Porch Group Inc (PRCH) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Positive Net ...
Porch Group Inc ( NASDAQ:PRCH ) is investing more aggressively, which may impact short-term profitability as it aims for faster growth in 2026 and beyond.
Q2 adjusted EBITDA is expected to be $5 million to $7 million lower than Q1 due to changes in reinsurance contracts.
The company faces potential mid-single-digit adjusted EBITDA impact from tariffs, although this has been factored into guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
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Q: How does the replacement value increase due to tariffs or market changes affect your pricing strategy? A: (Matthew Neagle, COO) We regularly update replacement values, which can increase prices due to higher coverage. Our data advantage allows us to target lower-risk segments with attractive pricing. We believe our data and pricing sophistication will enable us to pass through premium increases effectively.
Q: What percentage of consumers in Texas are selecting HOA versus Porch Insurance, and how does this compare to expectations? A: (Matt Ehrlichman, CEO) We don't provide specific metrics, but we focus on segments like homebuyers and new construction, where we convert well. Our products are positioned for these segments, and we are seeing good growth in new business premium.
Q: Can you explain the surplus figures and how they relate to the reciprocal's financial health? A: (Shawn Tabak, CFO) As of March 31, 2025, the surplus combined with non-admitted assets was $198 million, the highest ever for the reciprocal. This includes some share value, and the statutory surplus is around $105 million. The surplus is expected to fluctuate due to weather claims but remains in a healthy position.
Q: What steps are needed for Porch to report GAAP financials without consolidating the reciprocal? A: (Shawn Tabak, CFO) The consolidation is due to the surplus note relationship. We are pleased with the current structure, including the 15% coupon surplus note. While we could sell the surplus note in the future, we are not in a rush to change the current setup.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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Sysco Reports Fourth Quarter and Full Year 2025 Results; Introduces FY26 Guidance
HOUSTON, July 29, 2025 (GLOBE NEWSWIRE) -- Sysco Corporation (NYSE: SYY) ('Sysco' or the 'company') today announced financial results for its 13-week fourth fiscal quarter and its fiscal year ended June 28, 2025. Key financial results for the fourth quarter of fiscal year 2025 include the following (comparisons are to the same period in fiscal year 2024): Sales increased 2.8%; U.S. Foodservice volume decreased 0.3%; Gross profit increased 3.9% to $4.0 billion; Operating income decreased 9.0% to $889 million, and adjusted operating income increased 1.1% to $1.1 billion1; Net earnings decreased 13.2% to $531 million, and adjusted net earnings increased 3.3% to $716 million1; EBITDA decreased 6.5% to $1.1 billion, and adjusted EBITDA increased 1.8% to $1.3 billion1,2; and EPS3 decreased 10.6% to $1.10, and adjusted EPS1 increased 6.5% to $1.48. 'Sysco's Q4 results exceeded expectations, as improved financial outcomes were driven by Sysco-specific initiatives and improved restaurant industry traffic. Specific to our business, USFS local volumes improved sequentially by 200 bps, including a strong exit rate in June. Importantly, drivers of our progress accelerated during the quarter, with the momentum continuing in July, an encouraging signal as we begin the next fiscal year of profitable growth' said Kevin Hourican, Sysco's Chair of the Board and Chief Executive Officer. 'Building on our sales and adjusted EPS growth in FY25, we expect sales growth of approximately 3% to 5% to approximately $84 billion to $85 billion and adjusted EPS growth of approximately 1% to 3% to approximately $4.50 to $4.60 in FY26. This includes an approximate $100 million ($0.16 per diluted share) headwind from lapping lower incentive compensation in fiscal 2025. Excluding this impact, our outlook reflects EPS growth of approximately 5% to 7%, with the midpoint in-line with our long-term algorithm. Our teams are focusing on operational execution in the backdrop of continued macro uncertainties. We also plan to reward our shareholders with approximately $1 billion in dividends and approximately $1 billion in share repurchases for FY26,' said Kenny Cheung, Sysco's Chief Financial Officer. 1 Adjusted financial results, including adjusted operating expense, adjusted operating income (loss), adjusted net earnings, adjusted earnings per share (EPS) and adjusted EBITDA, among others, are non-GAAP financial measures that exclude certain items, which primarily include acquisition-related costs, restructuring and severance costs, and transformational project costs. Adjustments provided herein for fiscal 2025 results of operations also remove the impact of a goodwill impairment charge. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.2 Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.3 Earnings per share (EPS) are shown on a diluted basis, unless otherwise specified. Key financial results for fiscal year 2025 include the following (comparisons are to the same period in fiscal year 2024): Sales increased 3.2%; U.S. Foodservice volume increased 0.5%; Gross profit increased 2.5% to $15.0 billion; Operating income decreased 3.6% to $3.1 billion, and adjusted operating income increased 1.2% to $3.5 billion1; Net earnings decreased 6.5% to $1.8 billion, and adjusted net earnings increased 0.8% to $2.2 billion1; EBITDA decreased 1.2% to $4.0 billion, and adjusted EBITDA increased 2.4% to $4.3 billion1,2; EPS3 decreased 4.1% to $3.73, and adjusted EPS1 increased 3.5% to $4.46; Cash flow from operations decreased 16.0% to $2.5 billion and free cash flow decreased 18.7% to $1.8 billion as compared to the same period last year4; and We returned approximately $2.3 billion of capital to shareholders via $1.3 billion of share repurchases and $1.0 billion of dividends. Fourth Quarter Fiscal Year 2025 Results (comparisons are to the same period in fiscal year 2024) Total Sysco Sales for the fourth quarter increased 2.8% to $21.1 billion. Gross profit increased 3.9% to $4.0 billion, and gross margin increased 19 basis points to 18.9%. Product cost inflation was 3.5% at the total enterprise level, as measured by the estimated change in Sysco's product costs, primarily in the meat and dairy categories. The increase in gross profit for the fourth quarter was primarily driven by effective management of product cost inflation. Operating expenses increased 8.2%, driven by goodwill impairment in the 'other' segment, and business capacity and sales headcount investments. Adjusted operating expenses increased 4.9%1. Operating income decreased 9.0% to $889 million, and adjusted operating income increased 1.1% to $1.1 billion1. During the fourth quarter, the company incurred a $92 million non-cash goodwill impairment charge reflected in operating expenses related to the Guest Worldwide business. This equates to $82 million, net of tax, or $0.17 on a per share basis. Adjusted results exclude these amounts. U.S. Foodservice Operations The U.S. Foodservice Operations segment results were impacted by lower volumes from negative industry foot traffic and continued investments across capacity and headcount. Sales for the fourth quarter increased 2.4% to $14.8 billion. Total case volume within U.S. Foodservice decreased 0.3% for the fourth quarter, while local case volume within U.S. Foodservice decreased 1.5%. Gross profit increased 2.8% to $2.9 billion, and gross margin increased 8 basis points to 19.5%. Operating expenses increased 5.7%, and adjusted operating expenses increased 5.0%1. Operating income decreased 2.0% to $1.0 billion, and adjusted operating income decreased 0.8% to $1.1 billion1. 4 Free cash flow is a non-GAAP financial measure that represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release. International Foodservice Operations The International Foodservice Operations segment continued to deliver effective margin management, local volume growth and double-digit profit growth. Sales for the fourth quarter increased 3.6% to $3.9 billion. On a constant currency basis5, sales for the fourth quarter increased 1.0% to $3.8 billion. Foreign exchange rates increased both International Foodservice Operations sales by $101 million and total Sysco sales by $100 million during the quarter. Excluding the impact of the Mexico joint venture6, which was divested during the second quarter, sales grew 8.3% for International Foodservice Operations and 3.7% for total Sysco. Gross profit increased 7.6% to $847 million, and gross margin increased 80 basis points to 21.6%. On a constant currency basis5, gross profit increased 4.2% to $820 million. Foreign exchange rates increased both International Foodservice Operations gross profit by $27 million and total Sysco gross profit by $27 million during the quarter. Operating expenses increased 4.5%, and adjusted operating expenses increased 4.3%1. On a constant currency basis5, adjusted operating expenses increased 0.6%. Foreign exchange rates increased both International Foodservice Operations operating expenses by $23 million and total Sysco operating expenses by $23 million during the quarter. Operating income increased 26.1% to $145 million, and adjusted operating income increased 20.1% to $197 million1. On a constant currency basis5, adjusted operating income increased 17.7% to $193 million. Foreign exchange rates increased both International Foodservice Operations operating income by $4 million and total Sysco operating income by $4 million during the quarter. Fiscal Year 2025 Results (comparisons are to fiscal year 2024) Total Sysco Sales for fiscal year 2025 increased 3.2% to $81.4 billion. Gross profit increased 2.5% to $15.0 billion, and gross margin decreased 13 basis points to 18.4%. Product cost inflation was 2.5% at the total enterprise level, as measured by the estimated change in Sysco's product costs, primarily in the dairy and poultry categories. The increase in gross profit for the year was primarily driven by effective management of product cost inflation. Operating expenses increased 4.2%, driven by business and sales headcount investments, as well as cost inflation. These increases were partially offset by lower annual bonus incentive compensation. Adjusted operating expenses increased 2.9%1. Operating income decreased 3.6% to $3.1 billion, and adjusted operating income increased 1.2% to $3.5 billion1. During the fourth quarter, the company incurred a $92 million non-cash goodwill impairment charge reflected in operating expenses related to the Guest Worldwide business. This equates to $82 million, net of tax, or $0.17, on a per share basis. Adjusted results exclude these amounts. 5 Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. These adjusted measures are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.6 Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release. U.S. Foodservice Operations Sales for fiscal year 2025 increased 2.9% to $57.0 billion. Total case volume within U.S. Foodservice increased 0.5% for fiscal year 2025, while local case volume within U.S. Foodservice decreased 1.4%. Gross profit increased 1.6% to $10.9 billion, and gross margin decreased 26 basis points to 19.1%. Operating expenses increased 4.6%, and adjusted operating expenses increased 4.0%1. Operating income decreased 4.3% to $3.5 billion, and adjusted operating income decreased 3.0% to $3.6 billion1. International Foodservice Operations Sales for fiscal year 2025 increased 2.4% to $14.9 billion. On a constant currency basis5, sales for fiscal year 2025 increased 2.6% to $14.9 billion. Foreign exchange rates decreased both International Foodservice Operations sales by $29 million and total Sysco sales by $33 million during the year. Excluding the impact of the Mexico joint venture6, which was divested during the second quarter of 2025, sales grew 4.8% for International Foodservice Operations and 3.6% for total Sysco. Gross profit increased 5.5% to $3.1 billion, and gross margin increased 62 basis points to 20.9%. On a constant currency basis5, gross profit increased 5.1% to $3.1 billion. Foreign exchange rates increased both International Foodservice Operations gross profit by $11 million and total Sysco gross profit by $10 million during the year. Operating expenses increased 3.9%, and adjusted operating expenses increased 2.8%1. On a constant currency basis5, adjusted operating expenses increased 2.4%. Foreign exchange rates increased both International Foodservice Operations operating expense by $11 million and total Sysco operating expense by $11 million during the year. Operating income increased 16.5% to $437 million, and adjusted operating income increased 18.9% to $585 million1. On a constant currency basis5, adjusted operating income increased 18.9% to $585 million. Foreign exchange rates had no impact on International Foodservice Operations operating income and decreased total Sysco operating income by $2 million during the year. Balance Sheet, Cash Flow and Capital Spending As of the end of the quarter, the company had a cash balance of $1.1 billion and total liquidity of $3.8 billion. Debt to net earnings was approximately 7.3 times, and Net Debt to adjusted EBITDA7 was approximately 2.9 times. During the fiscal year, Sysco returned $2.3 billion to shareholders via $1.3 billion of share repurchases and $1.0 billion of dividends. Cash flow from operations was $2.5 billion and free cash flow4 was $1.8 billion for the fiscal year. Capital expenditures, net of proceeds from sales of plant and equipment, for fiscal year 2025 were $692 million. 7 Net debt to adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our net debt to adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of adjusted EBITDA. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release. Conference Call & Webcast Sysco will host a conference call to review the company's fourth quarter and full fiscal year 2025 financial results on Tuesday, July 29, 2025, at 10:00 a.m. Eastern Daylight Time. A live webcast of the call, accompanying slide presentation and a copy of this news release will be available online at Key Highlights: 13-Week Period Ended 52-Week Period Ended Financial Comparison: June 28, 2025 Change June 28, 2025 Change GAAP: Sales $21.1 billion 2.8% $81.4 billion 3.2% Gross Profit $4.0 billion 3.9% $15.0 billion 2.5% Gross Margin 18.9% 19 bps 18.4% -13 bps Operating Expenses $3.1 billion 8.2% $11.9 billion 4.2% Operating Income $889 million -9.0% $3.1 billion -3.6% Operating Margin 4.2% -54 bps 3.8% -26 bps Net Earnings $531 million -13.2% $1.8 billion -6.5% Diluted Earnings Per Share $1.10 -10.6% $3.73 -4.1% Non-GAAP (1): Adjusted Operating Expenses $2.9 billion 4.9% $11.4 billion 2.9% Adjusted Operating Income $1.1 billion 1.1% $3.5 billion 1.2% Adjusted Operating Margin 5.2% -9 bps 4.3% -9 bps EBITDA $1.1 billion -6.5% $4.0 billion -1.2% Adjusted EBITDA $1.3 billion 1.8% $4.3 billion 2.4% Adjusted Net Earnings $716 million 3.3% $2.2 billion 0.8% Adjusted Diluted Earnings Per Share (2) $1.48 6.5% $4.46 3.5% Case Growth: U.S. Foodservice -0.3% 0.5% Local -1.5% -1.4% Sysco Brand Sales as a % of Cases (3): U.S. Broadline 35.4% -114 bps 35.8% -81 bps Local 46.0% -106 bps 46.2% -81 bps Note: (1) Reconciliations of all non-GAAP financial measures to the nearest respective GAAP financial measures are included at the end of this release. (2) Individual components in the table above may not sum to the totals due to the rounding. (3) Amounts reflect the impact of current customer classifications; prior period history has been reclassified to match the current period customer Statements Statements made in this press release or in our earnings call for the fourth quarter of fiscal year 2025 that look forward in time or that express management's beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements include statements concerning: our expectations regarding future improvements in productivity; our belief that improvements in our organizational capabilities will deliver compelling outcomes in future periods; our expectations that our transformational agenda will drive long-term growth; our expectations regarding foot traffic and volume growth and benefits to gross margins; our expectations regarding the continuation of an inflationary environment; our expectations regarding improvements in the efficiency of our supply chain; our expectations regarding the impact of our Recipe for Growth strategy and the pace of progress in implementing the initiatives under that strategy; our expectations regarding Sysco's ability to outperform the market in future periods; our expectations that our strategic priorities will enable us to grow faster than the market; our expectations regarding our efforts to reduce overtime rates and the incremental investments in hiring; our plans to improve the capabilities of our sales team; our plans to refine our engineering labor standards; our ability to deliver against our strategic priorities, including strategic sourcing efforts; economic trends in the United States and abroad; our belief that there is further opportunity for profit in the future; our future growth, including growth in sales and earnings per share; the pace of implementation of our business transformation initiatives; our expectations regarding our ability to execute our balanced approach to capital allocation and rewarding our shareholders, including the size and timing of our share repurchase plan; our plans to improve colleague hiring, retention, training and productivity; our expectations regarding our long-term financial outlook; our expectations of the effects labor harmony will have on sales and case volume, as well as mitigation expenses; our expectations for customer acquisition and retention; our expectations regarding the effectiveness of our Global Support Center expense control measures; and our expectations regarding the growth and resilience of our food away from home market. It is important to note that actual results could differ materially from those estimated in or implied by such forward-looking statements based on numerous factors, including those outside of Sysco's control. Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties, estimates, and assumptions. Risks and uncertainties include without limitation: the impact of geopolitical, economic and market conditions and developments, including changes in global trade policies and tariffs; risks related to our business initiatives; periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability generally; risks related to our efforts to implement our transformation initiatives and meet our other long-term strategic objectives; risk of interruption of supplies and increase in product costs; risks related to changes in consumer eating habits; and impact of natural disasters or adverse weather conditions, public health crises, adverse publicity or lack of confidence in our products, and product liability claims. Therefore, you should not place undue reliance on any of the forward-looking statements contained herein. For more information on these risks and other concerning factors that could cause actual results to differ from those expressed or forecasted, see our Annual Report on Form 10-K for the year ended June 29, 2024, as filed with the SEC, and our subsequent filings with the SEC. We do not undertake to update our forward-looking statements, except as required by applicable law. About Sysco Sysco is the global leader in selling, marketing and distributing food and related products to customers who prepare meals away from home. This includes restaurants, healthcare and educational facilities, lodging establishments, entertainment venues, and more. Sysco operates 337 distribution centers, in 10 countries, with 75,000 colleagues serving approximately 730,000 customer locations. The company generated sales of more than $81 billion in fiscal year 2025 that ended June 28, 2025. As the world's largest food-away-from-home distributor, Sysco offers customized supply chain solutions, bespoke specialty product offerings, and culinary support to drive customers to innovate and optimize their operations. We act as a trusted business partner to our customers, helping them grow through our industry-leading portfolio that includes fresh produce, premium proteins, specialty products, sustainably focused items, equipment and supplies, and innovative culinary solutions. For more information, visit For important news and key information for Sysco investors, visit the Investor Relations section of the company's website at SYY-INVESTORS Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED RESULTS OF OPERATIONS(In Millions, Except for Share and Per Share Data) 13-Week Period Ended 52-Week Period Ended Jun. 28, 2025 Jun. 29, 2024 Jun. 28, 2025 Jun. 29, 2024 (Unaudited) (Unaudited) (Unaudited) Sales $ 21,138 $ 20,556 $ 81,370 $ 78,844 Cost of sales 17,152 16,718 66,401 64,236 Gross profit 3,986 3,838 14,969 14,608 Operating expenses 3,097 2,861 11,881 11,406 Operating income 889 977 3,088 3,202 Interest expense 166 165 635 607 Other expense (income), net 6 8 38 30 Earnings before income taxes 717 804 2,415 2,565 Income taxes 186 192 587 610 Net earnings $ 531 $ 612 $ 1,828 $ 1,955 Net earnings: Basic earnings per share $ 1.10 $ 1.23 $ 3.74 $ 3.90 Diluted earnings per share 1.10 1.23 3.73 3.89 Average shares outstanding 482,335,556 495,872,056 488,144,333 501,238,422 Diluted shares outstanding 483,381,310 497,464,115 489,825,648 503,096,086Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED BALANCE SHEETS(In Millions, Except for Share Data) Jun. 28, 2025 Jun. 29, 2024 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 1,071 $ 696 Accounts receivable, less allowances of $17 and $54 5,502 5,324 Inventories 5,053 4,678 Prepaid expenses and other current assets 338 323 Income tax receivable 4 22 Total current assets 11,968 11,043 Plant and equipment at cost, less accumulated depreciation 6,084 5,497 Other long-term assets Goodwill 5,231 5,153 Intangibles, less amortization 1,080 1,188 Deferred income taxes 497 445 Operating lease right-of-use assets, net 1,131 923 Other assets 783 668 Total other long-term assets 8,722 8,377 Total assets $ 26,774 $ 24,917 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 6,512 $ 6,290 Accrued expenses 2,268 2,226 Accrued income taxes 51 131 Current operating lease liabilities 136 125 Current maturities of long-term debt 949 469 Total current liabilities 9,916 9,241 Long-term liabilities Long-term debt 12,360 11,513 Deferred income taxes 345 345 Long-term operating lease liabilities 1,049 838 Other long-term liabilities 1,247 1,089 Total long-term liabilities 15,001 13,785 Commitments and contingencies Noncontrolling interest 27 31 Shareholders' equity Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none — — Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares 765 765 Paid-in capital 1,986 1,908 Retained earnings 13,061 12,260 Accumulated other comprehensive loss (1,098 ) (1,339 ) Treasury stock at cost, 287,678,658 and 273,416,685 shares (12,884 ) (11,734 ) Total shareholders' equity 1,830 1,860 Total liabilities and shareholders' equity $ 26,774 $ 24,917 Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED CASH FLOWS(In Millions) 52-Week Period Ended Jun. 28, 2025 Jun. 29, 2024 Cash flows from operating activities: (Unaudited) Net earnings $ 1,828 $ 1,955 Adjustments to reconcile net earnings to cash provided by operating activities: Share-based compensation expense 93 104 Depreciation and amortization 945 873 Operating lease asset amortization 141 124 Amortization of debt issuance and other debt-related costs 15 19 Deferred income taxes (13 ) 27 Provision for losses on receivables 85 57 Goodwill impairment 92 — Other non-cash items (100 ) (12 ) Additional changes in certain assets and liabilities, net of effect of businesses acquired: Increase in receivables (206 ) (110 ) Increase in inventories (330 ) (70 ) (Increase) decrease in prepaid expenses and other current assets (22 ) (2 ) Increase in accounts payable 143 104 (Decrease) increase in accrued expenses (14 ) (12 ) Decrease in operating lease liabilities (177 ) (144 ) (Decrease) increase in accrued income taxes (62 ) 13 Decrease in other assets 18 38 Increase in other long-term liabilities 74 25 Net cash provided by operating activities 2,510 2,989 Cash flows from investing activities: Additions to plant and equipment (906 ) (832 ) Proceeds from sales of plant and equipment 214 79 Acquisition of businesses, net of cash acquired (40 ) (1,210 ) Purchase of marketable securities (32 ) (33 ) Proceeds from sales of marketable securities 29 29 Other investing activities 18 5 Net cash used for investing activities (717 ) (1,962 ) Cash flows from financing activities: Bank and commercial paper borrowings, net 45 200 Other debt borrowings including senior notes 1,254 1,362 Other debt repayments including senior notes (549 ) (447 ) Proceeds from stock option exercises 110 120 Stock repurchases (1,250 ) (1,232 ) Dividends paid (1,000 ) (1,008 ) Other financing activities (1) (22 ) (33 ) Net cash (used for) provided by financing activities (1,412 ) (1,038 ) Effect of exchange rates on cash, cash equivalents and restricted cash 22 (10 ) Net increase (decrease) in cash, cash equivalents and restricted cash 403 (21 ) Cash, cash equivalents and restricted cash at beginning of period 945 966 Cash, cash equivalents and restricted cash at end of period $ 1,348 $ 945 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 629 $ 557 Income taxes, net of refunds (2) 640 564 (1) Change includes cash paid for shares withheld to cover taxes, settlement of interest rate hedges, debt issuance costs and other financing activities. (2) Cash paid for income taxes, net for the 52 weeks ended June 28, 2025 includes $190 million of cash paid for the purchase of federal tax Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove (1) restructuring charges; (2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions. Adjustments provided herein for fiscal 2025 results of operations also remove the impact of a goodwill impairment charge. No similar charge was applicable in fiscal 2024. The results of our operations can be impacted due to changes in exchange rates applicable in converting local currencies to U.S. dollars. We measure our results on a constant currency basis. Constant currency operating results are calculated by translating current-period local currency operating results with the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period. We also measure our sales growth excluding the impact of our joint venture in Mexico which was divested in the second quarter of fiscal 2025. Management believes that adjusting its operating expenses, operating income, operating margin, net earnings and diluted earnings per share to remove these Certain Items, presenting its results on a constant currency basis, and adjusting its sales results to exclude the impact of its joint venture in Mexico provides an important perspective with respect to our underlying business trends and results. It provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company's underlying operations and (2) facilitates comparisons on a year-over-year basis. Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of acquisition-related intangible amortization, acquisition costs and due diligence costs for those acquisitions. We believe this approach significantly enhances the comparability of Sysco's results for fiscal year 2025 and fiscal year 2024. Set forth on the following page is a reconciliation of sales, operating expenses, operating income, net earnings and diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not be equal to the total presented when added due to rounding. Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items(Dollars in Millions, Except for Share and Per Share Data) 13-Week Period Ended Jun. 28, 2025 13-Week Period Ended Jun. 29, 2024 Change in Dollars %/bps Change Sales (GAAP) $ 21,138 $ 20,556 $ 582 2.8 % Impact of Mexico joint venture sales — (163 ) 163 0.9 Comparable sales excluding Mexico joint venture (Non-GAAP) $ 21,138 $ 20,393 $ 745 3.7 % Sales (GAAP) $ 21,138 $ 20,556 $ 582 2.8 % Impact of currency fluctuations (1) (100 ) (100 ) (0.5 ) Comparable sales using a constant currency basis (Non-GAAP) $ 21,038 $ 20,556 $ 482 2.3 % Cost of sales (GAAP) $ 17,152 $ 16,718 $ 434 2.6 % Gross profit (GAAP) $ 3,986 $ 3,838 $ 148 3.9 % Impact of currency fluctuations (1) (27 ) (27 ) (0.7 ) Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 3,959 $ 3,838 $ 121 3.2 % Gross margin (GAAP) 18.86 % 18.67 % 19 bps Impact of currency fluctuations (1) (0.04 ) -4 bps Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) 18.82 % 18.67 % 15 bps Operating expenses (GAAP) $ 3,097 $ 2,861 $ 236 8.2 % Impact of restructuring and transformational project costs (2) (75 ) (61 ) (14 ) (23.0 ) Impact of acquisition-related costs (3) (39 ) (45 ) 6 13.3 Impact of goodwill impairment (92 ) — (92 ) NM Operating expenses adjusted for Certain Items (Non-GAAP) 2,891 2,755 136 4.9 Impact of currency fluctuations (1) (23 ) (23 ) (0.8 ) Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 2,868 $ 2,755 $ 113 4.1 % Operating expense as a percentage of sales (GAAP) 14.65 % 13.92 % 73 bps Impact of certain item adjustments (0.97 ) (0.52 ) -45 bps Adjusted operating expense as a percentage of sales (Non-GAAP) 13.68 % 13.40 % 28 bps Operating income (GAAP) $ 889 $ 977 $ (88 ) (9.0) % Impact of restructuring and transformational project costs (2) 75 61 14 23.0 Impact of acquisition-related costs (3) 39 45 (6 ) (13.3 ) Impact of goodwill impairment 92 — 92 NM Operating income adjusted for Certain Items (Non-GAAP) 1,095 1,083 12 1.1 Impact of currency fluctuations (1) (4 ) (4 ) (0.4 ) Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 1,091 $ 1,083 $ 8 0.7 % Operating margin (GAAP) 4.21 % 4.75 % -54 bps Operating margin adjusted for Certain Items (Non-GAAP) 5.18 % 5.27 % -9 bps Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) 5.19 % 5.27 % -8 bps Net earnings (GAAP) $ 531 $ 612 $ (81 ) (13.2) % Impact of restructuring and transformational project costs (2) 75 61 14 23.0 Impact of acquisition-related costs (3) 39 45 (6 ) (13.3 ) Impact of goodwill impairment 92 — 92 NM Tax impact of restructuring and transformational project costs (4) (14 ) (14 ) — — Tax impact of acquisition-related costs (4) (7 ) (11 ) 4 36.4 Tax impact of goodwill impairment (4) (10 ) — (10 ) NM Impact of other non-routine tax adjustments 10 — 10 NM Net earnings adjusted for Certain Items (Non-GAAP) $ 716 $ 693 $ 23 3.3 % Diluted earnings per share (GAAP) $ 1.10 $ 1.23 $ (0.13 ) (10.6) % Impact of restructuring and transformational project costs (2) 0.16 0.12 0.04 33.3 Impact of acquisition-related costs (3) 0.08 0.09 (0.01 ) (11.1 ) Impact of goodwill impairment 0.19 — 0.19 NM Tax impact of restructuring and transformational project costs (4) (0.03 ) (0.03 ) — — Tax impact of acquisition-related costs (4) (0.01 ) (0.02 ) 0.01 50.0 Tax impact of goodwill impairment (4) (0.02 ) — (0.02 ) NM Impact of other non-routine tax adjustments 0.02 — 0.02 NM Diluted earnings per share adjusted for Certain Items (Non-GAAP) (5) $ 1.48 $ 1.39 $ 0.09 6.5 % Diluted shares outstanding 483,381,310 497,464,115 (1) Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results. (2) Fiscal 2025 includes $26 million related to restructuring and severance charges and $49 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2024 includes $28 million related to restructuring and severance charges and $33 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. (3) Fiscal 2025 includes $36 million of intangible amortization expense and $3 million in acquisition and due diligence costs. Fiscal 2024 includes $37 million of intangible amortization expense and $8 million in acquisition and due diligence costs. (4) The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. (5) Individual components of diluted earnings per share may not equal the total presented when added due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. NM Represents that the percentage change is not Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items(Dollars in Millions, Except for Share and Per Share Data) 52-Week Period Ended Jun. 28, 2025 52-Week Period Ended Jun. 29, 2024 Change in Dollars %/bps Change Sales (GAAP) $ 81,370 $ 78,844 $ 2,526 