HanesBrands Inc. Announces Better-Than-Expected Second-Quarter 2025 Results and Raises Full-Year Outlook
Net Sales increased 1.8% over prior year to $991 million.
Gross Margin increased 1,100 basis points over prior year to 41.6%. Adjusted Gross Margin increased 145 basis points to 41.2%.
Operating Profit increased 345% over prior year to $155 million and Operating Margin increased 2,210 basis points to 15.6%. Adjusted Operating Profit increased 22% to $153 million and Adjusted Operating Margin increased 255 basis points to 15.5%.
Earnings per share (EPS) increased 162% over prior year to $0.24. Adjusted EPS increased 60% to $0.24.
Balance sheet further strengthened as leverage decreased to 3.3 times net debt-to-adjusted EBITDA, an improvement of 1.3 times compared to prior year.
Raises full-year 2025 outlook for net sales, operating profit and EPS.
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WINSTON-SALEM, N.C. — HanesBrands Inc. (NYSE: HBI), a global leader in everyday iconic apparel, today announced results for the second-quarter 2025.
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'For the third consecutive quarter, we delivered revenue, profit and earnings per share growth that exceeded our expectations as we continue to see the benefits of our growth strategy and prior transformation initiatives,' said Steve Bratspies, CEO. 'With our strong performance to date and our visibility to cost savings and input costs, we raised our full-year outlook, which continues to reflect our expected impact from U.S. tariffs. Our strategy is delivering consistent results, and we're confident it positions us for continued long-term success. We have multiple avenues to drive increased shareholder returns over the next several years through consistent sales growth, additional margin expansion, and continued debt reduction.'
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Second-Quarter 2025 Results
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Net Sales
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from continuing operations were $991 million.
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Net Sales increased 1.8% compared to prior year.
On an organic constant currency basis, Net Sales were relatively consistent with prior year (Table 2-B).
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Gross Profit and Gross Margin
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increased year-over-year driven by the benefits from cost savings and productivity initiatives, the benefits from assortment management, and lower input costs.
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The Company continued its consolidation and other optimization actions in its supply chain to lower fixed costs, increase efficiencies, and further improve customer service and in-stocks with lower levels of inventory. The Company expects these actions to drive continued benefits in 2025.
Gross Profit increased 38% to $412 million and Gross Margin increased 1,100 basis points to 41.6% as compared to prior year.
Adjusted Gross Profit increased 6% to $408 million and Adjusted Gross Margin increased 145 basis points to 41.2% as compared to prior year.
Adjusted Gross Profit and Adjusted Gross Margin exclude certain costs related to restructuring and other action-related charges (Table 6-A).
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Operating Profit and Operating Margin
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increased over prior year through the combination of gross margin improvement and lower SG&A expenses. SG&A expenses decreased compared to prior year both on an absolute basis and as a percent of net sales due to the benefits from cost savings initiatives and disciplined expense management.
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Operating Profit increased 345% to $155 million and Operating Margin increased 2,210 basis points to 15.6% as compared to prior year.
Adjusted Operating Profit increased 22% to $153 million and Adjusted Operating Margin increased 255 basis points to 15.5% as compared to prior year.
Adjusted Operating Profit and Adjusted Operating Margin exclude certain costs related to restructuring and other action-related charges (Table 6-A).
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Interest Expense and Other Expenses
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Earnings Per Share
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Income from continuing operations totaled $85 million, or $0.24 per diluted share, in the second quarter of 2025. This compares to a loss from continuing operations of ($136) million, or ($0.39) per diluted share, in second-quarter 2024.
Adjusted Income from continuing operations totaled $84 million, or $0.24 per diluted share, in the second quarter of 2025. This compares to income from continuing operations of $53 million, or $0.15 per diluted share, last year (Table 6-A).
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See the Note on Adjusted Measures and Reconciliation to GAAP Measures later in this news release for additional discussion and details of actions, which include restructuring and other action-related charges.
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U.S.
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net sales decreased slightly, or approximately $5 million, as compared to prior year. The Company continued to focus on its core growth fundamentals including innovation, brand investments, and incremental programming opportunities. These fundamentals delivered year-over-year growth in its Basics, Active, and New businesses. Similar to the overall innerwear market, this growth was more than offset by continued headwinds in its Intimate Apparel business.
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Operating margin of 25.0% increased 360 basis points over prior year driven by benefits from cost savings and productivity initiatives as well as lower input costs.
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International
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net sales decreased 3% on a reported basis, which included a $7 million headwind from unfavorable foreign exchange rates, and were consistent with prior year on a constant currency basis. By region, constant currency net sales increased in the Americas, were consistent with prior year in Australia, and decreased in Asia.
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Operating margin of 10.7% decreased 225 basis points compared to prior year, driven primarily by increased promotional activity, unfavorable mix, increased brand investment and the impact from foreign exchange rates, which more than offset the benefits from cost savings initiatives and lower input costs.
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Balance Sheet and Cash Flow
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Based on the calculation as defined in the Company's senior secured credit facility, the Leverage Ratio at the end of second-quarter 2025 was 3.3 times on a net debt-to-adjusted EBITDA basis, which was below prior year's 4.6 times (Table 6-B).
Inventory at the end of second-quarter 2025 of $957 million increased 4%, or $40 million, year-over-year.
Cash Flow from Operations was $36 million in second-quarter 2025, which compared to $78 million last year. Free Cash Flow for the quarter was $27 million as compared to $71 million last year.
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Third-Quarter and Full-Year 2025 Financial Outlook
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The Company is providing guidance on tax expense due to the expected fluctuation of its quarterly tax rate, stemming from the deferred tax reserve matter previously disclosed in fourth-quarter 2022. Importantly, the reserve does not impact cash taxes. Some portion of the reserve may reverse in future periods.
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The Company defines organic constant currency Net Sales as Net Sales excluding the 'other' segment and the year-over-year impact from foreign exchange rates.
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The Company's guidance reflects its expected impact from U.S. tariffs and is subject to change in the future.
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For Fiscal year 2025, which ends January 3, 2026, and includes a 53rd week, the Company currently expects:
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Net Sales from continuing operations of approximately $3.53 billion, which includes projected headwinds of approximately $35 million from changes in foreign currency exchange rates. Net Sales are expected to increase slightly over prior year on both a reported and organic constant currency basis.
GAAP Operating Profit from continuing operations of approximately $471 million.
