Market Newsdesk

August 4, 2023 6:58 am

Microchip Technology Increases Quarterly Cash Dividend 36.2% Year-Over-Year to 41.0 Cents Per Share

CHANDLER, Ariz., Aug. 03, 2023 (GLOBE NEWSWIRE) — (NASDAQ: MCHP) – Microchip Technology Incorporated, a leading provider of smart, connected, and secure embedded control solutions, today announced that its Board of Directors declared a quarterly cash dividend on its common stock of 41.0 cents per share. The dividend is payable on September 5, 2023, to stockholders of record on August 22, 2023. Microchip initiated quarterly cash dividend payments in the third quarter of fiscal year 2003 and has increased its dividend 78 times since its inception.

“Microchip’s financial performance in the June 2023 quarter was in line with expectations, resulting in solid cash generation and further debt reduction and share repurchases,” said Steve Sanghi, Executive Chair. “Today, our Board of Directors approved a year-over-year increase in our dividend of 36.2% to 41.0 cents per share, up from our August 2022 dividend of 30.1 cents per share. This represents 84 consecutive quarters of dividend payments for Microchip and reflects confidence in the cash-generating capability of our business, as well as our ongoing commitment to returning capital to our stockholders.”

Cautionary Statement:

The statements contained in this release relating to our confidence in the cash-generating capability of our business and our ongoing commitment to returning capital to our stockholders are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to any continued uncertainty, fluctuations or weakness in the U.S. and world economies (including China) due to rising interest rates, high inflation or the impact of the COVID-19 pandemic (including lock-downs in China) which affect our business and the businesses of our customers and suppliers, actions taken or which may be taken by the Biden administration or the U.S. Congress, monetary policy, political, geopolitical, trade or other issues in the U.S. or internationally (including the Ukraine-Russia military conflict), actual cash flows generated from and used in the operation of our business; actual or projected levels of capital expenditures; our balance of cash and investments; changes in the tax rates that our stockholders pay on our dividends or other changes in U.S. tax laws including the Inflation Reduction Act of 2022, the Tax Cut and Jobs Act of 2017 and any new laws which may be enacted; our available borrowings under our credit agreement; the impact of any significant acquisitions or strategic transactions we may undertake; our ability to realize the expected benefits of our acquisitions, changes in demand or market acceptance of our products and the products of our customers and our ability to meet any continued increases in market demand; the mix of inventory we hold and our ability to satisfy short-term orders from our inventory; changes in utilization of our manufacturing capacity and our ability to effectively manage our production levels and increase production to meet any continued increases in market demand; our ability to obtain additional capacity from our wafer foundries and other suppliers to increase production to meet any continued increases in market demand; our ability to control the level of operating expenses relative to our level of revenues; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; changes or fluctuations in customer order patterns and seasonality; the costs and outcome of any current or future litigation or other matters involving our Microsemi acquisition, the Microsemi business, intellectual property, customers, or other issues; the impact the CHIPS Act will have on increasing manufacturing capacity in our industry by providing incentives for us, our competitors and foundries to construct new wafer manufacturing facilities or expand existing facilities, the costs and outcome of any current or future tax audit or investigation regarding our business or the business of Microsemi; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns (including COVID-19) or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.

For a detailed discussion of these and other risk factors, please refer to Microchip’s filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip’s website (www.microchip.com) or the SEC’s website (www.sec.gov) or from commercial document retrieval services.

Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances, or new information after this August 3, 2023 press release or to reflect the occurrence of unanticipated events.

About Microchip:

Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. The company’s solutions serve more than 125,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.

The Microchip logo and name are registered trademarks of Microchip Technology Incorporated.

INVESTOR RELATIONS CONTACT:
J. Eric Bjornholt — CFO (480) 792-7804

August 4, 2023 6:56 am

Goldman Sachs BDC, Inc. Reports June 30, 2023 Financial Results and Announces Quarterly Dividend of $0.45 Per Share

Goldman Sachs BDC, Inc. Reports June 30, 2023 Financial Results and Announces Quarterly Dividend of $0.45 Per Share

NEW YORK–(BUSINESS WIRE)–
Goldman Sachs BDC, Inc. (“GSBD,” the “Company,” “we,” “us,” or “our”) (NYSE: GSBD) today reported financial results for the second quarter ended June 30, 2023 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.

QUARTERLY HIGHLIGHTS

Net investment income per share for the quarter ended June 30, 2023 was $0.59. Excluding purchase discount amortization per share of $0.01 from the Merger (as defined below), adjusted net investment income per share was $0.58, equating to an annualized net investment income yield on book value of 15.9%.¹ Earnings per share for the quarter ended June 30, 2023 was $0.60
Net asset value (“NAV”) per share for the quarter ended June 30, 2023 increased 1.04% to $14.59 from $14.44 as of March 31, 2023
As of June 30, 2023, the Company’s total investments at fair value and commitments were $3,916.1 million, comprised of investments in 135 portfolio companies across 36 industries. The investment portfolio was comprised of 97.5% senior secured debt, including 92.6% in first lien investments²
During the quarter, the Company made new investment commitments of $86.0 million, funded new investment commitments of $11.2 million, and had fundings of previously unfunded commitments of $30.5 million. Sales and repayments activity totaled $(24.9) million, resulting in a net funded portfolio change of $16.8 million
During the quarter, two portfolio companies were placed on non-accrual status. As of June 30, 2023, investments on non-accrual status amounted to 0.8% and 1.8% of the total investment portfolio at fair value and amortized cost, respectively
The Company’s ending net debt to equity ratio remained the same at 1.20x as of June 30, 2023 and March 31, 2023
As of June 30, 2023, 43.8% of the Company’s approximately $1,962.1 million of total principal amount of debt outstanding was in unsecured debt and 56.2% in secured debt
The Company’s Board of Directors declared a regular third quarter dividend of $0.45 per share payable to shareholders of record as of September 30, 2023³

SELECTED FINANCIAL HIGHLIGHTS

(in $ millions, except per share data)	As of June 30, 2023		As of March 31, 2023
Investment portfolio, at fair value²	$	3,550.0	$	3,514.9
Total debt outstanding⁴	$	1,962.1	$	1,943.3
Net assets	$	1,596.9	$	1,580.4
Net asset value per share	$	14.59	$	14.44
Ending net debt to equity	1.20x		1.20x

(in $ millions, except per share data)	Three Months Ended June 30, 2023		Three Months Ended March 31, 2023
Total investment income	$	112.1	$	107.4

Net investment income after taxes	$	64.5	$	48.0
Less: Purchase discount amortization		1.4		0.9
Adjusted net investment income after taxes¹	$	63.1	$	47.1

Net realized and unrealized gains (losses)	$	1.4	$	(19.5	)
Add: Realized/Unrealized depreciation from the purchase discount		1.4		0.9
Adjusted net realized and unrealized gains (losses)¹	$	2.8	$	(18.6	)

Net investment income per share (basic and diluted)	$	0.59	$	0.46
Less: Purchase discount amortization per share		0.01		0.01
Adjusted net investment income per share¹	$	0.58	$	0.45

Weighted average shares outstanding		109.5		104.6
Regular distribution per share	$	0.45	$	0.45

Total investment income for the three months ended June 30, 2023 and March 31, 2023 was $112.1 million and $107.4 million, respectively. The increase in investment income was primarily driven by the increase in base interest rates.

Net expenses before taxes for the three months ended June 30, 2023 and March 31, 2023 were $46.7 million and $58.6 million, respectively. Net expenses decreased by $11.9 million primarily as a result of a decrease in incentive fee.

INVESTMENT ACTIVITY²

Summary of Investment Activity for the three months ended June 30, 2023 was as follows:

	New Investment Commitments					Sales and Repayments
Investment Type	$ Millions		% of Total			$ Millions		% of Total
1st Lien/Senior Secured Debt	$	86.0		100.0	%	$	24.2		97.3	%
1st Lien/Last-Out Unitranche		—		—			0.1		0.4
2nd Lien/Senior Secured Debt		—		—			—		—
Unsecured Debt		—		—			—		—
Common Stock		—		—			0.6		2.3
Total	$	86.0		100.0	%	$	24.9		100.0	%

During the three months ended June 30, 2023, new investment commitments were across four new portfolio companies and five existing portfolio companies. Sales and repayments were primarily driven by the full repayment of investments in two portfolio companies.³

PORTFOLIO SUMMARY²

As of June 30, 2023, the Company’s investments consisted of the following:

	Investments at Fair Value
Investment Type	$ Millions		% of Total
1st Lien/Senior Secured Debt	$	3,169.4		89.3	%
1st Lien/Last-Out Unitranche		117.2		3.3
2nd Lien/Senior Secured Debt		172.3		4.9
Unsecured Debt		8.8		0.2
Preferred Stock		43.5		1.2
Common Stock		38.3		1.1
Warrants		0.5		—
Total	$	3,550.0		100.0	%

The following table presents certain selected information regarding the Company’s investments:

		As of
		June 30, 2023				March 31, 2023
Number of portfolio companies			135				133
Percentage of performing debt bearing a floating rate⁵			100.0	%			99.7	%
Percentage of performing debt bearing a fixed rate⁵			0.0	%	¹⁰		0.3	%
Weighted average yield on debt and income producing investments, at amortized cost⁶			12.6	%			12.2	%
Weighted average yield on debt and income producing investments, at fair value⁶			13.8	%			13.2	%
Weighted average leverage (net debt/EBITDA)⁷			5.9x			6.0x
Weighted average interest coverage⁷			1.6x			1.6x
Median EBITDA⁷	$	51.0 million			$	52.6 million

As of June 30, 2023, investments on non-accrual status represented 0.8% and 1.8% of the total investment portfolio at fair value and amortized cost, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2023, the Company had $1,962.1 million of total principal amount of debt outstanding, comprised of $1,102.1 million of outstanding borrowings under its senior secured revolving credit facility (“Revolving Credit Facility”), $360.0 million of unsecured notes due 2025, and $500.0 million of unsecured notes due 2026.^{The combined weighted average interest rate on debt outstanding was 5.20% for the quarter ended June 30, 2023. As of June 30, 2023, the Company had $594.8 million of availability under its Revolving Credit Facility and $42.4 million in cash.^4,8}

The Company’s ending net debt to equity leverage ratio remained the same at 1.20x as of June 30, 2023 and March 31, 2023.⁹

CONFERENCE CALL

The Company will host an earnings conference call on Friday, August 4, 2023 at 9:00 am Eastern Time. All interested parties are invited to participate in the conference call by dialing (800) 289-0459; international callers should dial +1 (929) 477-0443; conference ID 427709. All participants are asked to dial in approximately 10-15 minutes prior to the call, and reference “Goldman Sachs BDC, Inc.” when prompted. For a slide presentation that the Company may refer to on the earnings conference call, please visit the Investor Resources section of the Company’s website at www.goldmansachsbdc.com. An archived replay will be available on the Company’s webcast link located on the Investor Resources section of the Company’s website.

Please direct any questions regarding the conference call to Goldman Sachs BDC, Inc. Investor Relations, via e-mail, at [email protected].

ENDNOTES

¹⁾	On October 12, 2020, we completed our merger (the “Merger”) with Goldman Sachs Middle Market Lending Corp. (“MMLC”). The Merger was accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations — Related Issues. The consideration paid to MMLC’s stockholders was less than the aggregate fair values of the assets acquired and liabilities assumed, which resulted in a purchase discount (the “purchase discount”). The purchase discount was allocated to the cost of MMLC investments acquired by us on a pro-rata basis based on their relative fair values as of the closing date. Immediately following the Merger with MMLC, we marked the investments to their respective fair values and, as a result, the purchase discount allocated to the cost basis of the investments acquired was immediately recognized as unrealized appreciation on our Consolidated Statement of Operations. The purchase discount allocated to the loan investments acquired will amortize over the life of each respective loan through interest income, with a corresponding adjustment recorded as unrealized appreciation on such loan acquired through its ultimate disposition. The purchase discount allocated to equity investments acquired will not amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, we will recognize a realized gain with a corresponding reversal of the unrealized appreciation on disposition of such equity investments acquired.
	As a supplement to our financial results reported in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we have provided, as detailed below, certain non-GAAP financial measures to our operating results that exclude the aforementioned purchase discount and the ongoing amortization thereof, as determined in accordance with GAAP. The non-GAAP financial measures include i) Adjusted net investment income per share; ii) Adjusted net investment income after taxes; and iii) Adjusted net realized and unrealized gains (losses). We believe that the adjustment to exclude the full effect of the purchase discount is meaningful because it is a measure that we and investors use to assess our financial condition and results of operations. Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The aforementioned non-GAAP financial measures may not be comparable to similar non-GAAP financial measures used by other companies.
²⁾	The discussion of the investment portfolio excludes the investment, if any, in a money market fund managed by an affiliate of The Goldman Sachs Group, Inc. As of June 30, 2023, the Company did not have an investment in the money market fund.
³⁾	The $0.45 per share dividend is payable on October 27, 2023 to stockholders of record as of September 30, 2023.
⁴⁾	Total debt outstanding excludes netting of debt issuance costs of $7.1 million and $7.9 million, respectively, as of June 30, 2023 and March 31, 2023.
⁵⁾	The fixed versus floating composition has been calculated as a percentage of performing debt investments measured on a fair value basis, including income producing preferred stock investments and excludes investments, if any, placed on non-accrual.
⁶⁾	Computed based on the (a) annual actual interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments as of the reporting date, divided by (b) the total performing debt and other income producing investments (excluding investments on non-accrual) at amortized cost or fair value, respectively. This calculation excludes exit fees that are receivable upon repayment of the investment. Excludes the purchase discount and amortization related to the Merger.
⁷⁾	For a particular portfolio company, we calculate the level of contractual indebtedness net of cash (“net debt”) owed by the portfolio company and compare that amount to measures of cash flow available to service the net debt. To calculate net debt, we include debt that is both senior and pari passu to the tranche of debt owned by us but exclude debt that is legally and contractually subordinated in ranking to the debt owned by us. We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual rights of repayment of the tranche of debt owned by us relative to other senior and junior creditors of a portfolio company. We typically calculate cash flow available for debt service at a portfolio company by taking net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”) for the trailing twelve month period. Weighted average net debt to EBITDA is weighted based on the fair value of our debt investments and excludes investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.
	For a particular portfolio company, we also compare that amount of EBITDA to the portfolio company’s contractual interest expense (“interest coverage ratio”). We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual interest obligations of the portfolio company. Weighted average interest coverage is weighted based on the fair value of our performing debt investments and excludes investments where interest coverage may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.
	Median EBITDA is based on our debt investments and excludes investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.
	Portfolio company statistics are derived from the financial statements most recently provided to us of each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount. As of June 30, 2023 and March 31, 2023, investments where net debt to EBITDA may not be the appropriate measure of credit risk represented 42.3% and 42.0%, respectively, of total debt investments at fair value.
⁸⁾	The Company’s revolving credit facility has debt outstanding denominated in currencies other than U.S. Dollars (“USD”). These balances have been converted to USD using applicable foreign currency exchange rates as of June 30, 2023. As a result, the revolving credit facility’s outstanding borrowings and the available debt amounts may not sum to the total debt commitment amount.
⁹⁾	The ending net debt to equity leverage ratio is calculated by using the total borrowings net of cash and cash equivalents divided by equity as of June 30, 2023 and excludes unfunded commitments.
¹⁰⁾	Amount rounds to less than 0.1%.