3.2 % Impact of Mexico joint venture sales (207 ) (536 ) 329 0.4 Comparable sales excluding Mexico joint venture (Non-GAAP) $ 81,163 $ 78,308 $ 2,855 3.6 % Sales (GAAP) $ 81,370 $ 78,844 $ 2,526 3.2 % Impact of currency fluctuations (1) 33 33 — Comparable sales using a constant currency basis (Non-GAAP) $ 81,403 $ 78,844 $ 2,559 3.2 % Cost of sales (GAAP) $ 66,401 $ 64,236 $ 2,165 3.4 % Gross profit (GAAP) $ 14,969 $ 14,608 $ 361 2.5 % Impact of currency fluctuations (1) (10 ) (10 ) (0.1 ) Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 14,959 $ 14,608 $ 351 2.4 % Gross margin (GAAP) 18.40 % 18.53 % -13 bps Impact of currency fluctuations (1) (0.02 ) -2 bps Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) 18.38 % 18.53 % -15 bps Operating expenses (GAAP) $ 11,881 $ 11,406 $ 475 4.2 % Impact of restructuring and transformational project costs (2) (183 ) (120 ) (63 ) (52.5 ) Impact of acquisition-related costs (3) (160 ) (159 ) (1 ) (0.6 ) Impact of goodwill impairment (92 ) — (92 ) NM Operating expenses adjusted for Certain Items (Non-GAAP) 11,446 11,127 319 2.9 Impact of currency fluctuations (1) (11 ) (11 ) (0.1 ) Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 11,435 $ 11,127 $ 308 2.8 % Operating expense as a percentage of sales (GAAP) 14.60 % 14.47 % 13 bps Impact of certain item adjustments (0.53 ) (0.36 ) -17 bps Adjusted operating expense as a percentage of sales (Non-GAAP) 14.07 % 14.11 % -4 bps Operating income (GAAP) $ 3,088 $ 3,202 $ (114 ) (3.6) % Impact of restructuring and transformational project costs (2) 183 120 63 52.5 Impact of acquisition-related costs (3) 160 159 1 0.6 Impact of goodwill impairment 92 — 92 NM Operating income adjusted for Certain Items (Non-GAAP) 3,523 3,481 42 1.2 Impact of currency fluctuations (1) 2 2 0.1 Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 3,525 $ 3,481 $ 44 1.3 % Operating margin (GAAP) 3.80 % 4.06 % -26 bps Operating margin adjusted for Certain Items (Non-GAAP) 4.33 % 4.42 % -9 bps Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) 4.33 % 4.42 % -9 bps Net earnings (GAAP) $ 1,828 $ 1,955 $ (127 ) (6.5) % Impact of restructuring and transformational project costs (2) 183 120 63 52.5 Impact of acquisition-related costs (3) 160 159 1 0.6 Impact of goodwill impairment 92 — 92 NM Tax impact of restructuring and transformational project costs (4) (42 ) (29 ) (13 ) (44.8 ) Tax impact of acquisition-related costs (4) (37 ) (38 ) 1 2.6 Tax impact of goodwill impairment (4) (10 ) — (10 ) NM Impact of other non-routine tax adjustments 10 — 10 NM Net earnings adjusted for Certain Items (Non-GAAP) $ 2,184 $ 2,167 $ 17 0.8 % Diluted earnings per share (GAAP) $ 3.73 $ 3.89 $ (0.16 ) (4.1) % Impact of restructuring and transformational project costs (2) 0.37 0.24 0.13 54.2 Impact of acquisition-related costs (3) 0.33 0.32 0.01 3.1 Impact of goodwill impairment 0.19 — 0.19 NM Tax impact of restructuring and transformational project costs (4) (0.09 ) (0.06 ) (0.03 ) (50.0 ) Tax impact of acquisition-related costs (4) (0.08 ) (0.08 ) — — Tax impact of goodwill impairment (4) (0.02 ) — (0.02 ) NM Impact of other non-routine tax adjustments 0.02 — 0.02 NM Diluted earnings per share adjusted for Certain Items (Non-GAAP) (5) $ 4.46 $ 4.31 $ 0.15 3.5 % Diluted shares outstanding 489,825,648 503,096,086 (1) Represents a constant currency adjustment which eliminates the impact of foreign currency fluctuations on the current year results. (2) Fiscal 2025 includes $57 million related to restructuring and severance charges and $126 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2024 includes $56 million related to restructuring and severance charges and $64 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. (3) Fiscal 2025 includes $133 million of intangible amortization expense and $27 million in acquisition and due diligence costs. Fiscal 2024 includes $128 million of intangible amortization expense and $31 million in acquisition and due diligence costs. (4) The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. (5) Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. NM Represents that the percentage change is not Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Millions) 13-Week Period Ended Jun. 28, 2025 13-Week Period Ended Jun. 29, 2024 Change in Dollars %/bps Change U.S. FOODSERVICE OPERATIONS Sales (GAAP) $ 14,759 $ 14,413 $ 346 2.4 % Gross profit (GAAP) 2,872 2,793 79 2.8 % Gross margin (GAAP) 19.46 % 19.38 % 8 bps Operating expenses (GAAP) $ 1,851 $ 1,751 $ 100 5.7 % Impact of restructuring and transformational project costs (1) (19 ) (4 ) (15 ) NM Impact of acquisition-related costs (2) (18 ) (20 ) 2 10.0 Operating expenses adjusted for Certain Items (Non-GAAP) $ 1,814 $ 1,727 $ 87 5.0 % Operating income (GAAP) $ 1,021 $ 1,042 $ (21 ) (2.0) % Impact of restructuring and transformational project costs (1) 19 4 15 NM Impact of acquisition-related costs (2) 18 20 (2 ) (10.0 ) Operating income adjusted for Certain Items (Non-GAAP) $ 1,058 $ 1,066 $ (8 ) (0.8 )% INTERNATIONAL FOODSERVICE OPERATIONS Sales (GAAP) $ 3,927 $ 3,789 $ 138 3.6 % Impact of Mexico joint venture sales — (163 ) 163 4.7 Comparable sales excluding Mexico joint venture (Non-GAAP) $ 3,927 $ 3,626 $ 301 8.3 % Sales (GAAP) $ 3,927 $ 3,789 $ 138 3.6 % Impact of currency fluctuations (3) (101 ) (101 ) (2.6 ) Comparable sales using a constant currency basis (Non-GAAP) $ 3,826 $ 3,789 $ 37 1.0 % Gross profit (GAAP) $ 847 $ 787 $ 60 7.6 % Impact of currency fluctuations (3) (27 ) (27 ) (3.4 ) Comparable gross profit using a constant currency basis (Non-GAAP) $ 820 $ 787 $ 33 4.2 % Gross margin (GAAP) 21.57 % 20.77 % 80 bps Impact of currency fluctuations (3) (0.14 ) -14 bps Comparable gross margin using a constant currency basis (Non-GAAP) 21.43 % 20.77 % 66 bps Operating expenses (GAAP) $ 702 $ 672 $ 30 4.5 % Impact of restructuring and transformational project costs (4) (34 ) (30 ) (4 ) (13.3 ) Impact of acquisition-related costs (5) (18 ) (19 ) 1 5.3 Operating expenses adjusted for Certain Items (Non-GAAP) 650 623 27 4.3 Impact of currency fluctuations (3) (23 ) (23 ) (3.7 ) Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 627 $ 623 $ 4 0.6 % Operating income (GAAP) $ 145 $ 115 $ 30 26.1 % Impact of restructuring and transformational project costs (4) 34 30 4 13.3 Impact of acquisition-related costs (5) 18 19 (1 ) (5.3 ) Operating income adjusted for Certain Items (Non-GAAP) 197 164 33 20.1 Impact of currency fluctuations (3) (4 ) (4 ) (2.4 ) Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 193 $ 164 $ 29 17.7 % SYGMA Sales (GAAP) $ 2,164 $ 2,044 $ 120 5.9 % Gross profit (GAAP) 170 163 7 4.3 % Gross margin (GAAP) 7.86 % 7.97 % -11 bps Operating expenses (GAAP) $ 143 $ 137 $ 6 4.4 % Operating income (GAAP) 27 26 1 3.8 % OTHER Sales (GAAP) $ 288 $ 310 $ (22 ) (7.1) % Gross profit (GAAP) 69 85 (16 ) (18.8) % Gross margin (GAAP) 23.96 % 27.42 % -346 bps Operating expenses (GAAP) $ 151 $ 72 $ 79 NM Impact of restructuring and transformational project costs (6) — (10 ) 10 NM Impact of goodwill impairment (92 ) — (92 ) NM Operating expenses adjusted for Certain Items (Non-GAAP) $ 59 $ 62 $ (3 ) (4.8) % Operating (loss) income (GAAP) $ (82 ) $ 13 $ (95 ) NM Impact of restructuring and transformational project costs (6) — 10 (10 ) NM Impact of goodwill impairment 92 — 92 NM Operating income adjusted for Certain Items (Non-GAAP) $ 10 $ 23 $ (13 ) (56.5) % GLOBAL SUPPORT CENTER Gross profit (GAAP) $ 28 $ 9 $ 19 NM Operating expenses (GAAP) $ 250 $ 228 $ 22 9.6 % Impact of restructuring and transformational project costs (7) (22 ) (17 ) (5 ) (29.4 ) Impact of acquisition-related costs (8) (3 ) (6 ) 3 50.0 Operating expenses adjusted for Certain Items (Non-GAAP) $ 225 $ 205 $ 20 9.8 % Operating loss (GAAP) $ (222 ) $ (219 ) $ (3 ) (1.4) % Impact of restructuring and transformational project costs (7) 22 17 5 29.4 Impact of acquisition-related costs (8) 3 6 (3 ) (50.0 ) Operating loss adjusted for Certain Items (Non-GAAP) $ (197 ) $ (196 ) $ (1 ) (0.5) % TOTAL SYSCO Sales (GAAP) $ 21,138 $ 20,556 $ 582 2.8 % Gross profit (GAAP) 3,986 3,838 148 3.9 % Gross margin (GAAP) 18.86 % 18.67 % 19 bps Operating expenses (GAAP) $ 3,097 $ 2,861 $ 236 8.2 % Impact of restructuring and transformational project costs (1) (4) (6) (7) (75 ) (61 ) (14 ) (23.0 ) Impact of acquisition-related costs (2) (5) (8) (39 ) (45 ) 6 13.3 Impact of goodwill impairment (92 ) — (92 ) NM Operating expenses adjusted for Certain Items (Non-GAAP) $ 2,891 $ 2,755 $ 136 4.9 % Operating income (GAAP) $ 889 $ 977 $ (88 ) (9.0 )% Impact of restructuring and transformational project costs (1) (4) (6) (7) 75 61 14 23.0 Impact of acquisition-related costs (2) (5) (8) 39 45 (6 ) (13.3 ) Impact of goodwill impairment 92 — 92 NM Operating income adjusted for Certain Items (Non-GAAP) $ 1,095 $ 1,083 $ 12 1.1 %(1) Primarily represents severance and transformation initiative costs. (2) Fiscal 2025 and fiscal 2024 include intangible amortization expense and acquisition costs. (3) Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. (4) Includes restructuring and transformation costs primarily in Europe. (5) Primarily represents intangible amortization expense and acquisition costs. (6) Primarily represents restructuring costs. (7) Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. (8) Represents due diligence costs. NM Represents that the percentage change is not Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Millions) 52-Week Period Ended Jun. 28, 2025 52-Week Period Ended Jun. 29, 2024 Change in Dollars %/bps Change U.S. FOODSERVICE OPERATIONS Sales (GAAP) $ 56,965 $ 55,339 $ 1,626 2.9 % Gross profit (GAAP) 10,875 10,708 167 1.6 % Gross margin (GAAP) 19.09 % 19.35 % -26 bps Operating expenses (GAAP) $ 7,359 $ 7,035 $ 324 4.6 % Impact of restructuring and transformational project costs (1) (45 ) (10 ) (35 ) NM Impact of acquisition-related costs (2) (71 ) (61 ) (10 ) (16.4 ) Operating expenses adjusted for Certain Items (Non-GAAP) $ 7,243 $ 6,964 $ 279 4.0 % Operating income (GAAP) $ 3,516 $ 3,673 $ (157 ) (4.3 )% Impact of restructuring and transformational project costs (1) 45 10 35 NM Impact of acquisition-related costs (2) 71 61 10 16.4 Operating income adjusted for Certain Items (Non-GAAP) $ 3,632 $ 3,744 $ (112 ) (3.0 )% INTERNATIONAL FOODSERVICE OPERATIONS Sales (GAAP) $ 14,905 $ 14,561 $ 344 2.4 % Impact of Mexico joint venture sales (207 ) (536 ) 329 2.4 Comparable sales excluding Mexico joint venture (Non-GAAP) $ 14,698 $ 14,025 $ 673 4.8 % Sales (GAAP) $ 14,905 $ 14,561 $ 344 2.4 % Impact of currency fluctuations (3) 29 29 0.2 Comparable sales using a constant currency basis (Non-GAAP) $ 14,934 $ 14,561 $ 373 2.6 % Gross profit (GAAP) $ 3,109 $ 2,947 $ 162 5.5 % Impact of currency fluctuations (3) (11 ) (11 ) (0.4 ) Comparable gross profit using a constant currency basis (Non-GAAP) $ 3,098 $ 2,947 $ 151 5.1 % Gross margin (GAAP) 20.86 % 20.24 % 62 bps Impact of currency fluctuations (3) (0.12 ) -12 bps Comparable gross margin using a constant currency basis (Non-GAAP) 20.74 % 20.24 % 50 bps Operating expenses (GAAP) $ 2,672 $ 2,572 $ 100 3.9 % Impact of restructuring and transformational project costs (4) (74 ) (45 ) (29 ) (64.4 ) Impact of acquisition-related costs (5) (74 ) (72 ) (2 ) (2.8 ) Operating expenses adjusted for Certain Items (Non-GAAP) 2,524 2,455 69 2.8 Impact of currency fluctuations (3) (11 ) (11 ) (0.4 ) Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 2,513 $ 2,455 $ 58 2.4 % Operating income (GAAP) $ 437 $ 375 $ 62 16.5 % Impact of restructuring and transformational project costs (4) 74 45 29 64.4 Impact of acquisition-related costs (5) 74 72 2 2.8 Operating income adjusted for Certain Items (Non-GAAP) 585 492 93 18.9 Impact of currency fluctuations (3) — — — Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 585 $ 492 $ 93 18.9 % SYGMA Sales (GAAP) $ 8,410 $ 7,768 $ 642 8.3 % Gross profit (GAAP) 662 617 45 7.3 % Gross margin (GAAP) 7.87 % 7.94 % -7 bps Operating expenses (GAAP) $ 581 $ 545 $ 36 6.6 % Operating income (GAAP) 81 72 9 12.5 % OTHER Sales (GAAP) $ 1,090 $ 1,176 $ (86 ) (7.3 )% Gross profit (GAAP) 266 307 (41 ) (13.4 )% Gross margin (GAAP) 24.40 % 26.11 % -171 bps Operating expenses (GAAP) $ 339 $ 267 $ 72 27.0 % Impact of restructuring and transformational project costs (6) — (10 ) 10 NM Impact of goodwill impairment (92 ) — (92 ) NM Operating expenses adjusted for Certain Items (Non-GAAP) $ 247 $ 257 $ (10 ) (3.9 )% Operating (loss) income (GAAP) $ (73 ) $ 40 $ (113 ) NM Impact of restructuring and transformational project costs (6) — 10 (10 ) NM Impact of goodwill impairment (92 ) — (92 ) NM Operating income adjusted for Certain Items (Non-GAAP) $ 19 $ 50 $ (31 ) (62.0 )% GLOBAL SUPPORT CENTER Gross profit (GAAP) $ 57 $ 28 $ 29 NM Operating expenses (GAAP) $ 930 $ 986 $ (56 ) (5.7 )% Impact of restructuring and transformational project costs (7) (64 ) (55 ) (9 ) (16.4 ) Impact of acquisition-related costs (8) (15 ) (26 ) 11 42.3 Operating expenses adjusted for Certain Items (Non-GAAP) $ 851 $ 905 $ (54 ) (6.0 )% Operating loss (GAAP) $ (873 ) $ (958 ) $ 85 8.9 % Impact of restructuring and transformational project costs (7) 64 55 9 16.4 Impact of acquisition-related costs (8) 15 26 (11 ) (42.3 ) Operating loss adjusted for Certain Items (Non-GAAP) $ (794 ) $ (877 ) $ 83 9.5 % TOTAL SYSCO Sales (GAAP) $ 81,370 $ 78,844 $ 2,526 3.2 % Gross profit (GAAP) 14,969 14,608 361 2.5 % Gross margin (GAAP) 18.40 % 18.53 % -13 bps Operating expenses (GAAP) $ 11,881 $ 11,406 $ 475 4.2 % Impact of restructuring and transformational project costs (1) (4) (6) (7) (183 ) (120 ) (63 ) (52.5 ) Impact of acquisition-related costs (2) (5) (8) (160 ) (159 ) (1 ) (0.6 ) Impact of goodwill impairment (92 ) — (92 ) NM Operating expenses adjusted for Certain Items (Non-GAAP) $ 11,446 $ 11,127 $ 319 2.9 % Operating income (GAAP) $ 3,088 $ 3,202 $ (114 ) (3.6 )% Impact of restructuring and transformational project costs (1) (4) (6) (7) 183 120 63 52.5 Impact of acquisition-related costs (2) (5) (8) 160 159 1 0.6 Impact of goodwill impairment 92 — 92 NM Operating income adjusted for Certain Items (Non-GAAP) $ 3,523 $ 3,481 $ 42 1.2 %(1) Primarily represents severance and transformation costs. (2) Fiscal 2025 and fiscal 2024 include intangible amortization expense and acquisition costs. (3) Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. (4) Includes restructuring and transformation costs primarily in Europe. (5) Primarily represents intangible amortization expense and acquisition costs. (6) Primarily represents restructuring costs. (7) Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. (8) Represents due diligence costs. NM Represents that the percentage change is not meaningful. Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Free Cash Flow(In Millions) Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Sysco considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should not be used as a substitute for the most comparable GAAP financial measure in assessing the company's liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities. 52-Week Period Ended Jun. 28, 2025 52-Week Period Ended Jun. 29, 2024 52-Week Period Change in Dollars Net cash provided by operating activities (GAAP) $ 2,510 $ 2,989 $ (479 ) Additions to plant and equipment (906 ) (832 ) (74 ) Proceeds from sales of plant and equipment 214 79 135 Free Cash Flow (Non-GAAP) $ 1,818 $ 2,236 $ (418 ) Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(Dollars in Millions) EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of our underlying performance. As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA plus the impact of Certain Items, excluding certain items related to interest expense, income taxes, depreciation and amortization. Sysco's management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and investors about the profitability of the business, as it facilitates comparison of performance on a consistent basis from period to period by providing a measurement of recurring factors and trends affecting our business. Additionally, it is a commonly used component metric used to inform on capital structure decisions. Adjusted EBITDA should not be used as a substitute for the most comparable GAAP financial measure in assessing the company's financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the tables that follow, adjusted EBITDA for each period presented is reconciled to net earnings. 