Adjusted Operating Profit from continuing operations of approximately $485 million, which excludes pretax charges for restructuring and other action-related charges of approximately $14 million. The operating profit outlook includes a projected headwind of approximately $5 million from changes in foreign currency exchange rates.
Interest expense of approximately $180 million.
Other expenses of approximately $46 million, which includes approximately $10 million of one-time pretax charges related to first-quarter 2025 refinancing activities.
Tax expense of approximately $35 million.
GAAP Earnings Per Share from continuing operations of approximately $0.59.
Adjusted Earnings Per Share from continuing operations of approximately $0.66.
Cash Flow from Operations of approximately $350 million.
Capital investments of approximately $65 million, consisting of approximately $50 million of capital expenditures and approximately $15 million of cloud computing arrangements.
Free Cash Flow of approximately $300 million.
Fully diluted shares outstanding of approximately 357 million.
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For third-quarter 2025, which ends on September 27, 2025, the Company currently expects:
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Net Sales from continuing operations of approximately $900 million, which includes projected headwinds of approximately $7 million from changes in foreign currency exchange rates. Net Sales are expected to be relatively consistent with prior year on both a reported and organic constant currency basis.
GAAP Operating Profit from continuing operations of approximately $116 million.
Adjusted Operating Profit from continuing operations of approximately $122 million, which excludes pretax charges for restructuring and other action-related charges of approximately $6 million. The operating profit outlook includes a projected headwind of approximately $1 million from changes in foreign currency exchange rates.
Interest expense of approximately $46 million.
Other expenses of approximately $10 million.
Tax expense of approximately $10 million.
GAAP Earnings Per Share from continuing operations of approximately $0.14.
Adjusted Earnings Per Share from continuing operations of approximately $0.16.
Fully diluted shares outstanding of approximately 357 million.
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HanesBrands has updated its quarterly frequently-asked-questions document, which is available at www.Hanes.com/FAQ.
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To supplement financial results prepared in accordance with generally accepted accounting principles, the Company provides quarterly and full-year results concerning certain non‐GAAP financial measures, including adjusted EPS from continuing operations, adjusted income (loss) from continuing operations, adjusted operating profit (and margin), adjusted gross profit (and margin), EBITDA, adjusted EBITDA, organic constant currency net sales, net debt, leverage ratio and free cash flow.
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Adjusted EPS from continuing operations is defined as diluted EPS from continuing operations excluding actions and the tax effect on actions. Adjusted income (loss) from continuing operations is defined as income (loss) from continuing operations excluding actions and the tax effect on actions. Adjusted operating profit is defined as operating profit excluding actions. Adjusted gross profit is defined as gross profit excluding actions.
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Charges for actions taken in 2025 and 2024, as applicable, include supply chain restructuring and consolidation, headcount actions and related severance charges, professional services, gain/loss on sale of business and classification of assets held for sale, loss on extinguishment of debt, corporate asset impairment charges, and the tax effects thereof.
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While these costs are not expected to continue for any singular transaction on an ongoing basis, similar types of costs, expenses and charges have occurred in prior periods and may recur in future periods depending upon future business plans and circumstances.
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HanesBrands has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of our supply chain restructuring and consolidation and other actions that are deemed to be material stand-alone initiatives apart from the Company's core operations. HanesBrands believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the Company's ongoing business during each period presented without giving effect to costs associated with the execution of any of the aforementioned actions taken.
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The Company has also chosen to present EBITDA and adjusted EBITDA to investors because it considers these measures to be an important supplemental means of evaluating operating performance. EBITDA is defined as net income (loss) before the impacts of discontinued operations, interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding (x) restructuring charges related to our supply chain restructuring and consolidation, and other action-related charges described in more detail in Table 6-A and (y) certain other losses, charges and expenses as defined in the Consolidated Net Total Leverage Ratio under its Sixth Amended and Restated Credit Agreement, dated March 7, 2025 (the 'Credit Agreement') described in more detail in Table 6-B. HanesBrands believes that EBITDA and adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, and management uses EBITDA and adjusted EBITDA for planning purposes in connection with setting its capital allocation strategy. EBITDA and adjusted EBITDA should not, however, be considered as measures of discretionary cash available to invest in the growth of the business.
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Net debt is defined as the total of current debt, long-term debt, and borrowings under the accounts receivable securitization facility (excluding long-term debt issuance costs and debt discount and borrowings of unrestricted subsidiaries under the accounts receivable securitization facility) less (x) other debt and cash adjustments and (y) cash and cash equivalents. Leverage ratio is the ratio of net debt to adjusted EBITDA as it is defined in our Credit Agreement. The Company defines free cash flow as net cash from operating activities less capital expenditures. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. The Company defines organic net sales as net sales excluding the 'other' segment and excluding those derived from businesses acquired or divested within the previous 12 months of the reporting date.
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HanesBrands is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the Company's reported operating results, HanesBrands also presents constant-currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The Company uses constant currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation. To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period). HanesBrands believes constant currency information is useful to management and investors to facilitate comparison of operating results and better identify trends in the Company's businesses. The Company defines organic constant currency sales as net sales excluding the 'other' segment and also excluding the impact of translating foreign currencies into U.S. dollars as discussed above.
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Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.
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Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are presented in the supplemental financial information included with this news release.
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Cautionary Statement Concerning Forward-Looking Statements
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This news release contains information that may constitute 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the 'Exchange Act'). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as 'may,' 'believe,' 'could,' 'will,' 'expect,' 'outlook,' 'potential,' 'project,' 'estimate,' 'future,' 'intend,' 'anticipate,' 'plan,' 'continue' or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding our intent, belief and current expectations about our strategic direction, prospects and future results are forward-looking statements and are inherently subject to risks and uncertainties that could cause actual results to differ materially from those implied or expressed by such statements. These risks and uncertainties include, but are not limited to, trends associated with our business; our ability to successfully implement our strategic plans, including our supply chain restructuring and consolidation and other cost savings initiatives; the rapidly changing retail environment and the level of consumer demand; the effects of any geopolitical conflicts (including the ongoing Russia-Ukraine conflict and Middle East conflicts) or public health emergencies or severe global health crises, including effects on consumer spending, global supply chains, critical supply routes and the financial markets; our ability to deleverage on the anticipated time frame or at all; any inadequacy, interruption, integration failure or security failure with respect to our information technology; future intangible assets or goodwill impairment due to changes in our business, market condition, or other factors; significant fluctuations in foreign exchange rates; legal, regulatory, political and economic risks related to our international operations, including the imposition of or changes in duties, taxes, tariffs and other charges impacting our products or supply chain, or the threat thereof; our ability to effectively manage our complex international tax structure; our future financial performance; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements. Such statements speak only as of the date when made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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About HanesBrands
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HanesBrands (NYSE: HBI) is a socially responsible global leader in everyday iconic apparel with a mission to create a more comfortable world for every body. The company owns a portfolio of some of the world's most recognized apparel brands including Hanes, the leading basic apparel brand in the U.S.; Bonds, an Australian staple since 1915 that is setting new standards for design and innovation; Maidenform, America's number one shapewear brand; and Bali, America's number one national bra brand. HanesBrands owns the majority of its worldwide manufacturing facilities and has built a strong reputation for workplace quality, ethical business practices, and reducing environmental impact.
