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Q4 2024 First Advantage Corp Earnings Call

Q4 2024 First Advantage Corp Earnings Call

Yahoo28-02-2025

Stephanie Gorman; Vice President - Investor Relations; First Advantage Corp
Scott Staples; Chief Executive Officer, Director; First Advantage Corp
Steven Marks; Executive Vice President, Chief Financial Officer; First Advantage Corp
Shlomo Rosenbaum; Analyst; Stifel
Andrew Steinerman; Analyst; JPMorgan
Daniel Maxwell; Analyst; William Blair
Manav Patnaik; Analyst; Barclays
Jeff Silber; Analyst; BMO Capital Markets
Kyle Peterson; Analyst; Needham & Company LLC
Scott Wurtzel; Analyst; Wolfe Research
Operator
Good day everyone. My name is David and I'll be your conference operator today. I would like to welcome you to the first advantage, fourth quarter and full year 2024 earnings conference call and webcast. Hosting today's call from First Advantage is Stephanie Gorman, Vice President of Investor relations. At this time, all participants have been placed in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions) Please note today's event is being recorded. It is now my pleasure to turn the call over to Stephanie Gorman. You may begin.
Stephanie Gorman
Thank you, David. Good morning, everyone, and welcome to First Advantage's fourth quarter and full year 2024 earnings conference call. In the investors section of our website, you will find the earnings press release and slide presentation to accompany today's discussion. This webcast is being recorded and will be available for replay on our investor relations website. Before we begin our prepared remarks, I would like to remind everyone that our discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are discussed in more detail in our filings with the FEC, including our 2023 Form 10k and our 2024 Form 10k to be filed with the FEC. Such factors may be updated from time to time in our periodic filings with the FEC, and we do not undertake any obligation to update forward-looking statements. Throughout this conference call, we will also present and discuss non-gap financial measures, reconciliations of our non-gap financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort appear in today's earnings press release and presentation, which are available on our investor relations website. To facilitate comparability, we will also discuss pro forma combined company results consisting of first advantage and sterling Check Corp, historical results, and certain pro forma adjustments as if the acquisition of Sterling had occurred on January 1, 2023. The pro forma information does not constitute Article 11 pro forma information. I'm joined on our call today by Scott Staples, our Chief Executive Officer, and Stephen Marks, our Chief Financial Officer. After our prepared remarks, we will take your question. I will now hand the call over to Scott.
Scott Staples
Thank you, Stephanie, and good morning everyone. Thank you for joining our call. 2024 was a big year for first advantage as we advanced on our strategy and announced and closed on the sterling acquisition. I am very proud of our team's dedication to execution and consistently delivering results, keeping our customers at the center of everything we do. I am also excited to provide an update on our fourth quarter and full year accomplishments and to discuss our outlook for 2025. We have four key messages for today. First, we generated solid results for the fourth quarter and full year amid an uncertain macro environment. We also maintained our cost discipline to sustain robust margins within the legacy first advantage business and produce strong cash flow. Second, as we closed on our $2.2 billion strategic acquisition of sterling. Which leads me to the third point that we are underway in rolling out our updated strategy which we call FA 5.0. And as we discussed last quarter, our organization and management team have been optimized to deliver growth. With the additional scale and capabilities of Sterling and FA 5.0, we are accelerating our strategic progress. Our key strategic objectives in 2025 are to action our synergy targets, deleverage our balance sheet, successfully execute our integration plan, and accelerate our go to market strategy focused on product, technology, and innovation. We are tracking well on our synergy execution, and today we are pleased to be increasing the lower end of our targeted range with our updated net cost synergy target range of $60 million to $70 million and improvement from our previous target range of $50 million to $70 million. Over time, our synergy realization will help to stabilize and expand sterling margins. We are focused on deleveraging our balance sheet and have gotten a fast start on the sterling integration while continuing to provide our customers with the service and quality they know they can expect from us. At the same time, we are maintaining our focus on innovation in order to position our business for future growth. And fourth, we are introducing our full year 2025 guidance. We are entering 2025 in a strong business position encouraged by recent pipeline success, reducing headwinds as recent jolts data continues to normalize and feedback from our customers. That said, in view of the current macro environment, which continues to be uncertain, we are maintaining a cautiously optimistic outlook. Steven will cover our guidance and key assumptions in greater detail in the financial section shortly. We remain confident in our strategy and our position to create long-term shareholder value in 2025 and beyond. In view of the new US administration, I also wanted to share a few comments on potential policy impacts on our business. We do not have meaningful direct exposure to federal government hiring and therefore do not expect to be directly impacted by efforts to streamline federal government spending. In some respects, government efficiency efforts could potentially be a tailwind for first advantage if there are efforts to outsource and privatize work that is currently done by the government. To date, there has not been a noticeable impact from government efficiency efforts on our business. While tariffs may impact our customers and overall economic growth, we do not have any significant direct exposure to tariffs. And as a reminder, 87% of our 2024 pro forma revenues were generated in the US. Turning to slide 5 and an updated view of our enhanced profile with the addition of sterling. Our combined capabilities position us as a leader and increase our customer value proposition, offering differentiated technology platforms and a broad collection of innovative solutions across a comprehensive range of verticals. As a reminder, with the closing of Sterling on October 31, our reported fourth quarter and full year results include two months of Sterling's performance. In order to provide comparability to previous periods, we are showing first advantage and sterling on a pro forma basis with combined financial data for 2023 and 2024 throughout this presentation and plan to continue to do so in the future. In 2024 we delivered sustained profitability while managing through the sterling closing and kicking off integration. Our pro forma full year revenues were approximately $1.5 billion with $397 million in pro forma adjusted EBITDA or $458 million on a synergized basis. In 2024, our approximately 10,000 team members completed nearly $190 million sceens on behalf of our 80,000 active customers across 200 countries and territories. This includes over 2/3 of Fortune 100 companies and approximately one half of Fortune 500 companies. Our gross retention remains at approximately 96%. We now have over $900 million records in our proprietary databases, and we have over 100 integrations with applicant tracking systems and human capital management partners giving us a unique competitive advantage for the fourth quarter and full year, combined upsell, cross-sell, and new logo rates performed in line or better than Legacy, first advantage, and Sterling's historical growth algorithms. Retention rates also performed in line for both businesses. Together we had 25 enterprise bookings in the fourth quarter and 88 in the last 12 months, each with $500,000 or more of expected annual contract value, including two notably large US deals. Looking into 2025, we have been seeing our pipeline momentum continue. We have recently won a large deal with a significant retail customer in the gig economy. We were able to leverage existing relationships and trust to unlock critical business issues, drive the business to RFP, and ultimately be awarded this deal. Also in 2025, we won our largest international contract in the past years with a new logo in Australia. As you can see, our sales engine continues to deliver consistent results. Additionally, our verticalized go to market approach remains a differentiator and a key driver of our growth strategy. We offer deep subject matter expertise in our industry segments, and we use industry specific data to advise our customers on topics such as leading practices and product optimization. Our largest verticals are healthcare, transportation, and retail and e-commerce. While First Advantage has historically been more oriented to hourly workers within high volume hiring verticals, Sterling brings a strong portfolio of verticals focused on salaried workers, resulting in our pro forma revenue mix being more equally weighted between the two. Our balance across a diverse range of verticals and between hourly and hourly focused customers enables us to weather a variety of macroeconomic scenarios and makes us less dependent on any one sector or customer. On the slide, we have provided an updated view of our verticals for 2024 on a pro forma basis. During the year, we grew our footprint in healthcare and transportation as both verticals, particularly healthcare, proved themselves to be resilient through the macro and had strong upsell cross results. Our other verticals changed only modestly from the prior year with some headwinds experienced in our retail and staffing verticals. Steven will share more about the underlying dynamics shortly. Turning to 56. Since closing, we have been laser focused on executing our strategic post closed priorities, enabling enabled by our integration playbook. These priorities are focused on continuity with our customers, a smooth integration process, synergies, and deleveraging our balance sheet. We have seen early success in leveraging each legacy company's technology and processes since closing. Fundamentally, we are applying a best of breed approach on tech and product stacks to meet the needs of our customers. For example, First Advantage was recently awarded a large deal in the healthcare protocol, and we determined that Sterling's platform. Was actually best suited to this customer's requirements. So, this is the tech platform they will go on. This type of flexibility enhances our customer value proposition, offering more options for our customers and the market. We have also identified automation opportunities where one company may have automated criminal court records in a jurisdiction that the other had not yet, allowing us to simply turn on that service for all of our customers, creating synergy opportunities and expanding our combined capabilities. We are also very pleased that there have not been disruptions to customers throughout the integration process. Our executive team has communicated regularly with our large customers who have shared that they are excited to be able to benefit from the best of both worlds from first advantage and sterling. They are optimistic about our approach to integration. And what it means for their background screening programs, including improved turnaround times, new products and services, and enhanced platform functionality. They are eager to see new technology as it becomes available and experience performance improvements from our combined capabilities. We are also getting strong traction with prospects who are excited about our deeper global presence and our ability to leverage regional skills from both organizations. In addition, our increased vertical expertise is compelling for prospects who are looking for thought leadership and want to work with experts who understand their businesses. Prospects are also intrigued to hear how we will leverage our large amounts of data and how the work we are doing to innovate within verifications will benefit them. We continue to drive innovation to maintain our competitive advantage and ensure we are offering the best solutions to our customers, and we're doing all of this under our high performing culture. Our commitment to innovation supports our customers' priorities of speed, cost, and efficiency. We continue to integrate AI capabilities into our workflow, helping us increase our efficiency and provide greater customer service. By streamlining workflows and automating processes, we can leverage technology to meet business needs without increasing headcount. Our combined technologies distinguish us from the competition and are a clear competitive advantage that enables us to expand our businesses by offering a unique customer experience. And with that, I will now turn the call over to Stephen.