13-Week Period Ended Jun. 28, 2025 13-Week Period Ended Jun. 29, 2024 Change in Dollars % Change Net earnings (GAAP) $ 531 $ 612 $ (81 ) (13.2 )% Interest (GAAP) 166 165 1 0.6 Income taxes (GAAP) 186 192 (6 ) (3.1 ) Depreciation and amortization (GAAP) 234 226 8 3.5 EBITDA (Non-GAAP) $ 1,117 $ 1,195 $ (78 ) (6.5 )% Certain Item adjustments: Impact of restructuring and transformational project costs (1) 74 60 14 23.3 Impact of acquisition-related costs (2) 3 8 (5 ) (62.5 ) Impact of goodwill impairment 92 — 92 NM EBITDA adjusted for Certain Items (Non-GAAP) (3) $ 1,286 $ 1,263 $ 23 1.8 % Other expense (income), net 6 8 (2 ) (25.0 ) Depreciation and amortization, as adjusted (Non-GAAP) (4) (197 ) (188 ) (9 ) (4.8 ) Operating income adjusted for Certain Items (Non-GAAP) $ 1,095 $ 1,083 $ 12 1.1 %(1) Fiscal 2025 and fiscal 2024 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to accelerated depreciation. (2) Fiscal 2025 and fiscal 2024 include acquisition and due diligence costs. (3) In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $8 million and $10 million or non-cash stock compensation expense of $19 million and $27 million in fiscal 2025 and fiscal 2024, respectively. (4) Fiscal 2025 includes $234 million in GAAP depreciation and amortization expense, less $37 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2024 includes $226 million in GAAP depreciation and amortization expense, less $38 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. 52-Week Period Ended Jun. 28, 2025 52-Week Period Ended Jun. 29, 2024 Change in Dollars % Change Net earnings (GAAP) $ 1,828 $ 1,955 $ (127 ) (6.5 )% Interest (GAAP) 635 607 28 4.6 Income taxes (GAAP) 587 610 (23 ) (3.8 ) Depreciation and amortization (GAAP) 945 873 72 8.2 EBITDA (Non-GAAP) $ 3,995 $ 4,045 $ (50 ) (1.2 )% Certain Item adjustments: Impact of restructuring and transformational project costs (1) 179 116 63 54.3 Impact of acquisition-related costs (2) 27 31 (4 ) (12.9 ) Impact of goodwill impairment 92 — 92 NM EBITDA adjusted for Certain Items (Non-GAAP) (3) $ 4,293 $ 4,192 $ 101 2.4 % Other expense (income), net 38 30 8 26.7 Depreciation and amortization, as adjusted (Non-GAAP) (4) (808 ) (741 ) (67 ) (9.0 ) Operating income adjusted for Certain Items (Non-GAAP) $ 3,523 $ 3,481 $ 42 1.2 %(1) Fiscal 2025 and 2024 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to accelerated depreciation. (2) Fiscal 2025 and 2024 include acquisition and due diligence costs. (3) In arriving at adjusted EBITDA, Sysco does not exclude interest income of $29 million and $38 million or non-cash stock compensation expense of $93 million and $104 million for fiscal 2025 and fiscal 2024, respectively. (4) Fiscal 2025 includes $945 million in GAAP depreciation and amortization expense, less $137 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2024 includes $873 million in GAAP depreciation and amortization expense, less $132 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Net Debt to Adjusted EBITDA(In Millions) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. It is an important measure used by management to evaluate our access to liquidity, and we believe it is a representation of our financial strength. Our Net Debt to Adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of Adjusted EBITDA. In the table that follows, we have provided the calculation of our debt and net debt as a ratio of Adjusted EBITDA. Jun. 28, 2025 Current maturities of long-term debt $ 949 Long-term debt 12,360 Total Debt (GAAP) 13,309 Cash & Cash Equivalents (1,071 ) Net Debt (Non-GAAP) $ 12,238 Net Earnings for the previous 12 months (GAAP) $ 1,828 Adjusted EBITDA for the previous 12 months (Non-GAAP) (1) $ 4,293 Total Debt/Net Earnings Ratio (GAAP) 7.28 Total Debt/Adjusted EBITDA Ratio (Non-GAAP) 3.10 Net Debt/Adjusted EBITDA Ratio (Non-GAAP) 2.85 Note: (1) Refer to non-GAAP reconciliation at the end of this release. Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Trailing Twelve Months)(In Millions) 13-Week Period Ended Jun. 28, 2025 13-WeekPeriod EndedMar. 29, 2025 13-WeekPeriod Ended Dec. 28, 2024 13-WeekPeriod Ended Sep. 28, 2024 Total Net earnings (GAAP) $ 531 $ 401 $ 406 $ 490 $ 1,828 Interest (GAAP) 166 149 160 160 635 Income taxes (GAAP) 186 122 127 152 587 Depreciation and amortization (GAAP) 234 238 238 235 945 EBITDA (Non-GAAP) $ 1,117 $ 910 $ 931 $ 1,037 $ 3,995 Certain Item adjustments: Impact of restructuring and transformational project costs (1) 74 49 30 26 179 Impact of acquisition-related costs (2) 3 10 8 6 27 Impact of goodwill impairment 92 0 0 0 92 EBITDA adjusted for Certain Items (Non-GAAP) (3) $ 1,286 $ 969 $ 969 $ 1,069 $ 4,293(1) Includes charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to accelerated depreciation. (2) Includes acquisition and due diligence costs. (3) In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $8 million or non-cash stock compensation expense of $19 million in Q4 fiscal 2025, interest income of $7 million or non-cash stock compensation expense of $15 million in Q3 fiscal 2025, interest income of $7 million or non-cash stock compensation expense of $30 million in Q2 fiscal 2025, and interest income of $7 million or non-cash stock compensation expense of $30 million in Q1 fiscal 2025. Projected Adjusted EPS Guidance Adjusted earnings per share is a non-GAAP financial measure; however, we cannot predict with certainty certain items that would be included in the most directly comparable GAAP measure for the relevant future periods. Due to these uncertainties, we cannot provide a quantitative reconciliation of projected adjusted EPS to the most directly comparable GAAP financial measure without unreasonable effort. However, we expect to calculate adjusted earnings per share for future periods in the same manner as the reconciliations provided for the historical periods herein. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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SoFi Reports Second Quarter 2025, Accelerates Net Revenue Growth to Record $855 Million, Record Member and Product Growth, and Net Income of $97 Million
SAN FRANCISCO--(BUSINESS WIRE)--SoFi Technologies, Inc. (NASDAQ: SOFI), a member-centric, one-stop shop for digital financial services that helps members borrow, save, spend, invest and protect their money, reported financial results today for its second quarter ended June 30, 2025. 'We had an exceptional second quarter, driving durable growth and strong returns through our relentless focus on product innovation and brand building,' said Anthony Noto, CEO of SoFi. 'We accelerated adjusted net revenue growth to 44% year-over-year, the highest level in over two years, driven by record high new members, as well as new products, and an increase in fee-based revenue. This consistent, disciplined investment across our platform, combined with unmatched products and services, uniquely positions us to capture the massive and expanding opportunities ahead. Looking forward, we are focusing on innovating faster than ever before to serve more of our members' needs and increasing our financial guidance for 2025.' Consolidated Results Summary ____________________ (1) For more information and reconciliations of these non-GAAP measures to the most comparable GAAP measures, see 'Non-GAAP Financial Measures' and Table 2 to the 'Financial Tables' herein. Expand Product Highlights Set New Records in Members and Products. A record 850,000 new members joined SoFi in the quarter, up 34% from the prior year to 11.7 million. The company added a record 1.26 million new products, up 34% from the prior year to 17.1 million products. Delivering Results by Serving Members' Full Financial Needs. SoFi's integrated one-stop shop financial services model drove consistent member acquisition and product adoption, with 35% of new products opened by existing members. This strategy boosted Financial Services revenue per product by over 50% year-over-year in the second quarter. Products like SoFi Relay, which provides members with fully integrated financial insights; SoFi Money, which offers industry-leading 3.8% APY; and SoFi Invest, which provides expansion of alternative investment opportunities, deliver tangible value and competitive benefits that are seamlessly integrated on SoFi's one-stop shop financial services platform. Demonstrating Successful Diversification and Durable Growth with Record Fee‑Based Revenue. Total fee-based revenue reached a record of $377.5 million, up 72% from the prior year period, driven by strong performance from SoFi's Loan Platform Business (LPB), origination fees, referral fees, interchange revenue and brokerage fee revenue. LPB originated $2.4 billion in loans on behalf of third parties in the second quarter, an increase of 57% from the first quarter, and is now running at an annualized pace of over $9.5 billion in originations and half a billion dollars in high-margin, high-return fee-based revenue, and moved closer to the goal of becoming a billion-dollar revenue business for SoFi. Loan Originations Reach Record-Highs with Expanded Product Innovation. SoFi originated a record $8.8 billion in loans during the quarter, including LPB originations. With enhanced technology and improved fulfillment capabilities, SoFi launched a new personal loan product for prime credit card customers. Personal loan originations were up 66% year-over-year. Student loan originations were up 35% from a year ago with a new flexible student loan refinancing option. With stronger technology, improved fulfillment capabilities, and a recent home equity offering, SoFi home loan originations increased by 92% year-over-year. Transforming the Future of Finance with Crypto and AI Technology. SoFi announced plans to launch blockchain-enabled international money transfers and a return to crypto investing. Also, strategic investments and innovations in AI, with upcoming features like "Cash Coach", will give even more members tools to optimize their finances. Strengthened Brand Awareness to Attract More Members to SoFi's Ecosystem. With continued investment to build SoFi into a trusted household name, unaided brand awareness accelerated to an all-time high of 8.5%. Further Improved Credit Performance. SoFi's annualized charge-off rate decreased from 3.31% to 2.83% for personal loans compared to the first quarter. The on-balance sheet 90-day delinquency rate for personal loans decreased for the fifth consecutive quarter to 0.42%. Consolidated Results SoFi reported a number of key financial achievements. For the second quarter of 2025, GAAP net revenue of $854.9 million increased 43% relative to the prior-year period's $598.6 million. Record adjusted net revenue of $858.2 million grew 44% from the corresponding prior-year period of $597.0 million. For the second quarter of 2025, total fee-based revenue reached a record of $377.5 million, a year-over-year increase of 72%. This was driven by strong performance from our Loan Platform Business, as well as origination fee revenue, referral fee revenue, interchange fee revenue and brokerage fee revenue. Together, the Financial Services and Technology Platform segments generated $472.4 million of net revenue, an increase of 74% from the prior year period. SoFi reported its seventh consecutive quarter of GAAP profitability. For the second quarter of 2025, GAAP net income reached $97.3 million and diluted earnings per share reached $0.08. Second quarter record adjusted EBITDA of $249.1 million increased 81% from the prior year period's $137.9 million. This represents an adjusted EBITDA margin of 29%. All three segments delivered strong contribution profit, at attractive margins. Equity grew by $182.1 million during the quarter, ending at $6.9 billion and $6.16 of book value per share. Tangible book value grew by $193.8 million during the quarter, ending the period at $5.3 billion. Tangible book value per share was $4.72 at quarter-end, up from $3.94 per share in the prior year period. Net interest income of $517.8 million for the second quarter was up 26% year-over-year. This was driven by a 24% increase in average interest-earning assets and a 77 basis point decrease in cost of funds, partially offset by a 56 basis point decrease in average asset yields year-over-year. For the second quarter, net interest margin of 5.86% increased 3 basis points year-over-year from 5.83%. The average rate on deposits in the second quarter was 187 basis points lower than that of warehouse facilities, which translates to approximately $551.9 million of annualized interest expense savings due to the successful remixing of our funding base. Member and Product Growth Continued growth in both total members and products in the second quarter is the result of our continued investments in innovation and brand building and reflects the benefits of our broad product suite and unique Financial Services Productivity Loop (FSPL) strategy. Added a record 850,000 members in the second quarter of 2025, bringing total members over 11.7 million, up 34% from 8.8 million at the end of the same prior year period. Record product additions of 1.26 million in the second quarter of 2025, bringing total products to over 17.1 million, up 34% from 12.8 million at the end of the same prior year period. Financial Services products increased by 35% year-over-year to 14.9 million, primarily driven by continued demand for our SoFi Money, Relay and Invest products, and drove 89% of our total product growth. SoFi Money and SoFi Relay grew to 5.9 million and 5.5 million products, respectively, both representing nearly 40% year-over-year growth. Lending products increased by 28% year-over-year to 2.3 million products, driven primarily by continued demand for personal, student and home loan products. Technology Platform enabled accounts increased 1% year-over-year to 160 million. Financial Services Segment Results For the second quarter of 2025, Financial Services segment net revenue of $362.5 million more than doubled from the prior year period. Net interest income of $193.3 million increased 39% year-over-year, primarily driven by growth in consumer deposits. Noninterest income of $169.2 million more than quadrupled year-over-year, and now represents nearly $680 million in annualized revenue. In the second quarter, SoFi's Loan Platform Business added $130.6 million to our consolidated adjusted net revenue. Of this, $127.4 million was driven by $2.4 billion of personal loans originated on behalf of third parties as well as referrals to third parties. In addition to our Loan Platform Business, SoFi continued to see healthy growth in interchange fee revenue in the second quarter, up 83% year-over-year, as a result of nearly $18 billion in total annualized spend in the quarter across Money and Credit Card. Contribution profit for the second quarter of 2025 reached $188.2 million, a $133.0 million improvement from the prior year period, while contribution margin grew 21 percentage points year-over-year to 52%. This is a reflection of the strong operating leverage generated in the segment, with directly attributable expenses increasing only 50%. ____________________ (1) Contribution margin is defined for each of our reportable segments as contribution profit divided by net revenue. Expand By continuously innovating with new and relevant offerings, features and rewards for members, SoFi grew total Financial Services products by 3.9 million, or 35%, year-over-year, bringing the total to 14.9 million at quarter-end. SoFi Money reached 5.9 million products, Relay reached 5.5 million products and SoFi Invest reached 2.9 million products by the end of the second quarter. Monetization continues to improve with annualized revenue per product of $98 during the second quarter, up 52% year-over-year. In the second quarter of 2025, total deposits grew to $29.5 billion, with nearly 90% of SoFi Money deposits (inclusive of Checking and Savings and cash management accounts) coming from direct deposit members. ____________________ (1) Includes checking and savings accounts held at SoFi Bank, and cash management accounts. (2) Limited to loans wherein we provide third party fulfillment services as part of our Loan Platform Business. Expand Technology Platform Segment Results Technology