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1
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.
2
Results for the quarters ended June 28, 2025 and June 29, 2024 reflect adjustments for restructuring and other action-related charges. See 'Reconciliation of Select GAAP Measures to Non-GAAP Measures' in Table 6-A.
3
Amounts may not be additive due to rounding.
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1
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.
2
Results for the six months ended June 28, 2025 and June 29, 2024 reflect adjustments for restructuring and other action-related charges. See 'Reconciliation of Select GAAP Measures to Non-GAAP Measures' in Table 6-A.
3
Amounts may not be additive due to rounding.
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1
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.
2
Other sales in the second quarter of 2025 consist of sales from the Company's supply chain and short term support/transition services agreements for disposed businesses. Other sales in the second quarter of 2024 primarily reflect the U.S. Sheer Hosiery business which was sold on September 29, 2023.
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1
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.
2
Other sales in the six months ended June 28, 2025 consist of sales from the Company's supply chain and short term support/transition services agreements for disposed businesses. Other sales in the first six months of 2024 primarily reflect the U.S. Sheer Hosiery business which was sold on September 29, 2023.
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TABLE 3
HANESBRANDS INC.
Supplemental Financial Information
By Business Segment
(in thousands)
(Unaudited)
Quarters Ended
Six Months Ended
June 28,
2025
June 29,
2024
% Change
June 28,
2025
June 29,
2024
% Change
Segment net sales:
U.S.
$
735,483
$
740,154
(0.6
)%
$
1,271,708
$
1,284,045
(1.0
)%
International
225,953
233,073
(3.1
)
421,492
433,084
(2.7
)
Total segment net sales
961,436
973,227
(1.2
)
1,693,200
1,717,129
(1.4
)
Other net sales
29,889
700
4,169.9
58,273
1,473
3,856.1
Total net sales
$
991,325
$
973,927
1.8
%
$
1,751,473
$
1,718,602
1.9
%
Segment operating profit:
U.S.
$
183,628
$
158,214
16.1
%
$
295,797
$
256,477
15.3
%
International
24,253
30,237
(19.8
)
46,746
47,038
(0.6
)
Total segment operating profit
207,881
188,451
10.3
342,543
303,515
12.9
Other profit (loss)
4,388
(130
)
3,475.4
6,817
551
1,137.2
General corporate expenses
(55,162
)
(58,212
)
(5.2
)
(107,600
)
(118,904
)
(9.5
)
Amortization of intangibles
(3,640
)
(4,278
)
(14.9
)
(7,276
)
(8,948
)
(18.7
)
Total operating profit before restructuring and other action-related charges
153,467
125,831
22.0
234,484
176,214
33.1
Restructuring and other action-related charges
1,191
(189,034
)
(100.6
)
82
(204,003
)
(100.0
)
Total operating profit (loss)
$
154,658
$
(63,203
)
344.7
%
$
234,566
$
(27,789
)
944.1
%
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Quarters Ended
Six Months Ended
June 28,
2025
June 29,
2024
Basis Points Change
June 28,
2025
June 29,
2024
Basis Points Change
Segment operating margin:
U.S.
25.0
%
21.4
%
359
23.3
%
20.0
%
329
International
10.7
13.0
(224
)
11.1
10.9
23
Total segment operating profit
21.6
19.4
226
20.2
17.7
255
Other profit (loss)
14.7
(18.6
)
3,325
11.7
37.4
(2,571
)
General corporate expenses
(5.6
)
(6.0
)
41
(6.1
)
(6.9
)
78
Amortization of intangibles
(0.4
)
(0.4
)
7
(0.4
)
(0.5
)
11
Total operating margin before restructuring and other action-related charges
15.5
12.9
256
13.4
10.3
313
Restructuring and other action-related charges
0.1
(19.4
)
1,953
—
(11.9
)
1,187
Total operating margin
15.6
%
(6.5
)%
2,209
13.4
%
(1.6
)%
1,501
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TABLE 4
June 28,
2025
December 28,
2024
June 29,
2024
Assets
Cash and cash equivalents
$
220,343
$
214,854
$
213,267
Trade accounts receivable, net
487,010
376,195
463,302
Inventories
957,048
871,044
916,683
Other current assets
139,838
152,853
181,653
Current assets held for sale
57,421
100,430
511,003
Total current assets
1,861,660
1,715,376
2,285,908
Property, net
190,358
188,259
208,374
Right-of-use assets
242,743
222,759
230,425
Trademarks and other identifiable intangibles, net
910,148
886,264
936,294
Goodwill
648,362
638,370
653,934
Deferred tax assets
16,466
13,591
17,029
Other noncurrent assets
126,169
116,729
122,727
Noncurrent assets held for sale
23,412
59,593
925,153
Total assets
$
4,019,318
$
3,840,941
$
5,379,844
Liabilities
Accounts payable
$
589,723
$
593,377
$
693,492
Accrued liabilities
403,636
452,940
502,382
Lease liabilities
71,510
64,233
60,122
Accounts Receivable Securitization Facility
76,000
95,000
—
Current portion of long-term debt
26,250
—
44,250
Current liabilities held for sale
60,281
42,990
266,234
Total current liabilities
1,227,400
1,248,540
1,566,480
Long-term debt
2,265,394
2,186,057
3,224,155
Lease liabilities – noncurrent
222,509
206,124
212,706
Pension and postretirement benefits
57,570
66,171
90,367
Other noncurrent liabilities
66,502
67,452
90,768
Noncurrent liabilities held for sale
13,582
32,587
130,965
Total liabilities
3,852,957
3,806,931
5,315,441
Stockholders' equity
Preferred stock
—
—
—
Common stock
3,537
3,525
3,516
Additional paid-in capital
380,692
373,213
363,078
Retained earnings
306,759
234,494
217,400
Accumulated other comprehensive loss
(524,627
)
(577,222
)
(519,591
)
Total stockholders' equity
166,361
34,010
64,403
Total liabilities and stockholders' equity
$
4,019,318
$
3,840,941
$
5,379,844
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TABLE 5
Operating Activities:
Net income (loss)
$
81,611
$
(298,380
)
$
72,155
$
(337,502
)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation
6,503
22,304
13,861
39,978
Amortization of acquisition intangibles
1,866
4,100
3,705
8,203
Other amortization
1,774
2,899
3,571
6,198
Impairment of long-lived assets and goodwill
—
76,604
—
76,604
Inventory write-down charges
—
117,663
—
117,663
Loss on extinguishment of debt
—
—
9,293
—
Loss on sale of business and classification of assets held for sale
1,131
51,071
6,093
51,071
Amortization of debt issuance costs and debt discount