Goldman Sachs BDC, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share amounts)

	June 30, 2023 (Unaudited)			December 31, 2022
Assets
Investments, at fair value
Non-controlled/non-affiliated investments (cost of $3,616,571 and $3,598,963)	$	3,507,224		$	3,465,225
Non-controlled affiliated investments (cost of $71,299 and $69,712)		42,755			40,991
Controlled affiliated investments (cost of $22,366 and $22,366)		—			—
Total investments, at fair value (cost of $3,710,236 and $3,691,041)	$	3,549,979		$	3,506,216
Cash		42,414			39,602
Interest and dividends receivable		32,081			31,779
Deferred financing costs		11,317			12,772
Other assets		1,643			942
Total assets	$	3,637,434		$	3,591,311
Liabilities
Debt (net of debt issuance costs of $7,107 and $8,741)	$	1,955,014		$	2,012,660
Interest and other debt expenses payable		12,730			13,309
Management fees payable		8,970			9,063
Incentive fees payable		7,837			—
Distribution payable		49,259			46,283
Unrealized depreciation on foreign currency forward contracts		613			484
Accrued offering costs		328			—
Accrued expenses and other liabilities		5,833			7,118
Total liabilities	$	2,040,584		$	2,088,917
Commitments and contingencies (Note 8)
Net assets
Preferred stock, par value $0.001 per share (1,000,000 shares authorized, no shares issued and outstanding)	$	—		$	—
Common stock, par value $0.001 per share (200,000,000 shares authorized, 109,463,144 and 102,850,589 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)		109			103
Paid-in capital in excess of par		1,809,154			1,709,914
Distributable earnings (loss)		(210,992	)		(206,202	)
Allocated income tax expense		(1,421	)		(1,421	)
Total net assets	$	1,596,850		$	1,502,394
Total liabilities and net assets	$	3,637,434		$	3,591,311
Net asset value per share	$	14.59		$	14.61

Goldman Sachs BDC, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	101,952		$	71,680		$	200,082		$	143,279
Payment-in-kind income		8,735			4,366			16,452			9,112
Other income		664			949			1,546			2,166
From non-controlled affiliated investments:
Dividend income		138			56			245			125
Interest income		532			190			1,039			349
Payment-in-kind income		51			212			100			452
Other income		11			—			23			—
From controlled affiliated investments:
Payment-in-kind income		—			—			—			259
Interest income		—			—			—			16
Total investment income	$	112,083		$	77,453		$	219,487		$	155,758
Expenses:
Interest and other debt expenses	$	27,775		$	16,177		$	55,039		$	31,844
Incentive fees		7,837			3,833			30,139			12,023
Management fees		8,970			8,959			17,891			17,776
Professional fees		888			867			1,766			1,745
Directors’ fees		208			204			415			407
Other general and administrative expenses		1,026			1,148			2,083			2,260
Total expenses	$	46,704		$	31,188		$	107,333		$	66,055
Fee waivers	$	—		$	(4,179	)	$	(1,986	)	$	(11,724	)
Net expenses	$	46,704		$	27,009		$	105,347		$	54,331
Net investment income before taxes	$	65,379		$	50,444		$	114,140		$	101,427
Income tax expense, including excise tax	$	877		$	832		$	1,652		$	1,665
Net investment income after taxes	$	64,502		$	49,612		$	112,488		$	99,762
Net realized and unrealized gains (losses) on investment transactions:
Net realized gain (loss) from:
Non-controlled/non-affiliated investments	$	(2,953	)	$	(4,431	)	$	(39,214	)	$	(5,054	)
Controlled affiliated investments		—			—			—			(2,035	)
Foreign currency forward contracts		—			51			—			81
Foreign currency and other transactions		(5	)		(69	)		195			(848	)
Net change in unrealized appreciation (depreciation) from:
Non-controlled/non-affiliated investments		5,881			(27,585	)		24,391			(38,959	)
Non-controlled affiliated investments		472			(559	)		177			1,944
Controlled affiliated investments		—			(1,777	)		—			(1,061	)
Foreign currency forward contracts		(88	)		22			(129	)		46
Foreign currency translations and other transactions		(1,975	)		3,299			(3,625	)		5,077
Net realized and unrealized gains (losses)	$	1,332		$	(31,049	)	$	(18,205	)	$	(40,809	)
(Provision) benefit for taxes on unrealized appreciation/depreciation on investments	$	(170	)	$	114		$	(556	)	$	(118	)
Net increase (decrease) in net assets from operations	$	65,664		$	18,677		$	93,727		$	58,835
Weighted average shares outstanding		109,463,144			101,970,098			107,040,899			101,918,422
Net investment income per share (basic and diluted)	$	0.59		$	0.49		$	1.05		$	0.98
Earnings (loss) per share (basic and diluted)	$	0.60		$	0.18		$	0.88		$	0.58

ABOUT GOLDMAN SACHS BDC, INC.

Goldman Sachs BDC, Inc. is a specialty finance company that has elected to be regulated as a business development company under the Investment Company Act of 1940. GSBD was formed by The Goldman Sachs Group, Inc. (“Goldman Sachs”) to invest primarily in middle-market companies in the United States, and is externally managed by Goldman Sachs Asset Management, L.P., an SEC-registered investment adviser and a wholly-owned subsidiary of Goldman Sachs. GSBD seeks to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, first lien/last-out unitranche and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments. For more information, visit www.goldmansachsbdc.com. Information on the website is not incorporated by reference into this press release and is provided merely for convenience.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. These statements represent the Company’s belief regarding future events that, by their nature, are uncertain and outside of the Company’s control. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in filings we make with the Securities and Exchange Commission, and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803168263/en/

Goldman Sachs BDC, Inc.

Investor Contact: Austin Neri, 212-902-1000

Media Contact: Avery Reed, 212-902-5400

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Banking Asset Management Professional Services Finance

MEDIA:

August 4, 2023 6:55 am

Dolby Laboratories Reports Third Quarter Fiscal 2023 Financial Results

SAN FRANCISCO, Aug. 03, 2023 (GLOBE NEWSWIRE) — Dolby Laboratories, Inc. (NYSE:DLB) today announced the company’s financial results for the third quarter of fiscal 2023.

“We continue to transform the way people enjoy their content,” said Kevin Yeaman, President and CEO, Dolby Laboratories. “We remain focused on growing Dolby Atmos and Dolby Vision across our movies and TV, music and user-generated content ecosystems.”

Third Quarter Fiscal 2023 Financial Highlights

Total revenue was $298.4 million, compared to $289.6 million for the third quarter of fiscal 2022.
GAAP net income was $16.4 million, or $0.17 per diluted share, compared to GAAP net income of $39.6 million, or $0.39 per diluted share, for the third quarter of fiscal 2022. On a non-GAAP basis, third quarter net income was $54.1 million, or $0.55 per diluted share, compared to $68.7 million, or $0.68 per diluted share, for the third quarter of fiscal 2022.
Cash flow from operations was $121.1 million, compared to $172.6 million for the third quarter of fiscal 2022.
Dolby repurchased 0.3 million shares of its common stock and ended the quarter with approximately $237 million of stock repurchase authorization available going forward.

A complete listing of Dolby’s non-GAAP measures are described and reconciled to the corresponding GAAP measures at the end of this release.

Recent Business Highlights

Dolby Atmos Music is now available on WYNK Music in India.
Max launched their top-tier service with Dolby Atmos and Dolby Vision.
Moj, a large social media platform in India, adopted Dolby Vision.
NIO and Lotus launched car models that support Dolby Atmos in Europe.
Sony Interactive Entertainment announced that the PS5 will unlock support for compatible Dolby Atmos-enabled living room devices.
TCL announced they are expanding Dolby Vision and Dolby Atmos on their regional TV models in India.
Viddsee, a short-film video platform based in Singapore, adopted Dolby Vision and Dolby Atmos.

Dividend

Today, Dolby announced a cash dividend of $0.27 per share of Class A and Class B common stock, payable on August 22, 2023, to stockholders of record as of the close of business on August 14, 2023.

Financial Outlook

Dolby’s financial outlook relies on estimates of royalty-based revenue that take into consideration the macroeconomic effect of certain events, including supply chain constraints, international conflicts, and consumer demand for electronic products. In addition, actual results could differ materially from the estimates Dolby is providing below due in part to the increased uncertainty resulting from these items as well as the geopolitical instability and continuing concerns around inflation and elevated interest rates. The uncertainty resulting from these factors has greatly reduced its visibility into its future outlook. To the extent possible, the estimates Dolby is providing for future periods reflect certain assumptions about the potential impact of certain of these items, based upon a consideration of currently available external and internal data and information. These assumptions are subject to risks and uncertainties. For more information, see “Forward-Looking Statements” in this press release for a description of certain risks that Dolby faces, and the section captioned “Risk Factors” in its Quarterly Report on Form 10-Q for the third quarter of fiscal 2023, to be filed on or around the date hereof.

Dolby is providing the following estimates for the full year of fiscal 2023:

Total revenue is expected to range from $1.285 billion to $1.315 billion.
Gross margins are anticipated to be roughly 87.5% on a GAAP basis and roughly 88.0% on a non-GAAP basis.
Operating expenses are anticipated to range from $900 million to $910 million on a GAAP basis and from $760 million to $770 million on a non-GAAP basis.
Dolby expects operating margins on a GAAP basis to be roughly 18% and on a non-GAAP basis to be roughly 30%.
Diluted earnings per share is anticipated to range from $2.10 to $2.30 on a GAAP basis and from $3.30 to $3.50 on a non-GAAP basis.

Dolby is providing the following estimates for its fourth quarter of fiscal 2023:

Total revenue is estimated to range from $275 million to $305 million.
Gross margins are anticipated to be roughly 86.5% on a GAAP basis and roughly 87.5% on a non-GAAP basis.
Operating expenses are anticipated to range from $227 million to $237 million on a GAAP basis and from $195 million to $205 million on a non-GAAP basis.
Effective tax rate is anticipated to range from 22% to 24% on a GAAP basis and 19% to 21% on a non-GAAP basis.
Diluted earnings per share is anticipated to range from $0.10 to $0.30 on a GAAP basis and from $0.40 to $0.60 on a non-GAAP basis.

Conference Call Information

Members of Dolby management will lead a conference call open to all interested parties to discuss third quarter fiscal 2023 financial results for Dolby Laboratories at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, August 3, 2023. Access to the teleconference will be available at http://investor.dolby.com or by dialing 1-888-210-2212 (+1-646-960-0390 for international callers) and entering confirmation code 5587811.

A replay of the call will be available from 5:00 p.m. PT (8:00 p.m. ET) on Thursday, August 3, 2023, until 8:59 p.m. PT (11:59 p.m. ET) on Thursday, August 10, 2023 by dialing 1-800-770-2030 (+1-647-362-9199 for international callers) and entering the confirmation code 5587811. An archived version of the teleconference will also be available on the Dolby website, http://investor.dolby.com.

Non-GAAP Financial Information

To supplement Dolby’s financial statements presented on a GAAP basis, Dolby management uses, and Dolby provides to investors, certain non-GAAP financial measures as an additional tool to evaluate Dolby’s operating results in a manner that focuses on what Dolby’s management believes to be its ongoing business operations and performance. Specifically, Dolby excludes the following as adjustments from one or more of its non-GAAP financial measures:

Stock-based compensation expense: Stock-based compensation, unlike cash-based compensation, utilizes subjective assumptions in the methodologies used to value the various stock-based award types that Dolby grants. These assumptions may differ from those used by other companies. To facilitate more meaningful comparisons between its underlying operating results and those of other companies, Dolby excludes stock-based compensation expense.

Amortization of acquisition-related intangibles: Dolby amortizes intangible assets acquired in connection with acquisitions. These intangible assets consist of patents and technology, customer relationships, and other intangibles. Dolby records amortization charges relating to these intangible assets in its GAAP financial statements, and Dolby views these charges as items arising from pre-acquisition activities that are determined by the timing and valuation of its acquisitions. As these amortization charges do not directly correlate to its operations during any particular period, Dolby excludes these charges to facilitate an evaluation of its current operating performance and comparisons to its past operating results.

Restructuring cha
rges: Restructuring charges are costs associated with restructuring plans and primarily relate to costs associated with exit or disposal activities, employee severance benefits, and asset impairments. Dolby excludes restructuring costs, including any adjustments to charges recorded in prior periods (which may be credits), as Dolby believes that these costs are not representative of its normal operating activities and therefore, excluding these amounts enables a more effective comparison of its past operating performance and to that of other companies.

Income tax adjustments: The income tax effects of the aforementioned non-GAAP adjustments do not directly correlate to its operating performance so Dolby believes that excluding such income tax effects provides a more meaningful view of its underlying operating results to management and investors.

Using the aforementioned adjustments, Dolby provides various non-GAAP financial measures including, but not limited to: non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, and non-GAAP effective tax rate. Dolby’s management believes it is useful for itself and investors to review both GAAP and non-GAAP measures to assess the performance of Dolby’s business, including as a means to evaluate period-to-period comparisons. Dolby’s management does not itself, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, superior to, or as a substitute for, financial information prepared in accordance with GAAP. Whenever Dolby uses non-GAAP financial measures, it provides a reconciliation of the non-GAAP financial measures to the most closely applicable GAAP financial measures. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures as detailed above and below. Investors are also encouraged to review Dolby’s GAAP financial statements as reported in its US Securities and Exchange Commission (SEC) filings. A reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release and on the Dolby investor relations website, http://investor.dolby.com.

Forward-Looking Statements

Certain statements in this press release, including, but not limited to, expected financial results for the fourth quarter of fiscal 2023 and full year fiscal 2023, Dolby’s ability to expand existing business, navigate challenging periods, pursue its long-term growth opportunities, and advance its other long-term objectives are “forward-looking statements” that inherently involve substantial risks and uncertainties. These forward-looking statements are based on management’s current expectations, and as a result of certain risks and uncertainties, actual results may differ materially from those provided. The following important factors, without limitation, could cause actual results to differ materially from those in the forward-looking statements: the potential impacts of economic conditions on Dolby’s business operations, financial results, and financial position (including the impact to Dolby partners and disruption of the supply chain and delays in shipments of consumer products; the level at which Dolby technologies are incorporated into products and the consumer demand for such products; delays in the development and release of new products or services that contain Dolby technologies; delays in royalty reporting or delinquent payment by partners or licensees; lengthening sales cycles; the impact to the overall cinema market including adverse impact to Dolby’s revenue recognized on box-office sales and demand for cinema products and services; and macroeconomic conditions that affect discretionary spending and access to products that contain Dolby technologies); risks associated with geopolitical issues, such as the conflict between Russia and Ukraine; risks associated with trends in the markets in which Dolby operates, including the broadcast, mobile, consumer electronics, PC, and other markets; the loss of, or reduction in sales by, a key customer, partner, or licensee; pricing pressures; risks relating to changing trends in the way that content is distributed and consumed; risks relating to conducting business internationally, including trade restrictions and changes in diplomatic or trade relationships; risks relating to maintaining patent coverage; the timing of Dolby’s receipt of royalty reports and payments from its licensees, including recoveries; changes in tax regulations; timing of revenue recognition under licensing agreements and other contractual arrangements; Dolby’s ability to develop, maintain, and strengthen relationships with industry participants; Dolby’s ability to develop and deliver innovative products and technologies in response to new and growing markets; competitive risks; risks associated with conducting business in China and other countries that have historically limited recognition and enforcement of intellectual property and contractual rights; risks associated with the health of the motion picture and cinema industries generally, including the potential impacts of the strikes by the WGA and SAG-AFTRA; Dolby’s ability to increase its revenue streams and to expand its business generally, and to continue to expand its business beyond its current technology offerings; risks associated with acquiring and successfully integrating businesses or technologies; and other risks detailed in Dolby’s SEC filings and reports, including the risks identified under the section captioned “Risk Factors” in its Quarterly Report on Form 10-Q filed on or around the date hereof. Dolby may not actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements. Forward-looking statements are based upon information available to us as of the date of this press release, and while Dolby believes such information forms a reasonable basis for such statements, such information may be limited or incomplete. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, Dolby disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

About Dolby Laboratories

Dolby Laboratories (NYSE: DLB) is based in San Francisco, California with offices around the globe. From movies and TV shows, to apps, music, sports and gaming, Dolby transforms the science of sight and sound into spectacular experiences for billions of people worldwide. Dolby partners with artists, storytellers, developers, and businesses to revolutionize entertainment and communications with Dolby Atmos, Dolby Vision, Dolby Cinema, and Dolby.io.

Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby.io, and the double-D symbol are among the registered and unregistered trademarks of Dolby Laboratories in the United States and/or other countries. Other trademarks remain the property of their respective owners.

