not all the information that the Company posts to the Company’s website or on the Company’s social media channels is of a material nature, some information could be deemed to be material. Therefore, the Company encourages investors, the media, and others interested in the Company to review the information that it posts on the social media channels, including Facebook (facebook.com/eastgroupproperties), LinkedIn (linkedin.com/company/eastgroup-properties-inc), and X (X.com/eastgroupprop). The list of social media channels that the company uses may be updated on its investor relations website from time to time. The information contained on, or that may be accessed through, our website or any of our social media channels is not incorporated by reference into, and is not a part of, this document.

FORWARD-LOOKING STATEMENTS

The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “goals,” “plans” or variations of such words and similar expressions or the negative of such words, constitute “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, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. For instance, the amount, timing and frequency of future dividends is subject to authorization by the Company’s Board of Directors and will be based upon a variety of factors. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to:

international, national, regional and local economic conditions;
the competitive environment in which the Company operates;
fluctuations of occupancy or rental rates;
potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants, or our ability to lease space at current or anticipated rents, particularly in light of ongoing interest rate uncertainty;
disruption in supply and delivery chains;
increased construction and development costs, including as a result of the recent inflationary environment;
acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with our projections or to materialize at all;
potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate laws, REIT or corporate income tax laws, potential changes in zoning laws, or increases in real property tax rates, and any related increased cost of compliance;
our ability to maintain our qualification as a REIT;
natural disasters such as fires, floods, tornadoes, hurricanes, earthquakes or other extreme weather events, which may or may not be caused by longer-term shifts in climate patterns, could destroy buildings and damage regional economies;
the availability of financing and capital, increases in or long-term elevated interest rates, and our ability to raise equity capital on attractive terms;
financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest, and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
our ability to retain our credit agency ratings;
our ability to comply with applicable financial covenants;
credit risk in the event of non-performance by the counterparties to our interest rate swaps;
how and when pending forward equity sales may settle;
lack of or insufficient amounts of insurance;
litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
our ability to attract and retain key personnel or lack of adequate succession planning;
risks related to the failure, inadequacy or interruption of our data security systems and processes, including security breaches through cyber attacks;
pandemics, epidemics or other public health emergencies, such as the coronavirus pandemic;
potentially catastrophic events such as acts of war, civil unrest and terrorism; and
environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.

All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within the Company’s most recent Annual Report on Form 10-K, as such factors may be updated from time to time in the Company’s periodic filings and current reports filed with the SEC.

The Company assumes no obligation to update publicly any forward-looking statements, including its Outlook for 2025, whether as a result of new information, future events or otherwise.

CONTACT

[email protected]


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

	Three Months Ended			Twelve Months Ended
	December 31,			December 31,
	2024		2023	2024	2023
REVENUES
Income from real estate operations	$	163,767	149,026	638,035	566,179
Other revenue	277		123	2,199	4,412
	164,044		149,149	640,234	570,591
EXPENSES
Expenses from real estate operations	43,195		39,368	174,212	154,030
Depreciation and amortization	49,662		45,248	189,411	171,078
General and administrative	4,043		3,740	20,619	16,757
Indirect leasing costs	229		146	785	582
	97,129		88,502	385,027	342,447

OTHER INCOME (EXPENSE)
Interest expense	(9,192)		(11,108)	(38,956)	(47,996)
Gain on sales of real estate investments	—		13,156	8,751	17,965
Other	931		774	2,805	2,435
NET INCOME	58,654		63,469	227,807	200,548
Net income attributable to noncontrolling interest in joint ventures	(14)		(14)	(56)	(57)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS	58,640		63,455	227,751	200,491
Other comprehensive income (loss) — interest rate swaps	8,013		(17,200)	(2,935)	(11,483)
TOTAL COMPREHENSIVE INCOME	$	66,653	46,255	224,816	189,008

BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	1.17	1.35	4.67	4.43
Weighted average shares outstanding — Basic	50,241		46,831	48,803	45,224
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	1.16	1.35	4.66	4.42
Weighted average shares outstanding — Diluted	50,339		46,980	48,911	45,331


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

	Three Months Ended			Twelve Months Ended
	December 31,			December 31,
	2024		2023	2024	2023

NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS	$	58,640	63,455	227,751	200,491
Depreciation and amortization	49,662		45,248	189,411	171,078
Company’s share of depreciation from unconsolidated investment	31		31	125	124
Depreciation and amortization attributable to noncontrolling interest	(1)		(1)	(5)	(5)
Gain on sales of real estate investments	—		(13,156)	(8,751)	(17,965)
Gain on sales of non-operating real estate	(140)		—	(362)	(446)
FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON STOCKHOLDERS*	108,192		95,577	408,169	353,277
Gain on involuntary conversion and business interruption claims	—		—	(1,708)	(4,187)
FFO ATTRIBUTABLE TO COMMON STOCKHOLDERS – EXCLUDING GAIN ON INVOLUNTARY CONVERSION AND BUSINESS INTERRUPTION CLAIMS*	$	108,192	95,577	406,461	349,090

NET INCOME	$	58,654	63,469	227,807	200,548
Interest expense ⁽¹⁾	9,192		11,108	38,956	47,996
Depreciation and amortization	49,662		45,248	189,411	171,078
Company’s share of depreciation from unconsolidated investment	31		31	125	124
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)	117,539		119,856	456,299	419,746
Gain on sales of real estate investments	—		(13,156)	(8,751)	(17,965)
Gain on sales of non-operating real estate	(140)		—	(362)	(446)
EBITDA FOR REAL ESTATE (“EBITDAre”)*	$	117,399	106,700	447,186	401,335

Debt	$	1,503,562	1,674,827	1,503,562	1,674,827
Debt-to-EBITDAre ratio*	3.20		3.92	3.36	4.17

EBITDAre*	$	117,399	106,700	447,186	401,335
Interest expense ⁽¹⁾	9,192		11,108	38,956	47,996
Interest and fixed charge coverage ratio*	12.77		9.61	11.48	8.36

DILUTED PER COMMON SHARE DATA FOR EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	1.16	1.35	4.66	4.42
FFO attributable to common stockholders*	$	2.15	2.03	8.35	7.79
FFO attributable to common stockholders – excluding gain on involuntary conversion and business interruption claims*	$	2.15	2.03	8.31	7.70
Weighted average shares outstanding for EPS and FFO purposes – Diluted	50,339		46,980	48,911	45,331


⁽¹⁾ Net of capitalized interest of $5,026 and $4,371 for the three months ended December 31, 2024 and 2023, respectively; and $19,823 and $16,235 for the twelve months ended December 31, 2024 and 2023, respectively.
*This is a non-GAAP financial measure. Please refer to Definitions.


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Continued)
(IN THOUSANDS)
(UNAUDITED)

	Three Months Ended			Twelve Months Ended
	December 31,			December 31,
	2024		2023	2024	2023

NET INCOME	$	58,654	63,469	227,807	200,548
Gain on sales of real estate investments	—		(13,156)	(8,751)	(17,965)
Gain on sales of non-operating real estate	(140)		—	(362)	(446)
Interest income	(512)		(496)	(1,334)	(879)
Other revenue	(277)		(123)	(2,199)	(4,412)
Indirect leasing costs	229		146	785	582
Depreciation and amortization	49,662		45,248	189,411	171,078
Company’s share of depreciation from unconsolidated investment	31		31	125	124
Interest expense (1)	9,192		11,108	38,956	47,996
General and administrative expense (2)	4,043		3,740	20,619	16,757
Noncontrolling interest in PNOI of consolidated joint ventures	(15)		(15)	(62)	(62)
PROPERTY NET OPERATING INCOME (“PNOI”) *	120,867		109,952	464,995	413,321
PNOI from 2023 and 2024 acquisitions	(6,888)		(2,072)	(19,249)	(3,334)
PNOI from 2023 and 2024 development and value-add properties	(9,361)		(5,806)	(31,544)	(13,190)
PNOI from 2023 and 2024 operating property dispositions	—		(686)	(177)	(2,819)
Other PNOI	85		(81)	208	166
SAME PNOI (Straight-Line Basis) *	104,703		101,307	414,233	394,144
Lease termination fee income from same properties	(235)		(488)	(2,192)	(1,020)
SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS (Straight-Line Basis) *	104,468		100,819	412,041	393,124
Straight-line rent adjustments for same properties	(1,521)		(1,152)	(4,560)	(6,429)
Acquired leases — market rent adjustment amortization for same properties	(324)		(441)	(1,400)	(2,045)
SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS (Cash Basis) *	$	102,623	99,226	406,081	384,650


(1) Net of capitalized interest of $5,026 and $4,371 for the three months ended December 31, 2024 and 2023, respectively; and $19,823 and $16,235 for the twelve months ended December 31, 2024 and 2023, respectively.
(2) Net of capitalized development costs of $2,023 and $2,489 for the three months ended December 31, 2024 and 2023, respectively; and $8,181 and $10,472 for the twelve months ended December 31, 2024 and 2023, respectively.
*This is a non-GAAP financial measure. Please refer to Definitions.

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SOURCE EastGroup Properties

February 6, 2025 4:37 pm

Fortinet Reports Fourth Quarter and Full Year 2024 Financial Results

Fourth Quarter 2024 Highlights

Total revenue of $1.66 billion, up 17% year over year
Product revenue of $574 million, up 18% year over year
Billings of $2.00 billion, up 7% year over year
¹
Record GAAP operating margin of 35%
Record Non-GAAP operating margin of 39%
¹
Unified SASE ARR
²
up 28% and Security Operations ARR
²
up 32%, year over year
Ranked #7 on the Forbes Most Trusted Companies in America 2025 list, the only cybersecurity company in the top 50

Full Year 2024 Highlights

Total revenue of $5.96 billion, up 12% year over year
Service revenue of $4.05 billion, up 20% year over year
Record GAAP operating margin of 30%
Record Non-GAAP operating margin of 35%
¹
Remaining performance obligations of $6.42 billion, up 12% year over year
Cash flow from operations of $2.26 billion
Free cash flow of $1.88 billion
¹
Exceeded the ‘Rule of 45’ for the fifth consecutive year

SUNNYVALE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the fourth quarter of 2024 and full year ended December 31, 2024.

“In the fourth quarter, we successfully balanced growth and profitability as our non-GAAP operating margin increased 720 basis points year-over-year to a company record of 39%, while revenue grew 17%,” said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. “We continue to execute our strategy of investing in the high-growth Unified SASE and Security Operations markets, while strengthening our position in Secure Networking. Our customers are increasingly recognizing the benefits of a single-vendor approach to SASE, and we expect to emerge as a leader in this space, being the only company to natively develop all SASE functions within a unified operating system, FortiOS, which seamlessly integrates networking and security capabilities.”

