Jefferies Sticks to Its Hold Rating for United Natural Foods (UNFI)
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In addition to Jefferies, United Natural Foods also received a Hold from Guggenheim's John Heinbockel in a report issued yesterday. However, on July 16, CFRA upgraded United Natural Foods (NYSE: UNFI) to a Buy.
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- Business Wire
Warby Parker Announces Second Quarter 2025 Results
NEW YORK--(BUSINESS WIRE)--Warby Parker Inc. (NYSE: WRBY) ('Warby Parker' or the 'Company'), a direct-to-consumer lifestyle brand focused on vision for all, today announced financial results for the second quarter ended June 30, 2025. 'It has been a busy and exciting year marked by major milestones. We celebrated opening our 300th store and distributing 20 million pairs of glasses to people in need around the world. Looking ahead, our partnership with Google to develop intelligent eyewear is a testament to Warby Parker's commitment to innovation as we shape the future of how people interact with AI,' shared Co-Founder and Co-CEO Neil Blumenthal. 'We look forward to sharing more about our AI glasses initiative with Google. In the meantime, our team continues to invest in ways to make shopping for glasses easier than ever, leveraging proprietary digital innovations and AI tools to enable remarkable experiences across channels. This quarter, we launched Advisor, our personalized, AI-driven recommendation tool, which has strong early traction. We believe we are well-positioned for continued innovation and growth heading into the back half of the year,' added Co-Founder and Co-CEO Dave Gilboa. Second Quarter 2025 Highlights Net revenue increased $26.3 million, or 13.9%, to $214.5 million, as compared to the prior year period. Active Customers increased 9.0% to 2.60 million on a trailing 12-month basis, and Average Revenue per Customer increased 4.6% year over year to $316. Net loss improved $5.0 million to $1.8 million, as compared to the prior year period. Adjusted EBITDA (1) increased $5.4 million year over year to $25.0 million, and Adjusted EBITDA Margin (1) increased 1.3 points to 11.7%. Net cash provided by operating activities of $40.2 million. Free Cash Flow (1) of $23.9 million. Opened 11 net new stores during the quarter, ending Q2 with 298 stores. Second Quarter 2025 Year Over Year Financial Results Net revenue increased $26.3 million, or 13.9%, to $214.5 million. Active Customers increased 9.0% to 2.60 million on a trailing 12-month basis, and Average Revenue per Customer increased 4.6% to $316. Gross margin was 53.0% compared to 56.0% in the prior year. The decrease in gross margin was driven by $2.5 million of one-time inventory write-downs primarily related to the decision to sunset our Home-Try On program at the end of this year, as well as sales growth of contact lenses, increased store occupancy and doctor headcount, and tariff related costs, partially offset by the benefit from selective price increases and increased penetration of our higher priced frames and lenses. Selling, general, and administrative expenses ('SG&A') were $118.1 million, up $3.8 million from the prior year, and represented 55.1% of revenue, down from 60.8% in the prior year. As a percentage of revenue, SG&A decreased primarily due to leverage from lower stock-based compensation and corporate expenses. Adjusted SG&A (1) was $104.8 million, or 48.9% of revenue, compared to $98.2 million, or 52.2% of revenue in the prior year. Net loss improved $5.0 million to $1.8 million, primarily as a result of leveraging our expense base on higher revenue. Net loss includes $3.8 million of one-time costs in the quarter, including $2.5 million of inventory write-downs primarily related to the decision to sunset our Home-Try On program at the end of this year as well as $1.3 million of restructuring costs. Adjusted EBITDA (1) increased $5.4 million to $25.0 million, and Adjusted EBITDA Margin (1) increased 1.3 points to 11.7%. Balance Sheet Highlights Warby Parker ended the second quarter of 2025 with $286.4 million in cash and cash equivalents. Leadership Update Effective October 1, 2025, Steve Miller is stepping down as Warby Parker's Chief Financial Officer to pursue another opportunity outside of the industry. Co-Founder and Co-CEO Dave Gilboa will assume the roles of principal financial officer and principal accounting officer on an interim basis until the Company appoints a successor. Mr. Gilboa will work in close partnership with the Company's tenured financial and accounting leadership teams to ensure a seamless transition. 'When Steve joined Warby Parker fourteen years ago as our first CFO, he brought financial rigor, strategic vision, and an unwavering commitment to creating impact both inside and outside of the organization,' says Gilboa. 'He's been a close friend and partner throughout the Company's many milestones along our journey from a small startup to a public company. His contributions will be felt for many years to come, and we wish him the best in his next chapter.' 2025 Outlook For the full year 2025, Warby Parker is raising its guidance as follows: Net revenue of $880 million to $888 million, representing growth of approximately 14% to 15%. Adjusted EBITDA (1) of $98 million to $101 million, representing an Adjusted EBITDA Margin (1) of 11.1% to 11.4%. On track to open 45 new stores, including five shop-in-shops at select Target locations 'Our Q2 results underscore our ability to stay agile and focused in a dynamic consumer and policy environment,' said Steve Miller, Chief Financial Officer. 'We're proud to deliver our eighth consecutive quarter of accelerating active customer growth alongside 130 basis points of year over year Adjusted EBITDA margin expansion. It's been a privilege to help guide Warby Parker through more than a decade of growth, including our transition from a private company to a scaled public business. I'm proud of what we've accomplished and confident in the team's continued ability to execute with discipline and purpose.' The guidance and forward-looking statements made in this press release and on our conference call are based on management's expectations as of the date of this press release. (1) Please see the reconciliation of non-GAAP financial measures to the most comparable GAAP financial measure in the section titled 'Non-GAAP Financial Measures' below. Webcast and Conference Call A conference call to discuss Warby Parker's second quarter 2025 results, as well as third quarter and full year 2025 outlook, is scheduled for 8:00 a.m. ET on August 7, 2025. To participate, please dial 833-470-1428 from the U.S. or 404-975-4839 from international locations. The conference passcode is 754099. A live webcast of the conference call will be available on the investors section of the Company's website at where presentation materials will also be posted prior to the conference call. A replay will be made available online approximately two hours following the live call for a period of 90 days. Forward-Looking Statements This press release and the related conference call, webcast and presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, including expectations regarding achieving profitability and growth in our e-commerce channel, delivering stakeholder value, growing market share, and our guidance for the quarter ending September 30, 2025 and year ending December 31, 2025; expectations regarding the number of new store openings during the year ending December 31, 2025; management's plans, priorities, initiatives and strategies; expectations regarding growth of our business; and expectations regarding our ability to mitigate the impacts of existing or new tariffs. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as 'anticipate,' 'believe,' 'contemplate,' 'continue,' 'could,' 'estimate,' 'expect,' 'intend,' 'may,' 'plan,' 'potential,' 'predict,' 'project,' 'should,' 'target,' 'toward,' 'will,' or 'would,' or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made and are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to manage our future growth effectively; our expectations regarding cost of goods sold, gross margin, channel mix, customer mix, and selling, general, and administrative expenses; increases in component and shipping costs and changes in supply chain; changes to U.S. or other countries' trade policies and tariff and import/export regulations; our reliance on our information technology systems and enterprise resource planning systems for our business to effectively operate and safeguard confidential information; our ability to invest in and incorporate new technologies into our products and services; risks related to our use of artificial intelligence; our ability to engage our existing customers and obtain new customers; our ability to expand in-network access with insurance providers; planned new retail stores in 2025 and going forward; an overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, inflation, infectious diseases, government instability, and geopolitical unrest; our ability to compete successfully; our ability to manage our inventory balances and shrinkage; the growth of our brand awareness; our ability to recruit and retain optometrists, opticians, and other vision care professionals; the effects of seasonal trends on our results of operations; our ability to stay in compliance with extensive laws and regulations that apply to our business and operations; our ability to adequately maintain and protect our intellectual property and proprietary rights; our reliance on third parties for our products, operation and infrastructure; our duties related to being a public benefit corporation; the ability of our Co-Founders and Co-CEOs to exercise significant influence over all matters submitted to stockholders for approval; the effect of our multi-class structure on the trading price of our Class A common stock; our ability to achieve milestones necessary for Google's equity investment into the Company and Google's contribution to product development and commercialization costs; our ability to collaborate with partners with successful results; our ability to recognize the anticipated benefits from the partnership with Google; and the increased expenses associated with being a public company. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company's expectations is included in our most recent reports filed with the SEC on Form 10-K and Form 10-Q. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise. Additional information regarding these and other factors that could affect the Company's results is included in the Company's SEC filings, which may be obtained by visiting the SEC's website at Information contained on, or that is referenced or can be accessed through, our website does not constitute part of this document and inclusions of any website addresses herein are inactive textual references only. Glossary Active Customers is defined as unique customer accounts that have made at least one purchase in the preceding 12-month period. Average Revenue per Customer is defined as the sum of the total net revenues in the preceding 12-month period divided by the current period Active Customers. Non-GAAP Financial Measures We use Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cost of Goods Sold ('Adjusted COGS'), Adjusted Gross Margin, Adjusted Gross Profit, Adjusted Selling, General, and Administrative Expenses ('Adjusted SG&A'), and Free Cash Flow as important indicators of our operating performance. Collectively, we refer to these non-GAAP financial measures as our 'Non-GAAP Measures.' The Non-GAAP Measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Adjusted EBITDA is defined as net (loss) income before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs and major system implementation costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net revenue. Adjusted COGS is defined as cost of goods sold adjusted for stock-based compensation expense and related employer payroll taxes. Adjusted Gross Profit is defined as net revenue minus Adjusted COGS. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue. Adjusted SG&A is defined as SG&A adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs and major system implementation costs. Free Cash Flow is defined as net cash provided by operating activities minus purchases of property and equipment. The Non-GAAP Measures are presented for supplemental informational purposes only. A reconciliation of historical GAAP to Non-GAAP financial information is included under 'Selected Financial Information' below. We have not reconciled our Adjusted EBITDA Margin guidance to GAAP net (loss) income margin, or net margin, or Adjusted EBITDA guidance to GAAP net (loss) income because we do not provide guidance for GAAP net margin or GAAP net (loss) income due to the uncertainty and potential variability of stock-based compensation and taxes, which are reconciling items between GAAP net margin and Adjusted EBITDA Margin and GAAP net (loss) income and Adjusted EBITDA, respectively. Because such items cannot be reasonably provided without unreasonable efforts, we are unable to provide a reconciliation of the Adjusted EBITDA Margin guidance to GAAP net margin and Adjusted EBITDA guidance to GAAP net (loss) income. However, such items could have a significant impact on GAAP net margin and GAAP net (loss) income. About Warby Parker Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to inspire and impact the world with vision, purpose, and style–without charging a premium for it. Headquartered in New York City, the co-founder-led lifestyle brand pioneers ideas, designs products, and develops technologies that help people see, from designer-quality prescription glasses (starting at $95) and contacts, to eye exams and vision tests available online and in our 298 retail stores across the U.S. and Canada. Warby Parker aims to demonstrate that businesses can scale, do well, and do good in the world. Ultimately, the Company believes in vision for all, which is why for every pair of glasses or sunglasses sold, it distributes a pair to someone in need through its Buy a Pair, Give a Pair program. To date, Warby Parker has worked alongside its nonprofit partners to distribute more than 20 million glasses to people in need. Selected Financial Information Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands, except par value) June 30, 2025 Assets Current assets: Cash and cash equivalents $ 286,384 $ 254,161 Accounts receivable, net 1,139 1,948 Inventory 43,268 52,345 Prepaid expenses and other current assets 15,306 17,592 Total current assets 346,097 326,046 Property and equipment, net 177,156 170,464 Right-of-use lease assets 170,240 171,284 Other assets 8,406 8,696 Total assets $ 701,899 $ 676,490 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 26,037 $ 23,519 Accrued expenses 60,571 51,609 Deferred revenue 21,522 32,358 Current lease liabilities 24,632 20,235 Other current liabilities 2,771 2,633 Total current liabilities 135,533 130,354 Non-current lease liabilities 203,747 205,120 Other liabilities 1,168 943 Total liabilities 340,448 336,417 Commitments and contingencies Stockholders' equity: Common stock, $0.0001 par value; Class A: 750,000 shares authorized at June 30, 2025 and December 31, 2024, 105,012 and 102,889 issued and outstanding at June 30, 2025 and December 31, 2024, respectively; Class B: 150,000 shares authorized at June 30, 2025 and December 31, 2024, 16,946 and 17,961 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively, convertible to Class A on a one-to-one basis 12 12 Additional paid-in capital 1,048,699 1,029,220 Accumulated deficit (685,501 ) (687,221 ) Accumulated other comprehensive loss (1,759 ) (1,938 ) Total stockholders' equity 361,451 340,073 Total liabilities and stockholders' equity $ 701,899 $ 676,490 Expand Warby Parker Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net revenue $ 214,475 $ 188,222 $ 438,257 $ 388,225 Cost of goods sold 100,866 82,840 198,668 169,384 Gross profit 113,609 105,382 239,589 218,841 Selling, general, and administrative expenses 118,134 114,338 241,643 232,924 Interest and other income, net 1,984 2,567 4,439 5,123 (Loss) income before income taxes (2,541 ) (6,389 ) 2,385 (8,960 ) Provision for income taxes (789 ) 373 665 481 Net (loss) income $ (1,752 ) $ (6,762 ) $ 1,720 $ (9,441 ) Earnings per share: Basic $ (0.01 ) $ (0.06 ) $ 0.01 $ (0.08 ) Diluted $ (0.01 ) $ (0.06 ) $ 0.01 $ (0.08 ) Weighted average shares outstanding: Basic 122,565 120,086 122,257 119,615 Expand Warby Parker Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands) Six Months Ended June 30, 2025 2024 Cash flows from operating activities Net income (loss) $ 1,720 $ (9,441 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 24,648 21,704 Stock-based compensation 21,229 27,879 Non-cash charitable contribution 2,821 2,196 Asset impairment charges 486 421 Amortization of cloud-based software implementation costs 1,488 2,008 Change in operating assets and liabilities: Accounts receivable, net 809 571 Inventory 9,077 8,888 Prepaid expenses and other assets 1,085 (61 ) Accounts payable 1,846 1,384 Accrued expenses 10,752 5,187 Deferred revenue (10,836 ) (10,565 ) Lease assets and liabilities 4,067 1,956 Other liabilities 365 (577 ) Net cash provided by operating activities 69,557 51,550 Cash flows from investing activities Purchases of property and equipment (32,438 ) (32,088 ) Investment in optical equipment company — (2,000 ) Net cash used in investing activities (32,438 ) (34,088 ) Cash flows from financing activities Proceeds from stock option exercises 117 2,639 Shares withheld for taxes on stock-based compensation (6,361 ) — Proceeds from shares issued in connection with employee stock purchase plan 1,169 1,068 Net cash (used in) provided by financing activities (5,075 ) 3,707 Effect of exchange rates on cash 179 (105 ) Net change in cash and cash equivalents 32,223 21,064 Cash and cash equivalents, beginning of period 254,161 216,894 Cash and cash equivalents, end of period $ 286,384 $ 237,958 Supplemental disclosures Cash paid for income taxes $ 643 $ 345 Cash paid for interest 176 92 Non-cash investing and financing activities: Purchases of property and equipment included in accounts payable and accrued expenses $ 4,645 $ 4,089 Expand Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited) The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net (loss) income: (1) Represents expenses related to the Company's equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions. For both the three months ended June 30, 2025 and 2024, the amount includes $0.3 million of employer payroll taxes associated with releases of RSUs and option exercises. For the six months ended June 30, 2025 and 2024, the amount includes $0.9 million and $0.5 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises. (2) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2025 and May 2024 to the Warby Parker Impact Foundation. (3) Represents costs related to the implementation of major new enterprise software systems. (4) Represents one-time inventory write-downs primarily related to the decision to sunset our Home-Try On program at the end of this year. (5) Expand Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited) The following table presents our non-GAAP, or adjusted, financial measures for the periods presented as a percentage of revenue. Each cost and operating expense is adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs and major system implementation costs. Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited) The following table reflects a reconciliation of each non-GAAP, or adjusted, financial measure to its most directly comparable financial measure prepared in accordance with GAAP: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (unaudited, in thousands) (unaudited, in thousands) Cost of goods sold $ 100,866 $ 82,840 $ 198,668 $ 169,384 Adjusted to exclude the following: Stock-based compensation expense (1) 311 285 584 529 Inventory write-downs (2) 2,456 — 2,456 — Adjusted Cost of Goods Sold $ 98,099 $ 82,555 $ 195,628 $ 168,855 Gross profit $ 113,609 $ 105,382 $ 239,589 $ 218,841 Adjusted to exclude the following: Stock-based compensation expense (1) 311 285 584 529 Inventory write-downs (2) 2,456 — 2,456 — Adjusted Gross Profit $ 116,376 $ 105,667 $ 242,629 $ 219,370 Selling, general, and administrative expenses $ 118,134 $ 114,338 $ 241,643 $ 232,924 Adjusted to exclude the following: Stock-based compensation expense (1) 8,851 13,812 21,579 27,883 Non-cash charitable donation (3) 2,821 2,196 2,821 2,196 System implementation costs (4) 346 — 346 — Other costs (5) 1,341 168 1,866 1,303 Adjusted Selling, General, and Administrative Expenses $ 104,775 $ 98,162 $ 215,031 $ 201,542 Net cash provided by operating activities $ 40,199 $ 31,624 $ 69,557 $ 51,550 Purchases of property and equipment (16,286 ) (17,651 ) (32,438 ) (32,088 ) Free Cash Flow $ 23,913 $ 13,973 $ 37,119 $ 19,462 Expand (1) Represents expenses related to the Company's equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions. For both the three months ended June 30, 2025 and 2024, the amount includes $0.3 million of employer payroll taxes associated with releases of RSUs and option exercises. For the six months ended June 30, 2025 and 2024, the amount includes $0.9 million and $0.5 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises. (2) Represents one-time inventory write-downs primarily related to the decision to sunset our Home-Try On program at the end of this year. (3) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2025 and May 2024 to the Warby Parker Impact Foundation. (4) Represents costs related to the implementation of major new enterprise software systems. (5) Represents restructuring costs incurred in the second quarter of 2025 and charges for certain legal matters outside the ordinary course of business. Expand Source: Warby Parker Inc.
Business Wire
a minute ago
- Business Wire
Kenvue Reports Second Quarter 2025 Results
- SUMMIT, N.J.--(BUSINESS WIRE)--Kenvue Inc. (NYSE: KVUE) today announced financial results for the second quarter ended June 29, 2025. 'Kenvue has a strong portfolio of world-class, category-defining brands. We are actively focused on improving execution and performance, while advancing the comprehensive strategic alternatives review, to deliver our inherent value,' said Kirk Perry, Interim Chief Executive Officer. 'I'm thrilled to take on this new role at such an important time for the Company and am committed to ensuring we have the right talent, brand portfolio, and operational foundation in place to accelerate profitable growth and best position Kenvue to realize its full potential.' Second Quarter Summary Net sales decreased 4.0% vs the prior year period, primarily reflecting Organic sales 1 decline of 4.2% slightly offset by foreign currency benefit of 0.3%. Gross profit margin was 58.9% vs 59.1% in the prior year period. Adjusted gross profit margin 1 was 60.9% vs 61.6% in the prior year period. Operating income margin was 18.0% vs 3.9% in the prior year period. Adjusted operating income margin 1 was 22.7% vs 22.8% in the prior year period. Diluted earnings per share were $0.22 vs $0.03 in the prior year period. Adjusted diluted earnings per share 1 were $0.29 vs $0.32 in the prior year period. The Company is revising its outlook for Full Year 2025 to reflect year-to-date results as well as the underlying business and market conditions. In July, the Board announced a Chief Executive Officer transition and appointed Kirk Perry, current Kenvue Director, as Interim Chief Executive Officer, effective July 14, 2025. This follows the selection of Amit Banati as the Company's new Chief Financial Officer, effective May 12, 2025. The Board continues to advance the ongoing comprehensive review of strategic alternatives to unlock shareholder value. Second Quarter 2025 Financial Results Net Sales and Organic Sales Second quarter 2025 Net sales decreased 4.0% vs the prior year period, primarily reflecting Organic sales decline of 4.2% slightly offset by foreign currency benefit of 0.3%. Organic sales decline was driven by unfavorable value realization of 0.9%, reflecting planned strategic price investments, and 3.3% volume decline, which was impacted by sequential deceleration in category growth rate, weak allergy and sun seasons in North America, trade inventory fluctuations in certain customers, and changes in shipment timing versus last year in China. Gross Profit Margin and Operating Income Margin Second quarter 2025 Gross profit margin contracted 20 basis points to 58.9% from 59.1% in the prior year period. Adjusted gross profit margin declined 70 basis points to 60.9% from 61.6% in the prior year period. The year-over-year change in both measures reflects the impact from unfavorable mix, inflationary and foreign exchange headwinds, as well as strategic price investment, which more than offset savings from productivity gains attributable to our global supply chain optimization initiatives. Second quarter 2025 Operating income margin was 18.0% vs 3.9% in the prior year period, with the prior year figure impacted by non-cash charges related to asset impairment. Second quarter 2025 Adjusted operating income margin was 22.7% vs 22.8% in the prior year period. The year-over-year change in both measures reflects the year-over-year decline in Gross profit margin and Adjusted gross profit margin, partially offset by savings from Our Vue Forward, as well as quarterly phasing of brand support. Interest Expense, Net and Taxes Second quarter 2025 Interest expense, net was $94 million vs $92 million in the prior year period. Second quarter Effective tax rate was 28.6% vs 10.8% in the prior year period. The Adjusted effective tax rate 1 was 26.9% vs 25.7% in the prior year period. The year-over-year change in both measures largely reflects reductions in discrete tax benefits. Net Income Per Share ('Earnings Per Share') Second quarter 2025 Diluted earnings per share were $0.22 vs $0.03 in the prior year period and Adjusted diluted earnings per share were $0.29 vs $0.32 in the prior year period. 