DOLBY LABORATORIES, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts; unaudited)

	Fiscal Quarter Ended						Fiscal Year-To-Date Ended
	June 30, 2023			July 1, 2022			June 30, 2023			July 1, 2022
Revenue:
Licensing	$	273,108		$	269,289		$	932,727		$	915,406
Products and services		25,262			20,296			76,455			60,183
Total revenue		298,370			289,585			1,009,182			975,589

Cost of revenue:
Cost of licensing		15,610			13,756			50,334			45,363
Cost of products and services		25,905			22,201			66,680			58,818
Total cost of revenue		41,515			35,957			117,014			104,181

Gross profit		256,855			253,628			892,168			871,408

Operating expenses:
Research and development		68,696			62,859			201,097			199,104
Sales and marketing		85,594			87,114			263,494			268,514
General and administrative		69,954			57,113			191,865			218,250
Restructuring charges		16,676			976			16,465			6,043
Total operating expenses		240,920			208,062			672,921			691,911

Operating income		15,935			45,566			219,247			179,497

Other income/(expense):
Interest income		7,316			1,416			18,967			3,230
Interest expense		(114	)		(84	)		(161	)		(255	)
Other income, net		620			2,514			2,967			1,833
Total other income		7,822			3,846			21,773			4,808

Income before income taxes		23,757			49,412			241,020			184,305
Provision for income taxes		(7,352	)		(9,802	)		(49,284	)		(28,166	)
Net income including noncontrolling interest		16,405			39,610			191,736			156,139
Less: net (income)/loss attributable to noncontrolling interest		(6	)		(13	)		(266	)		192
Net income attributable to Dolby Laboratories, Inc.	$	16,399		$	39,597		$	191,470		$	156,331

Net income per share:
Basic	$	0.17		$	0.40		$	2.00		$	1.55
Diluted	$	0.17		$	0.39		$	1.96		$	1.52
Weighted-average shares outstanding:
Basic		95,658			100,213			95,794			100,936
Diluted		97,459			101,474			97,588			102,993

DOLBY LABORATORIES, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands; unaudited)

	June 30, 2023			September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	765,079		$	620,127
Restricted cash		34,080			8,244
Short-term investments		124,210			189,213
Accounts receivable, net		266,865			243,593
Contract assets, net		192,585			176,093
Inventories, net		32,398			23,549
Prepaid expenses and other current assets		54,148			50,075
Total current assets		1,469,365			1,310,894
Long-term investments		98,103			102,514
Property, plant, and equipment, net		501,666			513,481
Operating lease right-of-use assets		39,273			46,530
Goodwill and intangible assets, net		603,641			477,412
Deferred taxes		209,681			183,568
Other non-current assets		86,209			55,149
Total assets	$	3,007,938		$	2,689,548

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	15,395		$	14,171
Accrued liabilities		346,525			230,237
Income taxes payable		11,018			1,265
Contract liabilities		36,586			18,588
Operating lease liabilities		13,512			13,257
Total current liabilities		423,036			277,518
Non-current contract liabilities		41,624			23,203
Non-current operating lease liabilities		36,552			37,685
Other non-current liabilities		124,003			100,122
Total liabilities		625,215			438,528

Stockholders’ equity:
Class A common stock		53			53
Class B common stock		41			41
Retained earnings		2,397,307			2,297,730
Accumulated other comprehensive loss		(31,163	)		(51,641	)
Total stockholders’ equity – Dolby Laboratories, Inc.		2,366,238			2,246,183
Noncontrolling interest		16,485			4,837
Total stockholders’ equity		2,382,723			2,251,020
Total liabilities and stockholders’ equity	$	3,007,938		$	2,689,548

DOLBY LABORATORIES, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)

	Fiscal Year-To-Date Ended
	June 30, 2023			July 1, 2022
Operating activities:
Net income including noncontrolling interest	$	191,736		$	156,139
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		61,428			69,382
Stock-based compensation		90,291			87,963
Amortization of operating lease right-of-use assets		9,829			11,658
Amortization of premium on investments		(179	)		1,109
Provision for/(benefit from) credit losses		(348	)		2,166
Deferred income taxes		(21,653	)		(29,143	)
Other non-cash items affecting net income		(1,751	)		(2,388	)
Changes in operating assets and liabilities:
Accounts receivable, net		43,546			(5,395	)
Contract assets, net		(10,105	)		11,999
Inventories		(2,425	)		(12,231	)
Operating lease right-of-use assets		(3,799	)		(941	)
Prepaid expenses and other assets		775			(1,169	)
Accounts payable and accrued liabilities		(83,737	)		(29,782	)
Income taxes, net		14,975			17,023
Contract liabilities		(1,686	)		3,314
Operating lease liabilities		(7,452	)		(10,539	)
Other non-current liabilities		2,621			(1,898	)
Net cash provided by operating activities		282,066			267,267

Investing activities:
Purchases of marketable securities		(123,075	)		(248,156	)
Proceeds from sales of marketable securities		54,020			8,970
Proceeds from maturities of marketable securities		139,423			75,890
Purchases of property, plant, and equipment		(22,154	)		(37,218	)
Business combinations, net of cash and restricted cash acquired		25,703			(38,171	)
Purchases of intangible assets		—			(11,528	)
Purchases of other investments		—			(5,000	)
Net cash provided by/(used in) investing activities		73,917			(255,213	)

Financing activities:
Proceeds from issuance of common stock		37,231			53,600
Repurchase of common stock		(124,276	)		(310,486	)
Payment of cash dividend		(77,584	)		(75,816	)
Distribution to noncontrolling interest		(266	)		(1,435	)
Shares repurchased for tax withholdings on vesting of restricted stock		(28,619	)		(33,994	)
Payment of deferred consideration for prior business combinations		(500	)		—
Net cash used in financing activities		(194,014	)		(368,131	)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		8,819			(9,698	)
Net increase/(decrease) in cash, cash equivalents, and restricted cash		170,788			(365,775	)
Cash, cash equivalents, and restricted cash at beginning of period		628,371			1,233,032
Cash, cash equivalents, and restricted cash at end of period	$	799,159		$	867,257

GAAP to Non-GAAP Reconciliations
(unaudited)

The following tables present Dolby’s GAAP financial measures reconciled to the non-GAAP financial measures included in this release for the third quarters of fiscal 2023 and fiscal 2022:

Net income:							Fiscal Quarter Ended
(in thousands)							June 30, 2023			July 1, 2022
GAAP net income							$	16,399		$	39,597
Stock-based compensation⁽¹⁾								29,224			27,608
Amortization of acquisition-related intangibles⁽²⁾								3,031			1,749
Restructuring charges								16,676			976
Income tax adjustments								(11,255	)		(1,260	)
Non-GAAP net income							$	54,075		$	68,670

(1) Stock-based compensation included in above line items:
Cost of products and services							$	375		$	414
Research and development								9,681			9,171
Sales and marketing								9,756			9,718
General and administrative								9,412			8,305

(2) Amortization of acquisition-related intangibles included in above line items:
Cost of licensing							$	62		$	61
Cost of products and services								866			780
Research and development								—			124
Sales and marketing								806			784
General and administrative								1,297			—

Diluted earnings per share:							Fiscal Quarter Ended
							June 30, 2023			July 1, 2022
GAAP diluted earnings per share							$	0.17		$	0.39
Stock-based compensation								0.30			0.27
Amortization of acquisition-related intangibles								0.03			0.02
Restructuring charges								0.17			0.01
Income tax adjustments								(0.12	)		(0.01	)
Non-GAAP diluted earnings per share							$	0.55		$	0.68


Weighted-average shares outstanding – diluted(in thousands)								97,459			101,474

The following tables present a reconciliation between GAAP and non-GAAP versions of the estimated financial measures for the fourth quarter of fiscal 2023 and full year fiscal 2023 included in this release:

Gross margin:				Q4 2023						Fiscal 2023
GAAP gross margin				86.5% +/-						87.5% +/-
Stock-based compensation					0.4	%					0.2	%
Amortization of acquisition-related intangibles					0.6	%					0.3	%
Non-GAAP gross margin				87.5% +/-						88.0% +/-

Operating expenses *(in millions)* :				Q4 2023						Fiscal 2023
GAAP operating expenses (low – high end of range)				$227 – $237						$900 – $910
Stock-based compensation					(31	)					(119	)
Amortization of acquisition-related intangibles					(1	)					(5	)
Restructuring charges, net					—						(16	)
Non-GAAP operating expenses (low – high end of range)				$195 – $205						$760 – $770

Operating margin:										Fiscal 2023
GAAP operating margin										18% +/-
Stock-based compensation											10	%
Amortization of acquisition-related intangibles											1	%
Restructuring charges, net											1	%
Non-GAAP operating margin										30% +/-

Effective tax rate:										Q4 2023
GAAP effective tax rate (low – high end of range)										22% – 24%
Stock-based compensation (low – high end of range)										(2%) – (1%)
Amortization of acquisition-related intangibles (low – high end of range)										(1%) – 0%
Non-GAAP effective tax rate (low – high end of range)										19% – 21%

Diluted earnings per share:	Q4 2023						Fiscal 2023
	Low			High			Low			High
GAAP diluted earnings per share	$	0.10		$	0.30		$	2.10		$	2.30
Stock-based compensation		0.33			0.33			1.24			1.24
Amortization of acquisition-related intangibles		0.03			0.03			0.08			0.08
Restructuring charges, net		—			—			0.17			0.17
Income tax adjustments		(0.06	)		(0.06	)		(0.29	)		(0.29	)
Non-GAAP diluted earnings per share	$	0.40		$	0.60		$	3.30		$	3.50

Weighted-average shares outstanding – diluted (in millions)		97			97			98			98

Investor Contact:

Lana Adair
415-217-2631
[email protected]

Media Contact:

Rachel Lowery
Dolby Laboratories
714-496-3816
[email protected]

August 4, 2023 6:48 am

ReWalk Robotics to Report Second Quarter Financial Results on August 11, 2023

MARLBOROUGH, Mass. and BERLIN and YOKNEAM ILLIT, Israel, Aug. 03, 2023 (GLOBE NEWSWIRE) — ReWalk Robotics Ltd. (Nasdaq: RWLK) (“ReWalk” or the “Company”) announced that the Company will release its second quarter 2023 financial results before the markets open on Friday, August 11, 2023.

Larry Jasinski, Chief Executive Officer, and Michael Lawless, Chief Financial Officer, will host a conference call and live webcast at 8:30 a.m. EDT to discuss the financial results. To access the call, analysts and investors may utilize the following:

Toll free (U.S.)	1-833-316-0561
International (U.S)	1-412-317-0690
Germany	0800-6647650
Israel	1-80-9212373
Access Code	Please reference the “ReWalk Robotics Ltd. Call”

The conference call will be webcast live and the webcast can be accessed through a link on the Company’s website at rewalk.com in the “Investors” section, or through the following link: https://edge.media-server.com/mmc/p/rbqbw9m4. An archived webcast will also be available on the company’s website.

About ReWalk Robotics Ltd.:

ReWalk Robotics Ltd. is a medical device company that designs, develops, and commercializes innovative technologies that enable mobility and wellness in rehabilitation and daily life for individuals with neurological conditions. ReWalk’s mission is to fundamentally change the quality of life for these individuals through the creation and development of market leading technologies. Founded in 2001, ReWalk has operations in the United States, Israel, and Germany. For more information on the ReWalk systems, please visit rewalk.com.

ReWalk® and ReStore® are registered trademarks of ReWalk Robotics Ltd. in the United States and other jurisdictions.

ReWalk Investor Contact:

Mike Lawless
Chief Financial Officer
ReWalk Robotics Ltd.
E: [email protected]

ReWalk Media Relations:

John Tomlin
E: [email protected]

August 4, 2023 6:47 am

PLAYSTUDIOS, Inc. Announces Second Quarter Results

PLAYSTUDIOS, Inc. Announces Second Quarter Results

Second Quarter 2023 Revenue of $77.8 million and Net loss of $0.8 million

AEBITDA of $16.3 million, AEBITDA Margins up 1020bps from year ago levels

LAS VEGAS–(BUSINESS WIRE)–
PLAYSTUDIOS, Inc. (NASDAQ: MYPS) (“PLAYSTUDIOS” or the “Company”), the developer of the playAWARDS loyalty platform and an award-winning developer of free-to-play mobile and social games, today announced financial results for the second quarter ended June 30, 2023.

Second Quarter Financial Highlights

Revenue was $77.8 million during the second quarter of 2023, compared to $68.4 million during the second quarter of 2022.
Net loss was $0.8 million during the second quarter of 2023, compared to net income of $5.5 million during the second quarter of 2022.
AEBITDA, a non-GAAP financial measure defined below, was $16.3 million during the second quarter of 2023, compared to $7.3 million during the second quarter of 2022.

Andrew Pascal, Chairman and Chief Executive Officer of PLAYSTUDIOS, commented, “Our momentum continued in the second quarter of 2023 as we posted another solid quarter. Revenue and AEBITDA were well ahead of year ago results and exceeded Wall Street’s expectations for the third consecutive quarter. Similar to the first quarter, building momentum in our portfolio of games, increased focus on execution, and cost discipline are driving the results. Our AEBITDA margins grew over 1,000 basis points versus last year to 20.9%. This is a continuation of the strong year over year gains we achieved in the first quarter of 2023 and a reflection of our operational refinements over the past six months. Reaching margin parity with our peers is a primary goal of ours and something we’ll continue to advance as we balance our focus on operational improvements with our ongoing investments in future growth.”

He continued “On the games side, Tetris had another strong quarter and continues to gain traction with new and old players alike. We are incredibly optimistic about Tetris’ future and believe there are numerous paths to realizing the full potential of this beloved franchise. We continue to work diligently on optimizing the Tetris Prime product, while we invest in new more casual versions of this puzzle format. Performance was also strong across the remainder of our growth portfolio; myVEGAS Bingo, MGM Slots Live, and the Brainium suite. We expect this collection to continue to show sequential momentum as we scale their audience, leverage our loyalty model, and optimize monetization. Within our core business, our focus remains on myKONAMI Slots and myVEGAS Slots, both of which were transitioned to new teams based in our EMEA and Asia studios. While our new plans for these products will take time to implement, I’m hopeful we’ll begin seeing benefits later this year. As a reminder, the transition of these games was the impetus for the corporate restructuring we announced earlier this year. Part of that restructuring included a reduction in our headcount, which is now starting to flow through our results.”

Pascal further commented, “playAWARDS continued to expand by adding new partners and increasing its exposure across our portfolio of games. Late last quarter playAWARDS was added to Tetris and remains on track to be incorporated into our entire collection of casual games by year end. A full portfolio integration will nearly triple playAWARDS’ DAU reach and, we believe, demonstrate the “loyalty lift” that can be achieved in any category of gaming.”

He concluded “We remain incredibly excited about our direction and the initiatives currently underway. There are numerous opportunities in both our playGAMES and playAWARDS businesses and our strong financial position allows us to supplement this internal growth with strategic investments and acquisitions. This is reflected in our 2023 guidance which calls for Revenue and AEBITDA growth of 9% and 50%, respectively, at the midpoint. Also reflected in this guidance is a macroeconomic and industry backdrop which remain unsettled and volatile. While we have seen some stability over the past six months, we remain cautious and have accounted for this in our annual guidance.”

Recent Business Highlights

PLAYSTUDIOS conducted its first ever Global Artificial Intelligence (“AI”) Hackathon in the quarter. playMAKERS from every studio and every major job function participated. Over 100 original ideas were proposed with 30 full hacks developed and delivered. The company has already implemented select initiatives from the hackathon and views AI as a key driver of future growth.
myKONAMI Slots and myVEGAS Slots were fully transitioned to their new studios as part of our corporate reorganization plan announced earlier this year. In addition to realigning our games, this plan resulted in two distinct operating divisions (playGAMES and playAWARDS), and reduced our total number of employees globally.
The company continued to repurchase stock in the open market. As of August 3, 2023, we had repurchased an aggregate of 4.7 million shares of our Class A common stock at an average price of $4.23 per share under our $50 million share repurchase authorization and had approximately $30.0 million remaining capacity.
playAWARDS entered into partnerships with Cirque Du Soleil and Hershey’s in the quarter. At quarter end, playAWARDS had over 110 rewards partners with players making purchases of over $27 million in retail value.

Outlook

The Company is increasing its 2023 AEBITDA guidance to a range of $55 to $60 million from the previous range of $50 to $60 million. 2023 Revenue guidance of $305 to $325 million remains unchanged. At the midpoint of guidance, this implies year/year revenue growth of 9% and year/year AEBITDA growth of 50%.