Financial Summary for the Fourth Quarter of 2024

Revenue: Total revenue was $1.66 billion for the fourth quarter of 2024, an increase of 17.3% compared to $1.42 billion for the same quarter of 2023.
Service Revenue: Service revenue was $1.09 billion for the fourth quarter of 2024, an increase of 17.2% compared to $927.0 million for the same quarter of 2023.
Product Revenue: Product revenue was $574.0 million for the fourth quarter of 2024, an increase of 17.6% compared to $488.1 million for the same quarter of 2023.
Billings
¹
: Total billings were $2.00 billion for the fourth quarter of 2024, an increase of 7.4% compared to $1.86 billion for the same quarter of 2023.
Unified SASE ARR
²
: Unified SASE ARR was $1.12 billion for the fourth quarter of 2024, an increase of 27.9% compared to $875.3 million for the same quarter of 2023.
Security Operations ARR
²
: Security Operations ARR was $422.4 million for the fourth quarter of 2024, an increase of 32.2% compared to $319.6 million for the same quarter of 2023.
GAAP Operating Income and Margin: GAAP operating income was $574.1 million for the fourth quarter of 2024, representing a GAAP operating margin of 34.6%. GAAP operating income was $385.4 million for the same quarter of 2023, representing a GAAP operating margin of 27.2%.
Non-GAAP
Operating Income
and Margin
¹
: Non-GAAP operating income was $650.9 million for the fourth quarter of 2024, representing a non-GAAP operating margin of 39.2%. Non-GAAP operating income was $453.5 million for the same quarter of 2023, representing a non-GAAP operating margin of 32.0%.
GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $526.2 million for the fourth quarter of 2024, compared to GAAP net income of $310.9 million for the same quarter of 2023. GAAP diluted net income per share was $0.68 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.40 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding.
Non-GAAP
Net Income and Diluted Net Income Per Share
¹
: Non-GAAP net income was $571.5 million for the fourth quarter of 2024, compared to non-GAAP net income of $392.0 million for the same quarter of 2023. Non-GAAP diluted net income per share was $0.74 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to $0.51 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding.
Cash Flow: Cash flow from operations was $477.6 million for the fourth quarter of 2024, compared to $191.7 million for the same quarter of 2023.
Free Cash Flow
¹
: Free cash flow was $380.0 million for the fourth quarter of 2024, compared to $164.8 million for the same quarter of 2023.

Financial Summary for the Full Year 2024

Revenue: Total revenue was $5.96 billion for 2024, an increase of 12.3% compared to $5.30 billion in 2023.
Service Revenue: Service revenue was $4.05 billion for 2024, an increase of 19.8% compared to $3.38 billion in 2023.
Product Revenue: Product revenue was $1.91 billion for 2024, a decrease of 1.0% compared to $1.93 billion in 2023.
Billings
¹
: Total billings were $6.53 billion for 2024, an increase of 2.1% compared to $6.40 billion in 2023.
Remaining performance obligations: Remaining performance obligations were $6.42 billion as of December 31, 2024, an increase of 11.7% compared to $5.75 billion as of December 31, 2023.
Deferred Revenue: Total deferred revenue was $6.36 billion as of December 31, 2024, an increase of 10.9% compared to $5.74 billion as of December 31, 2023.
GAAP Operating Income and Margin: GAAP operating income was $1.80 billion for 2024, representing a GAAP operating margin of 30.3%. GAAP operating income was $1.24 billion for 2023, representing a GAAP operating margin of 23.4%.
Non-GAAP
Operating Income
and Margin
¹
: Non-GAAP operating income was $2.09 billion for 2024, representing a non-GAAP operating margin of 35.0%. Non-GAAP operating income was $1.51 billion for 2023, representing a non-GAAP operating margin of 28.4%.
GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $1.75 billion for 2024, compared to GAAP net income of $1.15 billion for 2023. GAAP diluted net income per share was $2.26 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $1.46 for 2023, based on 788.2 million diluted weighted-average shares outstanding.
Non-GAAP
Net Income and Diluted Net Income Per Share
¹
: Non-GAAP net income was $1.83 billion for 2024, compared to non-GAAP net income of $1.29 billion for 2023. Non-GAAP diluted net income per share was $2.37 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to $1.63 for 2023, based on 788.2 million diluted weighted-average shares outstanding.
Cash Flow: Cash flow from operations was $2.26 billion in 2024 compared to $1.94 billion in 2023.
Free Cash Flow
¹
: Free cash flow was $1.88 billion in 2024, compared to $1.73 billion in 2023.

Guidance

For the first quarter of 2025, Fortinet currently expects:

Revenue in the range of $1.500 billion to $1.560 billion
Billings in the range of $1.520 billion to $1.600 billion
Non-GAAP gross margin in the range of 80.0% to 81.0%
Non-GAAP operating margin in the range of 30.0% to 31.0%
Diluted non-GAAP net income per share in the range of $0.52 to $0.54, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 774 million to 780 million.

For the fiscal year 2025, Fortinet currently expects:

Revenue in the range of $6.650 billion to $6.850 billion
Service revenue in the range of $4.575 billion to $4.725 billion
Billings in the range of $7.200 billion to $7.400 billion
Non-GAAP gross margin in the range of 79.0% to 81.0%
Non-GAAP operating margin in the range of 31.0% to 33.0%
Diluted non-GAAP net income per share in the range of $2.41 to $2.47, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 773 million to 783 million.

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

Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, charges in connection with litigation settlement, gain on intellectual property matters, gain on bargain purchase related to acquisition, non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.

¹ A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.
² ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value.

Conference Call Details

Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.

First Quarter 2025 Conference Participation Schedule:

Morgan Stanley Technology, Media & Telecom Conference
March 4, 2025

Members of Fortinet’s management team are expected to present at this conference and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change.

About Fortinet
(www.fortinet.com)

Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet’s solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams (“CERTs”), government entities, and academia, is a fundamental aspect of Fortinet’s commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet’s elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs.

Copyright © 2025 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail, FortiSandbox, FortiADC, FortiAgent, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAppSec, FortiAuthenticator, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCART, FortiCASB, FortiCentral, FortiCNP, FortiConnect, FortiController, FortiConverter, FortiCSPM, FortiCWP, FortiDAST, FortiDATA, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevice, FortiDevSec, FortiDLP, FortiEdge, FortiEDR, FortiEndpoint, FortiExplorer, FortiExtender, FortiFirewall, FortiFlex, FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC, FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPoint, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiScanner, FortiSDNConnector, FortiSEC, FortiSIEM, FortiSMS, FortiSOAR, FortiSRA, FortiStack, FortiSwitch, FortiTester, FortiTIP, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM, FortiXDR and Lacework FortiCNAPP. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments.

FTNT-F

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future growth and market share gains, our strategy going forward, and guidance and expectations around future financial results, including guidance and expectations for the first quarter of 2025 and full year 2025, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by economic challenges, a possible economic downturn or recession and the effects of inflation or stagflation, rising interest rates or reduced information technology spending; supply chain challenges; negative impacts from the ongoing war in Ukraine and its related macroeconomic effects and our decision to reduce operations in Russia; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; sales execution risks, including risks in connection with the timing and completion of large strategic deals; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or perceived breach of our network or our customers’ networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive, including advances in artificial intelligence; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by competition and pricing pressure; excess product inventory for any reason, including those caused by the effects of increased inflation and interest rates in certain geographies and the war in Ukraine; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine or tensions between China and Taiwan, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies, including the impact of any future shutdowns of the U.S. government and the transition in administrations; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events.

Non-GAAP Financial Measures

We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.

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 financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.

Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.

Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure.

Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation, amortization of acquired intangible assets and charges in connection with litigation settlement, less gain on intellectual property matter and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.

Non-GAAP net income and diluted net income per share. We define non-GAAP net income as net income plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a gain on bargain purchase related to acquisition, a non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP.

FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions)

	December 31, 2024			December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,875.9		$	1,397.9
Short-term investments		1,126.4			1,021.5
Marketable equity securities		64.2			21.0
Accounts receivable—net		1,463.4			1,402.0
Inventory		315.5			484.8
Prepaid expenses and other current assets		126.1			101.1
Total current assets		5,971.5			4,428.3
PROPERTY AND EQUIPMENT—NET		1,349.5			1,044.4
DEFERRED CONTRACT COSTS		622.9			605.6
DEFERRED TAX ASSETS		1,335.6			868.8
GOODWILL AND OTHER INTANGIBLE ASSETS—NET		350.4			161.8
OTHER ASSETS		133.2			150.0
TOTAL ASSETS	$	9,763.1		$	7,258.9
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	190.9		$	204.3
Accrued liabilities		337.9			423.7
Accrued payroll and compensation		255.7			242.3
Deferred revenue		3,276.2			2,848.7
Total current liabilities		4,060.7			3,719.0
DEFERRED REVENUE		3,084.7			2,886.3
LONG-TERM DEBT		994.3			992.3
OTHER LIABILITIES		129.6			124.7
Total liabilities		8,269.3			7,722.3
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock		0.8			0.8
Additional paid-in capital		1,636.2			1,416.4
Accumulated other comprehensive loss		(26.1	)		(18.9	)
Accumulated deficit		(117.1	)		(1,861.7	)
Total stockholders’ equity (deficit)		1,493.8			(463.4	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	9,763.1		$	7,258.9

FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts)

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
REVENUE:
Product	$	574.0		$	488.1		$	1,908.7		$	1,927.3
Service		1,086.1			927.0			4,047.1			3,377.5
Total revenue		1,660.1			1,415.1			5,955.8			5,304.8
COST OF REVENUE:
Product		178.0			197.2			652.0			763.6
Service		136.5			118.7			505.6			473.6
Total cost of revenue		314.5			315.9			1,157.6			1,237.2
GROSS PROFIT:
Product		396.0			290.9			1,256.7			1,163.7
Service		949.6			808.3			3,541.5			2,903.9
Total gross profit		1,345.6			1,099.2			4,798.2			4,067.6
OPERATING EXPENSES:
Research and development		191.1			152.5			716.8			613.8
Sales and marketing		526.5			507.4			2,044.8			2,006.0
General and administrative		55.1			55.1			237.8			211.3
Gain on intellectual property matter		(1.2	)		(1.2	)		(4.6	)		(4.6	)
Total operating expenses		771.5			713.8			2,994.8			2,826.5
OPERATING INCOME		574.1			385.4			1,803.4			1,241.1
INTEREST INCOME		42.3			30.5			155.2			119.7
INTEREST EXPENSE		(4.9	)		(5.4	)		(20.0	)		(21.0	)
GAIN ON BARGAIN PURCHASE		—			—			106.3			—
OTHER INCOME (EXPENSE)—NET		6.9			5.1			13.6			(6.1	)
INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS		618.4			415.6			2,058.5			1,333.7
PROVISION FOR INCOME TAXES		86.7			95.2			283.9			143.8
LOSS FROM EQUITY METHOD INVESTMENTS		(5.5	)		(9.5	)		(29.4	)		(42.1	)
NET INCOME	$	526.2		$	310.9		$	1,745.2		$	1,147.8
Net income per share:
Basic	$	0.69		$	0.41		$	2.28		$	1.47
Diluted	$	0.68		$	0.40		$	2.26		$	1.46
Weighted-average shares outstanding:
Basic		766.5			764.9			764.4			778.6
Diluted		775.2			772.3			771.9			788.2

FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions)

	Year Ended
	December 31, 2024			December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,745.2		$	1,147.8
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		257.9			249.0
Amortization of deferred contract costs		293.7			266.3
Depreciation and amortization		122.8			113.4
Amortization of investment discounts		(48.8	)		(27.7	)
Loss from equity method investments		29.4			42.1
Gain on bargain purchase		(106.3	)		—
Other		(15.2	)		18.5
Changes in operating assets and liabilities, net of impact of business combinations:
Accounts receivable—net		(45.4	)		(146.4	)
Inventory		131.2			(253.5	)
Prepaid expenses and other current assets		(13.7	)		(27.6	)
Deferred contract costs		(311.1	)		(353.5	)
Deferred tax assets		(223.2	)		(301.9	)
Other assets		(11.0	)		17.7
Accounts payable		(10.2	)		(43.1	)
Accrued liabilities		(106.7	)		137.4
Accrued payroll and compensation		—			23.4
Other liabilities		(8.3	)		(21.7	)
Deferred revenue		577.8			1,095.3
Net cash provided by operating activities		2,258.1			1,935.5
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments		(1,948.6	)		(1,855.8	)
Sales of investments		0.5			4.0
Maturities of investments		1,891.7			1,414.8
Purchases of property and equipment		(378.9	)		(204.1	)
Purchase of investment in privately held company		—			(8.5	)
Payments made in connection with business combinations, net of cash acquired		(275.5	)		—
Purchases of marketable equity securities		(16.7	)		—
Other		0.1			0.3
Net cash used in investing activities		(727.4	)		(649.3	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase and retirement of common stock		(0.6	)		(1,500.5	)
Proceeds from issuance of common stock		63.1			43.8
Taxes paid related to net share settlement of equity awards		(100.9	)		(112.5	)
Other		(11.7	)		(1.2	)
Net cash used in financing activities		(50.1	)		(1,570.4	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(2.6	)		(0.8	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,478.0			(285.0	)
CASH AND CASH EQUIVALENTS—Beginning of year		1,397.9			1,682.9
CASH AND CASH EQUIVALENTS—End of year	$	2,875.9		$	1,397.9

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures

(Unaudited, in millions, except per share amounts)

Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income and diluted net income per share

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Reconciliation of non-GAAP operating income:
GAAP operating income	$	574.1		$	385.4		$	1,803.4		$	1,241.1
GAAP operating margin		34.6	%		27.2	%		30.3	%		23.4	%
Add back:
Stock‐based compensation		66.5			64.0			260.2			251.6
Amortization of acquired intangible assets		11.5			5.3			23.1			18.9
Litigation-related matter ^(a)		—			—			3.2			—
Gain on intellectual property matter		(1.2	)		(1.2	)		(4.6	)		(4.6	)
Non‐GAAP operating income	$	650.9		$	453.5		$	2,085.3		$	1,507.0
Non‐GAAP operating margin		39.2	%		32.0	%		35.0	%		28.4	%

Reconciliation of non-GAAP net income:
GAAP net income	$	526.2		$	310.9		$	1,745.2		$	1,147.8
Add back:
Stock‐based compensation		66.5			64.0			260.2			251.6
Amortization of acquired intangible assets		11.5			5.3			23.1			18.9
Litigation-related matter ^(a)		—			—			3.2			—
Gain on intellectual property matter		(1.2	)		(1.2	)		(4.6	)		(4.6	)
Gain on bargain purchase ^(b)		—			—			(106.3	)		—
Tax adjustment ^(c)		(31.5	)		13.0			(95.9	)		(128.1	)
Non-cash charge on equity method investment ^(d)		—			—			8.0			—
Non-GAAP net income	$	571.5		$	392.0		$	1,832.9		$	1,285.6

Non-GAAP net income per share, diluted
Non-GAAP net income	$	571.5		$	392.0		$	1,832.9		$	1,285.6
Non-GAAP shares used in diluted net income per share calculations		775.2			772.3			771.9			788.2
Non-GAAP net income per share, diluted	$	0.74		$	0.51		$	2.37		$	1.63

Reconciliation of non-GAAP net income per share, diluted
GAAP net income per share, diluted	$	0.68		$	0.40		$	2.26		$	1.46
Add back:
Non-GAAP adjustments to net income per share		0.06			0.11			0.11			0.17
Non-GAAP net income per share, diluted	$	0.74		$	0.51		$	2.37		$	1.63

(a) To exclude a $3.2 million adjustment for a litigation settlement in the three months ended September 30, 2024.
(b) To exclude a $106.3 million gain on bargain purchase related to our acquisition of Lacework Inc in the three months ended September 30, 2024.
(c) Non-GAAP financial information is adjusted to an effective tax rate of 17% in the three months and year ended December 31, 2024 and 2023, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate.
(d) To exclude an $8.0 million non-cash charge of impairment on our equity method investment in Linksys.

Reconciliation of net cash provided by operating activities to free cash flow

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net cash provided by operating activities	$	477.6		$	191.7		$	2,258.1		$	1,935.5
Less: Purchases of property and equipment		(97.6	)		(26.9	)		(378.9	)		(204.1	)
Free cash flow	$	380.0		$	164.8		$	1,879.2		$	1,731.4
Net cash used in investing activities	$	(79.9	)	$	(71.6	)	$	(727.4	)	$	(649.3	)
Net cash used in financing activities	$	(8.8	)	$	(910.1	)	$	(50.1	)	$	(1,570.4	)

Reconciliation of total revenue to total billings

	Three Months Ended					Year Ended
	December 31, 2024			December 31, 2023		December 31, 2024			December 31, 2023
Total revenue	$	1,660.1		$	1,415.1	$	5,955.8		$	5,304.8
Add: Change in deferred revenue		349.2			449.7		625.9			1,094.7
Less: Deferred revenue balance acquired in business acquisitions		(6.8	)		—		(49.2	)		—
Total billings	$	2,002.5		$	1,864.8	$	6,532.5		$	6,399.5

Investor Contact:	Media Contact:

Aaron Ovadia	Michelle Zimmermann
Fortinet, Inc.	Fortinet, Inc.
408-235-7700	408-235-7700
[email protected]	[email protected]

February 6, 2025 4:36 pm

TRIUMPH REPORTS STRONG THIRD QUARTER FISCAL 2025 RESULTS

PR Newswire

RADNOR, Pa. , Feb. 6, 2025 /PRNewswire/ — Triumph Group, Inc. (NYSE: TGI) (“TRIUMPH” or the “Company”) today reported financial results for its third quarter of fiscal 2025, which ended December 31, 2024.

Third Quarter Fiscal 2025

Net sales of $315.6 million; sales growth of 11%
Operating income of $39.3 million with operating margin of 12%; adjusted operating income of $45.7 million with adjusted operating margin of 14%
Income from continuing operations of $14.6 million, or $0.19 per diluted share; adjusted income from continuing operations of $21.0 million, or $0.27 per share
Adjusted EBITDAP of $55.5 million with Adjusted EBITDAP margin of 18%
Cash flow from operations of $33.1 million and free cash flow of $32.3 million

“TRIUMPH achieved 18% EBITDAP margins in its eleventh consecutive quarter of year-over-year sales growth,” said Dan Crowley, TRIUMPH’s chairman, president and chief executive officer. “Commercial and military aftermarket sales from our IP-based business grew by more than 36% and military OEM sales grew by more than 24%. We exceeded our cash targets in the quarter through strong operational performance across all our businesses.”

Mr. Crowley continued, “Ramping aftermarket demand and the increasing OEM production rates benefited TRIUMPH in our third fiscal quarter and are expected to continue as we capitalize on favorable industry dynamics. Developed with our Board over the last decade, our strategy to focus on IP-based OEM and aftermarket business, and work to turnaround our Interiors business, positions TRIUMPH well for fiscal 2026 and beyond. Our improving year-over-year results were made possible by our exceptional team and our partnerships with our customers and distribution partners.”

Third Quarter Fiscal 2025 Overview


	Three Months Ended December 31,
($ in millions)	2024		2023
Commercial OEM	$	125.4	$	142.3
Military OEM		75.9		61.1
Total OEM Revenue		201.3		203.4

Commercial Aftermarket		49.9		35.1
Military Aftermarket		50.4		38.3
Total Aftermarket Revenue		100.3		73.4

Non-Aviation Revenue		13.1		7.3
Amortization of acquired contract liabilities		0.9		0.8
Total Net Sales*	$	315.6	$	285.0
* Differences due to rounding
Note> Aftermarket sales include both repair & overhaul services and spare parts sales.

Commercial OEM sales decreased ($16.9) million, or (11.8%) primarily due to decreased sales volume on the Boeing 737MAX program as a result of the temporary work stoppage resulting from the strike at Boeing, which has since been resolved. This sales volume decrease was partially offset by improved pricing in Interiors across multiple programs that we expect will also benefit our results of operations over the remainder of fiscal 2025 as we continue to perform on these programs.

Commercial Aftermarket sales increased $14.8 million, or 42.3%, primarily due to a combination of increased spares and repair sales volume across several platforms including the Boeing 737 and 787 programs and Airbus A380 program.

Military OEM sales increased $14.7 million, or 24.1%, on increased sales volumes on the V-22 and CH-53K programs.

Military aftermarket sales increased $12.1 million, or 31.5%, primarily due to increased repairs on the UH-60 platform and spares volume on CH-47.

Triumph benefited from increasing non-aviation sales resulting from ongoing geopolitical conflicts and weapons inventory replenishment, as well as its diversification efforts.

TRIUMPH’s results included the following:

*($ millions except EPS)*	Pre-tax		After-tax		Diluted EPS
Income from Continuing Operations – GAAP	$	17.4	$	14.6	$	0.19
Adjustments

Legal contingencies loss		6.2		6.2		0.08
Restructuring costs		0.2		0.2		0.00

Adjusted income from continuing operations – non-GAAP	$	23.8	$	21.0	$	0.27

The number of shares used in computing earnings per share for the third quarter of 2025 was 77.9 million.

Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.87 billion. Our backlog includes increases across all end markets, partially offset by reductions due to the changes in timing of deliveries primarily under the Boeing 737MAX program.

For the third quarter of fiscal 2025, cash flow from operations was $33.1 million.

Merger Agreement with Affiliates of Warburg Pincus and Berkshire Partners

On February 3, 2025, TRIUMPH announced that it had entered into a definitive agreement under which affiliates of growth-focused private equity firms Warburg Pincus LLC and Berkshire Partners LLC will acquire TRIUMPH through a newly formed entity for a total enterprise value of approximately $3 billion. The transaction is expected to close in the second half of calendar year 2025 and is subject to customary closing conditions, including approval by TRIUMPH shareholders and receipt of required regulatory approvals.