1,675
2,561
3,554
5,105
Other
3,582
16,103
15,535
13,722
Changes in assets and liabilities:
Accounts receivable
(135,960
)
(51,193
)
(103,347
)
(54,487
)
Inventories
33,923
17,529
(59,876
)
(41,850
)
Accounts payable
3,028
30,964
19,094
134,029
Other assets and liabilities
37,181
86,201
(55,507
)
85,863
Net cash from operating activities
36,314
78,426
(71,869
)
104,597
Investing Activities:
Capital expenditures
(9,066
)
(7,834
)
(20,311
)
(28,091
)
Proceeds from sales of assets
7
3,625
159
3,653
Proceeds (payments) from disposition of businesses
(2,342
)
—
26,327
—
Net cash from investing activities
(11,401
)
(4,209
)
6,175
(24,438
)
Financing Activities:
Borrowings on Term Loan Facilities
—
—
1,500,000
—
Repayments on Term Loan Facilities
—
(14,750
)
(703,267
)
(29,500
)
Borrowings on Accounts Receivable Securitization Facility
373,000
467,000
663,000
980,500
Repayments on Accounts Receivable Securitization Facility
(301,000
)
(484,500
)
(682,000
)
(986,500
)
Borrowings on Revolving Loan Facilities
1,212,500
293,000
2,143,500
609,000
Repayments on Senior Notes
—
—
(900,000
)
—
Payments to amend and refinance credit facilities
(1,473
)
(501
)
(23,281
)
(679
)
Other
(1,893
)
214
(4,263
)
(3,817
)
Net cash from financing activities
16,134
(32,537
)
67,189
(39,996
)
Effect of changes in foreign exchange rates on cash
3,356
(195
)
3,994
(12,963
)
Change in cash and cash equivalents
44,403
41,485
5,489
27,200
Cash and cash equivalents at beginning of period
176,440
191,216
215,354
205,501
Cash and cash equivalents at end of period
$
220,843
$
232,701
$
220,843
$
232,701
Balances included in the Condensed Consolidated Balance Sheets:
Cash and cash equivalents
$
220,343
$
213,267
$
220,343
$
213,267
Cash and cash equivalents included in current assets held for sale
500
19,434
500
19,434
Cash and cash equivalents at end of period
$
220,843
$
232,701
$
220,843
$
232,701
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1
The cash flows related to discontinued operations have not been segregated and remain included in the major classes of assets and liabilities. Accordingly, the Condensed Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.
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1
Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure.
2
The last twelve months ended June 28, 2025 includes $19 million on a loss of extinguishment of debt, $17 million of professional services, $9 million of supply chain restructuring and consolidation charges, $1 million related to other restructuring and other action-related charges, and $(3) million of adjustments to headcount actions and related severance charges. The last twelve months ended June 29, 2024 includes $158 million of supply chain restructuring and consolidation charges, $22 million of headcount actions and related severance charges, $20 million related to corporate asset impairment charges, $6 million of professional services, $2 million related to other restructuring and other action-related charges, and $(2) million related to an adjustment of a loss on sale of business and classification of assets held for sale. The items included in restructuring and other action-related charges are described in more detail in Table 6-A.
3
Represents other net losses, charges and expenses that can be excluded from the Company's leverage ratio as defined under its Sixth Amended and Restated Credit Agreement, dated March 7, 2025, as amended. The last twelve months ended June 28, 2025, primarily includes $60 million of excess and obsolete inventory write-offs, $21 million in other compensation related items primarily stock compensation expense, $16 million in charges related to sales incentive amortization, $15 million of pension non-cash expense, $14 million of non-cash cloud computing expense, $8 million of other non-cash expenses, $2 million in charges related to unrealized losses due to hedging, $1 million related to extraordinary cash events, and $(4) million adjustment for interest expense on debt and amortization of debt issuance costs related to an unrestricted subsidiary. The last twelve months ended June 29, 2024, primarily includes $50 million of excess and obsolete inventory write-offs, $18 million in other compensation related items primarily stock compensation expense, $16 million of pension non-cash expense, $13 million in charges related to sales incentive amortization, $11 million of non-cash cloud computing expense, $(2) million in adjustments related to unrealized losses due to hedging, $(3) million adjustment to bad debt expense, and a $(7) million adjustment for interest expense on debt and amortization of debt issuance costs related to an unrestricted subsidiary.
4
Represents Total EBITDA from discontinued operations, as adjusted related to businesses still owned at period end, as adjusted for all items that can be excluded from the Company's leverage ratio as defined under its Sixth Amended and Restated Credit Agreement, dated March 7, 2025, as amended. Total EBITDA from discontinued operations, as adjusted, excludes EBITDA related to the Initial and Deferred Close of the global Champion business and U.S. outlet stores business as the sale of these businesses were completed before the period end. Total EBITDA from discontinued operations, as adjusted, for the last twelve months ended June 29, 2024 includes $(114) million of Total EBITDA from discontinued operations and $291 million of certain discontinued operations restructuring and other action-related charges, other net losses, charges and expenses that can be excluded from the Company's leverage ratio as defined under its Fifth Amended and Restated Credit Agreement, dated November 19, 2021, as amended.
5
Represents amounts outstanding under an existing accounts receivable securitization facility entered into by an unrestricted subsidiary of the Company.
6
Includes drawn and undrawn letters of credit, financing leases and cash balances in certain geographies.
7
Represents Debt divided by Income (loss) from continuing operations, which is the most comparable GAAP financial measure to Net debt/EBITDA, as adjusted.