Platform segment net revenue of $109.8 million for the second quarter of 2025 increased 15% year-over-year. Contribution profit of $33.2 million reflected a contribution margin of 30%. SoFi continues to diversify its Technology Platform client base. Banco Nación, one of Argentina's largest financial institutions, selected our Cyberbank Digital platform to modernize their digital banking infrastructure. ____________________ (1) Contribution margin is defined for each of our reportable segments as contribution profit divided by net revenue. Expand Technology Platform total enabled client accounts increased 1% year-over-year, to 160.0 million up from 158.5 million in the prior-year period. Lending Segment Results For the second quarter of 2025, Lending segment GAAP net revenue of $443.5 million increased 30% from the prior year period, while adjusted net revenue for the segment of $446.8 million increased 32% from the prior year period. Lending segment performance in the second quarter was driven by net interest income, which rose 33% year-over-year, primarily driven by growth in average loan balances of 27%. Lending segment second quarter contribution profit of $244.7 million was up 24% from $197.9 million in the corresponding prior-year period. Lending segment adjusted contribution margin was strong at 55%. This strong performance reflects our ability to capitalize on continued strong demand for our lending products. ____________________ (1) Contribution margin is defined for each of our reportable segments as contribution profit divided by net revenue. (2) For more information and a reconciliation of these non-GAAP financial measures to the most comparable GAAP measure, see 'Non-GAAP Financial Measures' and Table 2 to the 'Financial Tables' herein. Expand Lending – Loans At Fair Value ($ in thousands) Personal Loans Student Loans Home Loans Total June 30, 2025 Unpaid principal $ 18,416,674 $ 10,099,685 $ 359,360 $ 28,875,719 Accumulated interest 132,100 57,581 895 190,576 Cumulative fair value adjustments (1) 1,055,163 584,375 17,137 1,656,675 Total fair value of loans (2)(3) $ 19,603,937 $ 10,741,641 $ 377,392 $ 30,722,970 March 31, 2025 Unpaid principal $ 16,825,564 $ 9,053,359 $ 344,246 $ 26,223,169 Accumulated interest 126,203 49,501 1,069 176,773 Cumulative fair value adjustments (1) 917,463 468,597 11,518 1,397,578 Total fair value of loans (2)(3) $ 17,869,230 $ 9,571,457 $ 356,833 $ 27,797,520 Expand ____________________ (1) During the three months ended June 30, 2025, the cumulative fair value adjustments for personal loans were impacted by a higher unpaid principal balance, a lower weighted average discount rate and a lower weighted average annual default rate, and a lower weighted average conditional prepayment rate, partially offset by a lower weighted average coupon. The lower discount rate was driven by a 25 basis points decrease in benchmark rates offset by 5 basis points of spread widening. The cumulative fair value adjustments for student loans were impacted by a higher unpaid principal balance and a lower weighted average discount rate partially offset by lower weighted average coupon and higher weighted average conditional prepayment rate. The lower discount rate was driven by a 27 basis points decrease in benchmark rates partially offset by 2 basis points of spread widening. (2) Each component of the fair value of loans is impacted by charge-offs during the period. Our fair value assumption for annual default rate incorporates fair value markdowns on loans beginning when they are 10 days or more delinquent, with additional markdowns at 30, 60 and 90 days past due. (3) Student loans are classified as loans held for investment, and personal loans and home loans are classified as loans held for sale. Expand The following table summarizes the significant inputs to the fair value model for personal and student loans: ____________________ (1) Represents the average coupon rate on loans held on balance sheet, weighted by unpaid principal balance outstanding at the balance sheet date. (2) Corresponds with two-year SOFR for personal loans, and four-year SOFR for student loans. Expand For the second quarter of 2025, record origination volume of $8.8 billion increased 64% year-over-year. This was a result of continued strong member demand for personal loans, student loans and home loans as well as strong demand from capital markets partners. Record personal loan originations of $7.0 billion in the second quarter of 2025 were up 66% year-over-year, inclusive of $2.4 billion originated on behalf of third parties through our Loan Platform Business. Second quarter student loan volume of $1.0 billion was up 35% year-over-year. Home equity loan originations were a record during the second quarter, accounting for nearly one-third of total home loan volume. In total, home loan volume was $799 million, an increase of 92% year-over-year. Capital markets activity in the second quarter of 2025 was very strong. Overall, SoFi sold, or transferred through our Loan Platform Business, more than $3.4 billion in total of personal loans and home loans. In terms of personal loans, we closed $200.0 million of sales in whole loan form at a blended execution of 105.8%. In terms of home loan sales, we closed $777 million at a blended execution of 102.2%. In addition to our personal and home loan sales, SoFi executed a $690 million co-contributor securitization of loans previously originated through our Loan Platform Business. This was the second securitization of new collateral in our SoFi Consumer Loan Program (SCLP) since 2021 using collateral originated in the Loan Platform Business. Importantly, this channel provides our partners with meaningful liquidity to support their ongoing investment in the Loan Platform Business. The transaction priced at industry-leading cost-of-funds levels, with a weighted average spread of 101 basis points. Credit performance further strengthened in the second quarter. The on-balance sheet 90 day delinquency rate for personal loans decreased from 46 basis points to 42 basis points, while the on-balance sheet 90 day delinquency rate for student loans was 13 basis points, in line with the prior quarter. Personal loan annualized charge-off rate decreased to 2.83% from 3.31% in the prior quarter, including the impact of asset sales, new originations and the delinquency sales in the quarter. Had SoFi not sold these late stage delinquent loans, it is estimated that, including recoveries, they would have had an all-in annualized net charge-off rate for personal loans of approximately 4.5% vs. 4.8% in the prior quarter. The data continues to support a 7–8% maximum life of loan loss assumption for personal loans, in line with SoFi's underwriting tolerance. Recent vintages, originated from the fourth quarter of 2022 to the third quarter of 2024 have net cumulative losses of 4.23%, with 41% unpaid principal balance remaining. This is well below the 5.75% observed at the same point in time for the 2017 vintage which is the last vintage that approached our 7-8% tolerance. The gap between the newer cohort curve and the 2017 cohort curve improved by 19 basis points, after improving 16 basis points last quarter, demonstrating continued improvement. Additionally, of the first quarter of 2020 through the first quarter of 2025 originations, 60% of principal has already been paid down, with 6.7% in net cumulative losses. Therefore, for life-of-loan losses on this entire cohort of loans to reach 8%, the charge-off rate on the remaining 40% of unpaid principal would need to be approximately 10%. This would be well above past levels, providing further confidence in achieving loss rates below our 8% tolerance. ____________________ (1) Inclusive of origination volume related to our Loan Platform Business. (2) Within each loan product category, average loan balance is defined as the total unpaid principal balance of the loans divided by the number of loans that have a balance greater than zero dollars as of the reporting date. Average loan balance includes loans on our balance sheet, as well as transferred loans and referred loans with which SoFi has continuing involvement through our servicing agreements. Expand Lending – Products June 30, 2025 2024 % Change Personal loans (1) 1,641,340 1,222,230 34 % Student loans 596,351 532,279 12 % Home loans 42,677 32,071 33 % Total lending products 2,280,368 1,786,580 28 % Expand ____________________ (1) Includes loans which we originate as part of our Loan Platform Business. Expand Guidance and Outlook Given the strong first half of the year, management is increasing its 2025 guidance. For the full year 2025, management now expects to deliver adjusted net revenue of approximately $3.375 billion, which is $65 million higher than the top end of the prior guidance range of $3.235 to $3.310 billion. This implies approximately 30% annual growth versus 24% to 27% in our prior guidance. Management expects adjusted EBITDA of approximately $960 million, above prior guidance of $875 to $895 million. This represents an EBITDA margin of 28%. SoFi expects GAAP net income of approximately $370 million, above prior guidance of $320 to $330 million. Lastly, SoFi expects GAAP EPS of approximately $0.31 cents per share, above prior guidance of $0.27 to $0.28 cents per share. This guidance assumes a tax rate of 26% for the remainder of the year. Management expects growth in tangible book value of approximately $640 million. Management expects to add at least 3.0 million new members in 2025, which represents approximately 30% growth from 2024 levels. Management will further address full-year guidance on the quarterly earnings conference call. Management has not reconciled forward-looking non-GAAP measures to their most directly comparable GAAP measures. This is because the company cannot predict with reasonable certainty and without unreasonable efforts the ultimate outcome of certain GAAP components of such reconciliations due to market-related assumptions that are not within our control as well as certain legal or advisory costs, tax costs or other costs that may arise. For these reasons, management is unable to assess the probable significance of the unavailable information, which could materially impact the amount of the future directly comparable GAAP measures. Earnings Webcast SoFi's executive management team will host a live audio webcast beginning at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time) today to discuss the quarter's financial results and business highlights. All interested parties are invited to listen to the live webcast at A replay of the webcast will be available on the SoFi Investor Relations website for 30 days. Investor information, including supplemental financial information, is available on SoFi's Investor Relations website at Cautionary Statement Regarding Forward-Looking Statements Certain of the statements above are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our expectations for third quarter of 2025 and full year 2025 adjusted net revenue, annual growth rate, adjusted EBITDA, adjusted EBITDA margin, GAAP net income, GAAP net income incremental margin, GAAP EPS, tangible book value, and new members, our expectations regarding our ability to continue to grow our business, build our brand and launch new business lines and products, including our plans to launch blockchain and crypto related services and increase our investments and innovations in AI, our ability to continue to attract and execute deals, our ability to continue to improve our financials and increase our member, product and total accounts count, our ability to achieve diversified and more durable growth, including our ability to continue to grow our Loan Platform Business including the goal of the LPB to become a billion-dollar revenue business, our ability to continue the momentum seen in prior financial periods, our ability to have loss rates below 8%, our ability to navigate the macroeconomic, geopolitical and regulatory environment, any changes in demand for our products, and the financial position, business strategy and plans and objectives of management for our future operations. These forward-looking statements are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Words such as 'achieve', 'believe', 'continue', 'expect', 'capable', 'future', 'growth', 'may', 'opportunity', 'plan', 'potential', 'strategy', 'will be', 'will continue', and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: (i) the effect of and our ability to respond and adapt to changing market and economic conditions, including economic downturns, fluctuating inflation and interest rates, and volatility from macroeconomic, global, and political events, including announced or planned tariffs; (ii) our ability to maintain net income profitability, continue to increase fee-based revenue streams, continue to grow across our segments in the future, as well as our ability to meet our guidance; (iii) the impact on our business of the regulatory environment, changes in governmental policies, changes in personnel and resources of the governmental agencies that regulate us, and complexities with compliance related to such environment; (iv) our ability to realize the benefits of being a bank holding company and operating SoFi Bank, including continuing to grow high quality deposits and our rewards program for members; (v) our ability to continue to drive brand awareness and realize the benefits of our marketing and advertising campaigns; (vi) our ability to vertically integrate our businesses and accelerate the pace of innovation of our financial products; (vii) our ability to manage our growth effectively and our expectations regarding the development and expansion of our business; (viii) our ability to access sources of capital on acceptable terms or at all; (ix) the success of our continued investments in our business; (x) our ability to expand our member base and increase our product adds; (xi) our ability to maintain our leadership position in certain categories of our business and to grow market share in existing markets or any new markets we may enter; (xii) our ability to cater to a broad range of clients and continue to execute deals with current or future business partners; (xiii) our ability to develop new products, features and functionality that are competitive and meet market needs; (xiv) our ability to realize the benefits of our strategy, including what we refer to as our FSPL; (xv) our ability to make accurate credit and pricing decisions or effectively forecast our loss rates; (xvi) our ability to establish and maintain an effective system of internal controls over financial reporting; (xvii) our ability to maintain the security and reliability of our products; and (xviii) the outcome of any legal or governmental proceedings instituted against us. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties set forth in the section titled 'Risk Factors' in our last annual report on Form 10-K, as filed with the Securities and Exchange Commission, and those that are included in any of our future filings with the Securities and Exchange Commission. These forward-looking statements are based on information available as of the date hereof and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements. Non-GAAP Financial Measures This press release presents information about certain non-GAAP financial measures provided as supplements to the results provided in accordance with accounting principles generally accepted in the United States (GAAP). Our management and Board of Directors use these non-GAAP measures to evaluate our operating performance, formulate business plans, help better assess our overall liquidity position, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that these non-GAAP measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures. Other companies may not use these non-GAAP measures or may use similar measures that are defined in a different manner. Therefore, SoFi's non-GAAP measures may not be directly comparable to similarly titled measures of other companies. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are provided in Table 2 to the 'Financial Tables' herein. About SoFi SoFi Technologies (NASDAQ: SOFI) is a one-stop shop for digital financial services on a mission to help people achieve financial independence to realize their ambitions. Over 11.7 million members trust SoFi to borrow, save, spend, invest, and protect their money – all in one app – and get access to financial planners, exclusive experiences, and a thriving community. Fintechs, financial institutions, and brands use SoFi's technology platform Galileo to build and manage innovative financial solutions across 160.0 million global accounts. For more information, visit or download our iOS and Android apps. Availability of Other Information About SoFi Investors and others should note that we communicate with our investors and the public using our website ( the investor relations website ( and on social media (X and LinkedIn), including but not limited to investor presentations and investor fact sheets, Securities and Exchange Commission filings, press releases, public conference calls and webcasts. The information that SoFi posts on these channels and websites could be deemed to be material information. As a result, SoFi encourages investors, the media, and others interested in SoFi to review the information that is posted on these channels, including the investor relations website, on a regular basis. This list of channels may be updated from time to time on SoFi's investor relations website and may include additional social media channels. The contents of SoFi's website or these channels, or any other website that may be accessed from its website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. SOFI-F FINANCIAL TABLES (Unaudited) Table 2 Non-GAAP Financial Measures (Unaudited) Adjusted Net Revenue Adjusted net revenue is a non-GAAP measure. Adjusted net revenue is defined as total net revenue, adjusted to exclude the fair value changes in servicing rights and residual interests classified as debt due to valuation inputs and assumptions changes, which relate only to our Lending segment, as well as gains and losses on extinguishment of debt. We adjust total net revenue to exclude these items, as they are non-cash charges that are not realized during the period or not indicative of our core operating performance, and therefore positive or negative changes do not impact the cash available to fund our operations. Management believes this measure is useful because it enables management and investors to assess our underlying operating performance and cash available to fund our operations. In addition, management uses this measure to better decide on the proper expenses to authorize for each of our operating segments, to ultimately help achieve target contribution profit margins. The following table reconciles adjusted net revenue to total net revenue, the most directly comparable GAAP measure: ____________________ (1) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. Moreover, these non-cash charges are unrealized during the period and, therefore, have no impact on our cash flows from operations. (2) Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated securitization VIEs by purchasing residual interests, we receive proceeds at the time of the closing of the securitization and, thereafter, pass along contractual cash flows to the residual interest owner. These residual debt obligations are measured at fair value on a recurring basis, but they have no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. (3) Reflects gain on extinguishment of debt. Gains and losses are recognized during the period of extinguishment for the difference between the net carrying amount of debt extinguished and the fair value of equity securities issued. Expand The following table reconciles adjusted net revenue for the Lending segment to total net revenue, the most directly comparable GAAP measure for the Lending segment: ____________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. Expand Adjusted Noninterest Income Adjusted noninterest income is a non-GAAP measure. Adjusted noninterest income is defined as noninterest income, adjusted to exclude the fair value changes in servicing rights and residual interests classified as debt due to valuation inputs and assumptions changes, which relate only to our Lending segment, as well as gains and losses on extinguishment of debt. We adjust noninterest income to exclude these items, as they are non-cash charges that are not realized during the period or not indicative of our core operating performance, and therefore positive or negative changes do not impact the cash available to fund our operations. Management believes this measure is useful because it enables management and investors to assess our underlying operating performance and cash available to fund our operations. The following table reconciles adjusted noninterest income to noninterest income, the most directly comparable GAAP measure: ____________________ (1) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. Moreover, these non-cash charges are unrealized during the period and, therefore, have no impact on our cash flows from operations. (2) Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated securitization VIEs by purchasing residual interests, we receive proceeds at the time of the closing of the securitization and, thereafter, pass along contractual cash flows to the residual interest owner. These residual debt obligations are measured at fair value on a recurring basis, but they have no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. (3) Reflects gain on extinguishment of debt. Gains and losses are recognized during the period of extinguishment for the difference between the net carrying amount of debt extinguished and the fair value of equity securities issued. Expand The following table reconciles adjusted noninterest income for the Lending segment to noninterest income, the most directly comparable GAAP measure for the Lending segment: ____________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. Expand Adjusted Contribution Margin and Incremental Adjusted Contribution Margin — Lending Adjusted contribution margin and incremental adjusted contribution margin are non-GAAP measures and relate only to our Lending segment. Adjusted contribution margin is defined as segment contribution profit for the Lending segment, divided by adjusted net revenue for the Lending segment, a non-GAAP measure. Incremental adjusted contribution margin is defined as the change in segment contribution profit for our Lending segment, divided by change in adjusted net revenue for the Lending segment. See ' Adjusted Net Revenue' above for a reconciliation of Lending segment adjusted net revenue. Management believes adjusted contribution margin metrics are useful because they enable management and investors to assess the underlying operating performance of our Lending segment, by removing the impact of changes in volume over periods to present a comparable view of segment contribution profit, which is a measure of the direct profitability of each of our reportable segments, as a percentage of segment adjusted net revenue for the Lending segment during each period. The following table presents a reconciliation of adjusted contribution margin and incremental adjusted contribution margin for our reportable Lending segment: ____________________ (1) Contribution margin is defined for each of our reportable segments as contribution profit divided by net revenue. Incremental contribution margin for each of our reportable segments is defined as the change in segment contribution profit divided by change in net revenue. (2) Refer to ' Adjusted Net Revenue ' above for reconciliation of this non-GAAP measure. Expand Adjusted EBITDA, Adjusted EBITDA Margin and Incremental Adjusted EBITDA Margin Adjusted EBITDA, adjusted EBITDA margin and incremental adjusted EBITDA margin are non-GAAP measures. Adjusted EBITDA is defined as net income, adjusted to exclude, as applicable: (i) corporate borrowing-based interest expense (our adjusted EBITDA measure is not adjusted for warehouse or securitization-based interest expense, nor deposit interest expense and finance lease liability interest expense, as these are direct operating expenses), (ii) income tax expense (benefit), (iii) depreciation and amortization, (iv) share-based expense (inclusive of equity-based payments to non-employees), (v) restructuring charges, (vi) impairment expense (inclusive of goodwill impairments and property, equipment and software abandonments), (vii) transaction-related expenses, (viii) foreign currency impacts related to operations in highly inflationary countries, (ix) fair value changes in each of servicing rights and residual interests classified as debt due to valuation assumptions, (x) gain on extinguishment of debt, and (xi) other charges, as appropriate, that are not expected to recur and are not indicative of our core operating performance. Adjusted EBITDA margin is computed as adjusted EBITDA divided by adjusted net revenue. Incremental adjusted EBITDA margin is defined as the change in adjusted EBITDA, divided by change in adjusted net revenue. See ' Adjusted Net Revenue' above for a reconciliation of this non-GAAP measure. Management believes adjusted EBITDA, adjusted EBITDA margin and incremental adjusted EBITDA margin are useful measures for period-over-period comparisons of our business. These measures enable management and investors to assess our core operating performance or results of operations by removing the effects of certain non-cash items and charges, as well as the impact of changes in volume over periods as applicable. In addition, management uses these measures to help evaluate cash flows generated from operations and the extent of additional capital, if any, required to invest in strategic initiatives. The following table reconciles adjusted EBITDA to net income, the most directly comparable GAAP measure, and presents the computations of adjusted EBITDA margin and incremental adjusted EBITDA margin: Three Months Ended June 30, 2025 vs 2024 Six Months Ended June 30, 2025 vs 2024 ($ in thousands) 2025 2024 $ Change 2025 2024 $ Change Net income (GAAP) $ 97,263 $ 17,404 $ 79,859 $ 168,379 $ 105,447 $ 62,932 Non-GAAP adjustments: Interest expense – corporate borrowings (1) 11,504 12,725 (1,221 ) 22,932 23,436 (504 ) Income tax expense (2) 14,929 (2,064 ) 16,993 23,595 4,119 19,476 Depreciation and amortization 56,743 49,623 7,120 112,026 98,162 13,864 Share-based expense 63,256 61,057 2,199 127,012 116,139 10,873 Restructuring charges (3) 36 — 36 887 — 887 Foreign currency impact of highly inflationary subsidiaries (4) 2,066 194 1,872 2,342 368 1,974 Transaction-related expense (5) — 615 (615 ) — 615 (615 ) Servicing rights – change in valuation inputs or assumptions (6) 3,274 (1,654 ) 4,928 2,200 (6,880 ) 9,080 Residual interests classified as debt – change in valuation inputs or assumptions (7) 12 1 11 47 74 (27 ) Gain on extinguishment of debt (8) — — — — (59,194 ) 59,194 Total adjustments 151,820 120,497 31,323 291,041 176,839 114,202 Adjusted EBITDA (non-GAAP) $ 249,083 $ 137,901 $ 111,182 $ 459,420 $ 282,286 $ 177,134 Net income (GAAP) $ 97,263 $ 17,404 $ 79,859 $ 168,379 $ 105,447 $ 62,932 Total net revenue (GAAP) 854,944 598,618 256,326 1,626,703 1,243,613 383,090 Net income margin (GAAP) 11 % 3 % 10 % 8 % Incremental net income margin (GAAP) 31 % 16 % Adjusted EBITDA margin (non-GAAP) 29 % 23 % 28 % 24 % Incremental adjusted EBITDA margin (non-GAAP) 43 % 39 % Expand ____________________ (1) Our adjusted EBITDA measure adjusts for corporate borrowing-based interest expense, as these expenses are a function of our capital structure. Corporate borrowing-based interest expense includes interest on our revolving credit facility, as well as interest expense and the amortization of debt discount and debt issuance costs on our convertible notes. (2) The income tax expense recognized in 2025 is primarily attributable to the Company's profitability and discrete tax benefits for stock compensation recorded in each quarter. (3) Restructuring charges in the three and six months ended June 30, 2025 relate to legal entity restructuring. (4) Foreign currency charges reflect the impacts of highly inflationary accounting for our operations in Argentina, which are related to our Technology Platform segment and commenced in the first quarter of 2022 with the Technisys Merger. (5) Transaction-related expense in the 2024 periods included financial advisory and professional services costs associated with our acquisition of Wyndham. (6) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment, default rates and discount rates. This non-cash change is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, these positive and negative changes in fair value attributable to assumption changes are adjusted out of net income to provide management and financial users with better visibility into the earnings available to finance our operations. (7) Reflects changes in fair value inputs and assumptions, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, which has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, these positive and negative non-cash changes in fair value attributable to assumption changes are adjusted out of net income to provide management and financial users with better visibility into the earnings available to finance our operations. (8) Reflects gain on extinguishment of debt. Gains and losses are recognized during the period of extinguishment for the difference between the net carrying amount of debt extinguished and the fair value of equity securities issued. (9) Refer to ' Adjusted Net Revenue' above for reconciliation of this non-GAAP measure. Expand Tangible Book Value and Tangible Book Value per Common Share Beginning in the fourth quarter of 2024, the Company modified the presentation of its tangible book value and tangible book value per share, which are non-GAAP measures. Tangible book value is defined as permanent equity, adjusted to exclude goodwill and intangible assets, net of related deferred tax liabilities. Tangible book value per common share represents tangible book value at period-end divided by common stock outstanding at period-end. Prior periods were revised to conform with this presentation. These measures are utilized by management in assessing our use of equity and capital adequacy. We believe that tangible book value presents a meaningful measure of net asset value, and tangible book value per share provides additional useful information to investors to assess capital adequacy. The following table reconciles tangible book value to permanent equity, the most directly comparable GAAP measure, and presents the computation of permanent equity per common share and tangible book value per common share for the periods presented: Adjusted Net Income, Adjusted Net Income Margin, Incremental Adjusted Net Income Margin and Adjusted EPS Adjusted net income, adjusted net income margin, incremental adjusted net income margin and adjusted diluted earnings per share are non-GAAP measures. Adjusted net income is defined as net income, adjusted to exclude, as applicable, goodwill impairment expense and certain income tax benefits that are not expected to recur and are not indicative of our core operating performance. Adjusted diluted earnings per share ('adjusted EPS') is a non-GAAP financial measure that adjusts GAAP diluted earnings per share. Adjusted EPS is computed by dividing net income attributable to common stockholders, adjusted to exclude, as applicable, goodwill impairment expense and certain income tax benefits that are not expected to recur and are not indicative of our core operating performance, by the diluted weighted average number of shares of common stock outstanding during the period, excluding the dilutive impact of the 2029 convertible notes under the if-converted method for which the 2029 capped call transactions would deliver shares to offset dilution. Adjusted net income margin is computed as adjusted net income divided by adjusted net revenue. Incremental adjusted net income margin is defined as the change in adjusted net income, divided by change in adjusted net revenue. See ' Adjusted Net Revenue' above for a reconciliation of this non-GAAP measure. Management believes adjusted net income, adjusted net income margin, incremental adjusted net income margin and adjusted EPS are useful because they enable management and investors