Essa Pharma Inc. Announces US$80 Million Cash Distribution to Shareholders
The Distribution is scheduled to be paid on August 22, 2025, to Shareholders of record as of the close of business on August 19, 2025.
The Distribution will occur prior to the special meeting of the Company's Shareholders, optionholders and warrantholders that is being held to consider and approve the Company's previously announced transaction with XenoTherapeutics, Inc. (" Xeno"), a non-profit biotechnology company, under which Xeno will acquire all of the issued and outstanding Common Shares (the " Transaction"), which meeting is expected to be held on September 10, 2025 (the " Special Meeting"). On August 5, 2025, the Company obtained an interim order from the Court authorizing the Special Meeting.
In total, with the Distribution and the cash payable upon closing of the Transaction, each Shareholder is currently estimated to receive approximately US$1.91 per Common Share, exclusive of any contingent value rights payments Shareholders are entitled to receive pursuant to the Transaction.
About ESSA Pharma Inc.
ESSA is a pharmaceutical company that was previously focused on developing novel and proprietary therapies for the treatment of patients with prostate cancer. For more information, please visit www.essapharma.com.
Forward Looking Statement
This communication, and any related oral statements, contains certain information which, as presented, constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities laws (collectively, " forward-looking statements"). Forward-looking statements include, but are not limited to, statements that relate to future events and often address expected future business and financial performance, containing words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions and include, but are not limited to, statements regarding the proposed timing and completion of the Transaction, the amounts payable under the Transaction; the Company's application to the Supreme Court of British Columbia for a reduction of capital and cash distribution prior to the closing of the Transaction; the timing and receipt of securityholder, regulatory and court approvals of the Transaction; the satisfaction of the conditions to the completion of the Transaction and other statements that are not statements of historical facts.
In this communication, these forward-looking statements are based on ESSA's current expectations, estimates and projections regarding, among other things, the expected date of closing of the Transaction and the potential benefits thereof, its business and industry, management's beliefs and certain assumptions made by ESSA, all of which are subject to change. Forward-looking statements are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of ESSA to control or predict, and which may cause ESSA's actual results, performance or achievements to be materially different from those expressed or implied thereby, including the consummation of the Transaction and the anticipated benefits thereof. Such statements reflect ESSA's current views with respect to future events, are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by ESSA as of the date of such statements, are inherently subject to significant medical, scientific, business, economic, competitive, regulatory, political and social uncertainties and contingencies. In making forward-looking statements, ESSA may make various material assumptions, including but not limited to (i) the completion of the Transaction on anticipated terms and timing, including obtaining required securityholder, regulatory and court approvals, and the satisfaction of other conditions to the completion of the Transaction; (ii) the potential for the date of the Special Meeting to change; (iii) potential litigation relating to the Transaction that could be instituted by or against ESSA, Xeno, XOMA Royalty Corporation or their respective directors or officers, including the effects of any outcomes related thereto; (iv) the risk that disruptions from the Transaction will harm ESSA's business, including current plans and operations; (v) the ability of ESSA to retain and hire key personnel; (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Transaction; (vii) continued availability of capital and financing and rating agency actions; (viii) legislative, regulatory and economic developments affecting ESSA's business; (ix) the accuracy of ESSA's financial projections; (x) general business, market and economic conditions; (xi) certain restrictions during the pendency of the Transaction that may impact ESSA's ability to pursue certain business opportunities or strategic transactions; (xii) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, pandemics, outbreaks of war or hostilities, as well as ESSA's response to any of the aforementioned factors; (xiii) significant transaction costs associated with the Transaction; (xiv) the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xv) competitive responses to the Transaction; (xvi) the risks and uncertainties pertaining to ESSA's business, including those set forth in ESSA's Annual Report on Form 10-K dated December 17, 2024, under the heading "Risk Factors", a copy of which is available on ESSA's profile on EDGAR at www.sec.gov and on SEDAR+ at www.sedarplus.ca, and as otherwise disclosed from time to time on ESSA's EDGAR and SEDAR+ profiles; and (xvii) the risks and uncertainties that will be described in the proxy statement and management information circular for the Company's securityholders filed with the U.S. Securities and Exchange Commission (the " SEC," and such statement, the " Proxy Statement") available from the sources indicated above.