We have not provided the most directly comparable GAAP measure for our AEBITDA outlook because certain items that are part of the projected non-GAAP financial measure are outside of our control or cannot be reasonably estimated without unreasonable effort.

Conference Call Details

PLAYSTUDIOS will host a conference call at 5:00 p.m. Eastern Time today, which will include a brief discussion of the results followed by a question and answer session.

The call will be accessible via the Internet through https://ir.playstudios.com or by calling (866) 405-1203 for domestic callers and (201) 689-8432 for international callers.

A replay of the call will be archived at https://ir.playstudios.com.

About PLAYSTUDIOS, Inc.

PLAYSTUDIOS (Nasdaq: MYPS) creator of the groundbreaking playAWARDS loyalty platform is a publisher and developer of award-winning mobile games, including the iconic Tetris® mobile app, Pop! Slots, myVEGAS Slots, myVEGAS Blackjack, my KONAMI Slots, myVEGAS Bingo, MGM Slots Live, Solitaire, Spider Solitaire and Sudoku. The playAWARDS loyalty platform enables players to earn real-world rewards from a global collection of iconic hospitality, entertainment, and leisure brands. playAWARDS partners include MGM Resorts International, Wolfgang Puck, Norwegian Cruise Line, Resorts World, IHG, Bowlero, Gray Line Tours, and Hippodrome Casino among others. Founded by a team of veteran gaming, hospitality, and technology entrepreneurs, PLAYSTUDIOS apps combine the best elements of popular casual games with compelling real-world benefits. To learn more about PLAYSTUDIOS, visit playstudios.com.

Performance Indicators

We manage our business by regularly reviewing several key operating metrics to track historical performance, identify trends in player activity, and set strategic goals for the future. Our key performance metrics are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers’ policies, seasonality, player connectivity, and the addition of new content to games. We believe these measures are useful to investors for the same reasons. The key performance indicators may differ from similarly titled measures presented by other companies. For more information on our key performance indicators, please refer to the definitions below and the “Supplemental Data—Key Performance Indicators” section of this press release.

Daily Active Users (“DAU”): DAU is defined as the number of individuals who played a game on a particular day. For Tetris and our free-to-play social casino games, we track DAU by the player ID, which is assigned for each game installed by an individual. As such, an individual who plays two of these games on the same day is counted as two DAU while an individual who plays the same game on two different devices is counted as one DAU. For our Brainium suite of casual games, we track DAU by app instance ID, which is assigned to each installation of a game on a particular device. As such, an individual who plays two different Brainium games on the same day is counted as two DAU while an individual who plays the same game on two different devices is counted as two DAU. The term “Average DAU” is defined as the average of the DAU, determined as described above, for each day during the period presented. We use DAU and Average DAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a daily basis.

Monthly Active Users (“MAU”): MAU is defined as the number of individuals who played a game in a particular month. As with DAU, an individual who plays two different non-Brainium games in the same month is counted as two MAU while an individual who plays the same non-Brainium game on two different devices is counted as one MAU, and an individual who plays two different Brainium games on the same day is counted as two MAU while an individual who plays the same game on two different devices is counted as two MAU. The term “Average MAU” is defined as the average of the MAU, determined as described above, for each calendar month during the period presented. We use MAU and Average MAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a monthly basis.

Daily Paying Users (“DPU”): DPU is defined as the number of individuals who made a purchase in a mobile game during a particular day. As with DAU and MAU, we track DPU based on account activity. As such, an individual who makes a purchase on two different games in a particular day is counted as two DPU while an individual who makes purchases in the same game on two different devices is counted as one DPU. The term “Average DPU” is defined as the average of the DPU, determined as described above, for each day during the period presented. We use DPU and Average DPU to help us understand the size of our active player base that makes in-game purchases. This focus directs our strategic goals in setting player acquisition and pricing strategy.

Daily Payer Conversion: Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day. Daily Payer Conversion is also sometimes referred to as “Percentage of Paying Users” or “PPU”. The term “Average Daily Payer Conversion” is defined as the Average DPU divided by the Average DAU for a given period. We use Daily Payer Conversion and Average Daily Payer Conversion to help us understand the monetization of our active players.

Average Daily Revenue Per DAU (“ARPDAU”): ARPDAU is defined for a given period as the average daily revenue per Average DAU, and is calculated as game and advertising revenue for the period, divided by the number of days in the period, divided by the Average DAU during the period. We use ARPDAU as a measure of overall monetization of our active players.

playAWARDS Platform Metrics

Available Rewards: Available Rewards is defined as the monthly average number of unique rewards available in our applications’ rewards stores. A reward appearing in more than one application’s reward store is counted only once. A reward is counted only once irrespective of the inventory available through that reward. For example, one reward for a free night in a hotel room with ten rooms available for such free night is counted as one reward. Available Rewards only include real-world partner rewards and exclude PLAYSTUDIOS digital rewards. We use Available Rewards as a measure of the value and potential impact of the program for an interested player. It is assumed that the greater the variety and breadth of rewards offered, the more likely players will be to ascribe value to the program.

Purchases: Purchases is defined as the total number of rewards purchased for the period identified in which a player exchanges loyalty points for a reward. Purchases are not adjusted for refunds. Purchases only include purchases of real-world partner rewards and exclude any PLAYSTUDIOS digital rewards. The Company does not receive any compensation or revenue from Purchases. We use Purchases as a measure of audience interest and engagement with our playAWARDS platform.

Retail Value of Purchases: Retail Value of Purchases is defined as the cumulative retail value of all rewards listed as Purchases for the period identified. The retail value of each reward listed as Purchases is the retail value as determined by the partner upon creation of the reward. In the case where the retail value of a reward adjusts depending on time of redemption, the average retail value is used. Retail Value of Purchases only include the retail value of real-world partner rewards and exclude the cost of any PLAYSTUDIOS branded merchandise. We use Retail Value of Purchases to help us understand the real-world value of the rewards that are purchased by our players.

Non-GAAP Financial Measures

To provide investors with information in addition to results as determined by accounting principles generally accepted in the United States of America (“GAAP”), the Company discloses Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“AEBITDA”) as a non-GAAP measure that management believes provides useful information to investors. This measure is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income or any other operating performance measure calculated in accordance with GAAP.

We define AEBITDA as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items). We also present AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of net revenue.

We believe that the presentation of AEBITDA provides useful information to investors regarding the Company’s results of operations because the measure assists both investors and management in analyzing and benchmarking the performance and value of our business. AEBITDA provides an indicator of performance that is not affected by fluctuations in certain costs or other items. Accordingly, management believes that this measure is useful for comparing general operating performance from period to period, and management relies on this measure for planning and forecasting of future periods. Additionally, this measure allows management to compare results with those of other companies that have different financing and capital structures. However, other companies may define AEBITDA differently, and as a result, our measure of AEBITDA may not be directly comparable to that of other companies. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the “Reconciliation of Net Income (Loss) to AEBITDA” section of this press release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating performance (including statements regarding outlook or guidance), our liquidity and capital resources, the development and release plans of our games, our plans to commercialize the playAWARDS platform as a stand-alone service for use by third parties, our increased capacity and use of personnel in European and Asian studios, and our mergers and acquisition strategy (including our acquisition of Brainium and its expected impact and financial performance), all of which involve risks and uncertainties. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “goal,” “work towards,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology that conveys uncertainty of future events or outcomes. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to differ materially from statements made in this press release, including our ability to develop and publish our games; risks related to defects, errors, or vulnerabilities in our games and IT infrastructure; our ability to attract new, and retain existing, players of our games; the failure to timely develop and achieve market acceptance of new games and maintain the popularity of our existing games; rapidly evolving technological developments in the gaming market; competition in the industry in which we operate; our financial performance; our ability to execute merger and acquisition transactions; legal and regulatory developments; and general market, political, economic and business conditions. Other potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2023, and in other filings we make with the SEC from time to time, including our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, to be filed with the SEC. All information provided in this release is based on information available to us as of the date of this press release and any forward-looking statements contained herein are based on assumptions that we believe are reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this press release, which are inherently uncertain. We undertake no duty to update this information unless required by law.

PLAYSTUDIOS, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited and in thousands, except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Net revenue	$	77,793		$	68,353		$	157,916		$	138,804
Operating expenses:
Cost of revenue⁽¹⁾		18,887			20,921			38,414			41,954
Selling and marketing		18,431			19,547			36,497			40,087
Research and development		18,381			14,470			36,136			31,451
General and administrative		11,040			9,208			22,941			18,899
Depreciation and amortization		11,116			8,288			22,149			16,682
Restructuring and related		1,784			1,517			5,832			10,172
Total operating costs and expenses		79,639			73,951			161,969			159,245
Loss from operations		(1,846	)		(5,598	)		(4,053	)		(20,441	)
Other income (expense), net:
Change in fair value of warrant liabilities		(1,777	)		(821	)		(2,835	)		(3,537	)
Interest income, net		1,262			212			2,157			207
Other income (expense), net		1,044			(548	)		1,104			(361	)
Total other income (expense), net		529			(1,157	)		426			(3,691	)
Loss before income taxes		(1,317	)		(6,755	)		(3,627	)		(24,132	)
Income tax benefit		558			12,258			298			4,423
Net (loss) income	$	(759	)	$	5,503		$	(3,329	)	$	(19,709	)

Net (loss) income per share attributable to Class A and Class B common stockholders:
Basic	$	(0.01	)	$	0.04		$	(0.03	)	$	(0.16	)
Diluted	$	(0.01	)	$	0.04		$	(0.03	)	$	(0.16	)
Weighted average shares of common stock outstanding:
Basic		132,144			127,187			132,137			126,765
Diluted		132,144			146,197			132,137			126,765

(1) Amounts exclude depreciation and amortization.

PLAYSTUDIOS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited and in thousands, except par value amounts)
	June 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	127,667		$	134,000
Receivables		29,620			27,016
Prepaid expenses and other current assets		12,229			14,963
Total current assets		169,516			175,979
Property and equipment, net		17,506			17,532
Operating lease right-of-use assets		13,033			15,562
Intangibles assets and internal-use software, net		77,356			77,231
Goodwill		47,133			47,133
Deferred income taxes		17,294			13,969
Other long-term assets		3,631			4,603
Total non-current assets		175,953			176,030
Total assets	$	345,469		$	352,009
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		2,714			4,425
Warrant liabilities		6,517			3,682
Operating lease liabilities, current		4,538			4,571
Accrued liabilities		24,381			21,473
Total current liabilities		38,150			34,151
Minimum guarantee liability		1,500			1,500
Operating lease liability, noncurrent		9,190			11,660
Other long-term liabilities		1,384			2,385
Total non-current liabilities		12,074			15,545
Total liabilities	$	50,224		$	49,696
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value (100,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022)		—			—
Class A common stock, $0.0001 par value (2,000,000 shares authorized, 120,727 and 116,756 shares issued, and 116,004 and 115,635 shares outstanding as of June 30, 2023 and December 31, 2022, respectively)		11			11
Class B common stock, $0.0001 par value (25,000 shares authorized, 16,457 and 16,457 shares issued and outstanding as of June 30, 2023 and December 31, 2022.		2			2
Additional paid-in capital		302,528			290,337
Retained earnings		13,427			16,756
Accumulated other comprehensive income		(629	)		(151	)
Treasury stock, at cost, 4,723 and 1,166 shares at June 30, 2023 and December 31, 2022, respectively		(20,094	)		(4,642	)
Total stockholders’ equity		295,245			302,313
Total liabilities and stockholders’ equity	$	345,469		$	352,009

PLAYSTUDIOS, INC.

RECONCILIATION OF NET (LOSS) INCOME TO AEBITDA

(Unaudited and in thousands, except percentages)

The following table sets forth the reconciliation of AEBITDA and AEBITDA margin, which we calculate as AEBITDA as a percentage of net revenue, to net (loss) income and net (loss) income margin, the most directly comparable GAAP measures.

	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Net income (loss)	$	(759	)	$	5,503		$	(3,329	)	$	(19,709	)
Depreciation & amortization		11,116			8,288			22,149			16,682
Income tax expense		(558	)		(12,258	)		(298	)		(4,423	)
Stock-based compensation expense		5,193			3,141			10,047			10,008
Change in fair value of warrant liability		1,777			821			2,835			3,537
Change in fair value of contingent considerations		(897	)		—			(950	)		—
Restructuring and related⁽¹⁾		1,784			1,517			5,832			10,172
Other, net⁽²⁾		(1,382	)		336			(2,246	)		154
AEBITDA		16,274			7,348			34,040			16,421

GAAP revenue		77,793			68,353			157,916			138,804

Margin as a % of revenue
Net (loss) income margin		(1.0	)%		8.1	%		(2.1	)%		(14.2	)%
AEBITDA margin		20.9	%		10.8	%		21.6	%		11.8	%

(1) Amounts reported during the three and six months ended June 30, 2022 consist of fees related to a tender offer for the warrants and fees related to evaluating various merger and acquisition opportunities. Amounts reported during the six months ended June 30, 2022 relate to non-cash impairment charges related to the suspension of Kingdom Boss development. Amounts reported during the three and six months ended June 30, 2023 relate to non-cash impairment charges related to certain investments and fees related to evaluating various merger, acquisition and restructuring opportunities.
(2) Amounts reported in “Other, net” include interest expense, interest income, gains/losses from equity investments, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.

PLAYSTUDIOS, INC. SUPPLEMENTAL DATA – KEY PERFORMANCE INDICATORS (Unaudited and in thousands, except percentages and ARPDAU)
	Three Months Ended June 30,											Six Months Ended June 30,
		2023			2022		Change			% Change			2023			2022		Change			% Change
Average DAU		3,651			1,469			2,182		148.5	%		3,608			1,512			2,096		138.6	%
Average MAU		13,878			6,634			7,244		109.2	%		13,482			6,266			7,216		115.2	%
Average DPU		26			29			(3	)	(10.3	)%		27			30			(3	)	(10.0	)%
Average Daily Payer Conversion		0.7	%		2.0	%	(1.3) pp			(65.0	)%		0.7	%		2.0	%	(1.3) pp			(65.0	)%
ARPDAU (in dollars)	$	0.23		$	0.51		$	(0.28	)	(54.9	)%	$	0.23		$	0.50		$	(0.27	)	(54.0	)%
pp = percentage points

PLAYSTUDIOS, INC. SUPPLEMENTAL DATA – PLAYAWARDS PLATFORM METRICS (Unaudited and in thousands, except available rewards)
	Three Months Ended June 30,									Six Months Ended June 30,
		2023		2022	Change			% Change			2023		2022	Change			% Change
Available Rewards (in units)		602		532		70		13.2	%		568		532		36		6.8	%
Purchases (in units)		465		567		(102	)	(18.0	%)		905		1,159		(254	)	(21.9	%)
Retail Value of Purchases (in dollars)	$	26,640	$	32,478	$	(5,838	)	(18.0	%)	$	53,980	$	66,182	$	(12,202	)	(18.4	%)

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803351405/en/

Investor Relations

Samir Jain, CFA

[email protected]

(917) 224-1058

Media Relations

BerlinRosen

[email protected]

KEYWORDS: Nevada United States North America

INDUSTRY KEYWORDS: Entertainment Technology Mobile/Wireless Mobile Entertainment Electronic Games Casino/Gaming

MEDIA:

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August 4, 2023 6:45 am

eXp World Holdings Reports Q2 2023 Results

Positive Net Income of $9.4 Million

Agent Count Grew 7%
Compared to the Same Quarter One Year Ago
to More Than 88,000 Agents in 24 Global Markets

International Realty Revenue Increased 35% Compared to the Same Quarter One Year Ago to an All-Time Record

Generated $64.6 Million of Adjusted Operating Cash Flow

Company Declares Cash Dividend for Q3 2023 of $0.05 per Share of Common Stock

BELLINGHAM, Wash., Aug. 03, 2023 (GLOBE NEWSWIRE) — eXp World Holdings, Inc. (Nasdaq: EXPI), or the “Company”, the holding company for eXp Realty^®, Virbela and SUCCESS^® Enterprises, today announced financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Consolidated Financial Highlights as Compared to the Same Year-Ago Quarter:

Revenue decreased 13% to $1.2 billion.
Gross profit decreased 10% to $96.5 million.
Net income of $9.4 million. Earnings per diluted share of $0.06 compared to earnings per diluted share of $0.06 in the year-ago quarter.
Adjusted EBITDA (a non-GAAP financial measure) of $24.7 million.
As of June 30, 2023, cash and cash equivalents totaled $124.7 million, compared to $121.6 million as of December 31, 2022. The company repurchased approximately $48.8 million of common stock during the second quarter of 2023.
The Company paid a cash dividend for the second quarter of 2023 of $0.045 per share of common stock on May 31, 2023. On July 28, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of common stock for the third quarter of 2023, expected to be paid on September 4, 2023 to stockholders of record on August 18, 2023.