In light of the pending transaction, TRIUMPH has suspended quarterly earnings conference calls and webcasts. In addition, TRIUMPH is suspending its financial guidance for fiscal 2025.

About TRIUMPH

Founded in 1993 and headquartered in Radnor, Pennsylvania, TRIUMPH designs, develops, manufactures, repairs and provides spare parts across a broad portfolio of aerospace and defense systems and components. The Company serves the global aviation industry, including original equipment manufacturers and the full spectrum of military and commercial aircraft operators.

More information about TRIUMPH can be found on the Company’s website at www.triumphgroup.com.

Forward Looking Statements

Statements in this release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations of or assumptions about guidance, financial and operational performance, revenues, earnings per share, cash flow or use, cost savings and operational efficiencies. All forward-looking statements involve risks and uncertainties which could affect the Company’s actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. Factors that could cause actual results to differ materially are uncertainties relating to the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, the risk that the Company’s shareholders may not approve the proposed transaction, inability to complete the proposed transaction because, among other reasons, conditions to the closing of the proposed transaction may not be satisfied or waived, uncertainty as to the timing of completion of the proposed transaction, potential adverse effects or changes to relationships with customers, employees, suppliers or other parties resulting from the announcement or completion of the transaction, potential litigation relating to the proposed transaction that could be instituted against the Company or its directors and officers, including the effects of any outcomes related thereto and possible disruptions from the proposed transaction that could harm the Company’s business, including current plans and operations. Further information regarding the important factors that could cause actual results to differ from projected results can be found in Triumph Group’s reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

FINANCIAL DATA (UNAUDITED) ON FOLLOWING PAGES

FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)


	Three Months Ended				Nine Months Ended
	December 31,				December 31,
CONDENSED STATEMENTS OF OPERATIONS	2024		2023		2024		2023
Net sales	$	315,556	$	284,955	$	884,067	$	833,456
Cost of sales (excluding depreciation shown below)		213,036		214,972		613,004		618,742
Selling, general & administrative		49,450		42,846		149,951		135,479
Depreciation & amortization		7,373		7,383		22,227		22,062
Legal contingencies loss		6,200		—		13,664		1,338
Restructuring costs		200		43		5,382		1,985
Loss on sale of assets and businesses, net		—		—		—		12,208
Operating income		39,297		19,711		79,839		41,642
Interest expense and other, net		20,690		32,419		61,543		94,354
Debt modification and extinguishment (gain) loss		—		(1,046)		5,369		(5,125)
Warrant remeasurement gain		—		—		—		(8,545)
Non-service defined benefit expense (income)		1,246		(820)		3,747		(2,460)
Income tax expense		2,756		1,069		1,479		3,348
Income (loss) from continuing operations		14,605		(11,911)		7,701		(39,930)
Income (loss) from discontinued operations, net of tax		—		(3,991)		4,680		4,569
Net income (loss)	$	14,605	$	(15,902)	$	12,381	$	(35,361)
Earnings (loss) per share – basic:
Earnings (loss) per share – continuing operations	$	0.19	$	(0.15)	$	0.10	$	(0.55)
Earnings (loss) per share – discontinued operations		—		(0.05)		0.06		0.06
Earnings (loss) per share – basic	$	0.19	$	(0.20)	$	0.16	$	(0.49)
Weighted average common shares outstanding – basic		77,418		76,895		77,296		73,200
Earnings (loss) per share – diluted:
Earnings (loss) per share – continuing operations	$	0.19	$	(0.15)	$	0.10	$	(0.55)
Earnings (loss) per share – discontinued operations		—		(0.05)		0.06		0.06
Earnings (loss) per share – diluted	$	0.19	$	(0.20)	$	0.16	$	(0.49)
Weighted average common shares outstanding – diluted		77,862		76,895		77,763		73,200

(Continued)

FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except share data)

BALANCE SHEETS	Unaudited December 31, 2024		March 31, 2024
Assets
Cash and cash equivalents	$	133,487	$	392,511
Accounts receivable, net		139,977		138,272
Contract assets		85,113		74,289
Inventory, net		391,317		317,671
Prepaid and other current assets		16,952		16,626
Current assets		766,846		939,369
Property and equipment, net		151,880		144,287
Goodwill		509,950		510,687
Intangible assets, net		58,385		65,063
Other, net		24,725		26,864
Total assets	$	1,511,786	$	1,686,270
Liabilities & Stockholders’ Deficit
Current portion of long-term debt	$	8,549	$	3,200
Accounts payable		121,775		167,349
Contract liabilities		48,031		55,858
Accrued expenses		127,854		129,855
Current liabilities		306,209		356,262
Long-term debt, less current portion		961,802		1,074,999
Accrued pension and post-retirement benefits, noncurrent		255,334		283,634
Deferred income taxes, noncurrent		7,267		7,268
Other noncurrent liabilities		63,494		68,521
Stockholders’ Deficit:
Common stock, $.001 par value, 200,000,000 shares authorized, 77,353,955 and 76,923,691 shares issued and outstanding		77		77
Capital in excess of par value		1,115,688		1,107,750
Accumulated other comprehensive loss		(515,294)		(517,069)
Accumulated deficit		(682,791)		(695,172)
Total stockholders’ deficit		(82,320)		(104,414)
Total liabilities and stockholders’ deficit	$	1,511,786	$	1,686,270

(Continued)

FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

	Nine Months Ended December 31,
	2024		2023
Operating Activities
Net income (loss)	$	12,381	$	(35,361)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		22,227		25,688
Amortization of acquired contract liability		(2,115)		(1,951)
(Gain) loss on sale of assets and businesses		(5,018)		12,208
Loss (gain) on modification and extinguishment of debt		5,369		(5,125)
Other amortization included in interest expense		3,045		4,458
Provision for credit losses		19		855
Warrants remeasurement gain		—		(8,545)
Share-based compensation		9,851		8,788
Changes in other assets and liabilities, excluding the effects of acquisitions and divestitures:
Trade and other receivables		(2,870)		16,926
Contract assets		(10,881)		(4,144)
Inventories		(73,872)		(49,545)
Prepaid expenses and other current assets		(186)		(880)
Accounts payable, accrued expenses, and contract liabilities		(48,672)		(30,502)
Accrued pension and other postretirement benefits		(11,352)		(3,352)
Other, net		(7,684)		2,207
Net cash used in operating activities		(109,758)		(68,275)
Investing Activities
Capital expenditures		(15,390)		(16,258)
Payments on sale of assets and businesses		(2,310)		(6,840)
Investment in joint venture		—		(1,658)
Net cash used in investing activities		(17,700)		(24,756)
Financing Activities
Proceeds from issuance of debt		40,000		2,000
Retirement of debt and finance lease obligations		(162,465)		(50,585)
Payment of deferred financing costs		—		(1,728)
Proceeds on issuance of common stock, net of issuance costs		—		79,961
Premium on redemption of long-term debt		(3,600)		—
Repurchase of shares for share-based compensation minimum tax obligation		(2,321)		(1,287)
Net cash (used in) provided by financing activities		(128,386)		28,361
Effect of exchange rate changes on cash		(3,180)		166
Net change in cash and cash equivalents		(259,024)		(64,504)
Cash and cash equivalents at beginning of period		392,511		227,403
Cash and cash equivalents at end of period	$	133,487	$	162,899

(Continued)

FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
Systems & Support
Net sales to external customer	$	277,806		$	240,875		$	779,739		$	717,514
Inter-segment sales (eliminated in consolidation)		—			234			8			724
Segment EBITDAP		64,252			39,439			166,472			128,738
Segment EBITDAP Margin		23.2	%		16.4	%		21.4	%		18.0	%
Depreciation & amortization		6,415			6,393			19,179			18,805


Interiors
Net sales to external customer	$	37,750		$	44,080		$	104,328		$	115,942
Inter-segment sales (eliminated in consolidation)		—			—			11			13
Segment EBITDAP		6,310			(1,540)			924			(6,137)
Segment EBITDAP Margin		16.7	%		-3.5	%		0.9	%		-5.3	%
Depreciation & amortization		502			584			1,602			1,911

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC, AND SUBSIDIARES

(dollars in thousands)

Non-GAAP Financial Measure Disclosures

We prepare and publicly release annual audited and quarterly unaudited financial statements prepared in accordance with U.S. GAAP. In accordance with Securities and Exchange Commission (the “SEC”) rules, we also disclose and discuss certain non-GAAP financial measures in our public filings and earning releases. Currently, the non-GAAP financial measures that we disclose are Adjusted EBITDA, which is our income (loss) from continuing operations before interest and gains or losses on debt modification and extinguishment, income taxes, amortization of acquired contract liabilities, costs incurred pertaining to shareholder cooperation agreements, consideration payable to customer related to divestitures, legal contingency losses (including legal judgments and settlements), gains/loss on divestitures, gains/losses on warrant remeasurements and warrant-related transaction costs, share-based compensation expense, depreciation and amortization (including impairment of long-lived assets), other non-recurring impairments, and the effects of certain pension charges such as curtailments, settlements, withdrawals, and other early retirement incentives; and Adjusted EBITDAP, which is Adjusted EBITDA, before pension expense or benefit (excluding pension charges already adjusted in Adjusted EBITDA). We disclose Adjusted EBITDA on a consolidated and Adjusted EBITDAP on a consolidated and a reportable segment basis in our earnings releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors more meaningfully evaluate and compare our future results of operations with our previously reported results of operations.

We view Adjusted EBITDA and Adjusted EBITDAP as operating performance measures and, as such, we believe that the U.S. GAAP financial measure most directly comparable to such measures is income (loss) from continuing operations. In calculating Adjusted EBITDA and Adjusted EBITDAP, we exclude from income (loss) from continuing operations the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our continuing business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP financial measures as a result of these exclusions. Adjusted EBITDA and Adjusted EBITDAP are not measurements of financial performance under U.S. GAAP and should not be considered as a measure of liquidity, as an alternative to income (loss) from continuing operations, or as an indicator of any other measure of performance derived in accordance with U.S. GAAP. Investors and potential investors in our securities should not rely on Adjusted EBITDA or Adjusted EBITDAP as a substitute for any U.S. GAAP financial measure, including income (loss) from continuing operations. In addition, we urge investors and potential investors in our securities to carefully review the reconciliation of Adjusted EBITDA and Adjusted EBITDAP to income (loss) from continuing operations set forth below, in our earnings releases, and in other filings with the SEC and to carefully review the U.S. GAAP financial information included as part of our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K that are filed with the SEC, as well as our quarterly earnings releases, and compare the U.S. GAAP financial information with our Adjusted EBITDA and Adjusted EBITDAP.