These risks, as well as other risks associated with the Transaction, will be more fully discussed in the Proxy Statement. While the list of factors presented here is, and the list of factors to be presented in the Proxy Statement will be, considered representative, no such list should be considered a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material impact on ESSA's financial condition, results of operations, credit rating or liquidity. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and ESSA undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable United States and Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.
Important Additional Information and Where to Find It
In connection with the proposed Transaction between ESSA, Xeno and XOMA Royalty Corporation, ESSA has filed with the SEC the preliminary Proxy Statement on July 31, 2025, the definitive version of which will be filed with the SEC and sent or provided to ESSA securityholders. ESSA may also file other documents with the SEC regarding the proposed Transaction. This document is not a substitute for the Proxy Statement or any other document which ESSA may file with the SEC or send or provide to ESSA securityholders in connection with the Transaction. INVESTORS AND SECURITYHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and securityholders may obtain free copies of the Proxy Statement and other documents that are filed or will be filed with the SEC by ESSA (when they become available) through the website maintained by the SEC at www.sec.gov, on SEDAR+ at www.sedarplus.ca, or at ESSA's website at www.essapharma.com.
Participants in the Solicitation
ESSA and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from ESSA's shareholders in connection with the proposed Transaction. Additional information regarding such participants, including a description of their direct or indirect interests, by security holdings or otherwise, can be found under the captions "THE ARRANGEMENT – Interests of the Company's Directors and Executive Officers in the Arrangement", "IMPORTANT INFORMATION ABOUT THE COMPANY – Security Ownership" and "INTERESTS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS IN THE ARRANGEMENT" contained in the preliminary Proxy Statement filed with the SEC on July 31, 2025. Information relating to the foregoing can also be found in ESSA's proxy statement for its 2025 annual meeting of shareholders, which was filed with the SEC on January 22, 2025 (the " Annual Meeting Proxy Statement"). To the extent holdings of securities by potential participants changed since the applicable "as of" date disclosed in the preliminary Proxy Statement, such information has been or will be reflected on ESSA's Statements of Change in Ownership on Forms 3 and 4 filed with the SEC. You may obtain free copies of these documents using the sources indicated above.
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SOURCE ESSA Pharma Inc.
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(b) Advertising Revenues and Other Services include intersegment revenues with RH consisting of advertising contributions and tech fees of $22 million and $42 million during the three and six months ended June 30, 2025, respectively, and $10 million during the three and six months ended June 30, 2024, which are eliminated in consolidation. As a reminder, BK segment results are presented consistently with our franchisor model. As such, results include intersegment Franchise and Property Revenues and Advertising Revenues and Other Services from the Carrols Burger King restaurants included in RH (as footnoted above). Burger King US Reclaim the Flame Burger King is executing its multi-year "Reclaim the Flame" plan to accelerate sales growth and drive franchisee profitability. 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These factors were partially offset by net bad debt expenses in the current year period compared to bad debt recoveries in the prior year. PLK Segment Results Three Months Ended June 30, Six Months Ended June 30, (in US$ millions, unaudited) 2025 2024 2025 2024 System-wide Sales Growth 1.6 % 4.6 % (0.4) % 7.3 % System-wide Sales $ 1,578 $ 1,555 $ 3,053 $ 3,072 Comparable Sales (1.4) % 0.5 % (2.7) % 3.0 % Comparable Sales - US (0.9) % 0.6 % (2.4) % 3.3 % Net Restaurant Growth 2.5 % 4.3 % 2.5 % 4.3 % System Restaurant Count at Period End 3,524 3,437 3,524 3,437 Company Restaurant Sales $ 46 $ 33 $ 93 $ 56 Franchise and Property Revenues $ 87 $ 85 $ 165 $ 165 Advertising Revenues and Other Services $ 77 $ 76 $ 147 $ 151 Total Revenues $ 210 $ 194 $ 404 $ 372 