Management Commentary

“We are continually raising the bar on what it means to be the most agent-centric brokerage on the planet by constantly iterating our agent value proposition that delivers the best support and tools,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “Our agents’ feedback is critical in helping to determine and enhance programs. We have prioritized agent support through our reimagined eXpert Care Desk, which provides live support to agents 24/7. And in May, we launched Luna, the GPT-4 powered generative AI support agent, in direct response to aNPS feedback. We are seeing remarkable engagement, with a significant number of agents using the service asking follow-up questions. Even early in its development, Luna can correctly answer the majority of questions asked.”

“By consistently iterating on our agent value proposition along with our agent feedback, we are seeing strengthened agent Net Promoter Scores (aNPS), with second quarter aNPS up four percentage points year over year despite the challenging market.

“We know that in a slower housing market, productivity is at the top of everyone’s minds. As the largest and most efficient independent brokerage in the industry, we have the scale and financial resources to fund new investments in agent productivity while others scale back. During the quarter, we deployed several new agent support systems, increased our onboarding support coverage to 24/7 and established a white glove premier service desk for our top contributors. We also accelerated our initiative to get our agents paid faster and are making good progress toward our objective of near-real time agent payouts.”

“We delivered another profitable quarter despite lower transaction volume, as persistently high mortgage rates kept many buyers on the sidelines,” said Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings. “Even as we continued to fund our key growth priorities and invest in agent-centric innovation, our balanced approach to spending resulted in a higher operating margin compared to the prior year quarter. Our efficient, cloud-based model, strong balance sheet and attractive operating cash flow profile are enabling us to invest in our agents to drive long-term growth and shareholder value.

“While high mortgage rates are expected to persist in the short term, consumer price inflation has started to cool down in our core North American market, and forward interest rate curves suggest that rates may now be at or near peak levels. We are optimistic that lower mortgage rates will unleash significant pent-up demand as affordability improves and buyers can once again meet seller price objectives.”

Second Quarter 2023 Operational Highlights as Compared to the Same Year-Ago Period:

eXp Realty ended the second quarter of 2023 with a global agent Net Promoter Score of 72, up from 68 a year ago. NPS is a measure of agent satisfaction and an important KPI for eXp given the Company’s intense focus on improving the agent experience.
Agents and brokers on the eXp Realty platform increased 7% to 88,248 as of June 30, 2023.
Transactions decreased 9% to 137,199.
Transaction volume decreased 16% to $48.6 billion.
Named Carolyn Merchant Chief Marketing Officer of eXp Realty on April 6, 2023.
Named Carrie Lysenko CEO of Zoocasa on April 16, 2023.
Announced a strategic title and brokerage joint venture with Vesta Settlements, LLC, to bring local title expertise and personalized service to agents in Virginia on June 2, 2023.
Announced Boost Program for Culturally Aligned Independent Teams and Brokerages to financially incentivize qualifying independent teams and brokerages to join eXp Realty on June 29, 2023.
Announced eXp Realty will accelerate agent rewards by reducing revenue share criteria on June 30, 2023.

Second Quarter 2023 Results – Virtual Fireside Chat

The Company will hold a virtual fireside chat and investor Q&A with eXp World Holdings Founder and CEO Glenn Sanford and CFO Jeff Whiteside on Thursday, Aug. 3, 2023 at 2 p.m. PT / 5 p.m. ET.

The investor Q&A is open to investors, current shareholders and anyone interested in learning more about eXp World Holdings and its companies. Submit questions in advance for inclusion to [email protected].

Date: Thursday, Aug. 3, 2023

Time: 2 p.m. PT / 5 p.m. ET

Location: EXPI Campus. Join at https://expworldholdings.com/contact/download/

Livestream:
expworldholdings.com/events

About eXp World Holdings, Inc.

eXp World Holdings, Inc. (Nasdaq: EXPI) is the holding company for eXp Realty^®, Virbela and SUCCESS^® Enterprises. eXp Realty is the fastest-growing real estate company in the world with more than 88,000 agents in the United States, Canada, the United Kingdom, Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai and continues to scale internationally. As a publicly traded company, eXp World Holdings provides real estate professionals the unique opportunity to earn equity awards for production goals and contributions to overall company growth. eXp World Holdings and its businesses offer a full suite of brokerage and real estate tech solutions, including its innovative residential and commercial brokerage model, professional services, collaborative tools and personal development. The cloud-based brokerage is powered by Virbela, an immersive 3D platform that is deeply social and collaborative, enabling agents to be more connected and productive. SUCCESS^® Enterprises, anchored by SUCCESS^® magazine and its related media properties, was established in 1897 and is a leading personal and professional development brand and publication.

For more information, visit https://expworldholdings.com.

Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA and Adjusted Operating Cash Flow, which are non-U.S. GAAP financial measures that may be different than similarly titled measures used by other companies. These measures are presented to enhance investors’ overall understanding of the company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

The company’s Adjusted EBITDA provides useful information about financial performance, enhances the overall understanding of past performance and future prospects, and allows for greater transparency with respect to a key metric used by management for financial and operational decision-making. Adjusted EBITDA helps identify underlying trends in the business that otherwise could be masked by the effect of the expenses that are excluded in Adjusted EBITDA. In particular, the company believes the exclusion of stock and stock option expenses provides a useful supplemental measure in evaluating the performance of operations and provides better transparency into results of operations.

The Company defines the non-U.S. GAAP financial measure of Adjusted EBITDA to mean net income (loss), excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense, and stock option expense. The Company defines the non-U.S. GAAP financial measure of Adjusted Operating Cash Flow to mean net cash provided by operating activities, excluding the change in customer deposits. Adjusted EBITDA and Adjusted Operating Cash Flow may assist investors in seeing financial performance through the eyes of management, and may provide an additional tool for investors to use in comparing core financial performance over multiple periods with other companies in the industry.

Adjusted EBITDA and Adjusted Operating Cash Flow should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to Net Income (loss), the closest comparable U.S. GAAP measure. Some of these limitations are:

Adjusted EBITDA excludes stock-based compensation expense and stock option expense, which have been, and will continue to be for the foreseeable future, significant recurring expenses in the business and an important part of the compensation strategy; and
Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets, amortization of acquired intangible assets, and impairment charges related to these long-lived assets, and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future.

Safe Harbor Statement

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statements include, but are not limited to, statements about the continued growth of our agent and broker base; expansion of our residential real estate brokerage business into foreign markets; and revenue growth and financial performance. Such forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to revise or update them. Such statements are not guarantees of future performance. Important factors that may cause actual results to differ materially and adversely from those expressed in forward-looking statements include changes in business or other market conditions; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the company’s Securities and Exchange Commission filings, including but not limited to the most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K.

Media Relations Contact:

eXp World Holdings, Inc.

[email protected]

Investor Relations Contact:

Denise Garcia

[email protected]

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share amounts and per share data)


	Three Months Ended June 30,					Six Months Ended June 30,
		2023			2022		2023			2022
Revenues	$	1,232,927		$	1,415,060	$	2,083,543		$	2,425,791
Operating expenses
Commissions and other agent-related costs		1,136,411			1,307,810		1,913,970			2,235,077
General and administrative expenses		82,541			91,391		154,308			166,713
Sales and marketing expenses		2,878			4,210		5,841			7,910
Total operating expenses		1,221,830			1,403,411		2,074,119			2,409,700
Operating income		11,097			11,649		9,424			16,091
Other (income) expense
Other (income) expense, net		(1,299	)		62		(2,179	)		472
Equity in losses of unconsolidated affiliates		143			567		485			884
Total other (income) expense, net		(1,156	)		629		(1,694	)		1,356
Income before income tax expense		12,253			11,020		11,118			14,735
Income tax (benefit) expense		2,831			1,661		243			(3,488	)
Net income		9,422			9,359		10,875			18,223
Net income attributable to noncontrolling interest		–			–		–			18
Net income attributable to eXp World Holdings, Inc.	$	9,422		$	9,359	$	10,875		$	18,241
Earnings per share
Basic		0.06			0.06		0.07			0.12
Diluted		0.06			0.06		0.07			0.12
Weighted average shares outstanding
Basic		153,249,120			150,783,418		152,899,883			150,049,170
Diluted		156,693,959			155,816,038		156,119,627			156,579,590

The following tables reflects Revenues and Adjusted Segment EBITDA by reportable segments:



SEGMENT REVENUES
*(In thousands)*

	Three Months Ended June 30,						Six Months Ended June 30,
Revenues		2023			2022			2023			2022
North American Realty	$	1,219,345		$	1,404,028		$	2,056,459		$	2,405,908
International Realty		11,991			8,908			22,748			16,002
Virbela		1,811			2,040			3,974			3,853
Other Affiliated Services		1,072			1,043			2,749			1,881
Revenues reconciliation:
Segment eliminations		(1,292	)		(959	)	($	2,387	)	($	1,853	)
Consolidated revenues	$	1,232,927		$	1,415,060		$	2,083,543		$	2,425,791



ADJUSTED SEGMENT EBITDA
*(In thousands)*

	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
North American Realty	$	34,122		$	39,899		$	55,325		$	68,670
International Realty		(3,782	)		(3,014	)		(7,458	)		(4,970	)
Virbela		(1,196	)		(2,715	)		(2,492	)		(5,487	)
Other Affiliated Services		(1,168	)		(747	)		(1,849	)		(1,576	)
Corporate expenses and other		(3,247	)		(6,509	)		(5,470	)		(12,010	)
Consolidated Adjusted EBITDA	$	24,729		$	26,914		$	38,056		$	44,627


CONSOLIDATED US-GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION
*(In thousands)*

	Three Months Ended June 30,					Six Months Ended June 30,
		2023			2022		2023			2022
Net income	$	9,422		$	9,359	$	10,875		$	18,223
Other (income) expense, net		(1,156	)		629		(1,694	)		1,356
Income tax (benefit) expense		2,831			1,661		243			(3,488	)
Depreciation and amortization		2,779			2,429		5,358			4,387
Stock compensation expense⁽¹⁾		8,488			9,230		18,148			17,028
Stock option expense		2,365			3,606		5,126			7,121
Adjusted EBITDA	$	24,729		$	26,914	$	38,056		$	44,627

⁽¹⁾This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.



ADJUSTED OPERATING CASH FLOW
*(In thousands)*

	Three Months Ended June 30,					Six Months Ended June 30,
	2023			2022		2023			2022
Net Cash Provided by Operating Activities	$	98,024	$	53,791		$	154,168	$	165,298
Less: Customer Deposits		33,472		(23,373	)		50,854		25,893
Adjusted Operating Cash Flow	$	64,552	$	77,164		$	103,314	$	139,405

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)


	June 30, 2023			December 31, 2022
	*(Unaudited)*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	124,714		$	121,594
Restricted cash		88,560			37,789
Accounts receivable, net of allowance for credit losses of $1,544 and $4,014, respectively		134,998			87,262
Prepaids and other assets		8,101			8,468
TOTAL CURRENT ASSETS		356,373			255,113
Property, plant, and equipment, net		15,224			18,151
Operating lease right-of-use assets		32			2,127
Other noncurrent assets		6,567			1,703
Intangible assets, net		11,728			8,700
Deferred tax assets		65,306			68,676
Goodwill		27,552			27,212
TOTAL ASSETS	$	482,782		$	381,682
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	7,321		$	10,391
Customer deposits		88,643			37,789
Accrued expenses		128,461			78,944
Current portion of lease obligation – operating lease		29			175
TOTAL CURRENT LIABILITIES		224,454			127,299
Long-term payable		5			4,697
Long-term lease obligation – operating lease, net of current portion		3			694
TOTAL LIABILITIES		224,462			132,690
EQUITY
Common Stock, $0.00001 par value 900,000,000 shares authorized; 177,900,083 issued and 153,588,186 outstanding at June 30, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022		2			2
Additional paid-in capital		701,806			611,872
Treasury stock, at cost: 24,311,897 and 18,816,791 shares held, respectively		(463,738	)		(385,010	)
Accumulated earnings		18,138			20,723
Accumulated other comprehensive income		943			236
Total eXp World Holdings, Inc. stockholders’ equity		257,151			247,823
Equity attributable to noncontrolling interest		1,169			1,169
TOTAL EQUITY		258,320			248,992
TOTAL LIABILITIES AND EQUITY	$	482,782		$	381,682



EXP WORLD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
*(In thousands)*

	Six Months Ended June 30,
		2023			2022
OPERATING ACTIVITIES
Net income	$	10,875		$	18,223
Reconciliation of net income to net cash provided by operating activities:
Depreciation expense		4,163			3,570
Amortization expense – intangible assets		1,195			817
Loss on dissolution of consolidated affiliates		–			361
Allowance for credit losses on receivables/bad debt on receivables		(2,470	)		608
Equity in loss of unconsolidated affiliates		485			884
Agent growth incentive stock compensation expense		18,148			17,028
Stock option compensation		5,126			7,121
Agent equity stock compensation expense		65,652			86,835
Deferred income taxes, net		3,370			(6,892	)
Changes in operating assets and liabilities:
Accounts receivable		(45,266	)		(22,269	)
Prepaids and other assets		367			2,236
Customer deposits		50,854			25,893
Accounts payable		(3,069	)		(1,152	)
Accrued expenses		49,273			31,961
Long term payable		(4,692	)		–
Other operating activities		157			74
NET CASH PROVIDED BY OPERATING ACTIVITIES		154,168			165,298
INVESTING ACTIVITIES
Purchases of property, plant, equipment		(3,433	)		(8,077	)
Investments in unconsolidated affiliates		(5,350	)		–
Capitalized software development costs in intangible assets		(1,179	)		–
NET CASH USED IN INVESTING ACTIVITIES		(9,962	)		(8,077	)
FINANCING ACTIVITIES
Repurchase of common stock		(78,728	)		(79,820	)
Proceeds from exercise of options		1,253			780
Transactions with noncontrolling interests		–			(425	)
Dividends declared and paid		(13,460	)		(11,744	)
NET CASH USED IN FINANCING ACTIVITIES		(90,935	)		(91,209	)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash		620			(1,141	)
Net change in cash, cash equivalents and restricted cash		53,891			64,871
Cash, cash equivalents and restricted cash, beginning balance		159,383			175,910
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	$	213,274		$	240,781
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes		1,833			2,444
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Termination of lease obligation – operating lease		837			–
Property, plant and equipment increase due to transfer of right-of-use lease asset		1,100			–
Property, plant and equipment purchases in accounts payable		–			246

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1aae9410-bab0-4bd9-94e0-215f0b1d05da

August 4, 2023 6:43 am

Marchex Announces Second Quarter 2023 Results

Marchex Announces Second Quarter 2023 Results

SEATTLE–(BUSINESS WIRE)–Marchex, Inc. (NASDAQ: MCHX), the award-winning AI-powered conversation intelligence company that helps businesses turn strategic insights into the actions that drive their most valued sales outcomes, today announced its financial results for the second quarter ended June 30, 2023.

Q2 2023 Financial Highlights

GAAP revenue was $12.5 million for the second quarter of 2023 compared to $13.5 million for the second quarter of 2022.
Net loss was $2.7 million for the second quarter of 2023 or $0.06 per diluted share compared to a net loss of $1.5 million or $0.03 per diluted share for the second quarter of 2022.