Steven Marks
Thank you, Scott, and good morning, everyone. Today I will provide color on our results, an update on our synergy progress and targets, and walk you through our guidance for full year 2025. I'll start with our fourth quarter results on slide 8. Please note that as we continue to swiftly execute our integration program, we plan to focus on the consolidated business, particularly with the implementation of our FA 5.0 strategy. Our fourth quarter pro forma revenues were $375 million up 0.9% year over year. Our combined business continued to face year on year base headwinds as hiring volumes continued to stabilize, with base remaining negative on a year-on-year basis. This aligned to the trends in the jolts and other data over the last number of quarters. In our legacy first advantage segment America's segment, revenues of $172 million were down 5.5% from the prior year. These results were impacted by the uncertainty among American consumers during 24, which affected our retail and transportation customers' hiring levels. As such, seasonal hiring revenues in Q4 were slightly weaker than expected and lasted for a notably shorter duration compared to prior year and our expectations. Going forward on a total company basis, we expect that our increased diversification with the broader sterling base will help mitigate seasonality impacts on our business. Our legacy first advantage international segment continued to show green shoots across all regions and performed better than we anticipated, with revenues increasing 8.9% to $24 million on a constant currency basis, Legacy first advantage international revenues were up 7.0% year over year. In our legacy sterling segment, pro forma revenues for Q4 were $181 million up 7% year over year, with a 6% contribution from the vault acquisition. These trends in the legacy sterling business largely performed in line with Legacy first advantage America's. Pro forma adjusted EBITDA for the fourth quarter was $100 million and our pro forma adjusted IATA margin was 26.7%. Down approximately 300 basis points versus the prior year. Legacy first advantage continued to drive margins of nearly 32% as we focus on maintaining our variable cost structure consistent with our historical approach, despite the base and seasonal peak headwinds I previously mentioned. Legacy sterling continued to operate at a lower margin relative to Legacy first advantage as a result of its continued shifting mix to lower margin services, its lower margin from the vault acquisition and its historical operating methodology that results in a more fixed cost approach to fulfillment than legacy first advantage. As part of our integration plans, we are working to adapt the legacy sterling business to have a more variable cost structure, including FA's historical model for fulfillment workforce management. During the fourth quarter, we also identified cost savings above and beyond our normal levers through headcount management, even while diligently integrating Sterling. Turning to full year results on slide 9, our overall annual performance was solid and closely in line with our combined company 2024 guidance ranges for reported revenues, adjusted EPEA, adjusted net income, and adjusted diluted EPS. This is further evidence that we continue to be diligent and successful at controlling what can be controlled within our business despite the uncertain macro environment and its impact on our base volumes. Total pro forma revenues were $1.5 billion up approximately 2% year over year. In our legacy First Advantage America segment for 2024, revenues of $659 million were down 2.1% from the prior year. In our legacy First Advantage International segment, revenues of $97 million were flat first the prior year. But on a constant currency basis, Legacy first advantage international revenues were $96 million or 0.7% or 0.7% year over year. In total, Legacy first advantage revenues were down 2.2%. And in our legacy sterling segment, pro forma revenues were $763 million up 6% year over year, with 6.9% growth from the vault acquisition. Pro forma adjusted EBITDA for the year with $397 million and our pro forma adjusted EBITDA margin was 26.3%, approximately 220 basis points lower year over year. This decline, as previously noted, was driven by Sterling's revenue mix towards lower margin products and the margin impact of the vault acquisition. Turning to slide 10, we are showing a detailed adjusted diluted EPS bridge from full year 2023 to full year 2024, given all of the unique moving parts. Our full year 2024 adjusted net income was $124 million. Adjusted diluted EPS was $0.02, and our adjusted effective tax rate was 24.9%. As noted, when we gave our initial 2024 guidance last year, 2024, adjusted diluted EPS growth was impacted by several of our historical capital allocation actions, including our 2023 one-time special dividend, our 2023 share repurchases, and an expiration of favorable interest rate swaps. Also, as we noted during last quarter's call, the Sterling acquisition was not expected to provide immediate adjusted diluted EPS accretion, as the sterling results were initially more than offset by the incremental interest on the transaction financing and the impact of the share dilution from the issuance of the acquisition shares. All these items were in line with our previous commentary. Over time, as we realize synergies, we continue to anticipate delivering double-digit adjusted diluted EPS secretion as mentioned in previous quarters. On slide 11, you can see how we are making great progress on actioning our synergy program. We previously communicated a goal of achieving $50 million to $70 million in run rate target synergies, which was updated from our original target of $50 million plus. Today we are again updating our target range to $60 million to $70 million of expected synergies to be actioned within two years of close. When we presented last quarter, we highlighted $10 million of synergies already actioned, and we finished 2024 at approximately $20 million and $0.20 million dollars actions representing substantial progress towards our synergy goals. Our dedicated integration management functions, led by product and operations leaders are driving the execution of our plans. As we have been actioning synergies in our integration plans, we have uncovered additional opportunities for cost savings, giving us confidence to raise the lower end of our target range today. Our current focus has been on reducing duplicative costs in our corporate and internal functions and reducing certain redundancies in our fulfillment and commercial departments, and we have been able to action these savings more quickly than previously expected. As a result, we now expect to action 50% plus of our target synergies within the first six months post-closing, a meaningful acceleration from our previous objective of achieving the same goal within the first year. On slide 12, we are showing key growth metrics for legacy first advantage and legacy sterling. Over time, both businesses have consistently delivered strong historical performance for upsell and cross-sell, new customer logos, and attrition, demonstrating our ability to manage and deliver on what we can control with the variation being driven by base. This has been true throughout 2024, including the fourth quarter. And we have been pleased that both businesses combined upsell, cross-sell, and new logo performance, as well as retention have broadly aligned with historical revenue growth rates. This was this was propelled by our go to market momentum throughout the year and ending the year with a strong pipeline, and gross retention remained healthy and stable. In the fourth quarter, revenues continued to be a headwind, with legacy first advantage impacted by weaker than expected Q4 seasonal hiring as the softer hiring peak ended or ended earlier than normal in mid-November. Legacy Sterling saw parallel headwinds as similar late Q4ba softness was seen in Legacy Sterling's America's Business. Base growth at legacy sterling has lagged legacy first advantages as legacy sterling vertical have been more impacted by the normalization of hiring patterns. We believe that when the macro environment stabilizes, our base growth will normalize towards our historical rates. Now turning to cash flow and net leverage on slide 13. Over the last 12 months, we generated adjusted operating cash flows of $165 million a 1% increase on a year over year basis as we continue to closely manage our working capital and focus on cash flow conversion with our VSOs remaining in check. Our cash balance at December 31, 2024 was $169 million finishing above our desired minimum cash level of $150 million. During the quarter we used $10 million for purchases of property and equipment and capitalized software development costs. This was $32 million for the full year. Our synergized pro forma adjusted IAA net leverage ratio at year end was 4.4 times. We remain committed to our goal of reducing net leverage towards approximately three times synergized pro forma adjusted EBITDA within 24 months post close and to our long-term net leverage target of two to three times. Moving to slide 14 in our 2025 guidance, I'll start by noting that all year over year comparisons are on a pro forma basis to allow for easy comparability. We expect 2025 total revenues in the range of $1.5 billion to $1.6 billion adjusted EBITDA of $410 million to $450 million and adjusted diluted EPS of $0.86 to $1.03. For revenue, this range represents flat to a little over 5% year over year pro forma growth. At our guidance midpoint, we expect to expand full year adjusted EBITDA margins by approximately 150 basis points. Also factored into our 2025 guidance are our current assumptions related to sustained mixed shifts within our business, primarily within the sterling segment, which do impact adjusted Ear margins. Our guidance reflects 2025 in-year realization synergies in the range of $25 million to $30 million with our focus being to accelerate our savings wherever possible. Our guidance also includes our latest view on the macro environment and labor market. While labor market broadly looks to be more stable entering 2025, we have not yet seen a return of investment hiring in our verticals. As such, our guidance reflects a prudent posture towards growth in 2025, particularly in the first half of the year. Looking at our growth algorithm in more detail, we do not expect to fully lapse prior year based declines until the middle of 2025. Therefore, our guidance is based on the expectation that base will remain a growth headwind through the middle of the year, improving sequentially and turning to neutral and then slightly positive later in the year. Said more simply, we are modelling slight to modest full year base revenue declines across our entire guidance range. With that said, we do expect continued productivity of upsell and cross sales and new logo growth consistent with historical trends. We also expect customer retention to remain in line with our strong historical performance of around 96% to 97%, even as we continue to integrate the sterling acquisition. While recently FX has not been a big headwind for our business, recent strengthening of the US dollar has led to an expectation that FX will have a slightly larger impact on our business in 2025, an important factor as we have seen our international markets stabilize and return to growth. Looking now at the quarterly phasing of our 2025 guidance, we expect Q1 year over year revenues to decline by approximately 1% to 4% and expect quarterly, year over year revenue growth to sequentially approve for the first three quarters of 2025, with the fourth quarter more on par with the third. This change in anticipated sequential and seasonal growth dynamics is a result of our sterling acquisition, the diversification of vertical exposure, and how that project over the year. We expect our Q1 adjusted IA margin to be in the mid 23% to mid 24% range, which reflects the blended impact of legacy first advantage margins historically in the high 20s and legacy sterling's margins, which have been closer to 20% during the first quarter as seasonal revenues have yet to ramp. Additionally, our pace of synergy realization is expected to drive additional sequential adjusted margin expansion during the year. Starting with Q2, we expect adjusted Eton margins to be above 28%. Overall, we believe that we are extremely well positioned to benefit when the macro environment improves. We expect Q1 adjusted diluted EPS to be between $12.15 due to the seasonality I just mentioned and the impact of the full $2.2 billion dollar acquisition financing. After Q1, we expect considerable adjusted diluted EPS improvement as revenue ramps. We recognize that this guidance implies a meaningful improvement during the year, which is primarily driven by the impacts of the sterling acquisition and our new seasonality and to a much lesser extent, the evolution of our expected macro stabilization. We expect our adjusted diluted EPS to range between the mid to low 20% to 30% to $0.30 per share for each of the last three quarters. We have also provided a summary of selected 2025 modelling assumptions in the presentation appendix. Moving to slide 15, we have provided an adjusted diluted EPS bridge, which illustrates the puts and takes from our 2024 adjusted diluted EPS to our 2025 guidance I just mentioned. This is very important to understand, as the sterling financing and share issuance have 10 months of year over year impact in 2025. Even in our projected neutral macro environment and after adjusting for the sterling acquisition items expected synergy realization in 2025 growth in investments, we expect 2025 adjusted diluted EPS expansion of over 15% at the midpoint. This sets us up well to continue expanding adjusted diluted EPS in the coming years, which is aligned to our previous messaging. With that, let me turn it back to Scott for closing remarks before we open the line for questions. Thank you, Stephen.
Scott Staples
Moving to slide 17 and a few closing comments. First, we are excited to be hosting our inaugural Investor Day on May 28. At that event, we plan to share more about our FA 5.0 strategy and update on our integration program, as well as long-term targets that will guide our business over the coming years. I hope you will be able to participate. Look for more information coming soon. Second, I would like to emphasize our consistent focus at first advantage. We continue to deliver solid results and execute on priorities. We remain focused on delivering on our value creation playbook and shaping the future of our company to better serve our customers. With that, we will open the line for questions.
Operator
Thank you. We will now begin the question-and-answer session at this time. (Operator Instructions) We'll take our first question from Shlomo Rosenbaum with Steel. Please go ahead. Your line is open.
Shlomo Rosenbaum
Hi, good morning. Thank you for taking my questions. Could you provide a little bit more detail about some of the weakness in seasonal hiring in retail and transportation, just a little bit more of part of what your clients were telling you about why it happened, the duration, and is this something that you're, is this translating into other areas at all through, the first quarter of the year, or, and then I'd like to ask you a follow up.
Scott Staples
Yes, I think I think it's a great point because this, let's call it a trend has now happened for the last couple of years where we're basically seeing is less of that of the peaks in the valleys and a little bit just more of more normalization as we go into the seasonal hiring period. And what we've seen over the last couple of years is that hiring is starting to slow down around mid-November and continues all the way through the month of December but then picks back up in January. As if we're back on to normal course. So, for the last couple of years what we've seen is, fairly slow half of November, most of December, but no impact going into Q1 as hiring then continues to ramp back up. So, we have factored that into our 2025 guidance that we expect something similar again later this year. So that is definitely factored into our guidance.
Shlomo Rosenbaum
Okay, thanks. And then just the comment that you made about the big win in the healthcare space using the sterling platform, I think what we discussed in the past was the thought that you would move clients, or incremental clients would be on the first advantage platform but using kind of the sterling front end. And I guess the question I've got is that it's great to win with the Sterling platform. Does that mean that you're going to indefinitely be supporting really the back end of Sterling for a long period of time.
Scott Staples
Yeah, so, I got to give a huge shout out to our product and tech teams for coming up with some great innovative ideas here. The whole goal of this integration with Sterling was, no disruption to customers, and I think you can see that in our retention numbers that we that we've put out, we, our retention has been in line with normal, so we are not seeing. Any client disruption as part of this acquisition and that's primarily because of the technology and product vision that our teams have created. So they have it's a very complicated in-depth thing, but I'll give you a high level here. They have come up with a very innovative way for customers to leverage the best of both worlds from both platforms. Regardless of where they are around the world and essentially the technology solutions that we're going to be recreating will allow us to tap in to both platforms and the best in breed approach from both platforms without the clients having to do any migrations. So consider this as a series of upgrades. And yes, that does mean we have to maintain both platforms but not in the same way they're being maintained today so we can. Effectively reduce our headcount and overheads in supporting of the platforms by because of the solution the tech team has come up with. So that'll continue to drive our synergies with no impact to our original plan there, but we just think this is going to be a great experience for clients and for the client's candidates. Thank you.
Operator
We'll take our next question from Andrew Steinerman with JP Morgan. Please go ahead. Your line is open.
Andrew Steinerman
Hi, I definitely heard your comments how you know flexible the client approach in post-merger. I was wondering if you're tracking a net promoter score and particularly kind of pre-merger, post-merger so that we could keep. An eye on that and also if you could go back to talking about your verified database now that you know that you have of Sterling's information in that database, could you talk about how much revenues or savings the verified database is producing.
Scott Staples
Yeah, and Andrew, we will continue. First advantage has always been a big believer in net promoter scores on not just our, customers but also their candidates' experience. So, we continue to measure that. Candidate experience we measure the onboarding experience of new logos and we measure the ongoing net promoter scores and I think we've taken it a step further because of the acquisition that we are actively in front of especially the sterling customer base on a on a regular basis, more than usual just to make sure we're hearing all of their needs and concerns and addressing things, And I will tell you they are extremely excited about this acquisition because they are now going to be able to tap into. The best of breed stuff from first advantage, which is, kind of what I was talking about with Shlomo's question. So, customers are definitely anticipating getting the great products and service from First Advantage on the Sterling platform, So, they're going to get the best of both worlds, which is going to be a great situation for them. So that's where we're pretty bullish on our retention numbers and our client satisfaction numbers on the. On the database on the verified side, you heard in my prepared remarks that our proprietary database records are now up to $900 million. The breakdown of that is that Verified is now up to $120 million and our national criminal database is 780. Interesting point about that number is that none of that increase includes the sterling data yet. We haven't, we have not we have not tapped into that yet. There are teams working on it, but we haven't used that. We haven't tapped the sterling data into the databases. The database increases are because of new third party data provider partnerships that we've formed across multiple areas, and that's allowed us to increase the size of the database, but ultimately we also will be adding the sterling data to this, but we just that'll probably be a later in the year project because it takes a long time to clean and format and move over data, but that's what the teams are working on. Great, thank.
Operator
We'll take our next question from Andrew Nicholas with William Blair. Please go ahead. Your line is open.
Daniel Maxwell
Hey guys, this is Daniel Maxwell on for Andrew today. I appreciate all the commentary on guidance and cadence and everything, maybe. On the on the top line range, do you feel that the low end of the guide embeds, some leeway for a slower than expected recovery in base growth? It seems like a fairly quick recovery that's being embedded from the lower-than-expected Q4 to the breakeven point in the second half. So maybe your thoughts there.
Steven Marks
Yeah, and Daniel, a couple things to keep in mind, as I mentioned in the remarks, across all ranges of our guidance we still expect to be negative for the year. And when you really start to break that down and sequentially, it is a little bit more fun weed to your point, but if you've been following first advantage and sterling long enough, our base decline really started 23 of 2022. So, this is kind of a three-year evolution cycle where, we start to have, the steady. Cos when we get to the back half of the year that have those three years of compounded based declines in them already, and then when you also look at, the macro data and just, kind of the stabilization cycle that's been going on, the pace of change and the hiring trend has flattened out a lot. So, when we looked at our guidance and our budget and our modelling for 2025. We feel good. It's in terms of our base range in there that we've got kind of a fairly wide range of scenarios covered. Obviously, it projects the current stabilization trend to keep going on, but as you get towards the middle of the year, you have those compounding comps, from the prior years, and then, like I mentioned in the call earlier. And then like Scott's mentioned, we've got great productivity out of pipeline, new logo, upsell cost sell, those are triggering, as they always have for both client bases and our combined client base. And as Scott just mentioned a few minutes ago, we're laser focused on retention and those 96 97% retention levels are now our norm.