Company Restaurant Expenses $ 40 $ 29 $ 79 $ 48 Segment F&P Expenses $ 6 $ 5 $ 8 $ 6 Advertising Expenses and Other Services $ 80 $ 78 $ 152 $ 154 Segment G&A $ 19 $ 21 $ 40 $ 43 Adjusted Operating Income $ 66 $ 62 $ 126 $ 120 For the second quarter, the increases in Total Revenues and Adjusted Operating Income were primarily driven by the acquisition of company restaurants as part of the Carrols Acquisition. Additionally, Adjusted Operating Income benefited from a decrease in Segment G&A due primarily to lower compensation-related expenses. FHS Segment Results Three Months Ended June 30, Six Months Ended June 30, (in US$ millions, unaudited) 2025 2024 2025 2024 System-wide Sales Growth 6.3 % 3.3 % 6.8 % 3.5 % System-wide Sales $ 336 $ 316 $ 658 $ 617 Comparable Sales (0.8) % (0.1) % (0.2) % 0.1 % Comparable Sales - US (1.1) % (0.1) % (0.4) % 0.1 % Net Restaurant Growth 6.4 % 3.5 % 6.4 % 3.5 % System Restaurant Count at Period End 1,371 1,288 1,371 1,288 Company Restaurant Sales $ 11 $ 10 $ 22 $ 20 Franchise and Property Revenues $ 28 $ 27 $ 54 $ 51 Advertising Revenues and Other Services $ 20 $ 16 $ 36 $ 31 Total Revenues $ 59 $ 53 $ 113 $ 103 Company Restaurant Expenses $ 9 $ 9 $ 19 $ 18 Segment F&P Expenses $ 2 $ 1 $ 3 $ 3 Advertising Expenses and Other Services $ 20 $ 17 $ 38 $ 32 Segment G&A $ 13 $ 14 $ 27 $ 28 Adjusted Operating Income $ 15 $ 13 $ 26 $ 23 For the second quarter, the increases in Total Revenues and Adjusted Operating Income were primarily driven by the increase in System-wide Sales. INTL Segment Results Three Months Ended June 30, Six Months Ended June 30, (in US$ millions, unaudited) 2025 2024 2025 2024 System-wide Sales Growth (a) 9.8 % 9.2 % 9.3 % 10.4 % System-wide Sales (a) $ 4,992 $ 4,517 $ 9,360 $ 8,733 Comparable Sales 4.2 % 2.6 % 3.4 % 3.4 % Comparable Sales - INTL - Burger King 4.1 % 2.3 % 3.4 % 3.2 % Net Restaurant Growth 5.4 % 8.2 % 5.4 % 8.2 % System Restaurant Count at Period End 15,767 14,959 15,767 14,959 Franchise and Property Revenues $ 228 $ 213 $ 428 $ 414 Advertising Revenues and Other Services $ 21 $ 20 $ 40 $ 41 Total Revenues $ 250 $ 232 $ 468 $ 455 Segment F&P Expenses $ 9 $ — $ 14 $ 5 Advertising Expenses and Other Services $ 23 $ 22 $ 45 $ 45 Segment G&A $ 47 $ 49 $ 98 $ 102 Adjusted Operating Income $ 172 $ 160 $ 310 $ 302 (a) System-wide Sales Growth is calculated on a constant currency basis and therefore will not recalculate to the percentage change in System-wide Sales, which is reported on a nominal basis. For the second quarter, the increases in Total Revenues and Adjusted Operating Income were primarily driven by higher royalties from Burger King and Popeyes restaurants resulting from increased System-wide Sales, partially offset by the absence of $10 million of revenues from BK China which were recognized in the prior year. Adjusted Operating Income also benefited from a decrease in Segment G&A due primarily to lower compensation-related expenses and lower professional fees, partially offset by net bad debt expenses in the current year period compared to bad debt recoveries in the prior year. Excluding the FX Impact, Total Revenues increased by $15 million and Adjusted Operating Income by $10 million. Note: RH KPIs are shown consistent with RBI's reporting calendar, but results from BK Carrols restaurants in the P&L are shown consistent with Carrols reporting calendar, from the acquisition date. For the three months ended June 30, 2025, results are from March 31, 2025 to June 29, 2025. For the six months ended June 30, 2025, results are from December 30, 2024 to June 29, 2025. For the three and six months ended June 30, 2024, results are from May 16, 2024 to June 30, 2024. (a) Restaurant Occupancy and Other Expenses include intersegment royalties and property expense of $27 million and $55 million for the three and six months ended June 30, 2025, respectively, and $15 million for the three and six months ended June 30, 2024, which are eliminated in consolidation. (b) Advertising Expenses and Other Services include intersegment advertising expenses and tech fees of $22 million and $42 million for the three and six months ended June 30, 2025, respectively, and $10 million for the three and six months ended June 30, 2024, which are eliminated in consolidation. Declaration of Dividend The RBI Board of Directors has declared a dividend of $0.62 per common share and partnership exchangeable unit of RBI LP for the third quarter of 2025. The dividend will be payable on October 7, 2025 to shareholders and unitholders of record at the close of business on September 23, 2025. Share