8
Represents the Company's leverage ratio defined as Consolidated Net Total Leverage Ratio under its Sixth Amended and Restated Credit Agreement, dated March 7, 2025, as amended, which excludes other net losses, charges and expenses in addition to restructuring and other action-related charges.
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1
The Company expects approximately 357 million diluted weighted average shares outstanding for the quarter ended September 27, 2025 and approximately 357 million diluted weighted average shares outstanding for the year ended January 3, 2026.
The Company is unable to reconcile projections of financial performance beyond 2025 without unreasonable efforts, because the Company cannot predict, with a reasonable degree of certainty, the type and extent of certain items that would be expected to impact these figures in 2025 and beyond, such as net sales, operating profit, diluted earnings per share and action related charges.
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National Post
19 minutes ago
- National Post
Expensify Announces Q2 2025 Results
Article content Total interchange derived from the Expensify Card grew to $5.3 million, an increase of 31% as compared to the same period last year. Article content PORTLAND, Ore. — Expensify, Inc. (Nasdaq: EXFY), a payments superapp that helps individuals and businesses around the world simplify the way they manage money across expenses, corporate cards and bills, today released a letter to shareholders from Founder and CEO David Barrett alongside results for its quarter ended June 30, 2025. Article content A Message From Our Founder Article content Q2 finished strong, with F1® The Movie putting the Expensify brand on-screen over an estimated 650 times for a total of more than 35 minutes (sometimes over 10 feet tall, if you saw it in IMAX). With a $500 million box office to date, that's easily tens of millions of moviegoers, with potentially many more to go. We believe that's on pace to be seen by more people than saw our 30 second Superbowl ad, but with over 60x more screen time… and our name on the winning team. Article content While ROI on this can be hard to measure, independent brand awareness surveys are already showing 50% gains in our target demographics – and 350% gains in the highly coveted 18-24 demographic, the trendsetters of the future. We couldn't possibly be more pleased with the result of this major bet taken years ago, which we expect to benefit us for years to come. To prepare for this, and in recognition of F1's global appeal, we spent the last quarter strengthening our international offering: Article content Most exciting: the Expensify Card is expected to be available in the UK and most of the EU this month (and Canada is on the way)! This means over 30 million more businesses in 18 new countries have access to the Expensify Card for the first time. Additionally, we added support for third party card feeds from over 10,000 additional banks, including numerous international banks in F1 viewing regions. Card support wouldn't mean much without language support, so we now support 10 total languages, including Spanish, French, German, Italian, Japanese, and more. Finally, to lower the barrier to adoption in this new market, we have added support for EUR billing, adding to our other billing options in USD, GBP, AUD, and NZD, with support for CAD on the way. Article content Beyond F1 and international expansion, the core business continues its rock solid performance. Q2 cash flows from operating activities is down 4% y/y but FCF is up 10% y/y – even despite F1 payments – supporting a $3.0 million buyback of EXFY shares last quarter, and an increase of the midpoint of our full year 2025 FCF guidance by $2.0 million to $19.0 million – $23.0 million. The migration of customers from Classic to New Expensify continues at a brisk pace as New Expensify gains in capabilities, adds support for local reimbursements to most countries worldwide, and gets just a little faster every day (my personal favorite: switching pages is now 235% faster than it was the first week of March – a small detail, but one that I hit a hundred times a day). And last but not least, no message in this day and age would be complete without some mention of AI. This is something I personally spend nearly all my time on, and couldn't be more excited about. I've talked a big game about achieving financial AI supremacy, and Q3 is when we expect to start rolling out features to get us closer to that goal. Stay tuned! Article content -david Article content Founder and CEO of Expensify Article content Second Quarter 2025 Highlights Article content Financial: Article content Revenue was $35.8 million, an increase of 7% compared to the same period last year. Generated $8.9 million of cash from operating activities. Free cash flow was $6.3 million. Net loss was $8.8 million, compared to $2.8 million for the same period last year. Non-GAAP net loss was $1.9 million. Adjusted EBITDA was $(1.4) million. Interchange derived from the Expensify Card grew to $5.3 million, an increase of 31% compared to the same period last year. See Financial Outlook section for Free Cash Flow guidance for fiscal year ending December 31, 2025. Article content Business: Article content Paid members – Paid members were 652,000, a decrease of 5% compared to the same period last year. Expensify Travel – Expensify Travel saw a 44% increase in quarterly travel bookings. Share repurchase – The company repurchased 1,285,336 shares of its Class A common stock, totaling approximately $3.0 million. International expansion – The company added support for 10,000+ banks worldwide and launched Euro-based billing. Article content Financial Outlook Article content Expensify's outlook statements are based on current estimates, expectations and assumptions and are not a guarantee of future performance. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under 'Forward-Looking Statements' below. There can be no assurance that the Company will achieve the results expressed by this guidance. Article content Free Cash Flow Article content Expensify estimates Free Cash Flow of $19.0 million to $23.0 million for the fiscal year ending December 31, 2025. Article content The Company does not provide a reconciliation for free cash flow estimates on a forward-looking basis because it is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of net cash provided by operating activities and certain reconciling items on a forward-looking basis, which could be significant to the Company's results. Article content Stock Based Compensation Article content An estimate of expected stock-based compensation for the next four fiscal quarters is as follows, which is driven primarily by the pre-IPO grant of RSUs issued to all employees (which vest quarterly over eight years with approximately four years remaining). Article content Est. stock-based compensation (millions) Article content Investors and others should note that Expensify routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Expensify Investor Relations website at While not all of the information that the Company posts to its Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in Expensify to review the information that it shares on its Investor Relations website. Article content Conference Call Article content Expensify will host a video call to discuss the financial results and business highlights at 2:00 p.m. Pacific Time today. An investor presentation and the video call information is available on Expensify's Investor Relations website at A replay of the call will be available on the site for three months. Article content In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ('GAAP'), we provide certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net loss, and free cash flow. Article content We believe our non-GAAP financial measures are useful in evaluating our business, measuring our performance, identifying trends affecting our business, formulating business plans and making strategic decisions. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP is at the end of this press release. Article content Adjusted EBITDA. Article content We define adjusted EBITDA as net loss excluding (benefit from) provision for income taxes, other (income) expenses, net, depreciation and amortization, and stock-based compensation expense. Article content Non-GAAP net income. Article content We define non-GAAP net income as net loss excluding stock-based compensation expense. Article content Free cash flow. Article content We define Free cash flow as net cash provided by operating activities excluding changes in settlement assets and settlement liabilities, which represent funds held for customers and customer funds in transit, respectively, reduced by the purchases of property and equipment and software development costs. Article content The tables at the end of the Condensed Consolidated Financial Statements provide reconciliations to the most directly comparable GAAP financial measure to each of these non-GAAP financial measures. Article content Forward-Looking Statements Article content Forward-looking statements in this press release, or made during the earnings call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statements include statements regarding our strategy, future financial condition, future operations, future cash flow, projected costs, prospects, plans, objectives of management and expected market growth, product developments and their potential impact and our stock-based compensation estimates and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as 'may,' 'will,' 'shall,' 'should,' 'expects,' 'plans,' 'anticipates,' 'could,' 'intends,' 'target,' 'projects,' 'contemplates,' 'believes,' 'estimates,' 'predicts,' 'potential,' 'goal,' 'ambition,' 'objective,' 'seeks,' 'outlook,' or 'continue' or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the impact on inflation on us and our members; our borrowing costs, which have and may continue to increase as a result of increases in interest rates; our expectations regarding our financial performance and future operating performance; our ability to attract and retain members, expand usage of our platform, sell subscriptions to our platform and convert individuals and organizations into paying customers; the timing and success of new features, integrations, capabilities and enhancements by us, or by competitors to their products, or any other changes in the competitive landscape of our market; the amount and timing of operating expenses and capital expenditures that we may incur to maintain and expand our business and operations to remain competitive; the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our ability to make required payments under and to comply with the various requirements of our current and future indebtedness; our cash flows, the prevailing stock prices, general economic and market conditions and other considerations that could affect the specific timing, price and size of repurchases under our stock repurchase program or our ability to fund any stock repurchases; geopolitical tensions, including the war in Ukraine and the conflict in Israel, Gaza and surrounding areas; our ability to effectively manage our exposure to fluctuations in foreign currency exchange rates; the size of our addressable markets, market share and market trends; anticipated trends, developments and challenges in our industry, business and the highly competitive markets in which we operate; any adverse impact on our business operations as a result of using artificial intelligence or other machine learning technologies in our services; our expectations regarding our income tax liabilities and the adequacy of our reserves; our ability to effectively manage our growth and expand our infrastructure and maintain our corporate culture; our ability to identify, recruit and retain skilled personnel, including key members of senior management; the safety, affordability and convenience of our platform and our offerings; our ability to successfully defend litigation brought against us; our ability to successfully identify, manage and integrate any existing and potential acquisitions of businesses, talent, technologies or intellectual property; general economic conditions in either domestic or international markets, including geopolitical uncertainty and instability, and their effects on software spending; our ability to protect against security incidents, technical difficulties, or interruptions to our platform; our ability to maintain, protect and enhance our intellectual property; the impact of tariffs and global trade disruptions on us, our customers and our vendors, including the impact on inflation, supply chains and consumer sentiment; and other risks discussed in our filings with the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Article content Expensify a payments superapp that helps individuals and businesses around the world simplify the way they manage money across expenses, corporate cards and bills. More than 15 million people use Expensify's free features, which include corporate cards, expense tracking, next-day reimbursement, invoicing, bill pay, and travel booking in one app. All free. Whether you own a small business, manage a team, or close the books for your clients, Expensify makes it easy so you have more time to focus on what really matters. Article content Expensify, Inc. Condensed Consolidated Statements of Operations (unaudited, in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $ 35,764 $ 33,288 $ 71,838 $ 66,823 Cost of revenue, net (1) 17,187 14,363 35,019 28,947 Gross margin 18,577 18,925 36,819 37,876 Operating expenses: Research and development (1) 5,158 6,389 10,516 12,318 General and administrative (1) 9,411 9,245 20,240 20,676 Sales and marketing (1) 14,346 3,072 17,888 6,456 Total operating expenses 28,915 18,706 48,644 39,450 (Loss) income from operations (10,338 ) 219 (11,825 ) (1,574 ) Other income (expenses), net 889 (260 ) 1,213 (1,214 ) Loss before income taxes (9,449 ) (41 ) (10,612 ) (2,788 ) Benefit from (provision for) income taxes 661 (2,723 ) (1,345 ) (3,757 ) Net loss $ (8,788 ) $ (2,764 ) $ (11,957 ) $ (6,545 ) Net loss per share: Basic and diluted $ (0.10 ) $ (0.03 ) $ (0.13 ) $ (0.08 ) Weighted average shares of common stock used to compute net loss per share: Article content Three Months Ended June 30, 2025 2024 Net loss $ (8,788 ) $ (2,764 ) Net loss margin (25 )% (8 )% Add: (Benefit from) provision for income taxes (661 ) 2,723 Other (income) expenses, net (889 ) 260 Depreciation and amortization 2,018 1,590 Stock-based compensation expense 6,927 8,381 Adjusted EBITDA $ (1,393 ) $ 10,190 Adjusted EBITDA margin (4 )% 31 % Article content Non-GAAP Net Income and Non-GAAP Net Income Margin Three Months Ended June 30, 2025 2024 Net loss $ (8,788 ) $ (2,764 ) Net loss margin (25 )% (8 )% Add: Stock-based compensation expense 6,927 8,381 Non-GAAP net (loss) income $ (1,861 ) $ 5,617 Non-GAAP net (loss) income margin (5 )% 17 % Article content Article content Article content Article content Article content Contacts Article content Investor Relations Contact Article content Article content Nick Tooker Article content Article content Press Contact Article content Article content Article content
Globe and Mail
19 minutes ago
- Globe and Mail
Professional Services Automation from IBN Technologies Transforms U.S. Manufacturing Performance