Scott Staples
And then, I'll add a few things. We're entering 2025 in a very strong position with macro normalization plus strong pipeline conversion. So let's just relook at some of the things we talked about in the opening script. If you look at a year ago, Q4 2023, stand-alone first advantage, landed 10. New winds with ACV of 500k or more. The combined sterling first advantage team landed 25 wins in Q4, and we're having very, a very good start from a pipeline standpoint of 2025, which, gives us confidence in the guidance. In fact, we did mention the large healthcare win which Shlomo asked about, but in the script, we also talked about two other very large US wins which were not that healthcare win. These are two other ones. Those two, wins have a potential to be both of them to be TOP10 customers of first advantage, and probably it'll take a few months to get revenue going, but we expect that revenue to start coming in second half. So again, when you can start a year as fast as we have from a sales and pipeline standpoint. And you can land two deals that potentially could be TOP10 customers for you, that gives us really strong confidence in the second half of the year.
Daniel Maxwell
Great, super helpful. And then if I can squeeze in one follow up maybe more broadly, have you guys gotten any significant insights from customer conversations so far in 2025 and any changes you're seeing to package density or more broadly any changes to client behavior sort of post selection.
Scott Staples
Yeah, we're probably talking to customers more now than we ever did, because as we've said a couple times, our laser focuses on customer retention, and we want to make sure that the communication is. Crystal clear about our product strategy, about our platform strategy, and that how it'll benefit our customers. So yes, we are having more discussions with our customers, and I assume your question is more around what are we hearing from the hiring side and we are hearing normal hiring. We are hearing that, customers are planning on, normal hiring. But again, it's the new normal hiring. It's not the, post pandemic hiring, it's the pre-pandemic hiring. It's, normal cycles. They're anticipating, normal growth. And I don't think the administration has had any impact on their hiring strategies because there's nothing that's really been rolled out from the new administration yet, so we're not hearing anything negative or even positive about that. It's really kind of a non-event in our customers' eyes right now and until the government rolls out something, then we'll obviously react.
Daniel Maxwell
Great, thanks.
Operator
We'll take our next question from Maova Patnier with Barclays. Please go ahead. Your line is open.
Manav Patnaik
Hi, good morning. This is Ronan Kennedy. I'm from Manna. Thank you for taking my question. Can I just confirm with the acceleration of the realization for synergies, where the bulk of those are coming from, and if the actions going forward within, the target areas of internal ops fulfillment, product and commercial have changed or the expectation for real realization of benefits there.
Steven Marks
Yeah, Ronan, I mean the acceleration almost was across the board, we talked last call, our initial focus was on those kind of public company costs, dedu de duping executive leadership, some of those baseline M&A 101 type items. As a management team, we kind of challenged ourselves to find avenues to accelerate those synergies and also just it helps with some of the internal integration efforts. So, quite literally it contributed almost from every line of the P&L. We got at the actions, it was a lot of our identified playbook. That's why we didn't take the full range up. We were just able to get confidence in some of the programs we had and then TRY to accelerate as many of them as we could either into 24 or earlier into 25, which is why we know, we now think we're over 50% actioned by the six-month mark. That was the year that was the one-year mark when we had talked previously. I mean you don't get there by just one by one function contributing. It was across all of our work streams.
Manav Patnaik
Got it thank you. That's helpful. And then I guess more broadly speaking with regards to the sterling acquisition and integration progress thus far, that's positive development with regards to acceleration of the synergies. Any other positive developments or surprises, whether it's enhanced customer value prop, the innovation, the product, the resilience, seasonality, and then anything that has been potentially an unpleasant surprise or your kind of learning versus your expectations.
Scott Staples
Yeah, I think, listen, it's been a big effort. We've got a lot of people working on this and obviously, we closed on Halloween, so we really couldn't get under the hood until November first. I'd say the biggest, pleasant surprise by far has been the culture match. It's just amazing how well these teams are working together, especially on the go to market side and on the product side and operation side. Those are three big areas. Where the teams are working so well together and it's really because there's a culture match. I think that the biggest thing that can derail any M&A is cultures that don't match and we've got two high performing cultures that are working, really well together. We're also finding a lot of good, like I would call them nuggets on the product side and on the API integration sides with data. So again, this goes back to the best of breed comment where we have found that Sterling was doing some good things on the tech and product side. Obviously first advantage is doing a lot of great things on the tech product and automation side. And what we'll be able to do is turn on those things for legacy first advantage customers that we feel that Sterling was doing a good job on and legacy sterling customers for the things that first advantage. A good job on and these will all be behind the scenes type of upgrades that client really won't see but will feel and they'll feel in output in terms of faster turnaround times, higher quality, etc. So that's why the clients are so excited about, where this tech journey can bring them because they're seeing. The best of both world products that are platforms that are out there and they're going to have they're going to start tapping into these and we're already rolling these out. These are things that you know we've already started rolling out to legacy sterling clients and legacy first advantage clients and you know we have, product road maps where you know we're going to be rolling out nice upgrades almost monthly now so clients will really start to feel and see this. On the negative side, not really, obviously, the big concern is margins, and you know that's still going to, drag a bit for us, but we've got a good plan and obviously you guys know our track record on margins. I mean look at Q4 alone, it was down from a base standpoint, but we delivered 32%. Even a margin on legacy first advantage. So, we know how to improve margin, and we've just got some work to do on it, but we've got a great plan in place.
Manav Patnaik
Thank you, appreciate it.
Operator
We'll take our next question from Jeff Silber with BMO Capital Markets. Please go ahead. Your line is open.
Jeff Silber
Thank you so much. Just wanted to go back to the synergy. You talked about first advantage being more of a variable model than what you've seen in Sterling. Can you give some examples of, how you're doing that, what you're doing from Sterling's legacy business to change that?
Scott Staples
Yeah, Jeff, and welcome to the calls. Certainly, first advantage we've always looked at our fulfillment and operations functions as having a highly variable nature to them. Our third-party cost of sales, and that's fairly consistent with sterling, are almost 100% volume variable, but certainly on the labor side we have a very flexible staffing approach where, we do our modelling on. And then staff to a metric related to that and then use overtime variable shifts, weekends, etc. To modulate the available labor to the inbound orders in a pretty one to one matching ratio. I think a lot of others in our industry and Sterling included, had a little bit more of a fixed cost mindset where they staff to a kind of an underlying assumption. And then it was a fixed cost. They had 40 hours per week per employee, if you will, and we've looked at some of that that margin there, that tail end of the of the base volumes as we can use that variable function of our labor and that workforce management, it takes some time to adapt and kind of put the right tracking tools and forecasting tools and then planning tools in place, but that's been a focus. Of the operations team since day one, we're called 120 days in and we're getting very close to having some of those methodologies across the board. So that's how we handle it from a staffing standpoint. And then, I think the other big margin difference between first advantage and sterling has just been some of the shift in mix and as we've talked about a couple times, and this is coupled into our integration and synergy program. Sterling with their vault acquisition had their legacy, drug and healthcare wellness program. They had the one they acquired from Vault. First Advantage has all of that in our wellness platform as well. So, part of our synergy and integration program is harmonizing that down instead of having three of everything effectively to get to one best in class. so Between instilling that workforce management and then kind of duplicating the fulfillment of some of those wellness which are the lower mix services that we've been referring to, lower margin mix that we've been referring to, that's all on our game plan for 2025 and part of that, 150 basis point lift up at the margin at the midpoint.
Steven Marks
And Jeff, let me add that, we'll, we also have a, plan to, reduce headcount on the sterling side through automation. First advantage was, highly automated and, as we again roll out that best of breed automation to legacy sterling clients that will allow us to give some flexibility on the headcount side and a great example of that is, I think you guys have heard, for over a year now about our click chat call functionality on customer care. And Sterling didn't doesn't have that and so we'll be rolling that out, in the very near term to legacy Sterling customers which will give them the advantage of using chat, AI chat to get order status and things like that which will allow us to, rationalize some of the headcount on that side and as we roll out, even, things like agentic AI, we expect, even, further synergies on the headcount side. So, we're feeling pretty good about how we can, optimize, both organizations headcount with automation.
Jeff Silber
Right, that's really helpful. And then in your press release, you say the expected dates will remain a headwind through the middle of the year. Is it just that the comps get easier in the back half of the year? Are you expecting any major changes from a macro perspective? Any color would be great.
Scott Staples
Yeah, I mean, Jeff, that the fundamentals of it is a, you've got easier comps and as I mentioned a little while ago, right, it's your third year of compounded base declines when you get to the middle of the year. So that certainly is a major factor. And then also it's just there has been a broad stabilization trend and we're just seeing that start to play out, when you look at the hiring volumes and some of the other metrics, those have all been declining now for a couple of years, but the pace of decline has flattened out a lot over the last three to six months. And we kind of expect that normalization and stabilization to continue and then once you get to the middle of the year, you've got that stabilization trend compounded with those easier comps is kind of what drives it. But like I said a couple of times, when you zoom out and look at the year as a total, we still accept, in all parts of our range face to be negative.
Steven Marks
The only thing I would throw in there too is, that the sales engine has been, firing at all cylinders for a while now, so we will be, we'll get some revenue conversion, that things that go from new logo or upsell cross sale into base, that will start helping us, in the latter half of the year as well.
Jeff Silber
All right, thanks so much.
Operator
And as a reminder, if you'd like to ask a question today, (Operator Instructions) We'll take our next question from Kyle Peterson with Needham. Please go ahead. Your line is open.
Kyle Peterson
Great, good morning, guys. Thanks for taking the questions. Wanted to start off on, some of the expectations for, vertical performance this year. I know there's some. Some moving pieces and different mix, especially between, legacy first advantage and sterling. So, I guess any color, or any assumptions embedded in your guidance for whether it's vertical, so you expect to be particularly strong or bigger headwinds, in 2025, I think would be really helpful.
Steven Marks
Yeah, Kyle, I think not a lot of specific verticals to call out from a base perspective because you know that normalization trend and now that we're kind of hitting year three, it's kind of made its way through all of them. I know you know in the past on the legacy FA side we've highlighted the strength of retail and transportation, but like Scott mentioned not that long ago, the updated assumptions and trends around peak are certainly baked into our guidance, and I think that, guidance pretty well now has its. And across all verticals that stabilization trend, I think the call out that I would say and like Scott just mentioned is, the pipeline and momentum and go to market, we highlighted the deal in retail, the deal in health care that Scott's talked about. Those will help drive strengthen those, obviously, but from that controllable revenue standpoint, that upsell, cross sell new logo, and then retention trends are strong across all verticals.
Scott Staples
And also, Kyle, we expect that international rebound will continue. You know what we've seen out of international in the last two quarters has been very encouraging. So we expect international, even though even though it's only 13% of the business, we expect that to continue to rebound nicely. Got it. That's really helpful, and I guess just a follow up and kind of switching over into the balance sheet and leverage, appreciate all the color and the margins are solid and should get better as the year progresses. How are you guys thinking about, the pace of, deleveraging and, priorities here whether it's just, building cash and scaling you or you guys looking at, potentially. Pre-paying some debt, like, how should we kind of think about, your plans for the balance sheet, over the next, few quarters here. Yeah, well, certainly, Kyle, to start right, we do have some, a little about $5 million mandatory prepayments that we'll make on schedule at the end of every quarter that starts here in March. So, there'll be there's about $22 million of that, baked into our model and should be baked into assumptions at a minimum, we do expect, free cash flow, to be positive obviously in the year somewhere in the $55 million to $85 million dollar range is based on our guidance. And then when you kind of convert that over to leverage, there will be some deleveraging, but the synergy programs, even if we've got half of those executed midway through the year, let's call it 2026 will be the real year of deleveraging because you'll have the full year run rate benefit of those in your actual results and in your cash flow, but there will be some modesty leveraging in 2025.
Kyle Peterson
Okay. Appreciate all the color and thanks for taking the questions guys.
Operator
We'll take our next question from Scott Wertzel with Woolf Research. Please go ahead. Your line is open.
Scott Wurtzel
Hey, good morning, guys. Thank you for taking my questions. I just wanted to touch on the acceleration and growth on the legacy sterling upsell cross sale, and if you can touch on what has driven that over the last couple of quarters and then if there is anything, on their go to market side that they're executing on that you may think you can maybe fold into the FA sales force to, maybe realize some incremental, upsell, cross sale acceleration growth on your side as well. Thanks.
Steven Marks
Yeah, so Scott, mechanically on the on the legacy sterling side they had a couple larger upsells. I think they announced it the last time they did earnings, but it was the end of 2023 that went live in 2024 that was on their healthcare spaces and in some of those medical services that was their largest ever upsell. So obviously we got the full year. Benefit of that essentially in their 2024 results and I'll let Scott give some more color on in a second, but the Sterling, productivity out of frankly the entire sales force, including the Sterling team, has been phenomenal. We've got, even if you look at the more recent success, 25 enterprise bookings in Q4. If you look at last year's stand-alone FA was only 10. So not only did the transaction not distract the teams from productivity, but we've actually outperformed the prior year, if you will. I mean you just double them up from kind of the relative scale. So I think, the vault acquisition they did, while the margins aren't what we would desire, it gave Sterling a couple new avenues to cross sell into their base, and they've done a really nice job of executing on that plan.