Repurchase Authorization Our board of directors approved a share repurchase authorization that allows us to repurchase up to $1 billion of our common shares from September 15, 2025 until September 30, 2027 (the "Repurchase Authorization"). Effective as of September 15, 2025, this Repurchase Authorization will replace our prior two-year authorization to repurchase up to the same $1 billion of our common shares until September 30, 2025. Repurchases, if any, under the Repurchase Authorization will be funded using RBI's cash resources and all shares repurchased will be cancelled. We plan to submit a new normal course issuer bid, subject to TSX approval, to be effective as of or following the expiration of the current one in September 2025. While this authorization preserves our capital allocation flexibility, we remain committed to prioritizing debt reduction in the near term. 2025 Financial Guidance For 2025, RBI continues to expect: For 2025, RBI now expects Adjusted Interest Expense, net of around $520 million. Long-Term Algorithm RBI continues to expect the following long-term consolidated performance on average, from 2024 to 2028: 3%+ Comparable Sales; and 8%+ organic Adjusted Operating Income growth. In addition, the Company continues to expect to reach 5%+ Net Restaurant Growth towards the end of its algorithm period. Investor Conference Call We will host an investor conference call and webcast at 8:30 a.m. Eastern Time on Thursday, August 7, 2025, to review financial results for the second quarter ended June 30, 2025. The earnings call will be broadcast live via our investor relations website at and a replay will be available for 30 days following the release. The dial-in number is 1 (833)-470-1428 for U.S. callers, 1 (833)-950-0062 for Canadian callers, and 1 (929)-526-1599 for callers from other countries. For all dial-in numbers please use the following access code: 391075. About Restaurant Brands International Inc. Restaurant Brands International Inc. is one of the world's largest quick service restaurant companies with over $45 billion in annual system-wide sales and over 32,000 restaurants in more than 120 countries and territories. RBI owns four of the world's most prominent and iconic quick service restaurant brands – TIM HORTONS®, BURGER KING®, POPEYES®, and FIREHOUSE SUBS®. These independently operated brands have been serving their respective guests, franchisees and communities for decades. Through its Restaurant Brands for Good framework, RBI is improving sustainable outcomes related to its food, the planet, and people and communities. RBI's principal executive offices are in Miami, Florida. In North America, RBI's brands are headquartered in their home markets where they were founded decades ago: Canada for Tim Hortons and the U.S. for Burger King, Popeyes and Firehouse Subs. To learn more about RBI, please visit the company's website at Forward-Looking Statements This press release and our investor conference call contain certain forward-looking statements and information, which reflect management's current beliefs and expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. These forward-looking statements include statements about our expectations or beliefs regarding (i) the impact of the macro-economic pressures and currency fluctuations on our and our franchisees' results of operations and business; (ii) our remodel program and refranchising efforts; (iii) leverage and free cash flow; (iv) segment G&A, capital expenditures, tenant inducements, supply chain gross margins, FX headwinds, remodel incentives, comparable sales, adjusted operating income, net restaurant growth, effective tax rate and adjusted net interest expense in 2025 and, as applicable, through 2028; (v) long-term partners for Popeyes China and FHS Brazil and a new controlling shareholder for BK China; (vi) refranchising of stores acquired in the Carrols Acquisition; (vii) commodity prices; (viii) tax law changes; (ix) plans to maintain the franchisor dynamics in certain segments; * tariff related impacts; and (xi) our growth opportunities, plans and strategies for each of our brands and ability to enhance operations and drive long-term, sustainable growth. The factors that could cause actual results to differ materially from RBI's expectations are detailed in filings of RBI with the Securities and Exchange Commission and applicable Canadian securities regulatory authorities, such as its annual and quarterly reports and current reports on Form 8-K, and include the following: (1) our indebtedness, which could adversely affect our financial