2025 Outlook 'We are adjusting our outlook for 2025 to reflect the year-to-date results, as well as our current expectations for the second half of the year, considering the dynamic external environment and underlying business fundamentals,' said Amit Banati, Chief Financial Officer. 'While current results do not reflect the Company's full potential, I am confident that we are taking the appropriate actions to deliver sustainable value for our shareholders.' The Company is revising its outlook for Full Year 2025 as follows: Net sales and Organic sales are expected to be down low-single-digits, assuming approximately neutral impact from foreign currency translation. Adjusted operating income margin is expected to decline year-over-year. Adjusted diluted earnings per share are expected to be in the range of $1.00 to $1.05, including a low-single-digit unfavorable impact from foreign currency. The updated outlook is predicated on the current foreign exchange rates and the estimated impact from tariffs in place as of August 6, 2025. Kenvue is not able to provide the most directly comparable GAAP measures or reconcile Adjusted operating income margin or Adjusted diluted earnings per share to comparable GAAP measures on a forward-looking basis without unreasonable efforts given the unpredictability of the timing and amounts of discrete items such as foreign exchange, acquisitions or divestitures, which may significantly impact GAAP results. Strategic Review As previously announced, the Board has been conducting a comprehensive review of strategic alternatives and has established a Strategic Review Committee to oversee the ongoing process. The strategic review continues to advance and the Board is considering a broad range of potential alternatives, including optimizing the Company's brand portfolio, while improving execution and enhancing operating performance to accelerate profitable growth and unlock the inherent value in Kenvue. The Company plans to update shareholders as the strategic review progresses. Leadership Appointments The Company has appointed Anindya (Andy) Dasgupta, a nearly 30-year global consumer products industry veteran, as Group President, Asia Pacific, effective July 14, 2025. With extensive leadership experience in health, nutrition, and food and beverage sectors, Mr. Dasgupta has held senior-level regional and global roles across Europe, the U.S., and Asia Pacific at consumer products companies, including GSK, PepsiCo, Fonterra, and Imperial Brands. He brings expertise in commercial strategy, sales, marketing, and business development. The Company also announced today that Michael (Mike) Wondrasch will be appointed as Kenvue's new Chief Technology & Data Officer effective August 25, 2025. Mr. Wondrasch brings nearly 30 years of experience at the intersection of technology, digital, and data across global Fortune 100 companies, including Avantor, Bunge, PepsiCo, and AmerisourceBergen. He will succeed Bernardo Tavares, who will remain with the Company through August 29, 2025 to help ensure a smooth transition. Webcast Information Kenvue will host a conference call with investors to discuss its second quarter results on Thursday, August 7, 2025 at 8:30 a.m. Eastern Time. The conference call can be accessed by dialing 877-407-8835 from the U.S. or +1 201-689-8779 from international locations. A live webcast of the conference call can also be accessed at with a replay made available after the live event. About Kenvue Kenvue Inc. is the world's largest pure-play consumer health company by revenue. Built on more than a century of heritage, our iconic brands, including Aveeno®, BAND-AID® Brand, Johnson's®, Listerine®, Neutrogena®, and Tylenol®, are science-backed and recommended by healthcare professionals around the world. At Kenvue, we realize the extraordinary power of everyday care. Our teams work every day to put that power in consumers' hands and earn a place in their hearts and homes. Learn more at 1 Non-GAAP Financial Measures The Company uses certain non-GAAP financial measures to supplement the financial measures prepared in accordance with U.S. GAAP. There are limitations to the use of the non-GAAP financial measures presented herein. These non-GAAP financial measures are not prepared in accordance with U.S. GAAP nor do they have any standardized meaning under U.S. GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the Company calculates such measures. Accordingly, the non-GAAP financial measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. The Company cautions you not to place undue reliance on these non-GAAP financial measures, but instead to consider them with the most directly comparable U.S. GAAP measure. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP financial measures should be considered supplements to, not substitutes for, or superior to, the corresponding financial measures calculated in accordance with U.S. GAAP. The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. The Company believes these measures help improve investors' ability to understand the Company's operating performance and makes it easier to compare the Company's results with other companies. In addition, the Company believes these measures are also among the primary measures used externally by the Company's investors, analysts, and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in our industry. Below are definitions and the reconciliation to the most closely related GAAP measures for the non-GAAP measures used in this press release and the related prepared materials and webcast. Adjusted diluted earnings per share: We define Adjusted diluted earnings per share as Adjusted net income divided by the weighted average number of diluted shares outstanding. Management views this non-GAAP measure as useful to investors as it provides a supplemental measure of the Company's performance over time. Adjusted EBITDA margin: We define EBITDA as U.S. GAAP Net income adjusted for interest, provision for taxes, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for restructuring expenses and operating model optimization initiatives, costs incurred in connection with our establishment as a standalone public company ('Separation-related costs'), conversion of stock-based awards, stock-based awards granted to individuals employed by Kenvue as of October 2, 2023 ('Founder Shares'), impairment charges, the impact of the deferred transfer of certain assets and liabilities from Johnson & Johnson in certain jurisdictions (the 'Deferred Markets'), and losses on investments. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company's operating efficiency over time. Adjusted effective tax rate: We define Adjusted effective tax rate as U.S. GAAP Effective tax rate adjusted for the tax effects on special item adjustments including amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, impairment charges, and losses on investments. We also exclude taxes related to the Deferred Markets and taxes related to the ® asset impairment charges. Management believes this non-GAAP measure is useful to investors as it provides a supplemental measure of the Company's performance over time. Adjusted gross profit margin: We define Adjusted gross profit margin (also referred to as 'Adjusted gross margin') as U.S. GAAP Gross profit margin adjusted for amortization of intangible assets, Separation-related costs, conversion of stock-based awards, Founder Shares, and operating model optimization initiatives. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company's operating efficiency over time. Adjusted net income: We define Adjusted net income as U.S. GAAP Net income adjusted for amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, impairment charges, the impact of the Deferred Markets, losses on investments, and their related tax impacts (i.e. special items). Adjusted net income excludes the impact of items that may obscure trends in our underlying performance. Management believes this non-GAAP measure is useful to investors as the Company uses Adjusted net income for strategic decision making, forecasting future results, and evaluating current performance. Adjusted operating income: We define Adjusted operating income as U.S. GAAP Operating income adjusted for amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, impairment charges, and the impact of the Deferred Markets. Management believes this non-GAAP measure is useful to investors as management uses Adjusted operating income to assess the Company's financial performance. Adjusted operating income margin: We define Adjusted operating income margin (also referred to as 'Adjusted operating margin') as Adjusted operating income as a percentage of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company's operating efficiency over time. Free cash flow: We define Free cash flow as U.S. GAAP Net cash flows from operating activities adjusted for purchases of