Scott Staples
Scott, the only thing I would add is, as I mentioned earlier, especially the go to market teams are working extremely well together. It's almost like, we've been together for years now, not months, and I think, one, it's important to talk about numbers like 25 wins last quarter and obviously a great start to the year. So, the numbers are significant. But what's more important is that that shows that there's no hesitation in the market about this acquisition, that new logos are still coming to us and actually now maybe are coming to us at an accelerated rate because of The combined entity, the tech story, the best of breed story that's out there, the deep vertical story that we've got. So, we're obviously encouraged by the numbers themselves, but what's more important is that the sentiment in the in the new logo space, is certainly in favor of the merger.
Scott Wurtzel
Yeah, that's super helpful. And then just as a quick follow up on guidance, I know you're orienting towards the pro forma growth, but just wondering if there's any color you can give on your expectations for legacy first advantage growth for the year. Thanks
Steven Marks
Yeah, I mean, largely, Scott, I mean the two segments of the two, historical businesses are relatively in line, as I mentioned, we're kind of expecting the historical growth algorithms upsell, cross sell, new logo and retention to be in line. Candidly, like you've heard the story Scott mentioned, the lines get a little blurred because, there's a pipeline op. That developed out of legacy first advantage that the legacy sterling, front end platform may be the best solution, and we've had situations where the opposite is true too. So that's kind of why we're starting to look at things on a consolidated basis because it's we're able to leverage our combined strengths to impact the consolidated customer base versus kind of looking at the businesses and, as two stand-alone but I would, just looking at the trends, largely, the base trends are in line and, new logo cross sell, between the two legacy businesses are largely in line. There's nothing distinct between the two that makes you say one's going to completely perform differently than the other.
Scott Staples
I would just add that you know I think it's important to note we're not thinking that way anymore. I think what what's given us a lot of success in the early days of this integration is to not think about legacy first advantage and legacy sterling. In fact, those are words we don't use anymore internally. We'll use them with you today because obviously there's financial things we need to separate, but we don't say those words anymore internally. We're operating as one company. So, I think when you look at, what's going to happen in these businesses, we see it as one business going forward and that's you can also see in our arch structures and if you look at our go to market team, for example, it's about 50/50 sterling leaders, first advantage leaders, and you know we've got sterling leaders now running first advantage accounts and first advantage leaders running sterling accounts. It's one company going forward. It's this new co mentality that has really galvanized the team and has given us a lot of momentum. So I appreciate the question, but I just think it's important to note that culturally and organically and structurally we are not thinking legacy anything anymore.
Scott Wurtzel
Got it. Thanks, Chris.
Operator
And there are no further questions on the line at this time. I'll return the programs to our speakers for any closing remarks.
Scott Staples
Well, listen, I want to thank everybody for joining the call today. Thanks for the continued support and the first advantage story. Look forward to connecting. Take care.
Operator
Thank you all for joining us today and thank you for your participation. This concludes the first advantage; fourth quarter and full year 2024 earnings conference call and webcast. At this time, you may disconnect your line and have a wonderful day.

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Currency Exchange International Reports Second Quarter 2025 Results
Currency Exchange International Reports Second Quarter 2025 Results

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Currency Exchange International Reports Second Quarter 2025 Results

TORONTO, June 11, 2025 (GLOBE NEWSWIRE) -- Currency Exchange International, Corp. (the 'Group' or 'CXI') (TSX: CXI; OTCQX: CURN), today reported net income of $1.98 million for the second quarter of 2025, 291% higher than the prior year (all figures are in U.S. dollars except where otherwise indicated). This 2025 reported net income reflected $2.7 million net income from continuing operations and a net loss of $0.7 million from Exchange Bank of Canada, the Company's Canadian subsidiary which was classified as discontinued operations effective the second quarter of 2025. These results include restructuring charges of $0.2 million, pre-tax, related to discontinued operations in Canada and certain one-time charges of $0.1 million, pre-tax. Excluding these items, the Group's adjusted net income1 increased by 18% compared to the prior year and adjusted diluted earnings per share1 ('EPS') was 24% higher than the prior year. The completed condensed interim consolidated financial statements and management's discussion and analysis ('MD&A') can be found on the Group's SEDAR profile at Q2, 2025 Reported Results EBITDA $4.9 million Up 10% YoY Net Income $1.98 million Up 291% YoY Diluted EPS $0.31Up 288% YoY Annualized ROE 5% Down 50% YoY Q2, 2025 Adjusted Results1 EBITDA1 $5.1 million Up 15% YoY Net Income1 $2.3 millionUp 18% YoY Diluted EPS1 $0.36 Up 24% YoY Annualized ROE1 12%Flat YoY Below is a reconciliation of reported results to adjusted results based on non-recurring items: Three-month period endedApril 30, 2025 Three-month period endedApril 30, 2024 Six-month period endedApril 30, 2025 Six-monthperiod endedApril 30, 2024 Reported results $ $ $ $ EBITDA 4,901,810 4,470,061 8,755,560 7,755,158 Group net income 1,983,025 506,522 2,795,555 1,356,397 Pre-tax adjusting items Specified item: Restructuring charges 229,404 - 229,404 - Specified item: Advisory costs* 145,452 - 425,513 - Specified item: Deferred tax assets reversal* - 1,427,600 - 1,429,850 1,427,600 654,917Impact of income tax (72,073) - (80,647) - Adjusted results** EBITDA 5,131,214 4,470,061 8,984,964 7,755,158 Group net income 2,285,808 1,934,122 3,369,825 2,786,247Group Diluted earnings per share Reported 0.31 0.08 0.44 0.21 Adjusted** 0.36 0.29 0.53 0.42 *These adjustments are reported within the results from discontinued operations. **These are non-GAAP financial measures and ratios. For further details, refer to the key performance and non-GAAP financial measures section below. Total revenue was 3% lower than the prior year due to a decline in consumer demand for foreign currency as travel activity tapered during the current quarter. Although revenue declined, the Company's net income for the second quarter rose compared to the same quarter last year, primarily due to the favorable impact of a weaker U.S. Dollar on the revaluation of foreign currency banknote holdings. The Group's capital position remained robust, and liquidity was strong with $81.2 million in total equity and $60.4 million in net working capital as of April 30, 2025 ($79.4 million and $55.9 million as of October 31, 2024, respectively). All reported amounts are based on the Group's condensed interim consolidated financial statements presented in compliance with International Accounting Standard 34 Interim Financial reporting, unless otherwise noted. On February 18, 2025, the Group announced its decision to cease the operations of its wholly owned subsidiary, Exchange Bank of Canada. This strategic decision and operational plan for restructuring were communicated to all staff of EBC on February 19, 2025. Following the cessation of operations, the Bank intends to apply to the Minister of Finance in Canada to discontinue from the Bank Act. The application to discontinue is expected to be made in the fourth quarter of 2025, with the actual discontinuance of the Bank being subject to receipt of all necessary regulatory approvals. Following the Group's decision, management has commenced implementation of the restructuring and planned discontinuance of the Bank. Management anticipates that certain operating expenses and personnel costs, that are currently shared with EBC, will be 100% borne by the continuing operations of CXI, subsequent to the exit of EBC from Canada, and the current annualized estimate of these costs is approximately $3 million after tax. In the second quarter of 2025, Exchange Bank of Canada was classified as a discontinued operation in the Group's condensed interim consolidated financial statements. On May 20, 2025, CXI upgraded its U.S. securities listing with the Company's shares commencing trading on the OTCQX Best Market under the symbol CURN. Randolph Pinna, CEO of the Group, stated, 'The second quarter showed continued growth in the payments business, while with the current political and economic uncertainties, international travel activity to and from the United States decreased banknote revenues. CXI's diversified business model in the United States allows for continued new client growth in the payments business complemented by successful multi-channel banknotes offerings for both our U.S. Financial Institutions in branch or online as well as the Direct-to-Consumer customer offerings through online, agent and physical branch locations. CXI's management team and I remain committed to executing CXI's strategic plan which is focused on revenue and earnings growth as well as the return on capital and creating value for our shareholders resulting from providing leading FX technology and transaction processing solutions'. Financial Highlights for the three-month periods ended April 30, 2025 and 2024: Revenue decreased by 3% or $0.5 million to $15.9 million compared to $16.4 million. Banknotes revenue decreased by 5% or $0.6 million over the prior period while Payments revenue increased by 5% or $0.1 million; Reported EBITDA increased by 10% or $0.4 million to $4.9 million from $4.5 million. Adjusted EBITDA2 was $5.1 million, 15% higher than the prior period; Reported Group net income was $1.98 million, a 291% increase compared to the prior period. Adjusted Group net income2 increased 18% or $0.4 million to $2.3 million from $1.9 million in the prior period; Reported earnings per share were $0.32 and $0.31 on a basic and fully diluted basis, respectively, compared to the prior year's reported earnings per share of $0.08 on both a basic and fully diluted basis. Adjusted earnings per share2 were $0.37 and $0.36 on a basic and fully diluted basis, respectively, compared to the prior year's adjusted earnings per share of $0.30 and $0.29; and The Group maintained a strong financial position, with net working capital of $60.4 million and total equity of $81.2 million as of April 30, 2025. Financial Highlights for the six-month periods ended April 30, 2025 and 2024: Revenue increased by 3% or $0.8 million to $31.3 million compared to $30.5 million. Payments revenue increased by 11% or $0.5 million and Banknotes revenue increased by 1% or $0.3 million over the prior period; Reported EBITDA increased by 13% or $1.0 million to $8.8 million from $7.8 million. Adjusted EBITDA3 was $9.0 million, 16% higher than the prior period; Reported Group net income was $2.8 million, a 106% increase compared to the prior period. Adjusted Group net income3 increased 21% or $0.6 million to $3.4 million from $2.8 million in the prior period; and Reported earnings per share were $0.45 and $0.44 on a basic and fully diluted basis, respectively, compared to the prior year's reported earnings per share of $0.21 on both a basic and fully diluted basis. Adjusted earnings per share3 $0.54 and $0.53 on a basic and fully diluted basis, respectively, compared to the prior year's adjusted earnings per share of $0.44 and $0.42. Corporate Highlights for the three-month period ended April 30, 2025: The Group continued its growth in the direct-to-consumer market through its network of company-owned branch locations, agent relationships, and in the majority of states where it operates its OnlineFX platform. During the second quarter of 2025, the Group added the State of Mississippi to its OnlineFX platform network, now operating in 45 states and the District of Columbia; The Group increased its banknotes market penetration into the financial institutions sector in the United States with the addition of 124 new clients in the second quarter of 2025; and The Group continued to grow its Payments product line benefiting from the recent investments in core banking platform integrations which enabled the Group to expand its reach and increase its volumes in the United States. The Group processed 45,788 payment transactions in the second quarter compared to 37,781 payment transactions in the prior period. Selected Financial Data The following table summarizes the performance of the Group over the last eight fiscal quarters: Results of Continuing Operations - Reported Group Net Results - Reported Group Net Results- Adjusted3 Quarterly Results Revenue Net income Earnings per share (diluted) Net income (loss) Earnings/(loss) per share (diluted) Net income Earnings per share (diluted) $ $ $ $ $ $ $ Q2 2025 15,865,150 2,674,849 0.42 1,983,025 0.31 2,285,808 0.36 Q1 2025 15,450,861 1,694,672 0.26 812,530 0.12 1,092,648 0.17 Q4 2024 18,460,390 3,313,852 0.50 (2,817,897) (0.45) 2,780,445 0.42 Q3 2024 19,961,122 5,122,815 0.77 3,935,350 0.59 4,644,984 0.69 Q2 2024 16,358,796 2,731,629 0.41 506,522 0.08 1,934,122 0.29 Q1 2024 14,141,018 