Adjusted EBITDA and Adjusted EBITDAP are used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our business that, when viewed with our U.S. GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends affecting our business. We have spent more than 20 years expanding our product and service capabilities, partially through acquisitions of complementary businesses. Due to the expansion of our operations, which included acquisitions, our income (loss) from continuing operations has included significant charges for depreciation and amortization. Adjusted EBITDA and Adjusted EBITDAP exclude these charges and provide meaningful information about the operating performance of our business, apart from charges for depreciation and amortization. We believe the disclosure of Adjusted EBITDA and Adjusted EBITDAP helps investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year. We also believe Adjusted EBITDA and Adjusted EBITDAP are measures of our ongoing operating performance because the isolation of noncash charges, such as depreciation and amortization, and nonoperating items, such as interest, income taxes, pension and other postretirement benefits, provides additional information about our cost structure and, over time, helps track our operating progress. In addition, investors, securities analysts, and others have regularly relied on Adjusted EBITDA and Adjusted EBITDAP to provide financial measures by which to compare our operating performance against that of other companies in our industry.

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

Set forth below are descriptions of the financial items that have been excluded from our income (loss) from continuing operations) to calculate Adjusted EBITDA and Adjusted EBITDAP and the material limitations associated with using these non-GAAP financial measures as compared with income (loss) from continuing operations:

Gains or losses from sale of assets and businesses may be useful for investors to consider because they reflect gains or losses from sale of operating units or other assets. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.
Warrants remeasurement gains or losses and Warrant-related transaction costs may be useful for investors to consider because they reflect the mark-to-market changes in the fair value of our Warrants and the costs associated with Warrants issuance. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.
Consideration payable to a customer related to a divestiture may be useful for investors to consider because it reflects consideration paid to facilitate the ultimate sale of operating units. We do not believe these charges necessarily reflect the current and ongoing cash earnings related to our operations.
Shareholder cooperation expenses may be useful for investors to consider because they represent certain costs of corporate governance that may be incurred periodically when reaching cooperative agreements with shareholders. We do not believe these charges necessarily reflect the current and ongoing cash earnings related to our operations.
Legal contingencies loss, when applicable, may be useful for investors to consider because it reflects gains or losses from legal disputes with third parties. We do not believe these gains or losses reflect the current and ongoing earnings related to our operations.
Non-service defined benefit income or expense from our pension and other postretirement benefit plans (inclusive of certain pension related transactions such as curtailments, settlements, withdrawal, and early retirement or other incentives) may be useful for investors to consider because they represent the cost of postretirement benefits to plan participants, net of the assumption of returns on the plan’s assets and are not indicative of the cash paid for such benefits. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.
Amortization of acquired contract liabilities may be useful for investors to consider because it represents the noncash earnings on the fair value of off-market contracts acquired through acquisitions. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.
Amortization expense and nonrecurring asset impairments (including goodwill and intangible asset impairments) may be useful for investors to consider because it represents the estimated attrition of our acquired customer base and the diminishing value of trade names, product rights, licenses, or, in the case of goodwill, other assets that are not individually identified and separately recognized under U.S. GAAP, or, in the case of nonrecurring asset impairments, the impact of unusual and nonrecurring events affecting the estimated recoverability of existing assets. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
Depreciation may be useful for investors to consider because it generally represents the wear and tear on our property and equipment used in our operations. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
Share-based compensation may be useful for investors to consider because it represents a portion of the total compensation to management and the board of directors. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

The amount of interest expense and other, as well as debt extinguishment gains or losses, we incur may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense and other and debt extinguishment gains or losses to be a representative component of the day-to-day operating performance of our business.
Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business.

Management compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to gain an understanding of the factors and trends affecting our business.

The following table shows our Adjusted EBITDA and Adjusted EBITDAP reconciled to our income (loss) from continuing operations for the indicated periods (in thousands):

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (Adjusted EBITDAP):	2024			2023			2024			2023
Income (loss) from continuing operations	$	14,605		$	(11,911)		$	7,701		$	(39,930)
Add-back:
Income tax expense		2,756			1,069			1,479			3,348
Interest expense and other, net		20,690			32,419			61,543			94,354
Debt modification and extinguishment (gain) loss		—			(1,046)			5,369			(5,125)
Warrant remeasurement gain		—			—			—			(8,545)
Legal contingencies loss		6,200			—			13,664			1,338
Shareholder cooperation expenses		—			—			—			1,905
Loss on sales of assets and businesses, net		—			—			—			12,208
Share-based compensation		3,486			1,442			9,851			8,788
Amortization of acquired contract liabilities		(902)			(800)			(2,115)			(1,965)
Depreciation and amortization		7,373			7,383			22,227			22,062
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)	$	54,208		$	28,556		$	119,719		$	88,438
Non-service defined benefit expense (income) (excluding settlements)		1,246			(820)			3,747			(2,460)
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, and Pension (“Adjusted EBITDAP”)	$	55,454		$	27,736		$	123,466		$	85,978
Net sales	$	315,556		$	284,955		$	884,067		$	833,456
Income (loss) from continuing operations margin		4.6	%		(4.2)	%		0.9	%		(4.8)	%
Adjusted EBITDAP margin		17.6	%		9.8	%		14.0	%		10.3	%

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)

Adjusted income from continuing operations, before income taxes, adjusted income from continuing operations and adjusted income from continuing operations per diluted share, before non-recurring costs have been provided for consistency and comparability. These measures should not be considered in isolation or as alternatives to income from continuing operations before income taxes, income from continuing operations and income from continuing operations per diluted share presented in accordance with GAAP. The following tables reconcile income from continuing operations before income taxes, income from continuing operations, and income from continuing operations per diluted share, before non-recurring costs.

	Three Months Ended December 31, 2024
(amounts in ‘000s, except per share amounts)	Pre-Tax		After-Tax		Diluted EPS
Income from continuing operations – GAAP	$	17,361	$	14,605	$	0.19
Adjustments:
Legal contingencies loss		6,200		6,200		0.08
Restructuring costs		200		200		0.00
Adjusted income from continuing operations – non-GAAP	$	23,761	$	21,005	$	0.27

	Nine Months Ended December 31, 2024
	Pre-Tax		After-Tax		Diluted EPS
Income from continuing operations – GAAP	$	9,180	$	7,701	$	0.10
Adjustments:
Legal contingencies loss		13,664		13,664		0.18
Restructuring costs		5,382		5,382		0.07
Debt extinguishment loss		5,369		5,369		0.07
Adjusted income from continuing operations – non-GAAP*	$	33,595	$	32,116	$	0.41
*Difference due to rounding.

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)

	Three Months Ended December 31, 2023
	Pre-Tax		After-Tax		Diluted EPS
Loss from continuing operations – GAAP	$	(10,842)	$	(11,911)	$	(0.15)

Adjustments:
Restructuring costs		43		43		0.00
Debt modification and extinguishment gain		(1,046)		(1,046)		(0.01)
Adjusted loss from continuing operations – non-GAAP	$	(11,845)	$	(12,914)	$	(0.16)

	Nine Months Ended December 31, 2023
	Pre-Tax		After-Tax		Diluted EPS
Loss from continuing operations – GAAP	$	(36,582)	$	(39,930)	$	(0.55)

Adjustments:
Shareholder cooperation expenses		1,905		1,905		0.03
Loss on sale of assets and businesses, net		12,208		12,208		0.17
Restructuring costs		1,985		1,985		0.03
Debt modification and extinguishment gain		(5,125)		(5,125)		(0.07)
Legal contingencies loss		1,338		1,338		0.02
Adjusted loss from continuing operations – non-GAAP*	$	(24,271)	$	(27,619)	$	(0.38)
*Difference due to rounding.

Adjusted Operating Income is defined as GAAP Operating Income, less expenses/gains associated with the Company’s transformation, such as restructuring expenses, gains/losses on divestitures, impairments of goodwill and other assets. Management believes that this is useful in evaluating operating performance, but this measure should not be used in isolation. The following table reconciles our Operating income to Adjusted Operating income as noted above.

	Three Months Ended December 31,						Nine Months Ended December 31,
	2024			2023			2024			2023
Operating income – GAAP	$	39,297		$	19,711		$	79,839		$	41,642
Adjustments:
Loss on sale of assets and businesses, net		—			—			—			12,208
Legal contingencies loss		6,200			—			13,664			1,338
Restructuring costs (cash based)		200			43			5,382			1,985
Shareholder cooperation expenses		—			—			—			1,905
Adjusted operating income – non-GAAP	$	45,697		$	19,754		$	98,885		$	59,078
Adjusted operating margin – non-GAAP		14.5	%		6.9	%		11.2	%		7.1	%

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)
Cash provided by operations, is provided for consistency and comparability. We also use free cash flow as a key factor in planning for and consideration of strategic acquisitions and the repayment of debt. This measure should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with GAAP. The following table reconciles cash used in operations to free cash use.


	Three Months Ended December 31,				Nine Months Ended December 31,
$ in millions	2024		2023		2024		2023
Cash provided by (used in) from operating activities	$	33.1	$	27.6	$	(109.8)	$	(68.3)
*Less:*
Capital expenditures		(0.9)		(5.3)		(15.4)		(16.3)
Free cash flow (use)*	$	32.3	$	22.4	$	(125.1)	$	(84.5)
* Differences due to rounding

View original content:https://www.prnewswire.com/news-releases/triumph-reports-strong-third-quarter-fiscal-2025-results-302370500.html

SOURCE Triumph Group

February 6, 2025 4:36 pm

Qualys Announces Fourth Quarter and Full Year 2024 Financial Results

PR Newswire

Q4 Revenue Growth of 10% Year-Over-Year

Full Year 2024 Revenue Growth of 10% Year-Over-Year

Announces $200 Million
Increase to Share Repurchase Program

FOSTER CITY, Calif.
, Feb. 6, 2025 /PRNewswire/ — Qualys, Inc. (NASDAQ: QLYS), a leading provider of disruptive cloud-based IT, security and compliance solutions, today announced financial results for the fourth quarter and full year ended December 31, 2024. For the quarter, the Company reported revenues of $159.2 million, net income under United States Generally Accepted Accounting Principles (“GAAP”) of $44.0 million, non-GAAP net income of $59.4 million, Adjusted EBITDA of $74.2 million, GAAP net income per diluted share of $1.19, and non-GAAP net income per diluted share of $1.60.

“Customers are starting to leverage the breadth and depth of the Qualys Enterprise TruRisk Platform as they look to rearchitect and transform their security stacks,” said Sumedh Thakar, Qualys’ president and CEO. “Our results this quarter demonstrate the rapid pace of innovation at Qualys and reflect the growing success of newer product initiatives, including Cybersecurity Asset Management, Patch Management, and TotalCloud. With our natively integrated platform and frictionless approach to quantifying, prioritizing, articulating, and remediating cyber risk, we believe we’ll continue to perform well against our competitors, extend our leadership, and provide a runway for long-term sustainable growth.”

Fourth
Quarter 2024 Financial Highlights

Revenues: Revenues for the fourth quarter of 2024 increased by 10% to $159.2 million compared to $144.6 million for the same quarter in 2023.