property, plant, and equipment. Management believes this non-GAAP measure is useful to investors as it provides a view of the Company's liquidity after deducting capital expenditures, which are considered a necessary component of our ongoing operations. Organic sales: We define Organic sales as U.S. GAAP Net sales excluding the impact of changes in foreign currency exchange rates and the impact of acquisitions and divestitures. We report changes in Organic sales on a period-over-period basis. Management believes reporting period-over-period changes in Organic sales provides investors with additional, supplemental information that is useful in assessing the Company's results of operations by excluding the impact of certain items that we believe do not directly reflect our underlying operations. Cautions Concerning Forward-Looking Statements This press release contains 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements about management's expectations of Kenvue's future operating and financial performance, product development, market position, and business strategy. Such forward-looking statements include statements regarding the review of strategic alternatives conducted by the Board and the outcome and timing of the review process. Forward-looking statements may be identified by the use of words such as 'plans,' 'expects,' 'will,' 'anticipates,' 'estimates,' and other words of similar meaning. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Kenvue and its affiliates. Risks and uncertainties include, but are not limited to: the inability to execute on Kenvue's business development strategy; inflation and other economic factors, such as interest rate and currency exchange rate fluctuations, as well as existing or proposed tariffs and other constraints on trade both in the U.S. and in foreign markets; the ability to successfully manage local, regional, or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow Kenvue to effect any expected share repurchases and dividend payments; Kenvue's ability to maintain satisfactory credit ratings and access capital markets, which could adversely affect its liquidity, capital position, and borrowing costs; competition, including technological advances, new products, and intellectual property attained by competitors; challenges inherent in new product research and development; uncertainty of commercial success for new and existing products and digital capabilities; challenges to intellectual property protections including counterfeiting; the ability of Kenvue to successfully execute strategic plans, including Our Vue Forward and other restructuring or cost-saving initiatives; the impact of business combinations and divestitures, including any ongoing or future transactions; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations and other requirements imposed by stakeholders; changes in behavior and spending patterns of consumers; natural disasters, acts of war, or terrorism, catastrophes, or epidemics, pandemics, or other disease outbreaks; financial instability of international economies and legal systems and sovereign risk; the inability to realize the benefits of the separation from Kenvue's former parent, Johnson & Johnson; the risk of disruption or unanticipated costs in connection with the separation; the outcome and timing of the strategic review process, which may be suspended or modified at any time; the possibility that the Company may decide not to undertake a strategic alternative following the Board's strategic review process; the Company's inability to consummate any proposed strategic alternative resulting from the strategic review due to, among other things, market, regulatory and other factors; the potential for disruption to the Company's business resulting from the strategic review process; and potential adverse effects on the Company's stock price from the announcement, suspension or consummation of the strategic review process and the results thereof. A further list and descriptions of these risks, uncertainties, and other factors can be found in Kenvue's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other filings, available at or on request from Kenvue. Any forward-looking statement made in this release speaks only as of the date of this release. Kenvue undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or developments or otherwise. Organic Sales Change The following tables present a reconciliation of the change in Net sales, as reported, to the change in Organic sales, a non-GAAP measure for the periods presented: Fiscal Six Months Ended June 29, 2025 vs. June 30, 2024 Self Care (3.3 )% (0.5 )% — % (2.8 )% 0.1 % (2.9 )% Skin Health and Beauty (5.6 ) (1.1 ) (0.3 ) (4.2 ) (2.1 ) (2.1 ) Essential Health (3.4 ) (2.1 ) — (1.3 ) (0.3 ) (1.0 ) Total (4.0 )% (1.2 )% (0.1 )% (2.7 )% (0.6 )% (2.1 )% Expand (1) Price/Mix reflects value realization. Total Segment Net Sales and Adjusted Operating Income Segment Net sales for the periods presented were as follows: Segment Adjusted operating income for the periods presented was as follows: (1) Depreciation consists of depreciation of property, plant, and equipment and amortization of integration and development costs capitalized in connection with cloud computing arrangements. (2) Relates to the amortization of definite-lived intangible assets (primarily trademarks, trade names, and customer lists) over their estimated useful lives. (3) Separation-related costs relate to non-recurring costs incurred in connection with our establishment of Kenvue as a standalone public company. Separation-related costs are composed of the following: Expand Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited; Dollars in Millions) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Information technology and other $ 18 $ 68 $ 51 $ 128 Legal entity name change 6 11 11 18 Total Separation-related costs $ 24 $ 79 $ 62 $ 146 Expand Information technology and other costs primarily relates to the disentanglement of systems and the costs associated with the discontinuation of certain information technology assets. We do not expect that Separation-related costs will be recorded subsequent to the fiscal third quarter of 2025. Expand (5) Impairment charges includes $488 million recognized in the fiscal three months ended June 30, 2024 in relation to long-lived assets, $68 million recognized in the fiscal three months ended March 31, 2024 on the held for sale asset associated with the Company's former corporate headquarters in Skillman, New Jersey, and $22 million recognized in the fiscal three months ended June 30, 2024 on certain software development assets. Expand Non-GAAP Financial Information The following tables present reconciliations of GAAP to non-GAAP for the periods presented: Detail of Adjustments Cost of Sales SG&A/Restructuring Expenses Other Operating Expense, Net Provision for Taxes Total Amortization of intangible assets (1) $ 64 $ — $ — $ — $ 64 Restructuring expenses (2) — 60 — — 60 Operating model optimization initiatives (2) 6 2 — — 8 Separation-related costs (including conversion of stock-based awards and Founder Shares) (3) 7 23 — — 30 Impact of Deferred Markets—minority interest expense — — 6 — 6 Impact of Deferred Markets—provision for taxes — — 10 (10 ) — Tax impact on special item adjustments — — — (28 ) (28 ) (a) (b) (c) (d) $ 13 Expand Fiscal Three Months Ended June 30, 2024 Net sales $ 4,000 — $ 4,000 Gross profit $ 2,365 99 (a) $ 2,464 Gross profit margin 59.1 % 61.6 % Operating income $ 154 757 (a)-(d) $ 911 Operating income margin 3.9 % 22.8 % Net income $ 58 553 (a)-(e) $ 611 Net income margin 1.5 % 15.3 % Interest expense, net $ 92 Provision for taxes $ 7 Depreciation and amortization $ 141 EBITDA (non-GAAP) $ 298 685 (b)-(d), (f) $ 983 EBITDA margin (non-GAAP) 7.5 % 24.6 % Expand Detail of Adjustments Amortization of intangible assets (1) $ 72 $ — $ — $ — $ — $ 72 Restructuring expenses (2) — 48 — — — 48 Operating model optimization initiatives (2) 9 1 — — — 10 Separation-related costs (including conversion of stock-based awards and Founder Shares) (3) 18 76 — — — 94 Impairment charges (4) — — 510 — (151 ) 359 Impact of Deferred Markets—minority interest expense — — — 9 — 9 Impact of Deferred Markets—provision for taxes — — — 14 (14 ) — Tax impact on special item adjustments — — — — (39 ) (39 ) Total $ 99 $ 125 $ 510 $ 23 $ (204 ) $ 553 (a) (b) (c) (d) (e) $ 27 Expand Fiscal Six Months Ended June 29, 2025 (Unaudited; Dollars in Millions) As Reported Adjustments Reference As Adjusted Net sales $ 7,580 — $ 7,580 Gross profit $ 4,429 154 (a) $ 4,583 Gross profit margin 58.4 % 60.5 % Operating income $ 1,250 361 (a)-(c) $ 1,611 Operating income margin 16.5 % 21.3 % Net income $ 742 283 (a)-(d) $ 1,025 Net income margin 9.8 % 13.5 % Interest