2,020,274 0.30 849,874 0.13 849,874 0.13 Q4 2023 18,742,856 3,467,825 0.52 2,303,822 0.34 2,303,822 0.34 Q3 2023 19,416,155 4,650,604 0.69 4,056,478 0.60 4,056,478 0.60 Earnings Conference Call Details CXI plans to host a conference call on Thursday, June 12, 2025, at 8:30 AM (EST). To participate in or listen to the call, please dial the appropriate number: Toll Free - North America: (+1) 800 717 1738 Conference ID Number: 21262 About Currency Exchange International, Corp. Currency Exchange International is in the business of providing comprehensive foreign exchange technology and processing services for banks, credit unions, businesses, and consumers in the United States and select clients globally. Primary products and services include the exchange of foreign currencies, wire transfer payments, Global EFTs, and foreign cheque clearing. Wholesale customers are served through its proprietary FX software applications delivered on its web-based interface, ('CXIFX'), its related APIs with core banking platforms, and through personal relationship managers. Consumers are served through Group-owned retail branches, agent retail branches, and its e-commerce platform, ('OnlineFX'). Contact Information For further information please contact: Bill MitoulasInvestor Relations(416) 479-9547Email: KEY PERFORMANCE AND NON-GAAP FINANCIAL MEASURES The Group measures and evaluates its performance, as presented in this document, using a number of financial metrics and measures, such as adjusted net income, which do not have standardized meanings under generally accepted accounting principles (GAAP) and may not be comparable to other companies. The Group's management believes that these measures are more reflective of its operating results and provide the readers of this document with a better understanding of management's perspective on the performance. These measures enhance the comparability of our financial performance for the current year with the corresponding period in the prior year. For further information, including a reconciliation, refer to key performance and non-GAAP financial measures in the MD&A. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This press release includes forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, demand and market outlook for wholesale and retail foreign currency exchange products and services, future growth, the timing and scale of future business plans, results of operations, performance, and business prospects and opportunities. Forward-looking statements are identified by the use of terms and phrases such as 'anticipate', 'believe', 'could', 'estimate', 'expect', 'intend', 'may', 'plan', 'predict', 'preliminary', 'project', 'will', 'would', and similar terms and phrases, including references to assumptions. Forward-looking information is based on the opinions and estimates of management at the date such information is provided, and on information available to management at such time. Forward-looking information involves significant risks, uncertainties and assumptions that could cause the Group's actual results, performance, or achievements to differ materially from the results discussed or implied in such forward-looking information. Actual results may differ materially from results indicated in forward-looking information due to a number of factors including, without limitation, the competitive nature of the foreign exchange industry; evolving worldwide geopolitical developments and pandemics including COVID-19 all of which may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets which impact personal and business travel, tourism and factors relevant to the Group's business; global economic deterioration negatively impacting tourism in general; currency exchange risks, the need for the Group to manage its planned growth, the effects of product development and the need for continued technological change, protection of the Group's proprietary rights, the effect of government regulation and compliance on the Group and the industry in which it operates, network security risks, the ability of the Group to maintain properly working systems, theft and risk of physical harm to personnel, reliance on key management personnel; volatile securities markets impacting security pricing in a manner unrelated to operating performance and impeding access to capital or increasing the cost of capital as well as the factors identified throughout this press release and in the section entitled 'Risks and Uncertainties' of the Group's Management's Discussion and Analysis for the three and six-month periods ended April 30, 2025 and 2024. Forward-looking information contained in this press release represents management's expectations as of the date hereof (or as of the date such information is otherwise stated to be presented) and is subject to change after such date. The Group disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained in this press release. 1 These are non-GAAP financial measures and ratios and are not standardized financial measures under IFRS, they are based on management-determined non-recurring items. For further information, refer to the key performance and non-GAAP financial measures section on page 4 of this document. 2 These are non-GAAP financial measures and ratios and are not standardized financial measures under IFRS, they are based on management-determined non-recurring items. For further information, refer to the key performance and non-GAAP financial measures section on page 4 of this document.3 These adjusted results are non-GAAP financial measures and ratios and are not standardized financial measures under IFRS, they are based on management-determined non-recurring items. For further information, refer to the key performance and non-GAAP financial measures section on page 4 of this in to access your portfolio

Oracle Announces Fiscal 2025 Fourth Quarter and Fiscal Full Year Financial Results
Oracle Announces Fiscal 2025 Fourth Quarter and Fiscal Full Year Financial Results

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Oracle Announces Fiscal 2025 Fourth Quarter and Fiscal Full Year Financial Results

Q4 Remaining Performance Obligations up 41% to $138 billion Q4 GAAP Earnings per Share $1.19, non-GAAP Earnings per Share $1.70 Q4 Total Revenue $15.9 billion, up 11% Q4 Cloud Revenue (IaaS plus SaaS) $6.7 billion, up 27% Q4 Cloud Infrastructure (IaaS) Revenue $3.0 billion, up 52% Q4 Cloud Application (SaaS) Revenue $3.7 billion, up 12% Q4 Fusion Cloud ERP (SaaS) Revenue $1.0 billion, up 22% Q4 NetSuite Cloud ERP (SaaS) Revenue $1.0 billion, up 18% FY 2025 Total Revenue $57.4 billion, up 8% AUSTIN, Texas, June 11, 2025 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2025 Q4 and full-year 2025 results. Total quarterly revenues were up 11% year-over-year in USD and constant currency to $15.9 billion. Cloud services and license support revenues were up 14% in USD and constant currency to $11.7 billion. Cloud license and on-premise license revenues were up 9% in USD and up 8% in constant currency to $2.0 billion. Q4 GAAP operating income was $5.1 billion. Non-GAAP operating income was $7.0 billion, up 5% in USD and up 4% in constant currency. GAAP net income was $3.4 billion, and non-GAAP net income was $4.9 billion. GAAP earnings per share was $1.19 while non-GAAP earnings per share was $1.70. Short-term deferred revenues were $9.4 billion. Operating cash flow was $20.8 billion during fiscal year 2025, up 12% in USD. Fiscal year 2025 total revenues were up 8% in USD and up 9% in constant currency to $57.4 billion. Cloud services and license support revenues were up 12% in USD and constant currency to $44.0 billion. Cloud license and on-premise license revenues were up 2% in USD and up 3% in constant currency to $5.2 billion. Fiscal year 2025 GAAP operating income was $17.7 billion, and non-GAAP operating income was $25.0 billion. GAAP net income was $12.4 billion while non-GAAP net income was $17.3 billion. GAAP earnings per share was $4.34, while non-GAAP earnings per share was $6.03. "FY25 was a very good year—but we believe FY26 will be even better as our revenue growth rates will be dramatically higher," said Oracle CEO, Safra Catz. "We expect our total cloud growth rate—applications plus infrastructure—will increase from 24% in FY25 to over 40% in FY26. Cloud Infrastructure growth rate is expected to increase from 50% in FY25 to over 70% in FY26. And RPO is likely to grow more than 100% in FY26. Oracle is well on its way to being not only the world's largest cloud application company—but also one of the world's largest cloud infrastructure companies." "MultiCloud database revenue from Amazon, Google and Azure grew 115% from Q3 to Q4," said Oracle Chairman and CTO, Larry Ellison. "We currently have 23 MultiCloud datacenters live with 47 more being built over the next 12 months. We expect triple-digit MultiCloud revenue growth to continue in FY26. Revenue from Oracle Cloud@Customer datacenters grew 104% year-over-year. We have 29 Oracle Cloud@Customer dedicated datacenters live with another 30 being built in FY26. Overall Oracle Cloud Infrastructure consumption revenue grew 62% in Q4. We expect OCI consumption revenue to grow even faster in FY26. OCI revenue growth rates are skyrocketing—so is demand." The board of directors declared a quarterly cash dividend of $0.50 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 10, 2025, with a payment date of July 24, 2025. A sample list of customers which purchased Oracle Cloud services during the quarter will be available at A list of recent technical innovations and announcements is available at To learn what industry analysts have been saying about Oracle's products and services see Earnings Conference Call and WebcastOracle will hold a conference call and webcast today to discuss these results at 4:00 p.m. Central. A live and replay webcast will be available on the Oracle Investor Relations website at About OracleOracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at TrademarksOracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing. "Safe Harbor" Statement: Statements in this press release relating to future plans, expectations, beliefs, intentions and prospects, including projections for our growth in FY26 and our expectations of relative size among cloud applications and infrastructure companies, are "forward-looking statements" and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services, including our AI products; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; our ability to secure datacenter capacity; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; economic, political and market conditions; information technology system failures, privacy and data security concerns; cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at All information set forth in this press release is current as of June 11, 2025. Oracle undertakes no duty to update any statement in light of new information or future events. ORACLE CORPORATIONQ4 FISCAL 2025 FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions, except per share data)Three Months Ended May 31,% Increase% Increase (Decrease)2025 % of 2024 % of (Decrease) in ConstantRevenues Revenues in US $ Currency (1)REVENUES Cloud services and license support $ 11,698 74 % $ 10,234 72 % 14 % 14 % Cloud license and on-premise license 2,007 13 % 1,838 13 % 9 % 8 % Hardware 850 5 % 842 6 % 1 % 0 % Services 1,348 8 % 1,373 9 % (2 %) (2 %) Total revenues 15,903 100 % 14,287 100 % 11 % 11 %OPERATING EXPENSES Cloud services and license support 3,343 21 % 2,522 18 % 33 % 32 % Hardware 252 2 % 241 2 % 4 % 4 % Services 1,145 7 % 1,160 8 % (1 %) (2 %) Sales and marketing 2,306 15 % 2,114 15 % 9 % 9 % Research and development 2,654 17 % 2,226 15 % 19 % 20 % General and administrative 467 3 % 402 3 % 16 % 16 % Amortization of intangible assets 544 3 % 743 5 % (27 %) (27 %) Acquisition related and other 4 0 % 101 1 % (96 %) (97 %) Restructuring 79 0 % 92 0 % (15 %) (16 %) Total operating expenses 10,794 68 % 9,601 67 % 12 % 12 %OPERATING INCOME 5,109 32 % 4,686 33 % 9 % 7 % Interest expense (978) (6 %) (878) (6 %) 11 % 11 % Non-operating income (expenses), net 20 0 % (26) 0 % * * INCOME BEFORE INCOME TAXES 4,151 26 % 3,782 27 % 10 % 8 % Provision for income taxes 724 4 % 639 5 % 13 % 11 %NET INCOME $ 3,427 22 % $ 3,143 22 % 9 % 7 % EARNINGS PER SHARE: Basic $ 1.22$ 1.14Diluted $ 1.19$ 1.11 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 2,8052,753Diluted 2,8712,834(1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended May 31, 2025 compared with the corresponding prior year period increased our operating income by 2 percentage points.