Gross Profit: GAAP gross profit for the fourth quarter of 2024 increased by 11% to $130.2 million compared to $117.4 million for the same quarter in 2023. GAAP gross margin was 82% for the fourth quarter of 2024 compared to 81% for the same quarter in 2023. Non-GAAP gross profit for the fourth quarter of 2024 increased by 11% to $133.0 million compared to $120.2 million for the same quarter in 2023. Non-GAAP gross margin was 84% for the fourth quarter of 2024 compared to 83% for the same quarter in 2023.

Operating Income: GAAP operating income for the fourth quarter of 2024 increased by 19% to $49.4 million compared to $41.5 million for the same quarter in 2023. As a percentage of revenues, GAAP operating income was 31% for the fourth quarter of 2024 compared to 29% for the same quarter in 2023. Non-GAAP operating income for the fourth quarter of 2024 increased by 16% to $70.7 million compared to $60.8 million for the same quarter in 2023. As a percentage of revenues, non-GAAP operating income was 44% for the fourth quarter of 2024 compared to 42% for the same quarter in 2023.

Net Income: GAAP net income for the fourth quarter of 2024 increased by 8% to $44.0 million, or $1.19 per diluted share, compared to $40.6 million, or $1.08 per diluted share, for the same quarter in 2023. As a percentage of revenues, GAAP net income was 28% for both the fourth quarter of 2024 and the same quarter in 2023. Non-GAAP net income for the fourth quarter of 2024 was $59.4 million, or $1.60 per diluted share, compared to $52.8 million, or $1.40 per diluted share, for the same quarter in 2023. As a percentage of revenues, non-GAAP net income was 37% for both the fourth quarter of 2024 and the same quarter in 2023.

Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the fourth quarter of 2024 increased by 13% to $74.2 million compared to $65.8 million for the same quarter in 2023. As a percentage of revenues, Adjusted EBITDA was 47% for the fourth quarter of 2024 compared to 46% for the same quarter in 2023.

Operating Cash Flow: Operating cash flow for the fourth quarter of 2024 increased by 41% to $47.7 million compared to $33.8 million for the same quarter in 2023. As a percentage of revenues, operating cash flow was 30% for the fourth quarter of 2024 compared to 23% for the same quarter in 2023.

Fourth
Quarter 2024 Business Highlights

Launched the Risk Operations Center (ROC) with Enterprise TruRisk Management (ETM) to enable CISOs and business leaders to manage cybersecurity risks in real time, transforming fragmented, siloed data into actionable insights that align cyber risk operations with business priorities.
Qualys’ Endpoint Detection and Response (EDR) solution achieved impressive MITRE ATT&CK results with 100% major step detection and the lowest number of false positives produced by any other participating solution.

Full Year 2024 Financial Highlights

Revenues: Revenues for 2024 increased by 10% to $607.6 million compared to $554.5 million for 2023.

Gross Profit: GAAP gross profit for 2024 increased by 11% to $496.1 million compared to $447.0 million for 2023. GAAP gross margin was 82% for 2024 compared to 81% in 2023. Non-GAAP gross profit increased by 11% to $507.1 million for 2024 compared to $457.3 million for 2023. Non-GAAP gross margin was 83% in 2024 compared to 82% in 2023.

Operating Income: GAAP operating income for 2024 was $187.2 million compared to $163.1 million for 2023. As a percentage of revenues, GAAP operating income was 31% for 2024 compared to 29% for 2023. Non-GAAP operating income for 2024 was $267.2 million compared to $235.2 million for 2023. As a percentage of revenues, non-GAAP operating income was 44% for 2024 compared to 42% for 2023.

Net Income: GAAP net income for 2024 increased by 15% to $173.7 million, or $4.65 per diluted share, compared to $151.6 million, or $4.03 per diluted share for 2023. As a percentage of revenues, GAAP net income was 29% for 2024 compared to 27% for 2023. Non-GAAP net income for 2024 was $229.0 million, or $6.13 per diluted share, compared to non-GAAP net income of $198.1 million, or $5.27 per diluted share for 2023. As a percentage of revenues, non-GAAP net income was 38% for 2024 compared to 36% for 2023.

Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for 2024 increased by 9% to $282.8 million compared to $259.1 million for 2023. As a percentage of revenues, Adjusted EBITDA was 47% for 2024 compared to 47% for 2023.

Operating Cash Flow: Operating cash flow for 2024 was $244.1 million compared to $244.6 million for 2023. As a percentage of revenues, operating cash flow was 40% for 2024 compared to 44% for 2023.

Full Year 2024 Business Highlights

Market Recognition

Gartner recognized Qualys’ TotalCloud among solutions named in its July 2024, Marketguide for Cloud Native Application Protection Platforms.
Industry analyst firm KuppingerCole recognized Qualys’ TotalCloud as an Overall and Market Leader in their 2024 Leadership Compass for Cloud Security Posture Management.
Qualys’ Cybersecurity Asset Management ranked as a strong performer among top vendors in the Forrester Wave for Attack Surface Management.
The 2024 GigaOm Radar Report for Continuous Vulnerability Management ranked Qualys’ VMDR as a leading vulnerability management solution for the fourth straight year. It noted VMDR stands apart from the competition as a “comprehensive risk-based approach to vulnerability management.”
Qualys’ VMDR and TotalCloud were named finalists for the SC Awards Europe in categories of Best Vulnerability Management and Best Cloud Security solutions, highlighting their excellence and contributions to shaping the future of technology and cybersecurity in the UK and Europe.
Italian Security Awards names Qualys Best Enterprise Risk Management and Regulatory Compliance Solution.

Products & Features

Launched the Risk Operations Center (ROC) with Enterprise TruRisk Management (ETM) to enable CISOs and business leaders to manage cybersecurity risks in real time, transforming fragmented, siloed data into actionable insights that align cyber risk operations with business priorities.
Announced Qualys’ TruRisk Eliminate, a remediation solution extending beyond patching by providing patchless patching, targeted isolation, and other mitigation strategies to help organizations reduce risk.
Unveiled TotalCloud 2.0 with TruRisk Insights, bringing together cloud infrastructure, SaaS apps, and externally exposed assets for a unified view of risk across multi-cloud environments.
Introduced Qualys’ Containerized Scanner Appliance (QCSA) providing agility, flexibility, scalability, isolation, and standardization of Docker containers, an invaluable tool for modern IT environments.
Expanded our portfolio by introducing Qualys TotalAI, designed to address the growing challenges and risks of securing generative AI and large language model (LLM) applications to detect data leaks, injection issues, and model theft.
Delivered CyberSecurity Asset Management 3.0 with significant External Attack Surface Management (EASM) enhancements for an accurate, real-time view of asset inventory that reduces false positives.
Qualys’ enhanced CyberSecurity Asset Management solution detects unmanaged and untrusted devices in real time through passive discovery functionality within the Qualys Cloud Agent. This enhancement reinforces the solutions leadership in internal and external attack surface management.
Introduced updates to Qualys’ Web Application Security solution including context-aware TruRisk prioritization, advanced API security features, and a redesigned user interface offering guided workflows and feedback loops. These updates address the growing complexity of securing web applications and APIs in digital environments.
Expanded File Integrity Monitoring (FIM) to support network devices, providing customers with comprehensive tracking of file and folder changes, as well as critical file access. This includes real-time File Access Monitoring and Agentless FIM to help organizations achieve Payment Card Industry – Data Security Standard (PCI DSS) 4.0 compliance.

Business Developments

Celebrated Qualys’ 25-year anniversary along with showcasing the Company’s cutting-edge innovation and industry leadership to over 1,500 participants at Qualys Security Conferences held throughout the year in the U.S., U.K., and India.
Reinforced Qualys’ commitment to the Managed Security Service Provider (MSSP) channel by launching a new global MSSP portal to streamline partner operations with a single-user interface that helps accelerate client acquisition and growth.
Expanded our focus on the government sector by accelerating support for federal zero-trust strategies through automated asset visibility and attack surface risk management aligning with the Federal Information Security Modernization Act (FISMA) guidelines. Additionally, Qualys hosted more than 200 attendees at its first Public Sector Cyber Risk Conference in Washington, D.C., with notable speakers from the public sector.
Expanded Qualys’ partnership with Oracle to include VMDR and TotalCloud, which are both now integrated natively with Oracle Cloud Infrastructure (OCI), and available on the Oracle Cloud Marketplace.

Financial Performance Outlook

Based on information as of today, February 6, 2025, Qualys is issuing the following financial guidance for the first quarter and full year fiscal 2025. The Company emphasizes that the guidance is subject to various important cautionary factors referenced in the sections entitled “Legal Notice Regarding Forward-Looking Statements” and “Non-GAAP Financial Measures” below.

First Quarter 2025 Guidance: Management expects revenues for the first quarter of 2025 to be in the range of $155.5 million to $158.5 million, representing 7% to 9% growth over the same quarter in 2024. GAAP net income per diluted share is expected to be in the range of $0.95 to $1.05, which assumes an effective income tax rate of 22%. Non-GAAP net income per diluted share is expected to be in the range of $1.40 to $1.50, which assumes a non-GAAP effective income tax rate of 21%. First quarter 2025 net income per diluted share estimates are based on approximately 37.0 million weighted average diluted shares outstanding for the quarter.

Full Year 2025 Guidance: Management expects revenues for the full year of 2025 to be in the range of $645.0 million to $657.0 million, representing 6% to 8% growth over 2024. GAAP net income per diluted share is expected to be in the range of $3.62 to $4.02. This assumes an effective income tax rate of 22%. Non-GAAP net income per diluted share is expected to be in the range of $5.50 to $5.90. This assumes a non-GAAP effective income tax rate of 21%. Full year 2025 net income per diluted share estimates are based on approximately 36.9 million weighted average diluted shares outstanding.

Qualys has not reconciled non-GAAP net income per diluted share guidance to GAAP net income per diluted share guidance because Qualys does not provide guidance on the various reconciling cash and non-cash items between GAAP net income and non-GAAP net income (i.e., stock-based compensation, amortization of intangible assets from acquisitions and non-recurring items). The actual dollar amount of reconciling items in the first quarter and full year 2025 is likely to have a significant impact on the Company’s GAAP net income per diluted share in the first quarter and full year 2025. A reconciliation of the non-GAAP net income per diluted share guidance to the GAAP net income per diluted share guidance is not available without unreasonable effort.

Investor Conference Call

Qualys will host a conference call and live webcast to discuss its fourth quarter and full year 2024 financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on Thursday, February 6, 2025. To access the conference call by phone, please register here. A live webcast of the earnings conference call, investor presentation and prepared remarks can be accessed at https://investor.qualys.com/events-presentations. A replay of the conference call will be available through the same webcast link following the end of the call.

Investor Contact

Blair King

Vice President, Investor Relations and Corporate Development
(650) 538-2088
[email protected]

About Qualys

Qualys, Inc. (NASDAQ: QLYS) is a leading provider of disruptive cloud-based Security, Compliance and IT solutions with more than 10,000 subscription customers worldwide, including a majority of the Forbes Global 100 and Fortune 100. Qualys helps organizations streamline and consolidate their security and compliance solutions onto a single platform for greater agility, better business outcomes, and substantial cost savings.