expense, net $ 188 Provision for taxes $ 304 Depreciation and amortization $ 278 EBITDA (non-GAAP) $ 1,512 234 (b)-(c), (e) $ 1,746 EBITDA margin (non-GAAP) 19.9 % 23.0 % Expand Detail of Adjustments Cost of Sales SG&A/Restructuring Expenses Other Operating Expense, Net Provision for Taxes Total Amortization of intangible assets (1) $ 127 $ — $ — $ — $ 127 Restructuring expenses (2) — 120 — — 120 Operating model optimization initiatives (2) 12 3 — — 15 Separation-related costs (including conversion of stock-based awards and Founder Shares) (3) 15 59 — — 74 Impact of Deferred Markets—minority interest expense — — 10 — 10 Impact of Deferred Markets—provision for taxes — — 15 (15 ) — Tax impact on special item adjustments — — — (63 ) (63 ) Total $ 154 $ 182 $ 25 $ (78 ) $ 283 (a) (b) (c) (d) $ 27 (e) Expand Detail of Adjustments Cost of Sales SG&A/Restructuring Expenses Impairment Charges Other Operating Expense, Net Other Expense (Income), Net Provision for Taxes Total Amortization of intangible assets (1) $ 146 $ — $ — $ — $ — $ — $ 146 Restructuring expenses (2) — 89 — — — — 89 Operating model optimization initiatives (2) 15 4 — — — — 19 Separation-related costs (including conversion of stock-based awards and Founder Shares) (3) 41 150 — — — — 191 Impairment charges (4) — — 578 — — (151 ) 427 Impact of Deferred Markets—minority interest expense — — — 16 — — 16 Impact of Deferred Markets—provision for taxes — — — 23 — (23 ) — Losses on investments (5) — — — — 31 — 31 Tax impact on special item adjustments — — — — — (115 ) (115 ) Total $ 202 $ 243 $ 578 $ 39 $ 31 $ (289 ) $ 804 (a) (b) (c) (d) (e) (f) Cost of sales less amortization $ 56 (g) Expand (1) Relates to the amortization of definite-lived intangible assets (primarily trademarks, trade names, and customer lists) over their estimated useful lives. (2) Restructuring expenses and operating model optimization initiatives, which relate to the 2024 Multi-Year Restructuring Initiative, are composed of the following: Expand Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited; Dollars in Millions) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Employee-related costs (one-time severance and other termination benefits) $ 21 $ 29 $ 46 $ 64 Information technology and project-related costs 47 18 87 31 Other implementation costs — 11 2 13 Total Restructuring expenses and operating model optimization initiatives $ 68 $ 58 $ 135 $ 108 Expand (3) Separation-related costs relate to non-recurring costs incurred in connection with our establishment of Kenvue as a standalone public company. Separation-related costs, including the impact of the conversion of stock-based compensation awards and the incremental stock-based compensation from the issuance of the Founder Shares, are composed of the following: Expand Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited; Dollars in Millions) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Information technology and other $ 18 $ 68 $ 51 $ 128 Legal entity name change 6 11 11 18 Separation-related costs $ 24 $ 79 $ 62 $ 146 Conversion of stock-based awards 1 6 4 28 Founder Shares 5 9 8 17 Total $ 30 $ 94 $ 74 $ 191 Expand Information technology and other costs primarily relates to the disentanglement of systems and the costs associated with the discontinuation of certain information technology assets. We do not expect that Separation-related costs will be recorded subsequent to the fiscal third quarter of 2025. Expand (4) Impairment charges includes $488 million recognized in the fiscal three months ended June 30, 2024 in relation to long-lived assets, $68 million recognized in the fiscal three months ended March 31, 2024 on the held for sale asset associated with the Company's former corporate headquarters in Skillman, New Jersey, and $22 million recognized in the fiscal three months ended June 30, 2024 on certain software development assets. (5) Relates to impairment charges incurred to write off a portion of the Company's equity investment balance. Expand The following table presents reconciliations of the Effective tax rate, as reported, to Adjusted effective tax rate for the periods presented: The following table presents a reconciliation of Effective tax rate, as forecasted on a U.S. GAAP basis, to forecasted Adjusted effective tax rate for fiscal year 2025: The following table presents a reconciliation of Diluted earnings per share, as reported, to Adjusted diluted earnings per share for the periods presented: The following table presents a reconciliation of Net cash flows from operating activities, as reported, and Purchases of property, plant, and equipment, as reported, to Free cash flow for the periods presented: Other Supplemental Financial Information The following table presents the Company's Net sales by geographic region for the periods presented: Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited; Dollars in Millions) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Net sales by geographic region North America $ 1,878 $ 2,020 $ 3,735 $ 3,893 Europe, Middle East, and Africa 929 878 1,813 1,783 Asia Pacific 706 780 1,400 1,546 Latin America 326 322 632 672 Total Net sales by geographic region $ 3,839 $ 4,000 $ 7,580 $ 7,894 Expand The following table presents the Company's Research and development expenses for the periods presented. Research and development expenses are included within Selling, general, and administrative expenses. The following table presents the Company's Cash and cash equivalents, Total debt, and Net debt balance as of the periods presented: Contacts Investor Relations: Sofya Tsinis Kenvue_IR@ Media Relations: Melissa Witt media@ Get RSS Feed Kenvue Increases Quarterly Cash Dividend SUMMIT, N.J.--(BUSINESS WIRE)--Kenvue Inc. (NYSE: KVUE) today announced its Board of Directors declared a quarterly dividend of $0.2075 per share on its common stock, which represents a 1.2 percent increase compared to the prior quarterly dividend. The quarterly dividend is payable on August 27, 2025, to shareholders of record as of the close of business on August 13, 2025. About Kenvue Kenvue Inc. is the world's largest pure-play consumer health company by revenue. Built on more than a century... Kenvue to Announce Second Quarter 2025 Results on August 7, 2025 SUMMIT, N.J.--(BUSINESS WIRE)--Kenvue Inc. (NYSE: KVUE) will announce its second quarter 2025 financial results before the market opens on August 7, 2025. The company will host a conference call and webcast at 8:30 a.m. Eastern Time to discuss its financial results. The conference call can be accessed by dialing 877-407-8835 from the U.S. or +1 201-689-8779 from international locations. A live webcast of the conference call can also be accessed at with a replay made availa... Kenvue Announces CEO Transition and Actions to Unlock Shareholder Value SUMMIT, N.J.--(BUSINESS WIRE)--Kenvue Inc. (NYSE: KVUE) today announced that its Board of Directors is implementing a set of actions to enable the Company to unlock shareholder value and reach its full potential. The Board has made a Chief Executive Officer transition and is advancing an ongoing comprehensive review of strategic alternatives. 'Kenvue has world-class brands in attractive categories and a strong global platform. The actions announced today are to ensure we have the right talent,... Kenvue NYSE:KVUE Release Versions English
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Maximus Reports Fiscal Year 2025 Third Quarter Results
TYSONS, Va.--(BUSINESS WIRE)-- Maximus (NYSE: MMS), a leading provider of government services, reported financial results for the three and nine months ending June 30, 2025. 'Our third quarter results reflect once again the resilience of our business model that is underpinned by consistent delivery at scale of critical government services,' - Bruce Caswell, President and Chief Executive Officer Share Highlights for the third quarter of fiscal year 2025 include: Revenue increased 2.5% to $1.35 billion, compared to $1.31 billion for the prior year period. Organic growth was 4.3% driven primarily by strong performance in the U.S. Federal Services Segment. Diluted earnings per share were $1.86 and adjusted diluted earnings per share were $2.16, compared to $1.46 and $1.74, respectively, for the prior year period. The company is raising revenue and earnings guidance for fiscal year 2025. Full-year revenue is expected to range between $5.375 billion and $5.475 billion. Adjusted EBITDA margin is expected to be approximately 13% and adjusted diluted earnings per share are expected to range between $7.35 and $7.55 per share for the full fiscal year 2025. A quarterly cash dividend of $0.30 per share is payable on August 31, 2025, to shareholders of record on August 15, 2025. 