to assess our core operating performance or results of operations, by removing the effects of certain non cash items and charges to present a comparable view for period over period comparisons of our business. The following table: (i) reconciles adjusted net income to net income, the most directly comparable GAAP measure, (ii) reconciles adjusted EPS to diluted earnings per share, the most directly comparable GAAP measure, and (iii) presents the computations of adjusted net income margin and incremental adjusted net income margin. ____________________ (1) Certain amounts may not recalculate exactly using the rounded amounts provided. Earnings per share is calculated based on unrounded numbers. (2) Diluted earnings per share and diluted net income attributable to common stockholders exclude gain on extinguishment of debt, net of tax, as well as interest expense incurred, net of tax, associated with convertible note activity during the period as evaluated under the if-converted method. (3) This non-GAAP adjustment excludes the dilutive impact of the 2029 convertible notes at stock prices below $14.54, as the 2029 capped call transactions in place will deliver shares to offset dilution. At stock prices in excess of $14.54, the Company would have an obligation to deliver cash or additional shares in excess of the dilution protection provided by the 2029 capped call transactions. (4) Refer to ' Adjusted Net Revenue' above for reconciliation of this non-GAAP measure. Expand Table 3 SoFi Technologies, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In Thousands, Except for Share Data) June 30, 2025 December 31, 2024 Assets Cash and cash equivalents $ 2,122,502 $ 2,538,293 Restricted cash and restricted cash equivalents 592,101 171,067 Investment securities (includes available-for-sale securities of $2,266,588 and $1,804,043 at fair value with associated amortized cost of $2,255,505 and $1,807,686, as of June 30, 2025 and December 31, 2024, respectively) 2,374,810 1,895,689 Loans held for sale (includes $20.0 billion and $17.7 billion at fair value, as of June 30, 2025 and December 31, 2024, respectively) 20,063,089 17,684,892 Loans held for investment, at fair value 10,741,641 8,597,368 Loans held for investment, at amortized cost (less allowance for credit losses of $47,838 and $46,684, as of June 30, 2025 and December 31, 2024, respectively) 1,413,385 1,246,458 Servicing rights 375,006 342,128 Property, equipment and software 354,755 287,869 Goodwill 1,393,505 1,393,505 Intangible assets 263,522 297,794 Operating lease right-of-use assets 77,213 81,219 Other assets (less allowance for credit losses of $3,178 and $2,444, as of June 30, 2025 and December 31, 2024, respectively) 1,340,642 1,714,669 Total assets $ 41,112,171 $ 36,250,951 Liabilities and permanent equity Liabilities: Deposits: Interest-bearing deposits $ 29,411,104 $ 25,861,400 Noninterest-bearing deposits 129,570 116,804 Total deposits 29,540,674 25,978,204 Accounts payable, accruals and other liabilities 676,293 556,923 Operating lease liabilities 91,434 97,389 Debt 3,942,636 3,092,692 Residual interests classified as debt 554 609 Total liabilities 34,251,591 29,725,817 Commitments, guarantees, concentrations and contingencies Permanent equity: Common stock, $0.00 par value: 3,100,000,000 and 3,100,000,000 shares authorized; 1,113,442,968 and 1,095,357,781 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 111 109 Additional paid-in capital 7,994,095 7,838,988 Accumulated other comprehensive income (loss) 3,593 (8,365 ) Accumulated deficit (1,137,219 ) (1,305,598 ) Total permanent equity 6,860,580 6,525,134 Total liabilities and permanent equity $ 41,112,171 $ 36,250,951 Expand Table 4 SoFi Technologies, Inc. Average Balances and Net Interest Earnings Analysis (Unaudited) Three Months Ended Three Months Ended June 30, 2024 Assets Interest-earning assets: Interest-bearing deposits with banks $ 2,811,423 $ 25,086 3.58 % $ 2,809,405 $ 34,995 5.01 % Investment securities 2,277,616 29,878 5.26 1,485,455 20,665 5.60 Loans 30,331,237 737,441 9.75 24,189,904 618,935 10.29 Total interest-earning assets 35,420,276 792,405 8.97 28,484,764 674,595 9.53 Total noninterest-earning assets 3,944,524 3,091,473 Total assets $ 39,364,800 $ 31,576,237 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 2,063,657 $ 2,696 0.52 % $ 2,227,602 $ 12,619 2.28 % Savings deposits 25,264,749 226,394 3.59 17,515,485 191,033 4.39 Time deposits 487,916 4,142 3.40 2,248,868 28,163 5.04 Total interest-bearing deposits 27,816,322 233,232 3.36 21,991,955 231,815 4.24 Warehouse facilities 2,137,160 27,874 5.23 827,113 13,098 6.37 Securitization debt 62,432 554 3.56 219,327 1,828 3.35 Other debt 1,757,224 12,908 2.95 1,824,742 15,270 3.37 Total debt 3,956,816 41,336 4.19 2,871,182 30,196 4.23 Residual interests classified as debt 561 — — 3,169 — — Total interest-bearing liabilities 31,773,699 274,568 3.47 24,866,306 262,011 4.24 Total noninterest-bearing liabilities 919,349 707,439 Total liabilities 32,693,048 25,573,745 Total temporary equity — 160,187 Total permanent equity 6,671,752 5,842,305 Total liabilities, temporary equity and permanent equity $ 39,364,800 $ 31,576,237 Net interest margin 5.86 % 5.83 % Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Assets Interest-earning assets: Investment securities 2,153,794 56,222 5.26 1,123,775 30,867 5.52 Loans 29,608,981 1,448,922 9.87 23,870,538 1,237,376 10.42 Total interest-earning assets 34,514,453 1,556,217 9.09 27,949,667 1,340,506 9.64 Total noninterest-earning assets 3,902,786 3,046,070 Total assets $ 38,417,239 $ 30,995,737 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 1,964,252 $ 5,067 0.52 % $ 2,160,572 $ 25,439 2.37 % Savings deposits 24,484,120 443,065 3.65 16,130,130 352,056 4.39 Time deposits 557,151 10,499 3.80 2,611,862 65,771 5.06 Total interest-bearing deposits 27,005,523 458,631 3.42 20,902,564 443,266 4.26 Warehouse facilities 2,063,312 54,264 5.30 1,484,357 47,958 6.50 Securitization debt 68,034 1,135 3.36 276,576 5,486 3.99 Other debt 1,756,459 25,624 2.94 1,789,076 28,494 3.20 Total debt 3,887,805 81,023 4.20 3,550,009 81,938 4.64 Residual interests classified as debt 568 — — 4,080 — — Total interest-bearing liabilities 30,893,896 539,654 3.52 24,456,653 525,204 4.32 Total noninterest-bearing liabilities 885,613 712,981 Total liabilities 31,779,509 25,169,634 Total temporary equity — 228,838 Total permanent equity 6,637,730 5,597,265 Total liabilities, temporary equity and permanent equity $ 38,417,239 $ 30,995,737 Net interest income $ 1,016,563 $ 815,302 Net interest margin 5.94 % 5.87 % Expand Table 5 Company Metrics June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Members 11,745,572 10,915,811 10,127,323 9,372,615 8,774,236 8,131,720 7,541,860 6,957,187 6,240,091 Total Products 17,142,041 15,915,425 14,745,435 13,650,730 12,776,430 11,830,128 11,142,476 10,447,806 9,401,025 Total Products — Lending segment 2,280,368 2,129,833 2,010,354 1,890,761 1,786,580 1,705,155 1,663,006 1,593,906 1,503,892 Total Products — Financial Services segment 14,861,673 13,785,592 12,735,081 11,759,969 10,989,850 10,124,973 9,479,470 8,853,900 7,897,133 Total Accounts — Technology Platform segment 160,046,369 158,432,347 167,713,818 160,179,299 158,485,125 151,049,375 145,425,391 136,739,131 129,356,203 Total Products, excluding digital assets (1) 17,142,041 15,915,425 14,745,435 13,650,730 12,776,430 11,830,128 10,876,881 9,984,685 8,965,949 Total Products, excluding digital assets — Financial Services segment (1) 14,861,673 13,785,592 12,735,081 11,759,969 10,989,850 10,124,973 9,213,875 8,390,779 7,462,057 SoFi Invest, excluding digital assets (1) 2,853,416 2,684,658 2,525,059 2,394,367 2,332,045 2,224,705 2,115,046 2,001,951 1,880,701 Expand ____________________ (1) In the fourth quarter of 2023, we transferred the crypto services provided by SoFi Digital Assets, LLC, and began closing existing digital assets accounts and removing the account from Invest products. This process was completed in the first quarter of 2024. Expand Members We refer to our customers as 'members'. We define a member as someone who has a lending relationship with us through origination and/or ongoing servicing, opened a financial services account, linked an external account to our platform, or signed up for our credit score monitoring service. Our members have access to our CFPs, our member events, our content, educational material, news, and our tools and calculators, which are provided at no cost to the member. We view members as an indication not only of the size and a measurement of growth of our business, but also as a measure of the significant value of the data we have collected over time. Once someone becomes a member, they are always considered a member unless they are removed in accordance with our terms of service, in which case, we adjust our total number of members. This could occur for a variety of reasons—including fraud or pursuant to certain legal processes—and, as our terms of service evolve together with our business practices, product offerings and applicable regulations, our grounds for removing members from our total member count could change. The determination that a member should be removed in accordance with our terms of service is subject to an evaluation process, following the completion, and based on the results, of which, relevant members and their associated products are removed from our total member count in the period in which such evaluation process concludes. However, depending on the length of the evaluation process, that removal may not take place in the same period in which the member was added to our member count or the same period in which the circumstances leading to their removal occurred. For this reason, our total member count may not yet reflect adjustments that may be made once ongoing evaluation processes, if any, conclude. Beginning in the first quarter of 2024, we aligned our methodology for calculating member and product metrics with our member and product definitions to include co-borrowers, co-signers, and joint- and co-account holders, as applicable. Quarterly amounts for prior periods were determined to be immaterial and were not recast. Total Products Total products refers to the aggregate number of lending and financial services products that our members have selected on our platform since our inception through the reporting date, whether or not the members are still registered for such products. Total products is a primary indicator of the size and reach of our Lending and Financial Services segments. Management relies on total products metrics to understand the effectiveness of our member acquisition efforts and to gauge the propensity for members to use more than one product. In our Lending segment, total products refers to the number of personal loans, student loans and home loans that have been originated through our platform through the reporting date, inclusive of loans which we originate as part of our Loan Platform Business, whether or not such loans have been paid off. If a member has multiple loan products of the same loan product type, such as two personal loans, that is counted as a single product. However, if a member has multiple loan products across loan product types, such as one personal loan and one home loan, that is counted as two products. The account of a co-borrower or co-signer is not considered a separate lending product. In our Financial Services segment, total products refers to the number of SoFi Money accounts (inclusive of checking and savings accounts held at SoFi Bank and cash management accounts), SoFi Invest accounts, SoFi Credit Card accounts (including accounts with a zero dollar balance at the reporting date), referred loans (which are originated by a third-party partner to which we provide pre-qualified borrower referrals), SoFi At Work accounts and SoFi Relay accounts (with either credit score monitoring enabled or external linked accounts) that have been opened through our platform through the reporting date. Checking and savings accounts are considered one account within our total products metric. Our SoFi Invest service is composed of two products: active investing accounts and robo-advisory accounts. Our members can select any one or combination of the types of SoFi Invest products. If a member has multiple SoFi Invest products of the same account type, such as two active investing accounts, that is counted as a single product. However, if a member has multiple SoFi Invest products across account types, such as one active investing account and one robo-advisory account, those separate account types are considered separate products. The account of a joint- or co-account holder is considered a separate financial services product. In the event a member is removed in accordance with our terms of service, as discussed under 'Members' above, the member's associated products are also removed. Technology Platform Total Accounts In our Technology Platform segment, total accounts refers to the number of open accounts at Galileo as of the reporting date. We include intercompany accounts on the Galileo platform as a service in our total accounts metric to better align with the Technology Platform segment revenue which includes intercompany revenue. Intercompany revenue is eliminated in consolidation. Total accounts is a primary indicator of the accounts dependent upon our technology platform to use virtual card products, virtual wallets, make peer-to-peer and bank-to-bank transfers, receive early paychecks, separate savings from spending balances, make debit transactions and rely upon real-time authorizations, all of which result in revenues for the Technology Platform segment. We do not measure total accounts for the Technisys products and solutions, as the revenue model is not primarily dependent upon being a fully integrated, stand-ready service. Table 6 Segment Financials (Unaudited) Quarter Ended ($ and shares in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Lending Net interest income $ 372,675 $ 360,621 $ 345,210 $ 316,268 $ 279,212 $ 266,536 $ 262,626 $ 265,215 $ 231,885 Total noninterest income 70,837 52,752 72,586 79,977 61,493 63,940 90,500 83,758 99,556 Total net revenue 443,512 413,373 417,796 396,245 340,705 330,476 353,126 348,973 331,441 Adjusted net revenue – Lending (1) 446,798 412,334 422,783 391,892 339,052 325,323 346,541 342,481 322,238 Contribution profit – Lending (2) 244,710 238,935 245,958 238,928 197,938 207,719 226,110 203,956 183,309 Technology Platform Net interest income $ 266 $ 413 $ 473 $ 629 $ 555 $ 501 $ 941 $ 573 $ — Total noninterest income 109,567 103,014 102,362 101,910 94,883 93,865 95,966 89,350 87,623 Total net revenue (2) 109,833 103,427 102,835 102,539 95,438 94,366 96,907 89,923 87,623 Contribution profit – Technology Platform 33,195 30,913 32,107 32,955 31,151 30,742 30,584 32,191 17,154 Financial Services Net interest income $ 193,322 $ 173,199 $ 160,337 $ 154,143 $ 139,229 $ 119,713 $ 109,072 $ 93,101 $ 74,637 Total noninterest income 169,211 129,920 96,183 84,165 36,903 30,838 30,043 25,146 23,415 Total net revenue 362,533 303,119 256,520 238,308 176,132 150,551 139,115 118,247 98,052 Contribution profit (loss) – Financial Services (2) 188,232 148,332 114,855 99,758 55,220 37,174 25,060 3,260 (4,347 ) Corporate/Other Net interest income (expense) $ (48,426 ) $ (35,507 ) $ (35,851 ) $ (40,030 ) $ (6,412 ) $ 15,968 $ 17,002 $ (13,926 ) $ (15,396 ) Total noninterest income (loss) (12,508 ) (12,653 ) (7,175 ) 59 (7,245 ) 53,634 9,254 (6,008 ) (3,702 ) Total net revenue (loss) (2) (60,934 ) (48,160 ) (43,026 ) (39,971 ) (13,657 ) 69,602 26,256 (19,934 ) (19,098 ) Consolidated Net interest income $ 517,837 $ 498,726 $ 470,169 $ 431,010 $ 412,584 $ 402,718 $ 389,641 $ 344,963 $ 291,126 Total noninterest income 337,107 273,033 263,956 266,111 186,034 242,277 225,763 192,246 206,892 Total net revenue 854,944 771,759 734,125 697,121 598,618 644,995 615,404 537,209 498,018 Adjusted net revenue (1) 858,230 770,720 739,112 689,445 596,965 580,648 594,245 530,717 488,815 Net income (loss) 97,263 71,116 332,473 60,745 17,404 88,043 47,913 (266,684 ) (47,549 ) Adjusted EBITDA (1) 249,083 210,337 197,957 186,237 137,901 144,385 181,204 98,025 76,819 Expand ____________________ (1) Adjusted net revenue and adjusted