* Not meaningful ORACLE CORPORATIONQ4 FISCAL 2025 FINANCIAL RESULTS RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) ($ in millions, except per share data) Three Months Ended May 31,% Increase (Decrease)in US $ % Increase (Decrease)in Constant Currency (2) 20252025 20242024GAAP Non-GAAP GAAP Non-GAAP REVENUES$ 15,903$ -$ 15,903 $ 14,287$ -$ 14,28711 % 11 % 11 % 11 % TOTAL OPERATING EXPENSES$ 10,794$ (1,926)$ 8,868 $ 9,601$ (1,983)$ 7,61812 % 16 % 12 % 16 % Stock-based compensation (3)1,299(1,299)- 1,047(1,047)-24 % * 24 % * Amortization of intangible assets (4)544(544)- 743(743)-(27 %) * (27 %) * Acquisition related and other4(4)- 101(101)-(96 %) * (97 %) * Restructuring79(79)- 92(92)-(15 %) * (16 %) *OPERATING INCOME$ 5,109$ 1,926$ 7,035 $ 4,686$ 1,983$ 6,6699 % 5 % 7 % 4 %OPERATING MARGIN %32 %44 % 33 %47 %(67) bp. (244) bp. (96) bp. (266) TAX EFFECTS (5)$ 724$ 472$ 1,196 $ 639$ 519$ 1,15813 % 3 % 11 % 2 %NET INCOME$ 3,427$ 1,454$ 4,881 $ 3,143$ 1,464$ 4,6079 % 6 % 7 % 5 %DILUTED EARNINGS PER SHARE$ 1.19$ 1.70 $ 1.11$ 1.638 % 5 % 6 % 3 %DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING2,871-2,871 2,834-2,8341 % 1 % 1 % 1 %(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. (3) Stock-based compensation was included in the following GAAP operating expense categories:Three Months Ended Three Months EndedMay 31, 2025 May 31, Cloud services and license support$ 150$ (150)$ - $ 140$ (140)$ - Hardware7(7)- 6(6)- Services52(52)- 44(44)- Sales and marketing200(200)- 178(178)- Research and development737(737)- 583(583)- General and administrative153(153)- 96(96)- Total stock-based compensation$ 1,299$ (1,299)$ - $ 1,047$ (1,047)$ -(4) Estimated future annual amortization expense related to intangible assets as of May 31, 2025 was as follows: Fiscal 2026$ 1,639 Fiscal 2027672 Fiscal 2028635 Fiscal 2029561 Fiscal 2030522 Thereafter558 Total intangible assets, net$ 4,587 (5) Income tax effects were calculated reflecting an effective GAAP tax rate of 17.5% and 16.9% in the fourth quarter of fiscal 2025 and 2024, respectively, and an effective non-GAAP tax rate of 19.7% and 20.1% in the fourth quarter of fiscal 2025 and 2024, respectively. The difference in our GAAP and non-GAAP tax rates in each of the fourth quarters of fiscal 2025 and 2024 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.* Not meaningful ORACLE CORPORATIONFISCAL 2025 YEAR TO DATE FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions, except per share data)Year Ended May 31,% Increase% Increase (Decrease)2025 % of 2024 % of (Decrease) in ConstantRevenues Revenues in US $ Currency (1)REVENUES Cloud services and license support $ 44,029 77 % $ 39,383 74 % 12 % 12 % Cloud license and on-premise license 5,201 9 % 5,081 10 % 2 % 3 % Hardware 2,936 5 % 3,066 6 % (4 %) (4 %) Services 5,233 9 % 5,431 10 % (4 %) (3 %) Total revenues 57,399 100 % 52,961 100 % 8 % 9 %OPERATING EXPENSES Cloud services and license support 11,569 20 % 9,427 18 % 23 % 23 % Hardware 782 1 % 891 2 % (12 %) (11 %) Services 4,576 8 % 4,825 9 % (5 %) (5 %) Sales and marketing 8,651 15 % 8,274 15 % 5 % 5 % Research and development 9,860 17 % 8,915 17 % 11 % 11 % General and administrative 1,602 3 % 1,548 3 % 3 % 4 % Amortization of intangible assets 2,307 4 % 3,010 6 % (23 %) (23 %) Acquisition related and other 75 0 % 314 0 % (76 %) (76 %) Restructuring 299 1 % 404 1 % (26 %) (26 %) Total operating expenses 39,721 69 % 37,608 71 % 6 % 6 %OPERATING INCOME 17,678 31 % 15,353 29 % 15 % 16 % Interest expense (3,578) (6 %) (3,514) (7 %) 2 % 2 % Non-operating income (expenses), net 60 0 % (98) 0 % * * INCOME BEFORE INCOME TAXES 14,160 25 % 11,741 22 % 21 % 21 % Provision for income taxes 1,717 3 % 1,274 2 % 35 % 36 %NET INCOME $ 12,443 22 % $ 10,467 20 % 19 % 20 % EARNINGS PER SHARE: Basic $ 4.46$ 3.82Diluted $ 4.34$ 3.71 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 2,7892,744Diluted 2,8662,823(1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the year ended May 31, 2025 compared with the corresponding prior year period decreased each of our total revenues and operating income by 1 percentage point.* Not meaningful ORACLE CORPORATIONFISCAL 2025 YEAR TO DATE FINANCIAL RESULTS RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) ($ in millions, except per share data) Year Ended May 31,% Increase (Decrease)in US $ % Increase(Decrease) in ConstantCurrency (2) 20252025 20242024GAAP Non-GAAP GAAP Non-GAAP REVENUES$ 57,399$ -$ 57,399 $ 52,961$ -$ 52,9618 % 8 % 9 % 9 % TOTAL OPERATING EXPENSES$ 39,721$ (7,355)$ 32,366 $ 37,608$ (7,702)$ 29,9066 % 8 % 6 % 9 % Stock-based compensation (3)4,674(4,674)- 3,974(3,974)-18 % * 18 % * Amortization of intangible assets (4)2,307(2,307)- 3,010(3,010)-(23 %) * (23 %) * Acquisition related and other75(75)- 314(314)-(76 %) * (76 %) * Restructuring299(299)- 404(404)-(26 %) * (26 %) *OPERATING INCOME$ 17,678$ 7,355$ 25,033 $ 15,353$ 7,702$ 23,05515 % 9 % 16 % 9 %OPERATING MARGIN %31 %44 % 29 %44 %181 bp. 8 bp. 182 bp. 4 TAX EFFECTS (5)$ 1,717$ 2,514$ 4,231 $ 1,274$ 2,459$ 3,73335 % 13 % 36 % 14 %NET INCOME $ 12,443$ 4,841$ 17,284 $ 10,467$ 5,243$ 15,71019 % 10 % 20 % 11 %DILUTED EARNINGS PER SHARE$ 4.34$ 6.03 $ 3.71$ 5.5617 % 8 % 18 % 9 %DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING2,866-2,866 2,823-2,8232 % 2 % 2 % 2 %(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. (3) Stock-based compensation was included in the following GAAP operating expense categories:Year Ended Year EndedMay 31, 2025 May 31, Cloud services and license support$ 609$ (609)$ - $ 525$ (525)$ - Hardware29(29)- 23(23)- Services202(202)- 167(167)- Sales and marketing757(757)- 667(667)- Research and development2,638(2,638)- 2,225(2,225)- General and administrative439(439)- 367(367)- Total stock-based compensation$ 4,674$ (4,674)$ - $ 3,974$ (3,974)$ -(4) Estimated future annual amortization expense related to intangible assets as of May 31, 2025 was as follows: Fiscal 2026$ 1,639 Fiscal 2027672 Fiscal 2028635 Fiscal 2029561 Fiscal 2030522 Thereafter558 Total intangible assets, net$ 4,587 (5) Income tax effects were calculated reflecting an effective GAAP tax rate of 12.1% and 10.9% in fiscal 2025 and 2024, respectively, and an effective non-GAAP tax rate of 19.7% and 19.2% in fiscal 2025 and 2024, respectively. The difference in our GAAP and non-GAAP tax rates in each of fiscal 2025 and 2024 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.* Not meaningful ORACLE CORPORATIONFISCAL 2025 FINANCIAL RESULTS CONDENSED CONSOLIDATED BALANCE SHEETS ($ in millions) May 31, May 31,2025 2024 ASSETSCurrent Assets:Cash and cash equivalents $ 10,786$ 10,454 Marketable securities 417207 Trade receivables, net 8,5587,874 Prepaid expenses and other current assets 4,8184,019Total Current Assets 24,57922,554Non-Current Assets: Property, plant and equipment, net 43,52221,536 Intangible assets, net 4,5876,890 Goodwill, net 62,20762,230 Deferred tax assets 11,87712,273 Other non-current assets 21,58915,493Total Non-Current Assets 143,782118,422TOTAL ASSETS $ 168,361$ 140,976LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:Notes payable and other borrowings, current $ 7,271$ 10,605 Accounts payable 5,1132,357 Accrued compensation and related benefits 2,2431,916 Deferred revenues 9,3879,313 Other current liabilities 8,6297,353Total Current Liabilities 32,64331,544Non-Current Liabilities:Notes payable and other borrowings, non-current 85,29776,264 Income taxes payable 10,26910,817 Operating lease liabilities 11,5366,255 Other non-current liabilities 7,6476,857Total Non-Current Liabilities 114,749100,193Stockholders' Equity 20,9699,239TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 168,361$ 140,976 ORACLE CORPORATION FISCAL 2025 FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in millions) Year Ended May 31, 2025 2024 Cash Flows From Operating Activities: Net income $ 12,443$ 10,467Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,8673,129Amortization of intangible assets 2,3073,010Deferred income taxes (1,637)(2,139)Stock-based compensation 4,6743,974Other, net 667720Changes in operating assets and liabilities: Increase in trade receivables, net (653)(965)Decrease in prepaid expenses and other assets 266542Decrease in accounts payable and other liabilities (608)(594)Decrease in income taxes payable (659)(127)Increase in deferred revenues 154656Net cash provided by operating activities 20,82118,673Cash Flows From Investing Activities: Purchases of marketable securities and other investments (1,272)(1,003)Proceeds from sales and maturities of marketable securities and other investments 776572Acquisitions, net of cash acquired -(63)Capital expenditures (21,215)(6,866)Net cash used for investing activities (21,711)(7,360)Cash Flows From Financing Activities: Payments for repurchases of common stock (600)(1,202)Proceeds from issuances of common stock 653742Shares repurchased for tax withholdings upon vesting of restricted stock-based awards (900)(2,040)Payments of dividends to stockholders (4,743)(4,391)Proceeds from issuances of (repayments of) commercial paper, net 1,889(167)Proceeds from issuances of senior notes and term loan credit agreements, net of issuance costs 19,548-Repayments of senior notes and term loan credit agreements (15,841)(3,500)Other financing activities, net 1,0924Net cash provided by (used for) financing activities 1,098(10,554)Effect of exchange rate changes on cash and cash equivalents 124(70)Net increase in cash and cash equivalents 332689Cash and cash equivalents at beginning of period 10,4549,765Cash and cash equivalents at end of period $ 10,786$ 10,454 ORACLE CORPORATION FISCAL 2025 FINANCIAL RESULTS FREE CASH FLOW - TRAILING 4-QUARTERS (1) ($ in millions) Fiscal 2024 Fiscal 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GAAP Operating Cash Flow $ 17,745 $ 17,039 $ 18,239 $ 18,673 $ 19,126 $ 20,287 $ 20,745 $ 20,821 Capital Expenditures (8,290) (6,935) (5,981) (6,866) (7,855) (10,745) (14,933) (21,215) Free Cash Flow $ 9,455 $ 10,104 $ 12,258 $ 11,807 $ 11,271 $ 9,542 $ 5,812 $ (394) Operating Cash Flow % Growth over prior year 68 % 13 % 18 % 9 % 8 % 19 % 14 % 12 % Free Cash Flow % Growth over prior year 76 % 20 % 68 % 39 % 19 % (6 %) (53 %) (103 %)GAAP Net Income $ 9,375 $ 10,137 $ 10,642 $ 10,467 $ 10,976 $ 11,624 $ 12,160 $ 12,443 Operating Cash Flow as a % of Net Income 189 % 168 % 171 % 178 % 174 % 175 % 171 % 167 % Free Cash Flow as a % of Net Income 101 % 100 % 115 % 113 % 103 % 82 % 48 % (3) %(1) To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity. ORACLE CORPORATION FISCAL 2025 FINANCIAL RESULTS SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1) ($ in millions) Fiscal 2024 Fiscal 2025 Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL REVENUES BY OFFERINGS Cloud services $ 4,635 $ 4,775 $ 5,054 $ 5,311 $ 19,774$ 5,623 $ 5,937 $ 6,210 $ 6,737 $ 24,506 License support 4,912 4,864 4,909 4,923 19,6094,896 4,869 4,797 4,961 19,523 Cloud services and license support 9,547 9,639 9,963 10,234 39,38310,519 10,806 11,007 11,698 44,029 Cloud license and on-premise license 809 1,178 1,256 1,838 5,081870 1,195 1,129 2,007 5,201 Hardware 714 756 754 842 3,066655 728 703 850 2,936 Services 1,383 1,368 1,307 1,373 5,4311,263 1,330 1,291 1,348 5,233 Total revenues $ 12,453 $ 12,941 $ 13,280 $ 14,287 $ 52,961$ 13,307 $ 14,059 $ 14,130 $ 15,903 $ 57,399AS REPORTED REVENUE GROWTH RATES Cloud services 30 % 25 % 25 % 20 % 25 %21 % 24 % 23 % 27 % 24 % License support 2 % 2 % 1 % 0 % 1 %0 % 0 % (2 %) 1 % 0 % Cloud services and license support 13 % 12 % 12 % 9 % 12 %10 % 12 % 10 % 14 % 12 % Cloud license and on-premise license (10 %) (18 %) (3 %) (15 %) (12 %)7 % 1 % (10 %) 9 % 2 % Hardware (6 %) (11 %) (7 %) (1 %) (6 %)(8 %) (4 %) (7 %) 1 % (4 %) Services 2 % (2 %) (5 %) (6 %) (3 %)(9 %) (3 %) (1 %) (2 %) (4 %) Total revenues 9 % 5 % 7 % 3 % 6 %7 % 9 % 6 % 11 % 8 %CONSTANT CURRENCY REVENUE GROWTH RATES (2)Cloud services 29 % 24 % 24 % 20 % 24 %22 % 24 % 25 % 27 % 24 % License support 0 % 0 % 1 % 1 % 0 %0 % 0 % 0 % 0 % 0 % Cloud services and license support 12 % 11 % 11 % 10 % 11 %11 % 12 % 12 % 14 % 12 % Cloud license and on-premise license (11 %) (19 %) (3 %) (14 %) (12 %)8 % 3 % (8 %) 8 % 3 % Hardware (8 %) (12 %) (7 %) 0 % (7 %)(8 %) (3 %) (5 %) 0 % (4 %) Services 1 % (3 %) (5 %) (6 %) (3 %)(8 %) (3 %) 1 % (2 %) (3 %) Total revenues 8 % 4 % 7 % 4 % 6 %8 % 9 % 8 % 11 % 9 %CLOUD SERVICES AND LICENSE SUPPORT REVENUES BY ECOSYSTEM Applications cloud services and license support $ 4,471 $ 4,474 $ 4,584 $ 4,642 $ 18,172$ 4,769 $ 4,784 $ 4,811 $ 5,019 $ 19,383 Infrastructure cloud services and license support 5,076 5,165 5,379 5,592 21,2115,750 6,022 6,196 6,679 24,646 Total cloud services and license support revenues $ 9,547 $ 9,639 $ 9,963 $ 10,234 $ 39,383$ 10,519 $ 10,806 $ 11,007 $ 11,698 $ 44,029AS REPORTED REVENUE GROWTH RATES Applications cloud services and license support 11 % 10 % 10 % 6 % 9 %7 % 7 % 5 % 8 % 7 % Infrastructure cloud services and license support 15 % 14 % 13 % 12 % 14 %13 % 17 % 15 % 19 % 16 % Total cloud services and license support revenues13 % 12 % 12 % 9 % 12 %10 % 12 % 10 % 14 % 12 %CONSTANT CURRENCY REVENUE GROWTH RATES (2) Applications cloud services and license support 11 % 9 % 10 % 6 % 9 %7 % 7 % 6 % 8 % 7 % Infrastructure cloud services and license support 14 % 12 % 13 % 13 % 13 %14 % 17 % 18 % 19 % 17 % Total cloud services and license support revenues12 % 11 % 11 % 10 % 11 %11 % 12 % 12 % 14 % 12 %GEOGRAPHIC REVENUES Americas $ 7,841 $ 8,067 $ 8,270 $ 8,945 $ 33,122$ 8,372 $ 8,933 $ 9,000 $ 10,034 $ 36,339 Europe/Middle East/Africa 3,005 3,170 3,316 3,539 13,0303,228 3,381 3,421 3,996 14,025 Asia Pacific 1,607 1,704 1,694 1,803 6,8091,707 1,745 1,709 1,873 7,035 Total revenues$ 12,453 $ 12,941 $ 13,280 $ 14,287 $ 52,961$ 13,307 $ 14,059 $ 14,130 $ 15,903 $ 57,399 (1) The sum of the quarterly information presented may vary from the year-to-date information presented due to rounding.(2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024 and 2023 for the fiscal 2025 and fiscal 2024 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods. APPENDIX A ORACLE CORPORATIONQ4 FISCAL 2025 FINANCIAL RESULTSEXPLANATION OF NON-GAAP MEASURES To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects: Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses, income tax effects and net income measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods. Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating expenses, income tax effects and net income measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods. Acquisition related and other expenses; and restructuring expenses: We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses from our non-GAAP operating expenses, income tax effects and net income measures. We incurred expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition related and other expenses consisted of personnel related costs for transitional and certain other employees, certain business combination adjustments including certain adjustments after the measurement period has ended, and certain other operating items, net. Restructuring expenses consisted of employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses. Although acquisition related and other expenses and restructuring expenses may diminish over time with respect to past acquisitions and/or strategic initiatives, we generally will incur certain of these expenses in connection with any future acquisitions and/or strategic initiatives. 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Oxford: Owner of Tommy Bahama, Lilly Pulitzer and Johnny Was Reports First Quarter Results