'Our third quarter results reflect once again the resilience of our business model that is underpinned by consistent delivery at scale of critical government services,' said Bruce Caswell, President and Chief Executive Officer. 'We are grateful to play a central role in supporting our customers' missions by delivering essential services efficiently and accountably." Caswell added, 'Over the 50 years that Maximus has served as a trusted and impartial delivery partner for government, we've consistently demonstrated adaptability as legislation and regulatory changes lead to new program imperatives and advanced technologies like AI reshape citizen services." Third Quarter Results Revenue for the third quarter of fiscal year 2025 increased 2.5% to $1.35 billion, compared to $1.31 billion for the prior year period. Organic growth was 4.3% primarily due to the U.S. Federal Services Segment and, to a lesser degree, contributions from the Outside the U.S. Segment. The U.S. Services Segment delivered expected results following the prior year period's over-performance from Medicaid-related activities. For the third quarter of fiscal year 2025, operating margin was 12.3% and the adjusted EBITDA margin was 14.7%. This compares to margins of 10.8% and 13.1%, respectively, for the prior year period. Diluted earnings per share were $1.86 and adjusted diluted earnings per share were $2.16. This compares to $1.46 and $1.74, respectively, for the prior year period. U.S. Federal Services Segment U.S. Federal Services Segment revenue for the third quarter of fiscal year 2025 increased 11.4% to $761.2 million, compared to $683.3 million reported for the prior year period. All growth was organic and driven primarily by a trend across this fiscal year of elevated volumes on programs in the clinical portfolio. The segment operating margin for the third quarter of fiscal year 2025 was 18.1%, compared to 15.5% reported for the prior year period. Processing of elevated volume on behalf of our customers across several different program areas provided additional benefit to this quarter's margin. The full-year fiscal 2025 operating margin for the U.S. Federal Services Segment is now expected to be approximately 15%. U.S. Services Segment U.S. Services Segment revenue for the third quarter of fiscal year 2025 decreased 6.9% to $439.8 million, compared to $472.3 million reported in the prior year period. Similar to the first two quarters of this year, the decrease resulted from the prior year period containing excess volumes from Medicaid-related activities, including the unwinding exercise that drove extra redeterminations. The segment operating margin for the third quarter of fiscal year 2025 was 10.2%, compared to 13.0% reported for the prior year period. The higher margin in the prior year period was a direct benefit of the excess volumes that were temporary. The full-year fiscal 2025 operating margin for the U.S. Services Segment is now expected to be approximately 10.5%. Outside the U.S. Segment Outside the U.S. Segment revenue for the third quarter of fiscal year 2025 decreased to $147.4 million, compared to $159.3 million reported in the prior year period. The revenue reduction was due to the divestitures of multiple employment services businesses in prior periods, and partially offset by positive organic growth of 7.3%. The segment operating margin for the third quarter of fiscal year 2025 was 4.0%, compared to an operating loss of 0.9% in the prior year period. A trend of improved profitability for the segment across this fiscal year continues following the divestitures of multiple employment services businesses. Sales and Pipeline Year-to-date signed contract awards at June 30, 2025, totaled $3.37 billion, and contracts pending (awarded but unsigned) totaled $1.44 billion. The book-to-bill ratio at June 30, 2025, was 0.8x as calculated on a trailing twelve-month basis. The sales pipeline at June 30, 2025, totaled $44.7 billion, comprised of approximately $3.05 billion in proposals pending, $1.20 billion in proposals in preparation, and $40.4 billion in opportunities we are tracking. New work opportunities represent approximately 63% of the total sales pipeline. Balance Sheet and Cash Flows At June 30, 2025, unrestricted cash and cash equivalents totaled $59.8 million, and gross debt was $1.67 billion. The ratio of debt, net of allowed cash, to consolidated EBITDA for the quarter ended June 30, 2025, as calculated on a trailing twelve-month basis in accordance with our credit agreement, was 2.1x compared to 1.9x at March 31, 2025. The current debt ratio stands at the low end of our 2x to 3x target net leverage range and recent quarters of increased borrowings are due to a combination of Maximus common stock purchases and temporary working capital needs. For the third quarter of fiscal year 2025, cash used in operating activities totaled $182.7 million and free cash flow was an outflow of $198.2 million. Operating cash flows were impacted primarily by payment delays on two large programs as contemplated in prior guidance in which Days Sales Outstanding (DSO) were estimated to peak in this quarter-ended June 30, 2025. DSO were 96 days at June 30, 2025, compared with 73 days at March 31, 2025. Subsequent to June 30, 2025, collections have improved substantially and are anticipated to continue through the end of this fiscal year. As a result, fiscal year 2025 guidance for free cash flow is increasing. The current Board of Directors authorization announced in December 2024 has $65.8 million available for future purchases of Maximus common stock. On July 5, 2025, our Board of Directors declared a quarterly cash dividend of $0.30 for each share of our common stock outstanding. The dividend is payable on August 31, 2025, to shareholders of record on August 15, 2025. Raising Fiscal Year 2025 Guidance Maximus is raising revenue, earnings, and free cash flow guidance for fiscal year 2025. Revenue guidance is increasing by $100 million at the midpoint and is now expected to range between $5.375 billion and $5.475 billion. The full year adjusted EBITDA margin guidance, which excludes divestiture-related charges, improves by 130 basis points to approximately 13%, compared to prior guidance. Guidance for adjusted diluted earnings per share, which excludes expense for amortization of intangible assets and divestiture-related charges, increases by $1.00 at the midpoint and is now expected to range between $7.35 and $7.55 per share for fiscal year 2025. Free cash flow guidance increases by $10 million at the midpoint and is now expected to range between $370 million and $390 million for fiscal year 2025. Interest expense is now estimated to be $81 million for fiscal year 2025. The full year tax rate is still expected to range between 28% and 29% and the weighted average shares outstanding forecast of approximately 58 million shares is unchanged for fiscal year 2025. Conference Call and Webcast Information Maximus will host a conference call this morning, August 7, 2025, at 9:00 a.m. ET. The call is open to the public and available by webcast or by phone at: 877.407.8289 (Domestic) / +1.201.689.8341 (International) For those unable to listen to the live call, a recording of the webcast will be available on About Maximus As a leading strategic partner to government, Maximus helps improve the delivery of public services amid complex technology, health, economic, environmental, and social challenges. With a deep understanding of program service delivery, acute insights that achieve operational excellence, and an extensive awareness of the needs of the people being served, our employees advance the critical missions of our partners. Maximus delivers innovative business process management, impactful consulting services, and technology solutions that provide improved outcomes for the public and higher levels of productivity and efficiency of government-sponsored programs. For more information, visit Non-GAAP Measures and Forward-Looking Statements This release contains non-GAAP measures and other indicators, including organic growth, free cash flow, operating income and EPS adjusted for amortization of intangible assets and divestiture-related charges, adjusted EBITDA, consolidated EBITDA (as defined by our Credit Agreement) and other non-GAAP measures. A description of these non-GAAP measures and details as to how they are calculated are included with our earnings presentation and forthcoming Form 10-Q. The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, operating income, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies. Statements that are not historical facts, including statements about our confidence and strategies, and our guidance and expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand, or acceptance of our products are forward-looking