"Professional Services Automation [USA]" U.S. manufacturers are advancing operations with professional services automation to improve accuracy, reduce delays, and streamline decision-making. The news highlights automation results in real-world cases, adoption of AI and automation, scalable productivity models, and expert-backed ERP and DMS integrations by firms like IBN Technologies. Discover how manufacturing firms are reaching competitive milestones. Miami, Florida, 07 Aug 2025 Production leaders in the U.S. manufacturing sector are turning their attention to structured digital frameworks that align with evolving industry demands. Factory operations, engineering workflows, and supply-chain coordination are increasingly incorporating professional services automation to accelerate output and improve operational control. As plants expand their service ecosystems and digitize their project execution models, executives are refining their use of resources through detailed, data-backed systems. Facility heads and operations managers are actively engaging in process automation to enhance production cycles while streamlining back-office tasks such as invoicing, inventory tracking, and compliance reviews. These strategies are helping teams increase plant reliability and minimize manual interventions, setting a clearer path toward efficient execution. Manufacturers implementing unified platforms for oversight and planning are seeing measurable improvements in turnaround times, labor management, and vendor alignment, indicating a broader move toward sustainable and coordinated performance gains. U.S.-based manufacturers adopting structured automation practices are building long-term value by linking workforce knowledge with intelligent software. With the added advantage of precision reporting and real-time controls, industry leaders are defining more achievable goals while aligning strategic outcomes with measurable plant-level results. Power your payables through automation. Manual Processing Slows Manufacturing U.S. manufacturers managing operations without automation are encountering persistent pressure from rising operational costs. As inflation continues to affect raw material prices, labor, and logistics, firms depending solely on manual workflows face difficulty scaling efficiently and meeting production timelines. Manual oversight is limiting visibility, making it harder for decision-makers to act with speed and accuracy. ▪ Inconsistent tracking delays inventory turnover and disrupts demand planning ▪ Labor-intensive tasks increase overtime and raise operating expenses ▪ Manual documentation leads to higher chances of compliance errors ▪ Fragmented systems hinder coordination between departments and vendors ▪ Downtime grows due to reactive maintenance instead of predictive planning ▪ Limited reporting slows executive decision-making and performance reviews To address these concerns, industry specialists are introducing structured process frameworks designed for manufacturing environments. Solutions backed by professional services automation are helping teams manage time-sensitive workflows, eliminate task redundancies, and establish tighter integration across departments. These service-led systems offer real-time production oversight, refined cost tracking, and improved labor utilization, providing manufacturers with the tools to respond to market shifts while maintaining control over operations. Automation Services Elevate Manufacturing Decision-makers in U.S. manufacturing are accelerating automation to replace outdated manual processes, optimize operations, and improve plant-wide coordination. Specialists are introducing intelligent frameworks that support continuous output, cost control, and responsive planning—helping manufacturers better adapt to fluctuating demand and supply-side complexities. ✅ Automated workflow design for consistent output and reduced delays ✅ Real-time production tracking integrated with smart device networks ✅ Digitized inventory control with predictive restocking and usage metrics ✅ Integrated ERP connections for seamless financial and operational updates ✅ Document automation systems for compliance and audit readiness ✅ Smart scheduling platforms aligned with labor and resource availability ✅ Automated quality checks using sensor-based defect detection tools ✅ Predictive maintenance alerts based on machine usage and analytics ✅ Procurement automation linked to vendor timelines and price triggers ✅ Unified dashboards with live reporting for faster executive reviews By using these automation services, manufacturers are gaining sharper visibility, reducing reliance on manual input, and improving response times across departments. Expert-led implementations supported by professional services automation in USA are enabling firms to restructure their operations into scalable, high-performance ecosystems. Results are being realized through customized configurations and strategic advice—services that firms like IBN Technologies continue to deliver with precision and manufacturing-specific insight. Proven Gains from Automation Integration A U.S.-based HVAC manufacturer in California has recorded measurable performance improvements after integrating professional services automation into its sales order systems. Through expert-led automation, the company successfully linked its SAP environment to a more streamlined, real-time workflow—resulting in improved speed, accuracy, and visibility across operations. Order processing time dropped by two-thirds, from 7 minutes to 2 minutes. Order precision improved significantly throughout California, minimizing manual intervention errors. Over 80% of statewide sales orders now run on full automation, boosting efficiency. Statewide traceability and task ownership are now fully implemented for all teams. This outcome demonstrates how automation in manufacturing is generating clear, scalable returns—empowering firms to strengthen workflows, enhance decision-making, and maintain consistent output under increasing demand. Automation Drives Manufacturing Forward U.S. manufacturers are decisively turning toward structured digital transformation to remain competitive and sustainable. With proven outcomes in order to ensure accuracy, production timing, and cost control, companies are embracing professional services automation as a foundation for growth. Leaders in the sector are now aligning operational goals with technology-backed execution models that reduce delays, eliminate redundant workflows, and unlock higher productivity. Industry-wide gains are being powered through the integration of AI and Automation, enabling real-time data usage, predictive insights, and seamless coordination between departments. These advancements are driving consistent performance results, helping manufacturing businesses achieve stronger delivery benchmarks, minimize waste, and respond faster to supply chain demands. Automation continues to define how industrial operations can move beyond manual restrictions toward scalable, intelligent output. Firms ready to act are now choosing structured partners with deep expertise in ERP and DMS systems. Companies like IBN Technologies are setting the pace with proven knowledge, helping U.S. manufacturers rebuild processes into streamlined, adaptive models. As automation becomes central to success, decision-makers are investing in smarter workflows to secure lasting value and operational confidence. About IBN Technologies IBN Technologies LLC, an outsourcing specialist with 26 years of experience, serves clients across the United States, United Kingdom, Middle East, and India. Renowned for its expertise in RPA, Intelligent process automation includes AP Automation services like P2P, Q2C, and Record-to-Report. IBN Technologies provides solutions compliant with ISO 9001:2015, 27001:2022. The company has established itself as a leading provider of IT, KPO, and BPO outsourcing services in finance and accounting, including CPAs, hedge funds, alternative investments, banking, travel, human resources, and retail industries. It offers customized solutions that drive AR efficiency and growth. Media Contact Company Name: IBN Technologies LLC Contact Person: Pradip Email: Send Email Phone: +1 844-644-8440 Address: 66, West Flagler Street Suite 900 Miami, FL, USA 33130 City: Miami State: Florida Country: United States Website:
Globe and Mail
38 minutes ago
- Globe and Mail
TCPC Earnings Miss Estimates