Oxford: Owner of Tommy Bahama, Lilly Pulitzer and Johnny Was Reports First Quarter Results

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Oxford: Owner of Tommy Bahama, Lilly Pulitzer and Johnny Was Reports First Quarter Results

ATLANTA, June 11, 2025 (GLOBE NEWSWIRE) -- Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its first quarter of fiscal 2025 ended May 3, 2025. Consolidated net sales in the first quarter of fiscal 2025 were $393 million compared to $398 million in the first quarter of fiscal 2024. EPS on a GAAP basis was $1.70 compared to $2.42 in the first quarter of fiscal 2024. On an adjusted basis, EPS was $1.82 compared to $2.66 in the first quarter of fiscal 2024. Tom Chubb, Chairman and CEO, commented, 'We were able to deliver sales and adjusted EPS within our guidance ranges for the first quarter despite uncertain tariff and trade dynamics that are significantly impacting our industry and operating landscape. Despite the increasing headwinds, we were led by a low double digit increase at Lilly Pulitzer as the brand's current assortment is resonating strongly with its core consumer, and overall sales were only modestly lower than last year. At the same time, we were able to maintain strong gross margins above 64%." Mr. Chubb concluded, 'I am proud of the way the teams across our Company have responded swiftly to rapidly changing trade and tariff developments. Our teams have made meaningful progress in diversifying and shifting our supply chain to reduce our exposure to future tariff developments. We believe that our portfolio of differentiated lifestyle brands and strong balance sheet will enable us to navigate this uncertain period, manage the business to drive long-term shareholder value and provide an opportunity to gain market share in the current environment. We will continue to focus on what we can control, including executing our strategy and servicing our customers.' First Quarter of Fiscal 2025 versus Fiscal 2024 Net Sales by Operating Group First Quarter ($ in millions) 2025 2024 % Change Tommy Bahama $ 216.2 $ 225.6 (4.2 %) Lilly Pulitzer 99.0 88.4 12.0 % Johnny Was 43.5 51.2 (15.1 %) Emerging Brands 34.2 33.0 3.8 % Other (0.1 ) (0.1 ) NM Total Company $ 392.9 $ 398.2 (1.3 %) Consolidated net sales of $393 million decreased compared to sales of $398 million in the first quarter of fiscal 2024. Full-price direct-to-consumer (DTC) sales decreased 3% to $249 million versus the first quarter of fiscal 2024. Full-price retail sales of $135 million were 1% lower than the prior-year period. E-commerce sales of $114 million were 5% lower than the prior-year period. Outlet sales of $18 million were comparable to the prior period. Food and beverage sales were $34 million, a 3% decrease versus the prior-year period. Wholesale sales increased 4% to $92 million versus the first quarter of fiscal 2024. Gross margin was 64.2% on a GAAP basis, compared to 64.9% in the first quarter of fiscal 2024. On an adjusted basis, gross margin was 64.3% compared to 65.4% in the first quarter of fiscal 2024. The decreased gross margin on a GAAP basis was primarily due to (1) increased freight expenses to e-commerce customers at Tommy Bahama, (2) increased markdowns during clearance events at Lilly Pulitzer and Johnny Was and (3) a change in sales mix with wholesale sales, including off-priced wholesale sales, representing a higher proportion of net sales. We also incurred $1 million of additional charges in cost of goods sold in the first quarter of fiscal 2025 resulting from the U.S. tariffs on imported goods implemented in the first quarter of fiscal 2025. These decreases were partially offset by a $2 million lower LIFO accounting charge in the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024. SG&A was $223 million compared to $213 million last year with approximately $6 million, or 59%, of the increase is related to increases in employment costs, occupancy costs and depreciation expense due to the opening of 31 new brick and mortar retail locations since the first quarter of fiscal 2024. This includes the 8 net new stores including 2 Tommy Bahama Marlin Bars opened in the first quarter of fiscal 2025. We also incurred pre-opening expenses related to some of the approximately 7 additional stores planned to open during the remainder of fiscal 2025, including an additional Tommy Bahama Marlin Bar. On an adjusted basis, SG&A was $221 million compared to $210 million in the prior-year period. Royalties and other operating income decreased $1 million to $7 million in the first quarter of fiscal 2025 primarily due to decreased royalty income in Tommy Bahama reflecting the lower sales of our licensing partners. Operating income was $36 million, or 9.2% of net sales, compared to $52 million, or 13.2% of net sales, in the first quarter of fiscal 2024. On an adjusted basis, operating income decreased to $39 million, or 9.8% of net sales, compared to $57 million, or 14.4% of net sales, in the first quarter of fiscal 2024. Interest expense increased to $2 million from $1 million in the prior year period. The increased interest expense was primarily due to a higher average outstanding debt balance during the first quarter of fiscal 2025 than the first quarter of fiscal 2024. The effective income tax rate in the first quarter of fiscal 2025 was 24.1% which primarily reflects the benefit derived from a reduction in income tax expense as a result of the receipt of interest from a U.S. federal income tax receivable and the remeasurement of deferred tax balances due to changes in state tax rates partially offset by a net increase to uncertain tax positions during the quarter. The effective tax rate in the first quarter of fiscal 2024 was 25.6% which primarily reflects the unfavorable remeasurement of deferred tax assets and an increase to uncertain tax positions partially offset by a favorable return-to-provision adjustment for a foreign subsidiary. Balance Sheet and Liquidity Inventory increased $18 million, or 12%, on a LIFO basis and $20 million, or 9%, on a FIFO basis compared to the end of the first quarter of fiscal 2024. Inventories increased in all operating segments with the exception of Johnny Was due primarily to impacts associated with the U.S. tariffs that were implemented in first quarter of fiscal 2025 including (1) accelerated purchases of inventory before the anticipated implementation of increased tariffs and (2) increased costs capitalized into inventory after the implementation of the tariffs. At the end of the first quarter of fiscal 2025, our inventory balances included an additional $3 million of costs associated with the increased tariffs implemented in the first quarter of fiscal 2025. During the first quarter of fiscal 2025, cash used in operations was $4 million compared to cash provided by operations of $33 million in the first quarter of fiscal 2024. The cash used in operations reflects the result of lower net earnings, working capital needs, including accelerating inventory purchases, and $12 million of capitalizable implementation costs associated with cloud computing arrangements. Borrowings outstanding increased to $118 million at the end of the first quarter of fiscal 2025 compared to $19 million and $31 million of borrowings outstanding at the end of the first quarter of fiscal 2024 and the fourth quarter of fiscal 2024, respectively. During the first quarter of fiscal 2025, share repurchases of $51 million, capital expenditures of $23 million primarily associated with the project to build a new distribution center in Lyons, Georgia, and the opening of eight new stores, including two Tommy Bahama Marlin Bars, $12 million of capitalizable implementation costs associated with cloud computing arrangements, dividend payments of $10 million, and working capital requirements exceeded cash flow from operations. The Company had $8 million of cash and cash equivalents at the end of both the first quarter of fiscal 2025 and the first quarter of fiscal 2024. Dividend The Board of Directors declared a quarterly cash dividend of $0.69 per share. The dividend is payable on August 1, 2025 to shareholders of record as of the close of business on July 18, 2025. The Company has paid dividends every quarter since it became publicly owned in 1960. Outlook For fiscal 2025 ending on January 31, 2026, the Company revised its sales and EPS guidance. The Company now expects net sales in a range of $1.475 billion to $1.515 billion as compared to net sales of $1.52 billion in fiscal 2024. In fiscal 2025, GAAP EPS is expected to be between $2.28 and $2.68 compared to fiscal 2024 GAAP EPS of $5.87. Adjusted EPS is expected to be between $2.80 and $3.20, compared to fiscal 2024 adjusted EPS of $6.68. The revised fiscal 2025 EPS and adjusted EPS guidance includes $40 million in additional tariff costs, or $2.00 per share on an after-tax basis. For the second quarter of fiscal 2025, the Company expects net sales to be between $395 million and $415 million compared to net sales of $420 million in the second quarter of fiscal 2024. GAAP EPS is expected to be between $0.92 and $1.12 in the second quarter of fiscal 2025 compared to a GAAP EPS of $2.57 in the second quarter of fiscal 2024. Adjusted EPS is expected to be between $1.05 and $1.25 compared to adjusted EPS of $2.77 in the second quarter of fiscal 2024. The revised second quarter of fiscal 2025 EPS guidance includes $15 million in additional tariff costs, or $0.75 per share on an after-tax basis. The Company anticipates interest expense of $8 million in fiscal 2025, with interest expense expected to be between $1 million and $2 million per quarter for the remainder of fiscal 2025. The Company's effective tax rate is expected to be approximately 26% for the full year of fiscal 2025. Capital expenditures in fiscal 2025, including the $23 million in the first quarter of fiscal 2025, are expected to be approximately $120 million compared to $134 million in fiscal 2024. The planned year-over-year decrease relates primarily to lower anticipated new store openings in fiscal 2025. The Company expects a year-over-year net increase of approximately 15 full price stores by the end of fiscal 2025, including three new Marlin Bars. The $120 million in expected capital expenditures in fiscal 2025 includes capital expenditures of approximately $70 million related to the completion of the project to build a new distribution center in Lyons, Georgia, including $10 million in the first quarter of fiscal 2025, and capital expenditures related to new stores and Tommy Bahama Marlin Bars. Conference Call The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live web cast of the conference call will be available on the Company's website at A replay of the call will be available through June 25, 2025 by dialing (412) 317-6671 access code 13753975. About Oxford Oxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama®, Lilly Pulitzer®, Johnny Was®, Southern Tide®, The Beaufort Bonnet Company®, Duck Head® and Jack Rogers® lifestyle brands. Oxford's stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford's website at Basis of Presentation All per share information is presented on a diluted basis. Non-GAAP Financial Information The Company reports its consolidated financial statements in accordance with generally accepted accounting principles (GAAP). To supplement these consolidated financial results, management believes that a presentation and discussion of certain financial measures on an adjusted basis, which exclude certain non-operating or discrete gains, charges or other items, may provide a more meaningful basis on which investors may compare the Company's ongoing results of operations between periods. These measures include net adjusted earnings, adjusted net earnings per share, adjusted gross profit, adjusted gross margin, adjusted SG&A, and adjusted operating income, among others. Management uses these non-GAAP financial measures in making financial, operational, and planning decisions to evaluate the Company's ongoing performance. Management also uses these adjusted financial measures to discuss its business with investment and other financial institutions, its board of directors and others. Reconciliations of these adjusted measures to the most directly comparable financial measures calculated in accordance with GAAP are presented in tables included at the end of this release. Safe Harbor This press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation: changes in the trade policies of the United States and those of other nations, including risks of potential future changes or worsening trade tensions between the United States and other countries and the impact of uncertainties surrounding U.S. trade policy on consumer sentiment; demand for our products, which may be impacted by macroeconomic factors that may impact consumer discretionary spending and pricing levels for apparel and related products, many of which may be impacted by inflationary pressures, tariffs, volatile and/or elevated interest rates, concerns about a potential global