	Q2 2022		Q2 2023
GAAP Revenue	$13.5	million	$12.5	million
Non-GAAP Results:
Adjusted EBITDA*	$167,000		$(1.0)	million
*Adjusted EBITDA includes approximately $500,000 of reorganization costs. Excluding these amounts would result in Adjusted EBITDA totaling ($550,000) dollars.

Adjusted non-GAAP income (loss) per share for the second quarter of 2023 was $(0.03) compared to $(0.01) for the second quarter of 2022.

Second Quarter Summary:

New Customer Traction and Existing Customer Expansion. Marchex saw traction with new enterprise customers across multiple product lines in several verticals, including Home Services, Auto, Auto Services and others.
Conversation Volumes. Overall conversation volumes in the second quarter of 2023 were down on a year-over-year basis, due in part to some customers being impacted by customer churn and pressure from other overall macroeconomic factors. However, volumes within certain verticals, like auto, showed progress when compared to the first quarter of 2023.
Accelerate Product Innovation.
- Marchex Wins 2023 Artificial Intelligence Breakthrough Award for “Best AI-Based Solution for Sales.” AI Breakthrough is a leading market intelligence organization that recognizes the top companies, technologies and products in the global Artificial Intelligence (AI) market today. This year’s program attracted more than 3,200 nominations from over 20 different countries throughout the world. The mission of the AI Breakthrough Awards is to honor excellence and recognize innovation, hard work and success in a range of AI and machine learning related categories, including Generative AI, Computer Vision, AIOps, Deep Learning, Robotics, Natural Language Processing, industry specific AI applications and many more. Marchex Engage for Automotive is a powerful sales enablement solution that leverages AI, specifically natural language processing and machine learning, to empower dealership sales teams and enhance the buying experience for consumers. By unlocking the content of conversations with car buyers who are highly likely to make a purchase, this solution provides dealership sales teams and vehicle manufacturing customers with the insights and tools they need to close more deals and drive revenue growth.
- Marchex Wins 2023 APPEALIE SaaS Customer Success Award. For the second consecutive year, Marchex won the customer success award from APPEALIE. APPEALIE SaaS Awards honor customer-obsessed SaaS platforms and success stories that deliver extraordinary experiences and results. The SaaS Customer Success Award category winners are selected from entrants who are able to demonstrate the best customer success stories and outcomes. Marchex received the award for the use of its conversation intelligence capabilities to help a digital marketing agency that runs call-based campaigns on behalf of thousands of local businesses and multi-location organizations across the country who rely on channel attribution with automation and to improve data quality with integration. Through Marchex’s products, this digital marketing agency is able to reap significant cost and time savings every month that they are able to redeploy for more strategic work.
- During the second quarter, Marchex launched Spotlight for Automotive, a key addition to the company’s conversation intelligence platform. Spotlight identifies failed calls and enables users to easily measure call handling, campaign, and seller performance results against company benchmarks, to determine how individual locations and teams perform nationally, regionally, and locally. Spotlight can measure across a brand or network of business locations, all the way down to localized dealer and department levels, providing guided observations directing users where to take needed actions to improve performance and increase sales.

“In the second quarter Marchex continued to make significant progress,” said Edwin Miller, CEO. “We have aligned several facets of the company in the last few months to take advantage of the most meaningful opportunities we see in what is a multibillion-dollar market with Conversational AI. From the executive team to other functions within the company, we are reorganizing to accelerate Marchex’s progress. I am proud of the team and have seen amazing effort and alignment in a very short period of time. These initiatives will help us achieve profitability earlier than we previously anticipated. In addition, these efforts are focused on enabling us to move even faster as a company, faster to innovate, faster to deliver new products and faster to serve our customers. I am excited about building a much larger company and believe Marchex has an opportunity to emerge as an important leader in this dynamic market.”

Business Outlook

The following forward-looking statements reflect Marchex’s expectations as of August 3, 2023.

“Consistent with the first quarter of 2023, we continued to face conversation volume pressure in the second quarter of 2023 in certain customer segments,” said Mike Arends, Vice Chairman. “With that said, in the third quarter we anticipate that sales traction will lead to modest growth in revenue relative to the second quarter of 2023. With our current expected progress so far this year, we anticipate to be at or near breakeven on an Adjusted EBITDA basis for the third quarter, including break-even or above levels in September.”

In addition, based on current customer momentum, we continue to believe that we will see revenue growth in our back half of the year versus the first half of 2023 and we continue to believe that our traction within the automotive vertical can lead to double-digit growth on an annualized run rate year-over-year basis by the end of 2023 within that vertical. As we believe we will see sales traction and make further progress on technology infrastructure initiatives for the remainder of this year and into next year, we continue to believe that we can see revenue growth and potentially increase our operating leverage over time,” said Arends.

Management will hold a conference call, starting at 5:00 p.m. ET on Thursday, August 3, 2023, to discuss its second quarter June 30, 2023, financial results and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of Marchex’s website at www.marchex.com. An archived version of the webcast will also be available at the same location two hours after completion of the call.

About Marchex

Marchex’s award-winning conversation intelligence platform, featuring AI-powered sales engagement and marketing solutions, helps businesses turn strategic insights into the actions that drive their most valued sales outcomes. Our multichannel voice and text capabilities enable sales and marketing teams to deliver the buying experiences that today’s customers expect. Marchex is the trusted conversation intelligence partner for market-leading companies in critical industries, including many of the world’s most innovative and successful brands.

Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on Twitter (Twitter.com/Marchex), where Marchex discloses material information from time to time about the company, its financial information, and its business.

Forward-Looking Statements:

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenues, other financial guidance, acquisitions, dispositions, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex’s actual results to differ materially from those indicated by such forward-looking statements including but not limited to product demand, order cancellations and delays, competition and general economic conditions. These factors are described in greater detail in the “Risk Factors” section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of August 3, 2023, and Marchex undertakes no duty to update the information provided herein.

In the event the press release contains links to third party websites or materials, the links are provided solely as a convenience to you. Marchex is not responsible for the content of linked third-party sites or materials and does not make any representations regarding the content or accuracy thereof.

Non-GAAP Financial Information:

To supplement Marchex’s consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Marchex uses certain non-GAAP measures of financial performance and liquidity, including Adjusted EBITDA, Adjusted OIBA, and Adjusted non-GAAP income (loss) per share.

Adjusted EBITDA represents net income (loss) before (1) interest, (2) income taxes, (3) amortization of intangible assets from acquisitions, (4) depreciation and amortization, (5) stock-based compensation expense, (6) acquisition and disposition-related costs (benefit), and (7) foreign government assistance subsidies. Marchex believes that Adjusted EBITDA is an alternative measure used by our management to understand and evaluate our core operating performance and trends, and that provides meaningful supplemental information regarding performance and evaluating performance and liquidity to measure its ability to fund operations and its financing obligations.

Adjusted OIBA represents Adjusted EBITDA adjusted for depreciation and amortization. This measure, among other things, is another metric by which Marchex evaluates the performance of its business. Adjusted OIBA is the basis on which Marchex’s internal budgets are based and by which Marchex’s management is currently evaluated. Marchex believes these measures are useful to investors because they represent Marchex’s consolidated operating results, taking into account depreciation and other intangible amortization, which Marchex believes is an ongoing cost of doing business, but excluding the effects of certain other expenses as detailed above. Financial analysts and investors may use Adjusted EBITDA and Adjusted OIBA to help with comparative financial evaluation to make informed investment decisions.

Adjusted non-GAAP income (loss) per share represents Adjusted non-GAAP income (loss) divided by GAAP diluted shares outstanding. Adjusted non-GAAP income (loss) generally captures those items on the statement of operations that have been, or ultimately will be, settled in cash exclusive of certain items that are not indicative of Marchex’s recurring core operating results and represents net income (loss) applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) acquisition and disposition related costs (benefit), (3) amortization of intangible assets from acquisitions, (4) interest income and other, net, and (5) foreign government assistance subsidies. Financial analysts and investors may use Adjusted non-GAAP income (loss) per share to analyze Marchex’s financial performance since these groups have historically used EPS related measures, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company’s operating performance compared to that of other companies in its industry.

Marchex’s management believes that investors should have access to, and Marchex is obligated to provide, the same set of tools that management uses in analyzing the company’s results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Marchex’s non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar titled terms used by other companies, and accordingly, care should be exercised in understanding how Marchex defines its non-GAAP financial measures in this release. Marchex endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, GAAP financial statements, and detailed descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measure.

MARCHEX, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2023			2022			2023
Revenue	$	13,510		$	12,522		$	26,681		$	24,738
Expenses:
Service costs (1)		4,864			5,418			9,799			10,842
Sales and marketing (1)		3,619			2,631			6,784			6,601
Product development (1)		3,531			4,096			6,991			8,260
General and administrative (1)		2,440			2,546			5,046			5,163
Amortization of intangible assets from acquisitions		531			531			1,062			1,062
Acquisition and disposition-related costs		22			(1	)		27			12
Total operating expenses		15,007			15,221			29,709			31,940
Loss from operations		(1,497	)		(2,699	)		(3,028	)		(7,202	)
Interest income (expense) and other, net		17			(31	)		(4	)		26
Loss before provision for income taxes		(1,480	)		(2,730	)		(3,032	)		(7,176	)
Income tax expense		51			14			81			44
Net loss		(1,531	)		(2,744	)		(3,113	)		(7,220	)
Net loss applicable to common stockholders	$	(1,531	)	$	(2,744	)	$	(3,113	)	$	(7,220	)
Basic and diluted net loss per Class A and Class B share applicable to common stockholders	$	(0.03	)	$	(0.06	)	$	(0.07	)	$	(0.17	)
Shares used to calculate basic net loss per share applicable to common stockholders
Class A		4,661			4,661			4,661			4,661
Class B		38,696			37,840			38,670			37,837
Shares used to calculate diluted net loss per share applicable to common stockholders:
Class A		4,661			4,661			4,661			4,661
Class B		43,357			42,501			43,331			42,498

(1) Includes stock-based compensation allocated as follows:
Service costs	$	45		$	(45	)	$	79		$	—
Sales and marketing		200			228			391			491
Product development		76			47			158			133
General and administrative		393			471			781			876
Total	$	714		$	701		$	1,409		$	1,500

MARCHEX, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands) (unaudited)

	December 31,			June 30,
	2022			2023
Assets
Current assets:
Cash and cash equivalents	$	20,474		$	14,122
Accounts receivable, net		8,396			7,724
Prepaid expenses and other current assets		2,015			2,200
Total current assets		30,885			24,046
Property and equipment, net		4,050			4,669
Right-of-use lease asset		738			1,858
Other assets, net		973			1,064
Goodwill		17,558			17,558
Intangible assets from acquisitions, net		2,590			1,528
Total assets	$	56,794		$	50,723
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,037		$	915
Accrued benefits and payroll		3,566			2,903
Other accrued expenses and current liabilities		3,825			4,194
Deferred revenue and deposits		1,384			1,441
Right of use liability, current		1,252			443
Finance lease, current		—			264
Total current liabilities		12,064			10,160
Deferred tax liabilities		233			257
Finance lease, non-current		–			443
Right of use liability non-current		385			1,453
Total liabilities		12,682			12,313
Stockholders’ equity:
Class A common stock		49			49
Class B common stock		385			387
Additional paid-in capital		354,999			356,515
Accumulated deficit		(311,321	)		(318,541	)
Total stockholders’ equity		44,112			38,410
Total liabilities and stockholders’ equity	$	56,794		$	50,723

MARCHEX, INC. AND SUBSIDIARIES (in thousands) (unaudited)

Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2023			2022			2023
Net loss applicable to common stockholders	$	(1,531	)	$	(2,744	)	$	(3,113	)	$	(7,220	)
Interest expense (income) and other, net		(17	)		31			4			(26	)
Income tax expense		51			14			81			44
Amortization of intangible assets from acquisitions		531			531			1,062			1,062
Depreciation and amortization		407			422			858			780
Stock-based compensation		714			701			1,409			1,500
Acquisition and disposition-related costs		22			(1	)		27			12
Foreign government paycheck assistance and rent subsidies¹		(10	)		—			(10	)		—
Adjusted EBITDA	$	167		$	(1,046	)	$	318		$	(3,848	)
Depreciation and amortization		407			422			858			780
Adjusted OIBA	$	(240	)	$	(1,468	)	$	(540	)	$	(4,628	)

Includes pandemic related wage and rent relief subsidies, recognized as a reduction of wages or rent during the period received

MARCHEX, INC. AND SUBSIDIARIES (in thousands) (unaudited) Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2023			2022			2023
Net loss applicable to common stockholders, diluted	$	(0.03	)	$	(0.06	)	$	(0.07	)	$	(0.17	)
Stock-based compensation		0.01			0.02			0.04			0.03
Acquisition and disposition-related costs		–			–			–			–
Amortization of intangible assets from acquisitions		0.01			0.01			0.02			0.03
Interest income (expense) and other, net		–			–			–			–
Foreign government paycheck assistance and rent subsidies		–			–			–			–
Adjusted non-GAAP loss per share	$	(0.01	)	$	(0.03	)	$	(0.01	)	$	(0.11	)
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share		43,357			42,501			43,331			42,498

¹	For the purpose of computing the number of diluted shares for Adjusted non-GAAP income (loss) per share, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP net income (loss) per share.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803370525/en/

Trevor Caldwell

Marchex Investor Relations

Telephone: 206.331.3600

Email: [email protected]

Or

MEDIA INQUIRIES

Marchex Corporate Communications

Telephone: 206.331.3434

Email: pr(at)marchex.com

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August 4, 2023 6:42 am

Microchip Technology Announces Record Financial Results For First Quarter of Fiscal Year 2024

Record net sales of
$2.289 billion
,
up 2.5%
sequentially and
up
16.6%
from the year ago quarter. The midpoint of our guidance provided on
May 4, 2023
was net sales of $
2.289
billion.
On a GAAP basis: record gross profit of
68.1%
; record operating income of
$903.1 million
and a record
39.5%
of net sales; record net income of
$666.4 million
; and record EPS of
$1.21
per diluted share. Our guidance provided on
May 4, 2023
was for GAAP EPS of $
1.15
to $
1.16
per diluted share.
On a Non-GAAP basis: record gross profit of
68.4%
; record operating income of
$1.100 billion
and a record
48.1%
of net sales; net income of
$905.3 million
and record EPS of
$1.64
per diluted share. Our guidance provided on
May 4, 2023
was for Non-GAAP EPS of $
1.63
to $
1.65
per diluted share.
Paid down
$413.0 million
of debt in the
June 2023
quarter. Cumulatively paid down
$6.8 billion
of debt over the last
20 quarters
. Reduced net leverage to 1.29x.
Returned approximately
$349.2 million
to shareholders in the
June
quarter through dividends of
$208.9 million
and the repurchase of approximately
$140.3 million, or 1.8 million shares of our common stock, at an average price of $77.51 per share under our previously announced $4.0 billion stock buyback program. Cumulatively repurchased approximately $1.512 billion,
or
20.3 million
shares, over the last
seven
quarters.
Record quarterly dividend declared today for the
September
quarter of
41.0 cents
per share, an increase of
36.2
% from the year ago quarter.

CHANDLER, Ariz., Aug. 03, 2023 (GLOBE NEWSWIRE) — (NASDAQ: MCHP) – Microchip Technology Incorporated, a leading provider of smart, connected, and secure embedded control solutions, today reported results for the three months ended June 30, 2023, as summarized in the table below.

	Three Months Ended June 30, 2023 ⁽¹⁾
Net sales	$2,288.6
	GAAP	%	Non-GAAP ⁽²⁾	%
Gross profit	$1,558.4	68.1%	$1,565.2	68.4%
Operating income	$903.1	39.5%	$1,100.4	48.1%
Other expense	$(54.8)		$(45.7)
Income tax provision	$181.9		$149.4
Net income	$666.4	29.1%	$905.3	39.6%
Net income per diluted share	$1.21		$1.64

⁽¹⁾ In millions, except per share amounts and percentages of net sales.
⁽²⁾ See the “Use of Non-GAAP Financial Measures” section of this release.

Net sales for the first quarter of fiscal 2024 were a record $2.289 billion, up 16.6% from net sales of $1.964 billion in the prior year’s first fiscal quarter.