Key Points GAAP earnings per share from net investment income was $0.32 for Q2 2025, but Adjusted net investment income (non-GAAP) and GAAP revenue for Q2 2025 both missed analyst estimates. Non-accruals as a percentage of the portfolio decreased to 3.7% at fair value and 10.4% at cost for Q2 2025, down from 4.4% at fair value and 12.6% at cost in Q1 2025, improving asset quality, but Net asset value per share declined to $8.71 in Q2 2025 amid significant realized losses. Regular quarterly dividend maintained at $0.25 per share, with a $0.04 special dividend declared for Q3 2025, payable on September 30, 2025. These 10 stocks could mint the next wave of millionaires › BlackRock Tcp Capital (NASDAQ:TCPC), a business development company specializing in loans to middle-market companies, released its second quarter 2025 results on August 7, 2025. The most notable news from the release was that GAAP net investment income per share (EPS) was $0.32 for Q2 2025. However, Adjusted net investment income (non-GAAP) and GAAP total revenue for Q2 2025 both fell below analyst estimates. GAAP revenue was $51.5 million versus the $54.5 million consensus for Q2 2025. Key financial metrics declined compared to the prior year (Q2 2024), with adjusted net investment income (non-GAAP) down from $0.36 per share in Q1 2025, and GAAP revenue down from $71.5 million in Q2 2024. While the quarter reflected ongoing portfolio stress and lower net asset value, the company showed progress by reducing non-accruals in its loan book, with non-accruals declining to 3.7% of the portfolio at fair value in Q2 2025 from 4.4% in Q1 2025. Overall, the quarter presented a mix of challenges and positive developments as portfolio repositioning continued. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS – Net Investment Income $0.32 $0.32 $0.42 (23.8%) Revenue $51.5 million $54.5 million $71.5 million (28.0%) Net Asset Value per Share $8.71 Not provided N/A Net Increase (Decrease) in Net Assets from Operations $(0.19) $(0.60) −68.3% Debt Investments on Non-Accrual – % of Portfolio (Fair Value) 3.7% 5.6% (1.9 pp) Source: Analyst estimates for the quarter provided by FactSet. Business Overview and Recent Focus BlackRock Tcp Capital is a lender to performing middle-market companies, leaning heavily on senior secured loans for principal protection. Its business model emphasizes generating returns through interest from loans, origination fees, and occasional equity investments. The vast majority of its $1.8 billion portfolio as of June 30, 2025, is invested in senior secured debt (89.4%), with 82.4% of the total portfolio was first lien in Q2 2025. This focus targets companies with enterprise values between $100 million and $1.5 billion. Recent focus areas for the company include portfolio de-risking, actively reducing the share of non-performing loans, and strengthening its capital structure. The investment advisor, Tennenbaum Capital Partners (a BlackRock subsidiary), brings substantial experience, and aims to enhance portfolio quality through continual repositioning. Key success factors for the business are strong underwriting, disciplined leverage, and an adaptable approach to industry and sponsor relationships. Effective risk management and maintaining regulatory status as a Business Development Company (BDC) are also critical to its ongoing strategy. Quarterly Highlights and Key Developments During the quarter, Adjusted net investment income per share fell to $0.31 in Q2 2025, below the $0.32 non-GAAP analyst expectation and down from $0.38 per share (GAAP) in Q1 2025. Total investment income (GAAP) was $51.5 million in Q2 2025, missing the $54.5 million GAAP consensus and declining from $71.5 million in Q2 2024. Net asset value per share dropped to $8.71 in Q2 2025, down from $9.18 per share at March 31, 2025, and $9.23 per share at December 31, 2024. The company attributed these Q2 2025 declines mainly to markdowns on previously restructured portfolio companies, including losses recorded on SellerX, Khoros, InMoment, and Homerenew Buyer. Realized losses in Q2 2025 totaled $66.3 million on a GAAP basis, applying continued pressure to the balance sheet and earnings. A notable improvement came in portfolio quality: the share of assets on non-accrual status—meaning investments that are no longer generating current income—declined to 3.7% by fair value in Q2 2025, down from 4.4% in the prior quarter (Q1 2025) and 5.6% at December 31, 2024. At original cost, non-accruals dropped to 10.4% from 12.6% at cost in Q2 2025. The company invested $111.5 million in new credits during Q2 2025, with 91.6% of total investment acquisitions during Q2 2025 were in senior secured loans, while exiting approximately $47.9 million in investments during Q2 2025. New originations produced a weighted average effective annual yield of 10.8% versus 10.5% on assets that were exited during Q2 2025. The portfolio remains broad and granular, spread across 153 companies. Floating-rate debt comprised 93.8% of the credit book in Q2 2025, providing some insulation against further rate shifts. However, downward pressure on yields continued during the period. The weighted average annual effective yield of the debt portfolio slipped to 12.0% in Q2 2025, from 12.2% in Q1 2025 and 12.4% at December 31, 2024. Portfolio repositioning shifted investment toward more defensive senior secured loans. Capital structure and liquidity saw movement this quarter. Net leverage climbed to 1.28 times in Q2 2025, exceeding the usual target range of 0.9x to 1.2x in Q2 2025. Management explained this increase in net leverage in Q2 2025 as a result of late-quarter investments, delayed repayments, and a NAV decline. Available liquidity at quarter-end totaled $565.5 million in Q2 2025, drawn from leverage facilities and cash reserves. Notably, the company prepaid $92 million of 2025 notes on July 31, 2025, improving its near-term maturity profile and reducing future interest costs. Operating expenses (excluding interest) were 3.5% of average net assets on an annualized basis in Q2 2025. There were no material segment-level or product family breakouts, consistent with the company's focus on being a pure-play lender. However, the firm has continued to prioritize deals where it can be a lender of influence, distancing itself from complex, broadly syndicated group lending. Shareholder returns remain a significant focus. The company declared a Q3 2025 regular dividend of $0.25 per share and a $0.04 per share special dividend, both payable at the end of September 2025. The management fee waiver, amounting to $1.8 million in Q2 2025 and $3.6 million for the first half of 2025, supported net investment income during this transitional period. Share buyback activity was modest, with 43,980 shares repurchased at an average price of $6.85 during the six months ended June 30, 2025. Looking Ahead and Management Guidance Management did not offer specific financial guidance for future quarters or fiscal 2025. Instead, it described a focus on working through the remaining non-accrual loans and seeing through challenging restructurings. In commentary, it highlighted optimism regarding early signs of improvement in troubled investments. However, no explicit numerical guidance was provided for earnings or asset value targets. Portfolio repositioning, strategic capital deployment, and risk reduction remain priority themes for the near term. Shareholders will watch for progress in reducing non-accruals and resolving stressed credits. The portfolio's exposure to floating-rate loans, disciplined origination approach, and ongoing advisor fee waivers should help cushion earnings in the near term. The Q3 2025 regular dividend was maintained at $0.25 per share, and a special dividend of $0.04 per share was declared for Q3 2025, payable on September 30, 2025. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,047%* — a market-crushing outperformance compared to 181% for the S&P 500. 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