condition; (2) global economic or other business conditions that may affect the desire or ability of our guests to purchase our products; (3) our relationship with, and the success of, our franchisees and risks related to our nearly fully franchised business model; (4) our franchisees' financial stability and their ability to access and maintain the liquidity necessary to operate their businesses; (5) our supply chain operations; (6) our ownership and leasing of real estate; (7) the effectiveness of our marketing, advertising and digital programs and franchisee support of these programs; (8) fluctuations in interest rates and in the currency exchange markets and the effectiveness of our hedging activity; (9) our ability to successfully implement our domestic and international growth strategy for each of our brands and risks related to our international operations; (10) our reliance on franchisees, including subfranchisees to accelerate restaurant growth; (11) risks related to unforeseen events; (12) changes in applicable tax laws or interpretations thereof; (13) evolving legislation and regulations in the area of franchise and labor and employment law; (14) our ability to address environmental and social sustainability issues; (15) risks related to geopolitical conflicts and terrorism; (16) the ability of cash flows from the Carrols restaurants to fund our budgeted remodels and the timing of refranchising of such restaurants; (17) tariffs and their impact on economic conditions or our business; and (18) our ability to find long-term partners for Popeyes China and FHS Brazil and a new controlling shareholder for BK China. Other than as required under U.S. federal securities laws or Canadian securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, change in expectations or otherwise. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenues: Supply chain sales $ 732 $ 682 $ 1,343 $ 1,309 Company restaurant sales 600 347 1,158 449 Franchise and property revenues 760 747 1,423 1,459 Advertising revenues and other services 318 304 595 602 Total revenues 2,410 2,080 4,519 3,819 Operating costs and expenses: Supply chain cost of sales 589 540 1,085 1,057 Company restaurant expenses 498 286 966 375 Franchise and property expenses 144 134 274 260 Advertising expenses and other services 364 334 675 645 General and administrative expenses 188 185 379 358 (Income) loss from equity method investments (5) (69) (10) (72) Other operating expenses (income), net 149 7 232 (11) Total operating costs and expenses 1,927 1,417 3,601 2,612 Income from operations 483 663 918 1,207 Interest expense, net 132 147 262 295 Loss on early extinguishment of debt — 32 — 32 Income from continuing operations before income taxes 351 484 656 880 Income tax expense from continuing operations 87 85 169 153 Net income from continuing operations 264 399 487 727 Net loss from discontinued operations (net of tax of $0 and $0) 1 — 3 — Net income 263 399 484 727 Net income attributable to noncontrolling interests 74 119 136 217 Net income attributable to common shareholders $ 189 $ 280 $ 348 $ 510 Earnings per common share Basic net income per share from continuing operations $ 0.58 $ 0.89 $ 1.07 $ 1.62 Basic net loss per share from discontinued operations $ (0.00) $ — $ (0.01) $ — Basic net income per share $ 0.58 $ 0.89 $ 1.07 $ 1.62 Diluted net income per share from continuing operations $ 0.58 $ 0.88 $ 1.07 $ 1.60 Diluted net loss per share from discontinued operations $ (0.00) $ — $ (0.01) $ — Diluted net income per share $ 0.57 $ 0.88 $ 1.06 $ 1.60 Weighted average shares outstanding (in millions): Basic 328 317 327 316 Diluted 457 453 456 453 As of June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,026 $ 1,334 Accounts and notes receivable, net of allowance of $58 and $57, respectively 778 698 Inventories, net 167 142 Prepaids and other current assets 195 108 Assets held for sale - discontinued operations 622 — Total current assets 2,788 2,282 Property and equipment, net of accumulated depreciation and amortization of $1,188 and $1,087, respectively 2,243 2,236 Operating lease assets, net 1,909 1,852 Intangible assets, net 11,279 10,922 Goodwill 6,301 5,986 Other assets, net 1,168 1,354 Total assets $ 25,688 $ 24,632 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts and drafts payable $ 763 $ 765 Other accrued liabilities 1,135 1,141 Gift card liability 189 236 Current portion of long-term debt and finance leases 221 222 Liabilities held for sale - discontinued operations 446 — Total current liabilities 2,754 2,364 Long-term debt, net of current portion 13,428 