GAAP net income for the first quarter of fiscal 2024 was $666.4 million, or $1.21 per diluted share, up from GAAP net income of $507.2 million, or $0.90 per diluted share, in the prior year’s first fiscal quarter. For the first quarters of fiscal 2024 and fiscal 2023, GAAP net income was adversely impacted by amortization of acquired intangible assets associated with our previous acquisitions.

Non-GAAP net income for the first quarter of fiscal 2024 was a record at $905.3 million, or $1.64 per diluted share, up from non-GAAP net income of $767.2 million, or $1.37 per diluted share, in the prior year’s first fiscal quarter. For the first quarters of fiscal 2024 and fiscal 2023, our non-GAAP results exclude the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, severance, and other restructuring costs, and legal and other general and administrative expenses associated with acquisitions including legal fees and expenses for litigation and investigations related to our Microsemi acquisition), professional services associated with certain legal matters, and losses on the settlement of debt. For the first quarters of fiscal 2024 and fiscal 2023, our non-GAAP income tax expense is presented based on projected cash taxes for the applicable fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act. A reconciliation of our non-GAAP and GAAP results is included in this press release.

Microchip announced today that its Board of Directors declared a record quarterly cash dividend on its common stock of 41.0 cents per share, up 36.2% from the year ago quarter. The quarterly dividend is payable on September 5, 2023 to stockholders of record on August 22, 2023.

“Our June quarter results were in-line with the midpoint of our guidance as revenue grew 2.5% sequentially and 16.6% year over year, amid a weakening macro backdrop and increased business uncertainty,” said Ganesh Moorthy, President and Chief Executive Officer. “We delivered record revenue of $2.29 billion during our first fiscal quarter, marking the 11th consecutive quarter of revenue growth. Our team’s disciplined execution, in combination with resilient end markets and a diverse customer base, helped to drive record non-GAAP gross and operating margins of 68.4% and 48.1%, respectively.”

Mr. Moorthy added, “We continue to navigate a challenging market environment and are trending toward supply chain normalization as we continue to improve lead times for many of our products. In the June quarter, we further assisted customers in de-risking their inventory positions by pushing out non-reschedulable backlog to future quarters. China was our weakest region again, as macro softness drove weaker sell-through activity and inventory build at Chinese distributors. Even as our broad base of customers experience demand uncertainty, we expect our operating metrics to demonstrate resiliency through this business cycle.”

Eric Bjornholt, Microchip’s Chief Financial Officer, said, “We continued to pay down our debt with another $413.0 million of payments during the June quarter, reflecting a cumulative debt pay down of over $6.8 billion over the past 20 quarters, as we have enhanced our operating performance while actively managing the working capital requirements for the business. We ended the June 2023 quarter with our net debt to adjusted EBITDA ratio at 1.29x compared to 2.05x at the end of the June 2022 quarter. Our operating model has been, and remains, a strong cash generator and continues to demonstrate consistently high non-GAAP operating margins as we execute our Microchip 3.0 strategy.”

Steve Sanghi, Microchip’s Executive Chair, said, “Microchip’s board of directors approved a record dividend of 41 cents per share, which represents a 36.2% year-over-year increase. Given our cash flow generation during the June quarter, we are targeting to return $562.6 million to our shareholders in the September quarter through dividends and share repurchases. Our board remains committed to increasing cash returns to shareholders with the goal of returning 100% of our adjusted free cash flow to shareholders by the March 2025 quarter.”

Mr. Moorthy concluded, “Considering the macro environment we face of slowing economic activity and increasing business uncertainty, combined with the active steps we are taking to help customers with inventory positions to push out some of their backlog, we expect net sales in the September quarter to be up 1% to down 3% sequentially. At the mid-point of our guidance for the September quarter, net sales would be 9.3% higher than the year-ago quarter. Notwithstanding any near-term macro weakness, we are confident that semiconductors remain the engine of innovation for the applications and markets we serve. Our focus on Total System Solutions and key market megatrends is fueling strong design-win momentum that we expect will drive above-market long-term growth.”

Microchip’s Highlights for the Quarter Ended June 30, 2023:

Published annual Sustainability Report, highlighting key sustainability goals, the strategies used to implement them, and progress made to further sustainable business practices.
Announced the promotion of Rich Simoncic to executive vice president. Rich will continue to manage all of Microchip’s analog business units while playing a larger role assisting the CEO with corporate initiatives such as strategic planning, total system solutions, market megatrends and investor relations.
Released updated, next-generation MPLAB® ICD 5 and MPLAB PICkit™ 5 in-circuit debuggers/programmers with advanced connectivity and power options for developers of designs based on PIC®, AVR® and SAM devices and dsPIC® Digital Signal Controllers (DSCs). The new tools offer fast, affordable and convenient solutions that feature remote programming capabilities for an enhanced user experience.
Introduced a Silicon Carbide (SiC) E-Fuse demonstrator that provides a faster, more reliable method for protecting power electronics in electric vehicle applications. The E-Fuse demonstrator is available in six variants for 400–800V battery systems.
Revealed new long-reaching USB 3.2 compatible reclocker/redriver devices for automotive and industrial applications. The EQCO510 and EQCO5X31 devices offer a solid two-channel solution to send high-speed data signals up to 15 meters in both directions.
Expanded our radiation-tolerant family of gigabit ethernet physical layers (PHY). The new VSC8574RT PHY supports both copper and fiber interfaces for added flexibility in space applications.
Launched a new cesium atomic clock that provides autonomous precise time of 100 ns holdover for months. The 5071B is a compact commercial timing product offering ease of deployment across multiple industries.
Announced an industrial edge stack, more core library IP and conversion tools for the industry’s most power-efficient mid-range FPGA. The new tools are designed to help customers slash time to innovation by making it easier to than ever to switch to PolarFire® FPGAs and System-on-Chip (SoC) FPGAs.

Second Quarter Fiscal Year 2024 Outlook:

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

	Microchip Consolidated Guidance
Net Sales	$2.220 to $2.312 billion
	GAAP	Non-GAAP Adjustments	Non-GAAP⁽¹⁾
Gross Profit	68.0% to 68.2%	$6.8 to $7.8 million	68.3% to 68.5%
Operating Expenses⁽²⁾	28.8% to 29.4%	$197.7 to $201.7 million	20.1% to 20.5%
Operating Income	38.6% to 39.3%	$204.5 to $209.5 million	47.8% to 48.4%
Other Expense, net	$48.8 to $50.2 million	($0.2) to $0.2 million	$49.0 to $50.0 million
Income Tax Provision	$157.5 to $193.3 million⁽³⁾	$23.9 to $30.8 million	$133.6 to $162.5 million⁽⁴⁾
Net Income	$650.3 to $665.8 million	$228.2 to $240.5 million	$878.5 to $906.3 million
Diluted Common Shares Outstanding	Approximately 550.6 to 551.0 million shares		Approximately 550.6 to 551.0 million shares
Earnings per Diluted Share	$1.18 to $1.21	$0.42 to $0.43	$1.60 to $1.64

⁽¹⁾ See the “Use of Non-GAAP Financial Measures” section of this release for information regarding our non-GAAP guidance.
⁽²⁾ We are not able to estimate the amount of certain Special Charges and Other, net that may be incurred during the quarter ending September 30, 2023. Therefore, our estimate of GAAP operating expenses excludes certain amounts that may be recognized as Special Charges and Other, net in the quarter ending September 30, 2023.
⁽³⁾ The forecast for GAAP tax expense excludes any unexpected tax events that may occur during the quarter, as these amounts cannot be forecasted.
⁽⁴⁾ Represents the expected cash tax rate for fiscal 2024, excluding any transition tax payments associated with the Tax Cuts and Jobs Act.

Capital expenditures for the quarter ending September 30, 2023 are expected to be between $90 million and $100 million. Capital expenditures for all of fiscal 2024 are expected to be between $300 million and $400 million. We continue to add capital equipment to maintain, grow and operate our internal manufacturing capabilities to support the expected growth of our business.

Under the GAAP revenue recognition standard, which we adopted on April 1, 2018, we are required to recognize revenue when control of the product changes from us to a customer or distributor. We focus our sales and marketing efforts on creating demand for our products in the end markets we serve and not on moving inventory into our distribution network. We also manage our manufacturing and supply chain operations, including our distributor relationships, towards the goal of having our products available at the time and location the end customer desires.

Use of Non-GAAP Financial Measures:
Our non-GAAP adjustments, where applicable, include the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, severance, and other restructuring costs, and legal and other general and administrative expenses associated with acquisitions including legal fees and expenses for litigation and investigations related to our Microsemi acquisition), professional services associated with certain legal matters, and losses on the settlement of debt. For the first quarters of fiscal 2024 and fiscal 2023, our non-GAAP income tax expense is presented based on projected cash taxes for the fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act.

We are required to estimate the cost of certain forms of share-based compensation, including employee stock options, restricted stock units, and our employee stock purchase plan, and to record a commensurate expense in our income statement. Share-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by the price of our stock at the date of grant. The price of our stock is affected by market forces that are difficult to predict and are not within the control of management. Our other non-GAAP adjustments are either non-cash expenses, unusual or infrequent items, or other expenses related to transactions. Management excludes all of these items from its internal operating forecasts and models.

We are using non-GAAP operating expenses in dollars, including non-GAAP research and development expenses and non-GAAP selling, general and administrative expenses, non-GAAP other expense, net, and non-GAAP income tax rate, which exclude the items noted above, as applicable, to permit additional analysis of our performance.

Management believes these non-GAAP measures are useful to investors because they enhance the understanding of our historical financial performance and comparability between periods. Many of our investors have requested that we disclose this non-GAAP information because they believe it is useful in understanding our performance as it excludes non-cash and other charges that many investors feel may obscure our underlying operating results. Management uses non-GAAP measures to manage and assess the profitability of our business and for compensation purposes. We also use our non-GAAP results when developing and monitoring our budgets and spending. Our determination of these non-GAAP measures might

not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for amounts determined in accordance with GAAP. There are limitations associated with using these non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance. Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results.

Generally, gross profit fluctuates over time, driven primarily by the mix of products sold and licensing revenue; variances in manufacturing yields; fixed cost absorption; wafer fab loading levels; costs of wafers from foundries; inventory reserves; pricing pressures in our non-proprietary product lines; and competitive and economic conditions. Operating expenses fluctuate over time, primarily due to net sales and profit levels.

Diluted Common Shares Outstanding can vary for, among other things, the trading price of our common stock, the exercise of options or vesting of restricted stock units, the potential for incremental dilutive shares from our convertible debentures (additional information regarding our share count is available in the investor relations section of our website under the heading “Supplemental Financial Information”), and repurchases or issuances of shares of our common stock. The diluted common shares outstanding presented in the guidance table above assumes an average Microchip stock price in the September 2023 quarter between $85 and $95 per share (however, we make no prediction as to what our actual share price will be for such period or any other period and we cannot estimate what our stock option exercise activity will be during the quarter).

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF INCOME

(in millions, except per share amounts; unaudited)

	Three Months Ended June 30,
		2023			2022
Net sales	$	2,288.6		$	1,963.6
Cost of sales		730.2			653.7
Gross profit		1,558.4			1,309.9

Research and development		298.5			269.0
Selling, general and administrative		203.6			188.9
Amortization of acquired intangible assets		151.5			167.6
Special charges (income) and other, net		1.7			(16.9	)
Operating expenses		655.3			608.6

Operating income		903.1			701.3

Other expense, net		(54.8	)		(54.7	)
Income before income taxes		848.3			646.6
Income tax provision		181.9			139.4
Net income	$	666.4		$	507.2

Basic net income per common share	$	1.22		$	0.92
Diluted net income per common share	$	1.21		$	0.90

Basic common shares outstanding		545.1			553.8
Diluted common shares outstanding		551.4			561.5

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED
BALANCE SHEETS

(in millions; unaudited)

ASSETS
	June 30,		March 31,
		2023		2023
Cash and short-term investments	$	271.2	$	234.0
Accounts receivable, net		1,465.0		1,305.3
Inventories		1,336.4		1,324.9
Other current assets		197.0		205.1
Total current assets		3,269.6		3,069.3

Property, plant and equipment, net		1,185.7		1,177.9
Other assets		12,039.3		12,123.1
Total assets	$	16,494.6	$	16,370.3

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued liabilities	$	1,820.9	$	1,720.4
Current portion of long-term debt		1,398.7		1,398.2
Total current liabilities		3,219.6		3,118.6

Long-term debt		4,632.2		5,041.7
Long-term income tax payable		718.9		705.7
Long-term deferred tax liability		42.3		42.7
Other long-term liabilities		1,050.3		948.0

Stockholders’ equity		6,831.3		6,513.6
Total liabilities and stockholders’ equity	$	16,494.6	$	16,370.3

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(in millions, except per share amounts and percentages; unaudited)

RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT

	Three Months Ended June 30,
		2023			2022
Gross profit, as reported	$	1,558.4		$	1,309.9
Share-based compensation expense		6.8			7.7
Non-GAAP gross profit	$	1,565.2		$	1,317.6
GAAP gross profit percentage		68.1	%		66.7	%
Non-GAAP gross profit percentage		68.4	%		67.1	%

RECONCILIATION OF GAAP RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES

	Three Months Ended June 30,
		2023			2022
Research and development expenses, as reported	$	298.5		$	269.0
Share-based compensation expense		(22.9	)		(20.1	)
Other adjustments		(0.2	)		(0.2	)
Non-GAAP research and development expenses	$	275.4		$	248.7
GAAP research and development expenses as a percentage of net sales		13.0	%		13.7	%
Non-GAAP research and development expenses as a percentage of net sales		12.0	%		12.7	%

RECONCILIATION OF GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	Three Months Ended June 30,
		2023			2022
Selling, general and administrative expenses, as reported	$	203.6		$	188.9
Share-based compensation expense		(14.8	)		(13.4	)
Other adjustments		1.1			(0.6	)
Professional services associated with certain legal matters		(0.5	)		(0.9	)
Non-GAAP selling, general and administrative expenses	$	189.4		$	174.0
GAAP selling, general and administrative expenses as a percentage of net sales		8.9	%		9.6	%
Non-GAAP selling, general and administrative expenses as a percentage of net sales		8.3	%		8.9	%

RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES

	Three Months Ended June 30,
		2023			2022
Operating expenses, as reported	$	655.3		$	608.6
Share-based compensation expense		(37.7	)		(33.5	)
Other adjustments		0.9			(0.8	)
Professional services associated with certain legal matters		(0.5	)		(0.9	)
Amortization of acquired intangible assets		(151.5	)		(167.6	)
Special charges (income) and other, net		(1.7	)		16.9
Non-GAAP operating expenses	$	464.8		$	422.7
GAAP operating expenses as a percentage of net sales		28.6	%		31.0	%
Non-GAAP operating expenses as a percentage of net sales		20.3	%		21.5	%

RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME

	Three Months Ended June 30,
		2023			2022
Operating income, as reported	$	903.1		$	701.3
Share-based compensation expense		44.5			41.2
Other adjustments		(0.9	)		0.8
Professional services associated with certain legal matters		0.5			0.9
Amortization of acquired intangible assets		151.5			167.6
Special charges (income) and other, net		1.7			(16.9	)
Non-GAAP operating income	$	1,100.4		$	894.9
GAAP operating income as a percentage of net sales		39.5	%		35.7	%
Non-GAAP operating income as a percentage of net sales		48.1	%		45.6	%

RECONCILIATION OF GAAP OTHER EXPENSE, NET TO NON-GAAP OTHER EXPENSE, NET

	Three Months Ended June 30,
		2023			2022
Other expense, net, as reported	$	(54.8	)	$	(54.7	)
Loss on settlement of debt		9.1			6.2
Non-cash other expense, net		—			0.1
Non-GAAP other expense, net	$	(45.7	)	$	(48.4	)
GAAP other expense, net, as a percentage of net sales	(2.4)%			(2.8)%
Non-GAAP other expense, net, as a percentage of net sales	(2.0)%			(2.5)%

RECONCILIATION OF GAAP INCOME TAX PROVISION TO NON-GAAP INCOME TAX PROVISION

	Three Months Ended June 30,
		2023			2022
Income tax provision as reported	$	181.9		$	139.4
Income tax rate, as reported		21.4	%		21.6	%
Other non-GAAP tax adjustment		(32.5	)		(60.1	)
Non-GAAP income tax provision	$	149.4		$	79.3
Non-GAAP income tax rate		14.2	%		9.4	%

RECONCILIATION OF GAAP NET INCOME AND GAAP DILUTED NET INCOME PER COMMON SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER COMMON SHARE

	Three Months Ended June 30,
		2023			2022
Net income, as reported	$	666.4		$	507.2
Share-based compensation expense		44.5			41.2
Other adjustments		(0.9	)		0.8
Professional services associated with certain legal matters		0.5			0.9
Amortization of acquired intangible assets		151.5			167.6
Special charges (income) and other, net		1.7			(16.9	)
Loss on settlement of debt		9.1			6.2
Non-cash other expense, net		—			0.1
Other non-GAAP tax adjustment		32.5			60.1
Non-GAAP net income	$	905.3		$	767.2
GAAP net income as a percentage of net sales		29.1	%		25.8	%
Non-GAAP net income as a percentage of net sales		39.6	%		39.1	%
Diluted net income per common share, as reported	$	1.21		$	0.90
Non-GAAP diluted net income per common share	$	1.64		$	1.37
Diluted common shares outstanding, as reported		551.4			561.5
Diluted common shares outstanding non-GAAP		551.4			561.5

RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW

	Three Months Ended June 30,
		2023			2022
GAAP cash flow from operations, as reported	$	993.2		$	840.4
Capital expenditures		(111.1	)		(121.9	)
Free cash flow	$	882.1		$	718.5
GAAP cash flow from operations as a percentage of net sales		43.4	%		42.8	%
Free cash flow as a percentage of net sales		38.5	%		36.6	%

Microchip will host a conference call today, August 3, 2023 at 5:00 p.m. (Eastern Time) to discuss this release. This call will be simulcast over the Internet at www.microchip.com. The webcast will be available for replay until August 17, 2023.