The Qualys Enterprise TruRisk Platform leverages a single agent to continuously deliver critical security intelligence while enabling enterprises to automate the full spectrum of vulnerability detection, compliance, and protection for IT systems, workloads and web applications across on premises, endpoints, servers, public and private clouds, containers, and mobile devices. Founded in 1999 as one of the first SaaS security companies, Qualys has strategic partnerships and seamlessly integrates its vulnerability management capabilities into security offerings from cloud service providers, including Amazon Web Services, the Google Cloud Platform and Microsoft Azure, along with a number of leading managed service providers and global consulting organizations. For more information, please visit www.qualys.com.

Qualys, Qualys VMDR^® and the Qualys logo are proprietary trademarks of Qualys, Inc. All other products or names may be trademarks of their respective companies.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, quotations of management and statements related to: the benefits of our existing, new and upcoming products, features, integrations, acquisitions, collaborations and joint solutions, and their impact upon our long-term growth; our ability to advance our value proposition and competitive differentiation in the market; our ability to address demand trends; our ability to maintain and strengthen our category leadership; our ability to solve modern security challenges at scale; our strategies and ability to achieve and maintain durable profitable growth; statements regarding our share repurchase; our guidance for revenues, GAAP EPS and non-GAAP EPS for the first quarter and full year 2025; and our expectations for the number of weighted average diluted shares outstanding and the GAAP and non-GAAP effective income tax rate for the first quarter and full year 2025. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; the ability of our platform and solutions to perform as intended; customer acceptance and purchase of our existing solutions and new solutions; real or perceived defects, errors or vulnerabilities in our products or services; our ability to retain existing customers and generate new customers; the budgeting cycles and seasonal buying patterns of our customers; general market, political, economic and business conditions in the United States as well as globally; our ability to manage costs as we increase our customer base and the number of our platform solutions; the market for cloud solutions for IT security and compliance not increasing at the rate we expect; competition from other products and services; fluctuations in currency exchange rates; unexpected fluctuations in our effective income tax rate on a GAAP and non-GAAP basis; our ability to effectively manage our rapid growth and our ability to anticipate future market needs and opportunities; and any unanticipated accounting charges. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

The forward-looking statements in this press release are based on information available to Qualys as of the date hereof, and Qualys disclaims any obligation to update any forward-looking statements, except as required by law.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, Qualys provides investors with certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA (defined as earnings before interest expense, interest income and other income (expense), net, income taxes, depreciation, amortization, and stock-based compensation) and non-GAAP free cash flows (defined as cash provided by operating activities less purchases of property and equipment, net of proceeds from disposal).

In computing non-GAAP financial measures, Qualys excludes the effects of stock-based compensation expense, amortization of intangible assets from acquisitions, non-recurring items and for non-GAAP net income, certain tax effects. Qualys believes that these non-GAAP financial measures help illustrate underlying trends in its business that could otherwise be masked by the effect of the income or expenses that are excluded in non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA and non-GAAP free cash flows.

Furthermore, Qualys uses some of these non-GAAP financial measures to establish budgets and operational goals for managing its business and evaluating its performance. Qualys believes that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA and non-GAAP free cash flows provide additional tools for investors to use in comparing its recurring core business operating results over multiple periods with other companies in its industry.

Although Qualys does not focus on or use quarterly billings in managing or monitoring the performance of its business, Qualys provides calculated current billings (defined as total revenues recognized in a period plus the sequential change in current deferred revenue in the corresponding period) for the convenience of investors and analysts in building their own financial models.

In order to provide a more complete picture of recurring core operating business results, the Company’s non-GAAP net income and non-GAAP net income per diluted share include adjustments for non-recurring income tax items and certain tax effects of non-GAAP adjustments to achieve the effective income tax rate on a non-GAAP basis. The Company’s non-GAAP effective tax rate may differ from the GAAP effective income tax rate as a result of these income tax adjustments. The Company believes its estimated non-GAAP effective income tax rate of 21% in 2025 is a reasonable estimate under its current global operating structure and core business operations. The Company may adjust this rate during the year to take into account events or trends that it believes materially impact the estimated annual rate. The non-GAAP effective income tax rate could be subject to change for a number of reasons, including but not limited to, significant changes resulting from tax legislation, material changes in geographic mix of revenues and expenses and other significant events.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating its business internally and as such has determined that it is important to provide this information to investors.

Qualys, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)

	Three Months Ended December 31,		Twelve Months Ended December 31,
	2024	2023	2024	2023
Revenues	$ 159,191	$ 144,570	$ 607,571	$ 554,458
Cost of revenues ⁽¹⁾	29,037	27,130	111,482	107,485
Gross profit	130,154	117,440	496,089	446,973
Operating expenses:
Research and development⁽¹⁾	28,302	27,471	111,852	110,472
Sales and marketing ⁽¹⁾	34,063	31,941	128,303	111,691
General and administrative ⁽¹⁾	18,376	16,559	68,738	61,741
Total operating expenses	80,741	75,971	308,893	283,904
Income from operations	49,413	41,469	187,196	163,069
Other income (expense), net:
Interest income	6,194	5,563	25,784	16,905
Other income (expense), net	(1,777)	560	(3,158)	(1,323)
Total other income, net	4,417	6,123	22,626	15,582
Income before income taxes	53,830	47,592	209,822	178,651
Income tax provision	9,865	6,999	36,142	27,056
Net income	$ 43,965	$ 40,593	$ 173,680	$ 151,595
Net income per share:
Basic	$ 1.20	$ 1.10	$ 4.72	$ 4.11
Diluted	$ 1.19	$ 1.08	$ 4.65	$ 4.03
Weighted average shares used in computing net income per share:
Basic	36,568	36,845	36,799	36,879
Diluted	37,000	37,748	37,353	37,602
⁽¹⁾ Includes stock-based compensation as follows:
Cost of revenues	$ 2,162	$ 2,045	$ 8,129	$ 7,300
Research and development	5,277	5,357	21,188	21,091
Sales and marketing	3,670	3,654	14,690	12,234
General and administrative	9,570	7,463	33,126	28,454
Total stock-based compensation, net of amounts capitalized	$ 20,679	$ 18,519	$ 77,133	$ 69,079

Qualys, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)

	December 31, 2024	December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$ 232,182	$ 203,665
Restricted cash	—	1,500
Short-term marketable securities	149,241	221,893
Accounts receivable, net	164,551	146,226
Prepaid expenses and other current assets	39,717	26,714
Total current assets	585,691	599,998
Long-term marketable securities	193,887	56,644
Property and equipment, net	30,349	32,599
Operating leases – right of use asset	40,968	22,391
Deferred tax assets, net	81,307	62,761
Intangible assets, net	6,812	9,715
Goodwill	7,447	7,447
Noncurrent restricted cash	1,200	1,200
Other noncurrent assets	25,876	19,863
Total assets	$ 973,537	$ 812,618
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$ 1,270	$ 988
Accrued liabilities	45,942	43,096
Deferred revenues, current	371,457	333,267
Operating lease liabilities, current	9,721	11,857
Total current liabilities	428,390	389,208
Deferred revenues, noncurrent	24,265	31,671
Operating lease liabilities, noncurrent	37,500	16,885
Other noncurrent liabilities	6,266	6,680
Total liabilities	496,421	444,444
Stockholders’ equity:
Common stock	37	37
Additional paid-in capital	664,879	597,921
Accumulated other comprehensive income (loss)	1,417	(1,704)
Accumulated deficit	(189,217)	(228,080)
Total stockholders’ equity	477,116	368,174
Total liabilities and stockholders’ equity	$ 973,537	$ 812,618

Qualys, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

	Twelve Months Ended December 31,
	2024	2023
Cash flow from operating activities:
Net income	$ 173,680	$ 151,595
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	18,513	26,991
Provision for credit losses	764	547
Loss on non-marketable securities	—	533
Stock-based compensation, net of amounts capitalized	77,133	69,079
Accretion of discount on marketable securities, net	(6,735)	(5,712)
Deferred income taxes	(19,465)	(16,636)
Changes in operating assets and liabilities:
Accounts receivable	(19,089)	(24,978)
Prepaid expenses and other assets	(14,655)	(3,407)
Accounts payable	219	(1,578)
Accrued liabilities and other noncurrent liabilities	2,945	451
Deferred revenues	30,784	47,720
Net cash provided by operating activities	244,094	244,605
Cash flow from investing activities:
Purchases of marketable securities	(368,277)	(306,812)
Sales and maturities of marketable securities	309,184	242,432
Purchases of property and equipment	(12,334)	(8,786)
Net cash used in investing activities	(71,427)	(73,166)
Cash flow from financing activities:
Repurchase of common stock	(139,875)	(170,800)
Proceeds from exercise of stock options	17,269	45,576
Payments for taxes related to net share settlement of equity awards	(28,416)	(22,346)
Proceeds from issuance of common stock through employee stock purchase plan	6,872	6,077
Payment of acquisition-related holdback	(1,500)	—
Net cash used in financing activities	(145,650)	(141,493)
Net increase in cash, cash equivalents and restricted cash	27,017	29,946
Cash, cash equivalents and restricted cash at beginning of period	206,365	176,419
Cash, cash equivalents and restricted cash at end of period	$ 233,382	$ 206,365

Qualys, Inc.
RECONCILIATION OF NON-GAAP DISCLOSURES
ADJUSTED EBITDA
(unaudited)
(in thousands, except percentages)

	Three Months Ended December 31,		Twelve Months Ended December 31,
	2024	2023	2024	2023
Net income	$ 43,965	$ 40,593	$ 173,680	$ 151,595
Net income as a percentage of revenues	28 %	28 %	29 %	27 %
Depreciation and amortization of property and equipment	3,464	5,080	15,610	23,904
Amortization of intangible assets	639	771	2,903	3,087
Income tax provision	9,865	6,999	36,142	27,056
Stock-based compensation	20,679	18,519	77,133	69,079
Total other income, net	(4,417)	(6,123)	(22,626)	(15,582)
Adjusted EBITDA	$ 74,195	$ 65,839	$ 282,842	$ 259,139
Adjusted EBITDA as a percentage of revenues	47 %	46 %	47 %	47 %

Qualys, Inc.
RECONCILIATION OF NON-GAAP DISCLOSURES
(unaudited)
(in thousands, except per share data)