statements that involve risks and uncertainties. These risks could cause our actual results to differ materially from those indicated by such forward-looking statements. The guidance is only effective as of the date given. We undertake no obligation to update the guidance herein as circumstances evolve. A Special Note Regarding Forward-Looking Statements is included within our forthcoming Form 10-Q and a summary of risk factors can be found in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2024, which was filed with the Securities and Exchange Commission (SEC) on November 21, 2024, as supplemented by the risk factor set forth in Part II, Item 1A "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which was filed with the SEC on May 8, 2025. Our SEC reports are accessible on Maximus, Inc. Consolidated Balance Sheets September 30, 2024 (unaudited) (in thousands) Assets: Cash and cash equivalents $ 59,777 $ 183,123 Accounts receivable, net 1,422,350 879,514 Income taxes receivable 5,661 5,282 Prepaid expenses and other current assets 117,243 132,625 Total current assets 1,605,031 1,200,544 Property and equipment, net 34,536 38,977 Capitalized software, net 217,433 187,677 Operating lease right-of-use assets 115,437 133,594 Goodwill 1,782,836 1,782,871 Intangible assets, net 561,566 630,569 Deferred contract costs, net 60,392 59,432 Deferred compensation plan assets 58,714 55,913 Deferred income taxes 11,059 14,801 Other assets 15,289 27,130 Total assets $ 4,462,293 $ 4,131,508 Liabilities and Shareholders' Equity: Liabilities: Accounts payable and accrued liabilities $ 281,994 $ 303,321 Accrued compensation and benefits 164,194 237,121 Deferred revenue, current portion 70,197 83,238 Income taxes payable 31,310 26,535 Long-term debt, current portion 48,263 40,139 Operating lease liabilities, current portion 39,882 47,656 Other current liabilities 70,311 69,519 Total current liabilities 706,151 807,529 Deferred revenue, non-current portion 48,990 45,077 Deferred income taxes 161,426 169,118 Long-term debt, non-current portion 1,608,982 1,091,954 Deferred compensation plan liabilities, non-current portion 58,736 57,599 Operating lease liabilities, non-current portion 83,390 97,221 Other liabilities 21,582 20,195 Total liabilities 2,689,257 2,288,693 Shareholders' equity: Common stock, no par value; 100,000 shares authorized; 56,350 and 60,352 shares issued and outstanding as of June 30, 2025, and September 30, 2024, respectively 627,496 598,304 Accumulated other comprehensive loss (12,629 ) (32,460 ) Retained earnings 1,158,169 1,276,971 Total shareholders' equity 1,773,036 1,842,815 Total liabilities and shareholders' equity $ 4,462,293 $ 4,131,508 Expand Maximus, Inc. Consolidated Statements of Cash Flows (Unaudited) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (in thousands) Cash flows from operating activities: Net income $ 105,981 $ 89,752 $ 243,746 $ 234,410 Adjustments to reconcile net income to cash flows from operations: Depreciation and amortization of property, equipment, and capitalized software 9,607 7,530 27,502 24,146 Amortization of intangible assets 23,010 23,542 69,041 68,532 Amortization of debt issuance costs and debt discount 736 1,697 2,046 2,899 Deferred income taxes (5,239 ) 4,545 (5,829 ) (3,770 ) Stock compensation expense 10,749 9,481 30,324 27,605 Divestiture-related charges — — 39,343 1,018 Change in assets and liabilities, net of effects of business combinations and divestitures: Accounts receivable (318,415 ) 65,857 (553,297 ) (26,528 ) Prepaid expenses and other current assets 1,398 (616 ) 9,341 19,316 Deferred contract costs 1,059 (4,777 ) (856 ) (8,377 ) Accounts payable and accrued liabilities (27,751 ) 4,642 (21,808 ) (1,659 ) Accrued compensation and benefits (2,368 ) (10,487 ) (50,369 ) (21,043 ) Deferred revenue 2,618 7,374 (8,675 ) 18,079 Income taxes 12,090 (2,734 ) 5,625 10,576 Operating lease right-of-use assets and liabilities (1,145 ) (1,746 ) (3,508 ) (2,131 ) Other assets and liabilities 4,952 5,268 (2,626 ) 8,351 Net cash (used in)/provided by operating activities (182,718 ) 199,328 (220,000 ) 351,424 Cash flows from investing activities: Purchases of property and equipment and capitalized software (15,488 ) (34,690 ) (55,686 ) (82,237 ) Asset acquisition — — — (18,006 ) Proceeds from divestitures — — 736 3,078 Other — — (2,165 ) — Net cash used in investing activities (15,488 ) (34,690 ) (57,115 ) (97,165 ) Cash flows from financing activities: Cash dividends paid to Maximus shareholders (16,904 ) (18,239 ) (51,865 ) (54,847 ) Purchases of Maximus common stock — (47,275 ) (306,443 ) (47,275 ) Tax withholding related to RSU vesting (10 ) — (16,451 ) (13,455 ) Payments for contingent consideration — (2,809 ) — (10,977 ) Payments for debt financing costs — (9,724 ) (1,658 ) (9,724 ) Proceeds from borrowings 376,208 426,757 1,335,208 850,166 Principal payments for debt (212,535 ) (488,038 ) (810,174 ) (952,825 ) Other (643 ) 3,996 (1,824 ) 9,118 Net cash provided by/(used in) financing activities 146,116 (135,332 ) 146,793 (229,819 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 1,528 155 (65 ) 1,270 Net change in cash, cash equivalents, and restricted cash (50,562 ) 29,461 (130,387 ) 25,710 Cash, cash equivalents, and restricted cash, beginning of period 155,938 118,340 235,763 122,091 Expand Maximus, Inc. Consolidated Results of Operations by Segment (Unaudited) For the Three Months Ended For the Nine Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (dollars in thousands) Revenue: U.S. Federal Services $ 761,174 $ 683,347 $ 2,319,756 $ 2,062,127 U.S. Services 439,818 472,298 1,334,418 1,448,258 Outside the U.S. 147,408 159,284 458,687 479,942 Revenue $ 1,348,400 $ 1,314,929 $ 4,112,861 $ 3,990,327 Gross profit: U.S. Federal Services $ 226,134 29.7 % $ 186,075 27.2 % $ 601,507 25.9 % $ 506,074 24.5 % U.S. Services 105,932 24.1 % 121,012 25.6 % 312,706 23.4 % 369,497 25.5 % Outside the U.S. 27,447 18.6 % 25,227 15.8 % 85,678 18.7 % 74,386 15.5 % Gross profit $ 359,513 26.7 % $ 332,314 25.3 % $ 999,891 24.3 % $ 949,957 23.8 % Selling, general, and administrative expenses: U.S. Federal Services $ 88,272 11.6 % $ 79,949 11.7 % $ 245,563 10.6 % $ 247,671 12.0 % U.S. Services 60,975 13.9 % 59,531 12.6 % 173,096 13.0 % 174,032 12.0 % Outside the U.S. 21,507 14.6 % 26,647 16.7 % 66,822 14.6 % 75,249 15.7 % Divestiture-related charges (2) — NM — NM 39,343 NM 1,018 NM Other (3) 77 NM 906 NM 599 NM 6,712 NM Selling, general, and administrative expenses $ 170,831 12.7 % $ 167,033 12.7 % $ 525,423 12.8 % $ 504,682 12.6 % Operating income: U.S. Federal Services $ 137,862 18.1 % $ 106,126 15.5 % $ 355,944 15.3 % $ 258,403 12.5 % U.S. Services 44,957 10.2 % 61,481 13.0 % 139,610 10.5 % 195,465 13.5 % Outside the U.S. 5,940 4.0 % (1,420 ) (0.9 )% 18,856 4.1 % (863 ) (0.2 )% Amortization of intangible assets (23,010 ) NM (23,542 ) NM (69,041 ) NM (68,532 ) NM Divestiture-related charges (2) — NM — NM (39,343 ) NM (1,018 ) NM Other (3) (77 ) NM (906 ) NM (599 ) NM (6,712 ) NM Operating income $ 165,672 12.3 % $ 141,739 10.8 % $ 405,427 9.9 % $ 376,743 9.4 % Expand (1) Percentage of respective revenue, as applicable. Percentages not considered meaningful are marked "NM." (2) During fiscal years 2025 and 2024, we have divested businesses from our Outside the U.S. Segment. (3) Other expenses includes credits and costs that are not allocated to a particular segment. Expand Maximus, Inc. Non-GAAP Adjusted Results - Operating Income, Adjusted EBITDA, Net Income, and Diluted Earnings per Share (Unaudited) For the Three Months Ended For the Nine Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (dollars in thousands, except per share data) Operating income $ 165,672 $ 141,739 $ 405,427 $ 376,743 Add back: Amortization of intangible assets 23,010 23,542 69,041 68,532 Add back: Divestiture-related charges — — 39,343 1,018 Add back: Depreciation and amortization of property, equipment, and capitalized software 9,607 7,530 27,502 24,146 Adjusted EBITDA (Non-GAAP) $ 198,289 $ 172,811 $ 541,313 $ 470,439 Adjusted EBITDA margin (Non-GAAP) 14.7 % 13.1 % 13.2 % 11.8 % Net income $ 105,981 $ 89,752 $ 243,746 $ 234,410 Add back: Amortization of intangible assets, net of tax 16,958 17,350 50,883 50,508 Add back: Divestiture-related charges — — 39,343 1,018 Adjusted net income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) $ 122,939 $ 107,102 $ 333,972 $ 285,936 Diluted earnings per share $ 1.86 $ 1.46 $ 4.20 $ 3.81 Add back: Effect of amortization of intangible assets on diluted earnings per share 0.30 0.28 0.88 0.82 Add back: Effect of divestiture-related charges on diluted earnings per share — — 0.67 0.02 Adjusted diluted earnings per share excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) $ 2.16 $ 1.74 $ 5.75 $ 4.65 Expand