recession, the stability of the banking industry or general economic uncertainty, and the effectiveness of measures to mitigate the impact of these factors; risks relating to our product sourcing decentralization efforts, including our ability to identify alternative countries to source and produce our products and to successfully implement changes in our supply chain; possible changes in governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued inflationary pressures; competitive conditions and/or evolving consumer shopping patterns, particularly in a highly promotional retail environment; acquisition activities (such as the acquisition of Johnny Was); global supply chain constraints that have, and could continue, to affect freight, transit, and other costs; costs and availability of labor and freight deliveries, including our ability to appropriately staff our retail stores and food & beverage locations; costs of products as well as the raw materials used in those products, as well as our ability to pass along price increases to consumers; energy costs; our ability to respond to rapidly changing consumer expectations; unseasonal or extreme weather conditions or natural disasters, such as the 2024 hurricanes impacting the Southeastern United States; lack of or insufficient insurance coverage; the ability of business partners, including suppliers, vendors, wholesale customers, licensees, logistics providers and landlords, to meet their obligations to us and/or continue our business relationship to the same degree as they have historically; hiring of, retention of and disciplined execution by key management and other critical personnel; cybersecurity breaches and ransomware attacks, as well as our and our third party vendors' ability to properly collect, use, manage and secure business, consumer and employee data and maintain continuity of our information technology systems; the effectiveness of our advertising initiatives in defining, launching and communicating brand-relevant customer experiences; the level of our indebtedness, including the risks associated with heightened interest rates on the debt and the potential impact on our ability to operate and expand our business; the timing of shipments requested by our wholesale customers; fluctuations and volatility in global financial and/or real estate markets; our ability to identify and secure suitable locations for new retail store and food & beverage openings; the timing and cost of retail store and food & beverage location openings and remodels, technology implementations and other capital expenditures; the timing, cost and successful implementation of changes to our distribution network; the effectiveness of recent, focused efforts to reassess and realign our operating costs in light of revenue trends, including potential disruptions to our operations as a result of these efforts; pandemics or other public health crises; expected outcomes of pending or potential litigation and regulatory actions; consumer, employee and regulatory focus on sustainability issues and practices, including failures by our suppliers to adhere to our vendor code of conduct; the regulation or prohibition of goods sourced, or containing raw materials or components, from certain regions and our ability to evidence compliance; access to capital and/or credit markets; factors that could affect our consolidated effective tax rate, including the impact of potential changes in U.S. tax laws and regulations; the risk of impairment to goodwill and other intangible assets such as the recent impairment charges incurred in our Johnny Was segment; and geopolitical risks, including ongoing challenges between the United States and China and those related to the ongoing war in Ukraine, the Israel-Hamas war and the conflict in the Red Sea region. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I. Item 1A. Risk Factors contained in our Fiscal 2024 Form 10-K, and those described from time to time in our future reports filed with the SEC. We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Contact:E-mail: Brian SmithInvestorRelations@ Industries, Inc. Consolidated Balance Sheets (in thousands, except par amounts) (unaudited) May 3, May 4, 2025 2024 ASSETS Current Assets Cash and cash equivalents $ 8,175 $ 7,657 Receivables, net 105,501 87,918 Inventories, net 162,334 144,373 Income tax receivable 271 19,437 Prepaid expenses and other current assets 41,253 38,978 Total Current Assets $ 317,534 $ 298,363 Property and equipment, net 281,504 193,702 Intangible assets, net 255,768 259,147 Goodwill 27,403 27,185 Operating lease assets 372,452 319,308 Other assets, net 63,195 41,183 Deferred income taxes 21,850 18,088 Total Assets $ 1,339,706 $ 1,156,976 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 86,212 $ 73,755 Accrued compensation 21,417 19,340 Current portion of operating lease liabilities 64,119 65,366 Accrued expenses and other liabilities 69,007 67,124 Total Current Liabilities $ 240,755 $ 225,585 Long-term debt 117,714 18,630 Non-current portion of operating lease liabilities 360,935 296,080 Other non-current liabilities 27,879 23,806 Shareholders' Equity Common stock, $1.00 par value per share 14,875 15,634 Additional paid-in capital 194,893 183,126 Retained earnings 385,761 396,933 Accumulated other comprehensive loss (3,106 ) (2,818 ) Total Shareholders' Equity $ 592,423 $ 592,875 Total Liabilities and Shareholders' Equity $ 1,339,706 $ 1,156,976Oxford Industries, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) First Quarter Fiscal 2025 Fiscal 2024 Net sales $ 392,861 $ 398,184 Cost of goods sold 140,575 139,823 Gross profit $ 252,286 $ 258,361 SG&A 222,708 213,103 Royalties and other operating income 6,628 7,193 Operating income $ 36,206 $ 52,451 Interest expense, net 1,726 874 Earnings before income taxes $ 34,480 $ 51,577 Income tax expense 8,299 13,204 Net earnings $ 26,181 $ 38,373 Net earnings per share: Basic $ 1.72 $ 2.46 Diluted $ 1.70 $ 2.42 Weighted average shares outstanding: Basic 15,222 15,597 Diluted 15,404 15,844 Dividends declared per share $ 0.69 $ 0.67Oxford Industries, Inc. Consolidated Statements of Cash Flows (in thousands) (unaudited) First Quarter Fiscal 2025 Fiscal 2024 Cash Flows From Operating Activities: Net earnings $ 26,181 $ 38,373 Adjustments to reconcile net earnings to cash flows from operating activities: Depreciation 14,529 13,586 Amortization of intangible assets 2,434 2,955 Equity compensation expense 3,605 4,051 Amortization and write-off of deferred financing costs 96 96 Deferred income taxes (1,440 ) 6,059 Changes in operating assets and liabilities, net of acquisitions and dispositions: Receivables, net (33,078 ) (24,571 ) Inventories, net 5,271 15,151 Income tax receivable 5,053 112 Prepaid expenses and other current assets (2,973 ) 4,051 Current liabilities (7,376 ) (15,365 ) Other balance sheet changes (16,244 ) (11,575 ) Cash (used in) provided by operating activities $ (3,942 ) $ 32,923 Cash Flows From Investing Activities: Acquisitions, net of cash acquired (28 ) (240 ) Purchases of property and equipment (23,427 ) (11,894 ) Cash used in investing activities $ (23,455 ) $ (12,134 ) Cash Flows From Financing Activities: Repayment of revolving credit arrangements (94,125 ) (136,216 ) Proceeds from revolving credit arrangements 180,733 125,542 Repurchase of common stock (50,526 ) — Proceeds from issuance of common stock 482 513 Cash dividends paid (10,381 ) (10,549 ) Other financing activities (224 ) — Cash provided by (used in) financing activities $ 25,959 $ (20,710 ) Net change in cash and cash equivalents (1,438 ) 79 Effect of foreign currency translation on cash and cash equivalents 143 (26 ) Cash and cash equivalents at the beginning of year 9,470 7,604 Cash and cash equivalents at the end of period $ 8,175 $ 7,657Oxford Industries, Inc. Reconciliations of Certain Non-GAAP Financial Information (in millions, except per share amounts) (unaudited) First Quarter AS REPORTED Fiscal 2025 Fiscal 2024 % Change Tommy Bahama Net sales $ 216.2 $ 225.6 (4.2 )% Gross profit $ 139.7 $ 148.3 (5.8 )% Gross margin 64.6 % 65.7 % Operating income $ 30.7 $ 42.6 (27.9 )% Operating margin 14.2 % 18.9 % Lilly Pulitzer Net sales $ 99.0 $ 88.4 12.0 % Gross profit $ 64.9 $ 59.3 9.5 % Gross margin 65.6 % 67.0 % Operating income $ 18.1 $ 15.5 16.7 % Operating margin 18.3 % 17.6 % Johnny Was Net sales $ 43.5 $ 51.2 (15.1 )% Gross profit $ 28.1 $ 33.2 (15.4 )% Gross margin 64.7 % 64.9 % Operating (loss) income $ (3.4 ) $ 0.3 (1124.0 )% Operating margin (7.8 )% 0.7 % Emerging Brands Net sales $ 34.2 $ 33.0 3.8 % Gross profit $ 20.3 $ 19.5 4.0 % Gross margin 59.3 % 59.2 % Operating income $ 1.9 $ 3.8 (49.8 )% Operating margin 5.6 % 11.5 % Corporate and Other Net sales $ (0.1 ) $ (0.1 ) NM Gross profit $ (0.8 ) $ (2.0 ) NM Operating loss $ (11.2 ) $ (9.9 ) NM Consolidated Net sales $ 392.9 $ 398.2 (1.3 )% Gross profit $ 252.3 $ 258.4 (2.4 )% Gross margin 64.2 % 64.9 % SG&A $ 222.7 $ 213.1 4.5 % SG&A as % of net sales 56.7 % 53.5 % Operating income $ 36.2 $ 52.5 (31.0 )% Operating margin 9.2 % 13.2 % Earnings before income taxes $ 34.5 $ 51.6 (33.1 )% Net earnings $ 26.2 $ 38.4 (31.8 )% Net earnings per diluted share $ 1.70 $ 2.42 (29.8 )% Weighted average shares outstanding - diluted 15.4 15.8 (2.8 )%First Quarter ADJUSTMENTS Fiscal 2025 Fiscal 2024 % Change LIFO adjustments(1) $ 0.5 $ 2.2 Amortization of Johnny Was intangible assets(2) $ 1.9 $ 2.7 Impact of income taxes(3) $ (0.6 ) $ (1.3 ) Adjustment to net earnings(4) $ 1.8 $ 3.7 AS ADJUSTED Tommy Bahama Net sales $ 216.2 $ 225.6 (4.2 )% Gross profit $ 139.7 $ 148.3 (5.8 )% Gross margin 64.6 % 65.7 % Operating income $ 30.7 $ 42.6 (27.9 )% Operating margin 14.2 % 18.9 % Lilly Pulitzer Net sales $ 99.0 $ 88.4 12.0 % Gross profit $ 64.9 $ 59.3 9.5 % Gross margin 65.6 % 67.0 % Operating income $ 18.1 $ 15.5 16.7 % Operating margin 18.3 % 17.6 % Johnny Was Net sales $ 43.5 $ 51.2 (15.1 )% Gross profit $ 28.1 $ 33.2 (15.4 )% Gross margin 64.7 % 64.9 % Operating (loss) income $ (1.5 ) $ 3.1 (148.4 )% Operating margin (3.4 )% 6.0 % Emerging Brands Net sales $ 34.2 $ 33.0 3.8 % Gross profit $ 20.3 $ 19.5 4.0 % Gross margin 59.3 % 59.2 % Operating income $ 1.9 $ 3.8 (49.8 )% Operating margin 5.6 % 11.5 % Corporate and Other Net sales $ (0.1 ) $ (0.1 ) NM Gross profit $ (0.3 ) $ 0.2 NM Operating loss $ (10.7 ) $ (7.6 ) NM Consolidated Net sales $ 392.9 $ 398.2 (1.3 )% Gross profit $ 252.8 $ 260.6 (3.0 )% Gross margin 64.3 % 65.4 % SG&A $ 220.8 $ 210.4 4.9 % SG&A as % of net sales 56.2 % 52.8 % Operating income $ 38.6 $ 57.4 (32.8 )% Operating margin 9.8 % 14.4 % Earnings before income taxes $ 36.9 $ 56.5 (34.8 )% Net earnings $ 28.0 $ 42.1 (33.5 )% Net earnings per diluted share $ 1.82 $ 2.66 (31.6 )%First Quarter First Quarter First Quarter Fiscal 2025 Fiscal 2025 Fiscal 2024 Actual Guidance(5) Actual Net earnings per diluted share: GAAP basis $ 1.70 $ 1.61 - 1.81 $ 2.42 LIFO adjustments(1)(6) 0.02 0.00 0.11 Amortization of Johnny Was intangible assets(2)(6) 0.09 0.09 0.13 As adjusted(4) $ 1.82 $ $1.70 - $1.90 $ 2.66 Second Quarter Second Quarter Fiscal 2025 Fiscal 2024 Guidance(7) Actual Net earnings per diluted share: GAAP basis $ 0.92 - 1.12 $ 2.57 LIFO adjustments(8) 0.00 0.03 Amortization of Johnny Was intangible assets(2)(6) 0.13 0.13 Johnny Was distribution center relocation costs(9)(6) 0.00 0.04 As adjusted(4) $ 1.05 - 1.25 $ 2.77 Fiscal 2025 Fiscal 2024 Guidance(7) Actual Net earnings per diluted share: GAAP basis $ 2.28 - 2.68 $ 5.87 LIFO adjustments(8) 0.02 0.16 Amortization of Johnny Was intangible assets(2)(6) 0.50 0.51 Johnny Was distribution center relocation costs(9)(6) 0.00 0.14 As adjusted(4) $ 2.80 - 3.20 $ 6.68 (1) LIFO adjustments represents the impact of LIFO accounting adjustments. These adjustments are included in cost of goods sold in Corporate and Other.(2) Amortization of Johnny Was intangible assets represents the amortization related to intangible assets acquired as part of the Johnny Was acquisition. These charges are included in SG&A in Johnny Was.(3) Impact of income taxes represents the estimated tax impact of the above adjustments based on the estimated applicable tax rate on current year earnings.(4) Amounts in columns may not add due to rounding.(5) Guidance as issued on March 27, 2025.(6) Adjustments shown net of income taxes.(7) Guidance as issued on June 11, 2025.(8) No estimate for LIFO accounting adjustments is reflected in the guidance for any future periods.(9) Johnny Was distribution center relocation costs relate to the transition of Johnny Was distribution center operations from Los Angeles, California to Lyons, Georgia including systems integrations, employee bonuses and severance agreements, moving costs and occupancy expenses related to the vacated distribution centers. These charges are included in SG&A in Johnny Was. Direct to Consumer Location Count End of Q1 End of Q2 End of Q3 End of Q4 Fiscal 2024 Tommy Bahama Full-price retail store 102 103 106 106 Retail-food & beverage 23 23 25 24 Outlet 35 36 37 36 Total Tommy Bahama 160 162 168 166 Lilly Pulitzer full-price retail store 60 60 61 64 Johnny Was Full-price retail store 75 76 77 77 Outlet 3 3 3 3 Total Johnny Was 78 79 80 80 Emerging Brands Southern Tide full-price retail store 20 24 28 30 TBBC full-price retail store 4 5 5 5 Total Oxford 322 330 342 345 Fiscal 2025 Tommy Bahama Full-price retail store 103 Retail-food & beverage 26 Outlet 36 Total Tommy Bahama 165 Lilly Pulitzer full-price retail store 65 Johnny Was Full-price retail store 77 Outlet 3 Total Johnny Was 80 Emerging Brands Southern Tide full-price retail store 35 TBBC full-price retail store 8 Total Oxford 353Error 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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