	Three Months Ended December 31,		Twelve Months Ended December 31,
	2024	2023	2024	2023
GAAP Cost of revenues	$ 29,037	$ 27,130	$ 111,482	$ 107,485
Less: Stock-based compensation	(2,162)	(2,045)	(8,129)	(7,300)
Less: Amortization of intangible assets	(639)	(746)	(2,837)	(2,987)
Non-GAAP Cost of revenues	$ 26,236	$ 24,339	$ 100,516	$ 97,198
GAAP Gross profit	$ 130,154	$ 117,440	$ 496,089	$ 446,973
Plus: Stock-based compensation	2,162	2,045	8,129	7,300
Plus: Amortization of intangible assets	639	746	2,837	2,987
Non-GAAP Gross Profit	$ 132,955	$ 120,231	$ 507,055	$ 457,260
GAAP Research and development	$ 28,302	$ 27,471	$ 111,852	$ 110,472
Less: Stock-based compensation	(5,277)	(5,357)	(21,188)	(21,091)
Less: Amortization of intangible assets	—	(25)	(66)	(100)
Non-GAAP Research and development	$ 23,025	$ 22,089	$ 90,598	$ 89,281
GAAP Sales and marketing	$ 34,063	$ 31,941	$ 128,303	$ 111,691
Less: Stock-based compensation	(3,670)	(3,654)	(14,690)	(12,234)
Non-GAAP Sales and marketing	$ 30,393	$ 28,287	$ 113,613	$ 99,457
GAAP General and administrative	$ 18,376	$ 16,559	$ 68,738	$ 61,741
Less: Stock-based compensation	(9,570)	(7,463)	(33,126)	(28,454)
Non-GAAP General and administrative	$ 8,806	$ 9,096	$ 35,612	$ 33,287
GAAP Operating expenses	$ 80,741	$ 75,971	$ 308,893	$ 283,904
Less: Stock-based compensation	(18,517)	(16,474)	(69,004)	(61,779)
Less: Amortization of intangible assets	—	(25)	(66)	(100)
Non-GAAP Operating expenses	$ 62,224	$ 59,472	$ 239,823	$ 222,025
GAAP Income from operations	$ 49,413	$ 41,469	$ 187,196	$ 163,069
Plus: Stock-based compensation	20,679	18,519	77,133	69,079
Plus: Amortization of intangible assets	639	771	2,903	3,087
Non-GAAP Income from operations	$ 70,731	$ 60,759	$ 267,232	$ 235,235
GAAP Net income	$ 43,965	$ 40,593	$ 173,680	$ 151,595
Plus: Stock-based compensation	20,679	18,519	77,133	69,079
Plus: Amortization of intangible assets	639	771	2,903	3,087
Less: Tax adjustment	(5,916)	(7,046)	(24,728)	(25,615)
Non-GAAP Net income	$ 59,367	$ 52,837	$ 228,988	$ 198,146
GAAP Net income per share:
Basic	$ 1.20	$ 1.10	$ 4.72	$ 4.11
Diluted	$ 1.19	$ 1.08	$ 4.65	$ 4.03
Non-GAAP Net income per share:
Basic	$ 1.62	$ 1.43	$ 6.22	$ 5.37
Diluted	$ 1.60	$ 1.40	$ 6.13	$ 5.27
Weighted average shares used in GAAP and non-GAAP net income per share:
Basic	36,568	36,845	36,799	36,879
Diluted	37,000	37,748	37,353	37,602

Qualys, Inc.
RECONCILIATION OF NON-GAAP DISCLOSURES
FREE CASH FLOWS
(unaudited)
(in thousands)

	Twelve Months Ended December 31,
	2024	2023
GAAP Cash flows provided by operating activities	$ 244,094	$ 244,605
Less:
Purchases of property and equipment, net of proceeds from disposal	(12,334)	(8,786)
Non-GAAP Free cash flows	$ 231,760	$ 235,819

Qualys, Inc.
RECONCILIATION OF NON-GAAP DISCLOSURES
CALCULATED CURRENT BILLINGS
(unaudited)
(in thousands, except percentages)

	Three Months Ended December 31,
	2024	2023
GAAP Revenue	$ 159,191	$ 144,570
GAAP Revenue growth compared to same quarter of prior year	10 %	10 %
Plus: Current deferred revenue at December 31	371,457	333,267
Less: Current deferred revenue at September 30	(337,821)	(307,179)
Non-GAAP Calculated current billings	$ 192,827	$ 170,658
Calculated current billings growth compared to same quarter of prior year	13 %	17 %

View original content:https://www.prnewswire.com/news-releases/qualys-announces-fourth-quarter-and-full-year-2024-financial-results-302370564.html

SOURCE Qualys, Inc.

February 6, 2025 4:36 pm

TFF Pharmaceuticals Announces Delisting from Nasdaq and Potential SEC Deregistration

PR Newswire

FOXBOROUGH, Mass., Feb. 6, 2025 /PRNewswire/ — TFF Pharmaceuticals, Inc. (Nasdaq: TFFP) today announced that the Company has provided notification to The Nasdaq Stock Market, LLC (“Nasdaq”) of its intent to voluntarily delist the Company’s common stock, par value $0.001 per share (the “Common Stock”), from the Nasdaq Capital Market. The Company expects to file a Form 25 (Notification of Removal from Listing) with the Securities and Exchange Commission (the “SEC”) and Nasdaq relating to the delisting of its Common Stock on or about February 16, 2025. The removal of the Common Stock from Nasdaq will be effective 10 days after the filing of the Form 25. The Company has made no arrangements for the listing or quotation of its Common Stock on any other exchange, market or quotation medium.

The withdrawal of the Common Stock from listing and registration is being undertaken in connection with the planned the liquidation and dissolution of the Company.

Forward Looking Statements

Statements made in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward‐looking statements. Such statements include, but are not limited to, statements regarding our plans to wind down our operations or other statements not of historical fact. Risks that could cause actual results to differ from those expressed in these forward‐looking statements include: the timing, progress and results of our planned wind down; general market conditions; and other risks described in TFF Pharmaceuticals’ filings with the Securities and Exchange Commission under the heading “Risk Factors”. All forward‐looking statements contained in this press release speak only as of the date on which they were made and are based on management’s assumptions and estimates as of such date. TFF Pharmaceuticals undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made except as required by law.

View original content:https://www.prnewswire.com/news-releases/tff-pharmaceuticals-announces-delisting-from-nasdaq-and-potential-sec-deregistration-302370494.html

SOURCE TFF Pharmaceuticals

February 6, 2025 4:35 pm

Arcadium Lithium Announces Date for Fourth Quarter and Full Year 2024 Earnings Release

PR Newswire

PHILADELPHIA and PERTH, Australia, Feb. 6, 2025 /PRNewswire/ — Arcadium Lithium plc (NYSE: ALTM, ASX: LTM, “Arcadium Lithium”) today announced it will release fourth quarter and full year 2024 earnings results on Thursday, February 27, 2025, after stock market close via PR Newswire and the company’s investor relations website at: https://ir.arcadiumlithium.com.

As a result of its pending acquisition by Rio Tinto, and as is customary during such transactions, Arcadium Lithium will not hold an earnings conference call in connection with its fourth quarter financial results.

Arcadium Lithium Contacts

Investors:

Daniel Rosen +1 215 299 6208
[email protected]

Phoebe Lee +61 413 557 780
[email protected]

Media:

Karen Vizental +54 9 114 414 4702
[email protected]

About Arcadium Lithium
Arcadium Lithium is a leading global lithium chemicals producer committed to safely and responsibly harnessing the power of lithium to improve people’s lives and accelerate the transition to a clean energy future. We collaborate with our customers to drive innovation and power a more sustainable world in which lithium enables exciting possibilities for renewable energy, electric transportation and modern life. Arcadium Lithium is vertically integrated, with industry-leading capabilities across lithium extraction processes, including hard-rock mining, conventional brine extraction and direct lithium extraction (DLE), and in lithium chemicals manufacturing for high performance applications. We have operations around the world, with facilities and projects in Argentina, Australia, Canada, China, Japan, the United Kingdom and the United States. For more information, please visit us at www.ArcadiumLithium.com.

Important Information and Legal Disclaimer:

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this news release are forward-looking statements. In some cases, we have identified forward-looking statements by such words or phrases as “will likely result,” “is confident that,” “expect,” “expects,” “should,” “could,” “may,” “will continue to,” “believe,” “believes,” “anticipates,” “predicts,” “forecasts,” “estimates,” “projects,” “potential,” “intends” or similar expressions identifying “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words and phrases. Such forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and the outlook for Arcadium Lithium based on currently available information. There are important factors that could cause Arcadium Lithium’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including the supply and demand in the market for our products as well as pricing for lithium and high-performance lithium compounds; our ability to realize the anticipated benefits of the integration of the businesses of Livent and Allkem or of any future acquisitions; our ability to acquire or develop additional reserves that are economically viable; the existence, availability and profitability of mineral resources and mineral and ore reserves; the success of our production expansion efforts, research and development efforts and the development of our facilities; our ability to retain existing customers; the competition that we face in our business; the development and adoption of new battery technologies; additional funding or capital that may be required for our operations and expansion plans; political, financial and operational risks that our lithium extraction and production operations, particularly in Argentina, expose us to; physical and other risks that our operations and suppliers are subject to; our ability to satisfy customer qualification processes or customer or government quality standards; global economic conditions, including inflation, fluctuations in the price of energy and certain raw materials; the ability of our joint ventures, affiliated entities and contract manufacturers to operate according to their business plans and to fulfill their obligations; severe weather events and the effects of climate change; extensive and dynamic environmental and other laws and regulations; our ability to obtain and comply with required licenses, permits and other approvals; and other factors described under the caption entitled “Risk Factors” in Arcadium Lithium’s 2023 Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 29, 2024, as well as Arcadium Lithium’s other SEC filings and public communications. Although Arcadium Lithium believes the expectations reflected in the forward-looking statements are reasonable, Arcadium Lithium cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Arcadium Lithium nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Arcadium Lithium is under no duty to update any of these forward-looking statements after the date of this news release to conform its prior statements to actual results or revised expectations.

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SOURCE Arcadium Lithium PLC

February 6, 2025 4:35 pm

Agree Realty Declares Monthly Common and Preferred Dividends

PR Newswire

ROYAL OAK, Mich.
, Feb. 6, 2025 /PRNewswire/ — Agree Realty Corporation (NYSE: ADC) (the “Company”) today announced that its Board of Directors has authorized, and the Company has declared, a monthly cash dividend of $0.253 per common share. The monthly dividend reflects an annualized dividend amount of $3.036 per common share, representing a 2.4% increase over the annualized dividend amount of $2.964 per common share from the first quarter of 2024. The dividend is payable March 14, 2025 to stockholders of record at the close of business on February 28, 2025.

Additionally, the Company’s Board of Directors has authorized, and the Company has declared, a monthly cash dividend on its 4.25% Series A Cumulative Redeemable Preferred Stock of $0.08854 per depositary share, which is equivalent to $1.0625 per annum. The dividend is payable March 3, 2025 to stockholders of record at the close of business on February 21, 2025.

About Agree Realty Corporation

Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2024, the Company owned and operated a portfolio of 2,370 properties, located in all 50 states and containing approximately 48.8 million square feet of gross leasable area. The Company’s common stock is listed on the New York Stock Exchange under the symbol “ADC”. For additional information on the Company and RETHINKING RETAIL, please visit www.agreerealty.com.

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SOURCE AGREE REALTY CORPORATION