EBITDA are non-GAAP financial measures. For additional information on these measures and reconciliations to the most directly comparable GAAP measures, see 'Non-GAAP Financial Measures' and Table 2 to the 'Financial Tables' herein. (2) Technology Platform segment total net revenue includes intercompany fees. The equal and offsetting intercompany expenses are reflected within all three segments' directly attributable expenses, as well as within expenses not allocated to segments. The intercompany revenues and expenses are eliminated in consolidation. The revenues are eliminated within Corporate/Other and the expenses represent a reconciling item of segment contribution profit (loss) to consolidated income (loss) before income taxes. Expand Table 7 Fee-Based Revenue (Unaudited) Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2025 2024 2025 2024 Loan platform fees $ 104,857 $ 138 $ 177,907 $ 150 Referrals, loan platform business 22,548 11,880 42,248 22,582 Total Loan platform fees 127,405 12,018 220,155 22,732 Referrals, other 2,588 1,738 5,118 3,772 Interchange 26,502 14,457 49,314 26,459 Brokerage 7,542 5,960 14,527 9,994 Loan origination fees 120,758 98,043 222,756 171,785 Technology services 89,574 85,469 175,562 170,119 Other 3,136 1,278 5,503 3,465 Total fee-based revenue $ 377,505 $ 218,963 $ 692,935 $ 408,326 Expand Table 8 Analysis of Charge-Offs (Unaudited) Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 ($ in thousands) Average Loans Net Charge-offs Ratio Average Loans Net Charge-offs Ratio Personal loans $ 18,414,581 $ 129,970 2.83 % $ 15,919,442 $ 151,834 3.84 % Student loans 10,107,155 23,747 0.94 % 6,944,152 11,004 0.64 % Home loans 540,994 — — % 68,461 — — % Secured loans 770,154 — — % 839,159 — — % Credit card 342,051 6,565 7.70 % 275,943 11,034 16.08 % Commercial and consumer banking 156,302 1 — % 142,747 11 0.03 % Total loans $ 30,331,237 $ 160,283 2.12 % $ 24,189,904 $ 173,883 2.89 % Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 ($ in thousands) Average Loans Net Charge-offs Ratio Average Loans Net Charge-offs Ratio Personal loans $ 18,345,733 $ 280,044 3.08 % $ 15,799,621 $ 286,221 3.64 % Student loans 9,579,563 34,344 0.72 % 6,961,939 21,421 0.62 % Home loans 447,541 — — % 59,021 — — % Secured loans 762,819 — — % 645,173 — — % Credit card 318,436 14,555 9.22 % 272,638 21,580 15.92 % Commercial and consumer banking 154,889 4 0.01 % 132,146 29 0.04 % Total loans $ 29,608,981 $ 328,947 2.24 % $ 23,870,538 $ 329,251 2.77 % Expand Table 9 Regulatory Capital (Unaudited) June 30, 2025 June 30, 2024 ($ in thousands) Amount (1) Ratio (1) Amount Ratio Required Minimum (2) SoFi Technologies CET1 risk-based capital $ 4,804,043 14.3 % $ 4,045,783 16.6 % 7.0 % Tier 1 risk-based capital 4,804,043 14.3 % 4,045,783 16.6 % 8.5 % Total risk-based capital 4,851,605 14.4 % 4,097,392 16.8 % 10.5 % Tier 1 leverage 4,804,043 12.9 % 4,045,783 13.6 % 4.0 % Risk-weighted assets 33,579,875 24,423,088 Quarterly adjusted average assets 37,311,693 29,719,043 Expand ____________________ (1) Estimated. (2) Required minimums presented for risk-based capital ratios include the required capital conservation buffer. Expand
Hamilton Spectator
3 hours ago
- Hamilton Spectator
CECO Environmental Reports Second Quarter 2025 Results
ADDISON, Texas, July 29, 2025 (GLOBE NEWSWIRE) — CECO Environmental Corp. (Nasdaq: CECO) ('CECO' or the 'Company'), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment, and industrial equipment, today reported its financial results for the second quarter of 2025. Second Quarter Summary(1) (1) All comparisons are versus the comparable prior year period, unless otherwise stated. Reconciliations of GAAP (reported) to non-GAAP measures are in the attached financial tables. Todd Gleason, CECO's Chief Executive Officer commented, 'We delivered another record quarter, led by tremendous orders, which were up 95 percent year-over-year. Our multi-quarter string of record bookings enabled our highest ever quarterly revenue and increased our backlog to an all-time high of $688 million, which is up 76 percent versus last year. Our diverse and well-positioned portfolio of leading environmental solutions for industrial air, industrial water and energy transition markets continue to gain traction in key markets and new geographies. In the quarter, we booked CECO's largest-ever order which will provide emissions management solutions for a large power generation project. That order, combined with continued strong natural gas and water infrastructure and other energy transition projects, helped push second quarter orders to the all-time record. We are excited about our ability to capitalize on these mega-theme opportunities as well as our steady return on investment associated with our ongoing portfolio transformation.' Second quarter operating income was $18.1 million, up $8.8 million when compared to $9.3 million in the second quarter of 2024. On an adjusted basis, non-GAAP operating income was $18.3 million, up $5.7 million or 45 percent when compared to $12.6 million in the second quarter of 2024. Net income was $9.5 million in the quarter, up $5.0 million compared to $4.5 million in the second quarter of 2024. Non-GAAP net income was $8.7 million, up $1.3 million when compared to $7.4 million in the second quarter of 2024. Adjusted EBITDA of $23.3 million, reflecting an adjusted EBITDA margin of 12.6 percent, was up 45 percent compared to $16.1 million in the second quarter of 2024. Free cash flow in the quarter was $(3.0) million, down $5.6 million compared to $2.6 million in the second quarter of 2024. 'I am pleased, and not at all surprised, that our teams of dedicated employees continue to execute at high levels while overcoming macro uncertainties and market challenges. While certain headlines could distract, our teams remain laser focused on delivering for our customers while navigating supply chain disruptions and evolving trade policies. This is strongly reflected with our highest-ever gross margins and expanded income margins, all while maintaining investments in commercial growth, new geographies, operating resources to drive efficiencies, as well as new market leading solutions,' Gleason added. 2025 Full Year Guidance For the full year 2025 outlook, the Company has raised its revenue outlook to $725 to $775 million, up approximately 35 percent at the midpoint. The previous outlook for full year revenue was $700 to $750 million. The Company maintains its expected range for adjusted EBITDA of between $90 to $100 million and a free cash flow outlook of greater than 60 percent conversion of adjusted EBITDA. 'As we enter the second half of 2025, we are energized to maintain our top-quartile growth and operating performance. Our confidence is bolstered by our record backlog and our robust, $5.5 billion sales pipeline which continues to grow in support of strong demand for power generation, natural gas and water infrastructure, semiconductor expansion and general industrial markets. This backlog and pipeline visibility allows us to increase our full-year revenue outlook to between $725 and $775 million, which represents a growth rate of approximately 35 percent compared to last year. We remain very bullish on our full year adjusted EBITDA outlook – which reflects a roughly 50 percent growth rate – despite some anticipated inflationary pressure in the second half of the year. Overall, we are very pleased with how our year is shaping up and look forward to maintaining our investments to support sustainable growth,' concluded Gleason. EARNINGS CONFERENCE CALL A conference call is scheduled for today at 8:30 a.m. ET to discuss the second quarter 2025 financial results. Please visit the Investor Relations portion of the website ( ) to listen to the call via webcast. The conference call may also be accessed by visiting . A replay of the conference call will be available on the Company's website for a period of one year. The replay may also be accessed by visiting . ABOUT CECO ENVIRONMENTAL CECO Environmental is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally providing innovative solutions and application expertise. CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment. CECO solutions improve air and water quality, optimize emissions management, and increase energy efficiency for highly-engineered applications in power generation, midstream and downstream hydrocarbon processing and transport, electric vehicle production, polysilicon fabrication, semiconductor and electronics, battery production and recycling, specialty metals and steel production, beverage can, and water/wastewater treatment and a wide range of other industrial end markets. CECO is listed on Nasdaq under the ticker symbol 'CECO.' Incorporated in 1966, CECO's global headquarters is in Addison, Texas. For more information, please visit . CECO Environmental Investor Contact: Marcio Pinto Vice President - Financial Planning and Investor Relations 888-990-6670 Steven Hooser and Jean Marie Young Three Part Advisors, LLC 214-872-2710 (1) Other non-recurring expenses, including fair value adjustment of earn-out liabilities from the acquisitions of WK Group, restructuring expenses primarily relating to severance, facility exits, and associated legal expenses, asbestos litigation expenses relating to future settlement payments, and third party professional consulting fees associated with Enterprise Resource Planning system implementations. NOTE REGARDING NON-GAAP FINANCIAL MEASURES CECO is providing certain non-GAAP historical financial measures as presented above as we believe that these figures are helpful in allowing individuals to better assess the ongoing nature of CECO's core operations. A 'non-GAAP financial measure' is a numerical measure of a company's historical financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, non-GAAP earnings per basic and diluted share, adjusted EBITDA and free cash flow, as we present them in the financial data included in this press release, have been adjusted to exclude the effects of amortization expenses for acquisition-related intangible assets, contingent retention and earnout expenses, restructuring expenses primarily relating to severance and legal expenses, acquisition and integration expenses which include retention, legal, accounting, banking, and other expenses, foreign currency remeasurement and other nonrecurring or infrequent items and the associated tax benefit of these items. Management believes that these items are not necessarily indicative of the Company's ongoing operations and their exclusion provides individuals with additional information to better compare the Company's results over multiple periods. Management utilizes this information to evaluate its ongoing financial performance. Our financial statements may continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent. Non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, non-GAAP earnings per basic and diluted share, adjusted EBITDA and free cash flow are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of CECO's results as reported under GAAP. Additionally, CECO cautions investors that non-GAAP financial measures used by the Company may not be comparable to similarly titled measures of other companies. In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, non-GAAP earnings per basic and diluted share, adjusted EBITDA and free cash flow stated in the tables above are reconciled to the most directly comparable GAAP financial measures. Non-GAAP measures presented on a forward-looking basis were not reconciled to the comparable GAAP financial measures because the reconciliation could not be performed without unreasonable efforts. The GAAP measures are not accessible on a forward-looking basis because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include amortization expenses for acquisition-related intangible assets, contingent retention and earnout expenses, restructuring expenses primarily relating to severance and legal expenses, acquisition and integration expenses which include retention, legal, accounting, banking, and other expenses, foreign currency remeasurement and other nonrecurring or infrequent items and the associated tax benefit of these items. The unavailable information could have a significant impact on our GAAP financial results. SAFE HARBOR Any statements contained in this Press Release, other than statements of historical fact, including statements about management's beliefs and expectations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, and should be evaluated as such. These statements are made on the basis of management's views and assumptions regarding future events and business performance. We use words such as 'believe,' 'expect,' 'anticipate,' 'intends,' 'estimate,' 'forecast,' 'project,' 'will,' 'plan,' 'should' and similar expressions to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Potential risks and uncertainties, among others, that could cause actual results to differ materially are discussed under 'Part I – Item 1A. Risk Factors' of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and may be included in subsequently filed Quarterly Reports on Form 10-Q, and include, but are not limited to: the effect of the divestiture of our Fluid Handling business on business relationships, operating results, and business generally, disruption of current plans and operations and potential difficulties in employee retention as a result of the transaction, diversion of management's attention from ongoing business operations in connection with the integration of recent acquisitions, the amount of the costs, fees, expenses and other charges related to the transaction, the achievement of the anticipated benefits of transactions, our ability to successfully integrate acquired businesses and realize the synergies from acquisitions, as well as a number of factors related to our business, including the sensitivity of our business to economic and financial market conditions generally and economic conditions in CECO's service areas; the potential for fluctuations in prices for manufactured components and raw materials, including as a result of tariffs and surcharges, and rising energy costs; inflationary pressures relating to rising raw material costs and the cost of labor; dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding estimates and method of accounting for revenue; the effect of growth on our infrastructure, resources, and existing sales; the ability to expand operations in both new and existing markets; the potential for contract delay or cancellation as a result of on-going or worsening supply chain challenges or other customer considerations; liabilities arising from faulty services or products that could result in significant professional or product liability, warranty, or other claims; changes in or developments with respect to any litigation or investigation; failure to meet timely completion or performance standards that could result in higher cost and reduced profits or, in some cases, losses on projects; the substantial amount of debt incurred in connection with our strategic transactions and our ability to repay or refinance it or incur additional debt in the future; the impact of federal, state or local government regulations; our ability to repurchase shares of our common stock and the amounts and timing of repurchases; our ability to successfully realize the expected benefits of our restructuring program; economic and political conditions generally; our ability to optimize our business portfolio by identifying acquisition targets, executing upon any strategic acquisitions or divestitures, integrating acquired businesses and realizing the synergies from strategic transactions; and the unpredictability and severity of catastrophic events, including cyber security threats, acts of terrorism or outbreak of war or hostilities or public health crises, as well as management's response to any of the aforementioned factors. Many of these risks are beyond management's ability to control or predict. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. Investors are cautioned not to place undue reliance on such forward-looking statements as they speak only to our views as of the date the statement is made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise.