A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on August 3, 2023 and will remain available until 5:00 p.m. (Eastern Time) on August 17, 2023. Interested parties may listen to the replay by dialing 201-612-7415/877-660-6853 and entering access code 13740125.

Cautionary Statement:

The statements in this release relating to a weakening macro backdrop and increased business uncertainty, continuing to navigate a challenging market environment and trending toward supply chain normalization as we continue to improve lead times for many of our products, that even as our broad base of customers experience demand uncertainty, we expect our operating metrics to demonstrate resiliency through this business cycle, enhancing our operating performance while actively managing the working capital requirements for the business, that our operating model has been, and remains, a strong cash generator and continues to demonstrate consistently high non-GAAP operating margins as we execute on our Microchip 3.0 strategy, targeting to return $562.6 million to our shareholders in the September quarter through dividends and share repurchases, that our board remains committed to increasing cash returns to shareholders with the goal of returning 100% of our adjusted free cash flow to shareholders by the March 2025 quarter, slowing economic activity and increasing business uncertainty, active steps we are taking to help customers with inventory positions to push out some of their backlog, expecting net sales in the September quarter to be up 1% to down 3% sequentially, that at the mid-point of our guidance for the September quarter, net sales would be 9.3% higher than the year-ago quarter, being confident that semiconductors remain the engine of innovation for the applications and markets we serve, that our focus on Total System Solutions and key market megatrends is fueling strong design-win momentum that we expect will drive above-market long-term growth, our second quarter fiscal 2024 guidance for net sales and GAAP and non-GAAP gross profit, operating expenses, operating income, other expense, net, income tax provision, net income, diluted common shares outstanding, earnings per diluted share, capital expenditures for the September 2023 quarter and for all of fiscal 2024, continuing to add capital equipment to maintain, grow and operate our internal manufacturing capabilities to support the expected growth of our business, our belief that non-GAAP measures are useful to investors and our assumed average stock price in the September 2023 quarter are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: any continued uncertainty, fluctuations or weakness in the U.S. and world economies (including China) due to rising interest rates, high inflation or the impact of the COVID-19 pandemic (including lock-downs in China), actions taken or which may be taken by the Biden administration or the U.S. Congress, monetary policy, political, geopolitical, trade or other issues in the U.S. or internationally (including the Ukraine-Russia military conflict), changes in demand or market acceptance of our products and the products of our customers and our ability to meet any continued increases in market demand or customer requests to reschedule or cancel orders; the mix of inventory we hold, our ability to satisfy short-term orders from our inventory and our ability to effectively manage our inventory levels; the impact that the CHIPS Act will have on increasing manufacturing capacity in our industry by providing incentives for us, our competitors and foundries to build new wafer manufacturing facilities or expand existing facilities; the amount and timing of any incentives we may receive under the CHIPS Act, the impact of current and future changes in U.S. corporate tax laws (including the Inflation Reduction Act of 2022 and the Tax Cuts and Jobs Act of 2017), foreign currency effects on our business; changes in utilization of our manufacturing capacity and our ability to effectively manage and expand our production levels to meet any continued increases in market demand or any customer requests to reschedule or cancel orders; the impact of inflation on our business; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; our ability to realize the expected benefits of our preferred supply program and our long-term supply assurance program; changes or fluctuations in customer order patterns and seasonality; our ability to obtain a sufficient supply of wafers from third party wafer foundries to meet our increasing needs and the cost of such wafers, our ability to obtain additional capacity from our suppliers to increase production to meet any continued increases in market demand; our ability to successfully integrate the operations and employees, retain key employees and customers and otherwise realize the expected synergies and benefits of our acquisitions; the impact of any future significant acquisitions or strategic transactions we may make; the costs and outcome of any current or future litigation or other matters involving our Microsemi acquisition, the Microsemi business, intellectual property, customers, or other issues; the costs and outcome of any current or future tax audit or investigation regarding our business or the business of Microsemi, our actual average stock price in the September quarter and the impact such price will have on our share count; fluctuations in our stock price and trading volume which could impact the number of shares we acquire under our share repurchase program and the timing of such repurchases; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns (including the COVID-19 pandemic) or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.

Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this August 3, 2023 press release, or to reflect the occurrence of unanticipated events.

About Microchip:

Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. Our solutions serve more than 125,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.

Note: The Microchip name and logo, the Microchip logo, AVR, dsPIC, MPLAB, PIC and PolarFire are registered trademarks of Microchip Technology Incorporated in the U.S.A. and other countries. PICkit is a trademark of Microchip Technology Incorporated in the U.S.A. and other countries. All other trademarks mentioned herein are the property of their respective companies.

INVESTOR RELATIONS CONTACT:
J. Eric Bjornholt — CFO….. (480) 792-7804

August 4, 2023 6:35 am

Deciphera Pharmaceuticals Announces Retirement of Daniel L. Flynn, Ph.D., and Appointment of Dashyant Dhanak, Ph.D., as Executive Vice President and Chief Scientific Officer

Deciphera Pharmaceuticals Announces Retirement of Daniel L. Flynn, Ph.D., and Appointment of Dashyant Dhanak, Ph.D., as Executive Vice President and Chief Scientific Officer

— Director Ron Squarer Appointed Chairperson of the Board; James A. Bristol, Ph.D., continues as Board Member —

WALTHAM, Mass.–(BUSINESS WIRE)–
Deciphera Pharmaceuticals, Inc. (NASDAQ: DCPH), a biopharmaceutical company focused on discovering, developing, and commercializing important new medicines to improve the lives of people with cancer, today announced that the Company’s Founder, Executive Vice President, and Chief Scientific Officer, Daniel L. Flynn, Ph.D., will retire effective September 5, 2023 and will transition to a role as Senior Advisor to the Company. Dashyant Dhanak, Ph.D., has been appointed Executive Vice President and Chief Scientific Officer effective September 5, 2023.

Dr. Dhanak brings over 30 years of experience in pharmaceutical research and development and joins Deciphera from Incyte Corporation where he was Executive Vice President and Chief Scientific Officer.

“On behalf of all my colleagues, I want to thank Dan for his vision to found Deciphera two decades ago as a company dedicated to improving the lives of people with cancer. It has been an honor to work alongside such a trailblazing researcher whose innovations in drug discovery now benefit thousands of cancer patients around the world and have the potential to continue making an impact for years to come thanks to our rich clinical and pre-clinical pipeline developed from the research engine that Dan created,” said Steve Hoerter, President and Chief Executive Officer of Deciphera Pharmaceuticals. “We are excited to build on our track record of innovation in drug discovery with the announcement that Dash Dhanak is joining Deciphera as our new Chief Scientific Officer. In addition to broad experience in drug discovery and development, Dash is a proven leader with a track record of advancing innovative oncology agents to the clinic. I look forward to working with Dash to continue to build a strong pipeline of novel therapies at Deciphera.”

“I am unbelievably proud of Deciphera’s progress and accomplishments in the years since I founded the company. We have grown from a small research team into a fully-integrated biotechnology company with capabilities from research to international commercialization, anchored as always by a culture that seeks to drive innovation to help patients as our first priority. Together, we have improved the quality of life for many cancer patients around the world,” said Dr. Flynn. “I am confident that the Company’s discovery and early-stage programs are in excellent hands with Dash, and under his leadership, I know Deciphera will develop additional important new medicines for the treatment of cancer.”

“It’s an honor to continue Dan’s legacy of innovation. I’m thrilled to join Deciphera at this pivotal time as it prepares to become a company with multiple approved medicines,” said Dr. Dhanak. “As Deciphera continues to mature as a commercial company, we remain driven to innovate and to discover new medicines to help patients with cancer.”

Prior to Deciphera, Dr. Dhanak served as Chief Scientific Officer and Executive Vice President at Incyte Corporation. Before joining Incyte in 2018, Dr. Dhanak was Vice President and Head of Discovery Sciences at Janssen Research & Development, and previously spent 25 years at GlaxoSmithKline in positions of increasing responsibility across multiple disease areas, including his final role as Vice President and Head of the Cancer Epigenetics Discovery Performance Unit. Dr. Dhanak received a B.Sc. in Chemistry from the University of Manchester Institute of Science and Technology and a Ph.D. from the University of London. He completed his postdoctoral research in Natural Product Synthesis at Northwestern University.

In addition, the Company announced today that Ron Squarer has been appointed Chairperson of the Board of Directors. Mr. Squarer has over 30 years of experience in the pharmaceutical and biotechnology industry and joined Deciphera as a Director in December 2019. Mr. Squarer served as Chief Executive Officer and a member of the board of directors of Array BioPharma, Inc. from 2012 until its acquisition by Pfizer Inc. in August 2019 following the successful commercial launches of both Braftovi® and Mektovi®. James A. Bristol, Ph.D., who has served as either Chairperson or Co-Chairperson since 2007, will remain a Board member of Deciphera.

“I want to recognize Jim Bristol’s tremendous leadership as Chairperson of the Deciphera board for over 15 years. Jim’s deep industry expertise has been invaluable in guiding our research activities, scaling our organization, and transforming Deciphera into a leading commercial-stage oncology company. We thank him for his exceptional stewardship as Chairperson and look forward to his continued contributions as a member of the board,” said Mr. Hoerter.

About Deciphera Pharmaceuticals

Deciphera is a biopharmaceutical company focused on discovering, developing, and commercializing important new medicines to improve the lives of people with cancer. We are leveraging our proprietary switch-control kinase inhibitor platform and deep expertise in kinase biology to develop a broad portfolio of innovative medicines. In addition to advancing multiple product candidates from our platform in clinical studies, QINLOCK® is Deciphera’s switch-control inhibitor for the treatment of fourth-line GIST. QINLOCK is approved in Australia, Canada, China, the European Union, Hong Kong, Israel, Macau, New Zealand, Singapore, Switzerland, Taiwan, the United Kingdom, and the United States. For more information, visit www.deciphera.com and follow us on LinkedIn and Twitter (@Deciphera).

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, the ability for Deciphera to develop additional important new medicines for the treatment of cancer and to become a company with multiple approved medicines. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “seek,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, our ability to successfully demonstrate the efficacy and safety of our drug or drug candidates, the preclinical or clinical results for our product candidates, which may not support further development of such product candidates, comments, feedback and actions of regulatory agencies, our ability to commercialize QINLOCK and execute on our marketing plans for any drugs or indications that may be approved in the future, the inherent uncertainty in estimates of patient populations, competition from other products, our ability to obtain and maintain reimbursement for any approved product and the extent to which patient assistance programs are utilized and other risks identified in our Securities and Exchange Commission (SEC) filings, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and subsequent filings with the SEC. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. We disclaim any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

The Deciphera logo and the QINLOCK® word mark and logo are registered trademarks and the Deciphera word mark is a trademark of Deciphera Pharmaceuticals, LLC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803652580/en/

Investor Relations:

Maghan Meyers

Argot Partners

[email protected]

212-600-1902

Media:

David Rosen

Argot Partners

[email protected]

212-600-1902

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Biotechnology Pharmaceutical Health Oncology

MEDIA:

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August 4, 2023 6:31 am

Clover Health Regains Compliance with NASDAQ Minimum Bid Price Requirement

FRANKLIN, Tenn., Aug. 03, 2023 (GLOBE NEWSWIRE) — Clover Health Investments, Corp. (NASDAQ: CLOV) (“Clover,” “Clover Health” or the “Company”), a physician enablement company committed to bringing access to great healthcare to everyone on Medicare, today announced that it has received formal notice from The Nasdaq Stock Market, LLC (“Nasdaq”) stating that the Company has regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1). As previously disclosed, the Company received a written notice from Nasdaq on April 20, 2023 notifying the Company that it had failed to meet the $1.00 per share minimum bid price requirement for continued inclusion on The Nasdaq Global Select Market.

To regain compliance with the Listing Rule, the Company’s Class A Common Stock was required to maintain a minimum closing bid price of $1.00 or more for at least 10 consecutive business days, which was achieved on July 28, 2023. Nasdaq has stated that this matter is now closed.

In light of this positive development, the Company will re-evaluate its options, including with respect to the reverse stock split and authorized share reduction proposal currently pending before the Company’s stockholders for approval at the special meeting of stockholders currently scheduled for 11:00 a.m. ET on Wednesday, August 30, 2023.

Forward-Looking Statements

Please note that this press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking statements include
statements regarding future events and Clover Health’s future results of operations,
financial position, business strategy and future plans. Forward-looking statements are
not guarantees of future performance, and you are cautioned not to place undue
reliance on such statements. In some cases, you can identify forward looking
statements because they contain words such as “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “going to,” “can,” “could,” “should,” “would,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “outlook,”
“forecast,” “guidance,” “objective,” “plan,” “seek,” “grow,” “target,” “if,” “continue,” or the
negative of these words or other similar terms or expressions that concern Clover
Health’s expectations, strategy, priorities, plans or intentions. These statements are
subject to known and unknown risks, uncertainties and other factors that may cause
Clover Health’s actual results, levels of activity, performance or achievements to differ
materially from results expressed or implied in this press release. Additional information
concerning these and other risk factors is contained in Clover Health’s latest Annual
Report on Form 10-K filed with the SEC on March 1, 2023 and Quarterly Report on
Form 10-Q filed with the SEC on May 9, 2023, in each case, including the Risk Factors
section therein, and in its other filings with the SEC. The forward-looking statements
included in this press release are made as of the date hereof. Except as required by
law, Clover Health undertakes no obligation to update any of these forward-looking
statements after the date of this press release or to conform these statements to actual
results or revised expectations.

About Clover Health:

Clover Health (Nasdaq: CLOV) is a physician enablement company committed to bringing access to great healthcare to everyone on Medicare. This includes a health equity-based focus on seniors who have historically lacked access to affordable, high-quality healthcare. Our strategy is powered by our software platform, Clover Assistant, which is designed to aggregate patient data from across the healthcare ecosystem to support clinical decision-making and improve health outcomes through the early identification and management of chronic disease. We operate two distinct lines of business: Insurance and Non-Insurance. Through our Insurance line of business, we provide PPO and HMO Medicare Advantage plans in several states, with a differentiated focus on our flagship wide-network, high-choice PPO plans. Our Non-Insurance line of business similarly aims to reduce cost-of-care while enhancing the quality of care for patients enrolled in Original Medicare.

Press Contact:

Andrew Still-Baxter
[email protected]

Investor Relations Contact:

Ryan Schmidt
[email protected]