13,455 Finance leases, net of current portion 282 286 Operating lease liabilities, net of current portion 1,835 1,770 Other liabilities, net 1,094 706 Deferred income taxes, net 1,205 1,208 Total liabilities 20,598 19,789 Shareholders' equity: Common shares, no par value; unlimited shares authorized at June 30, 2025 and December 31, 2024; 327,777,360 shares issued and outstanding at June 30, 2025; 324,426,589 shares issued and outstanding at December 31, 2024 2,469 2,357 Retained earnings 1,794 1,860 Accumulated other comprehensive income (loss) (946) (1,107) Total Restaurant Brands International Inc. shareholders' equity 3,317 3,110 Noncontrolling interests 1,773 1,733 Total shareholders' equity 5,090 4,843 Total liabilities and shareholders' equity $ 25,688 $ 24,632 Six Months Ended June 30, 2025 2024 Cash flows from operating activities: Net income $ 484 $ 727 Net loss from discontinued operations 3 — Net income from continuing operations 487 727 Depreciation and amortization 148 108 Non-cash loss on early extinguishment of debt — 22 Amortization of deferred financing costs and debt issuance discount 13 12 (Income) loss from equity method investments (10) (72) (Gain) loss on remeasurement of foreign denominated transactions 207 (29) Net (gains) losses on derivatives (102) (91) Share-based compensation and non-cash incentive compensation expense 81 87 Deferred income taxes 8 10 Other non-cash adjustments, net 31 5 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (72) 9 Inventories and prepaids and other current assets (30) 14 Accounts and drafts payable (6) (70) Other accrued liabilities and gift card liability (155) (210) Tenant inducements paid to franchisees (14) (11) Changes in other long-term assets and liabilities (19) (29) Net cash provided by operating activities from continuing operations 567 482 Cash flows from investing activities: Payments for additions of property and equipment (102) (69) Net proceeds from disposal of assets, restaurant closures, and refranchisings 12 7 Net payments for acquisition of franchised restaurants, net of cash acquired (152) (531) Settlement/sale of derivatives, net 40 35 Other investing activities, net — (1) Net cash used for investing activities from continuing operations (202) (559) Cash flows from financing activities: Proceeds from long-term debt — 1,950 Repayments of long-term debt and finance leases (66) (1,639) Payment of financing costs — (32) Payment of common share dividends and Partnership exchangeable unit distributions (544) (506) Proceeds from stock option exercises 20 60 Proceeds from derivatives 34 57 Other financing activities, net 1 (2) Net cash used for financing activities from continuing operations (555) (112) Net cash used for discontinued operations (85) — Effect of exchange rates on cash and cash equivalents 19 (8) Decrease in cash and cash equivalents, including cash classified as assets held for sale - discontinued operations (256) (197) Increase in cash classified as assets held for sale - discontinued operations (52) — Decrease in cash and cash equivalents (308) (197) Cash and cash equivalents at beginning of period 1,334 1,139 Cash and cash equivalents at end of period $ 1,026 $ 942 Supplemental cash flow disclosures: Interest paid $ 360 $ 390 Income taxes paid $ 285 $ 186 Accruals for additions of property and equipment $ 22 $ — RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES Key Operating Metrics and Non-GAAP Financial Measures Key Operating Metrics Key performance indicators ("KPIs") are shown for RBI's Five Franchisor Segments. The KPIs for the Carrols Burger King restaurants are included in the BK segment and KPIs for the PLK China, BK China, and FHS Brazil restaurants are included in the INTL segment. System-wide Sales Growth refers to the percentage change in sales at all franchised restaurants and company restaurants (referred to as System-wide Sales) in one period from the same period in the prior year on a constant currency basis, which means the results exclude the effect of foreign currency translation ("FX Impact"). We calculate the FX Impact by translating prior year results at current year monthly average exchange rates. System-wide Sales is reported on a nominal basis. Comparable Sales refers to the percentage change in restaurant sales in one period from the same prior year period on a constant currency basis for restaurants that have been open for an initial consecutive period, typically at least 13 months. Additionally, if a restaurant is closed for a significant portion of a month, the restaurant is excluded from the monthly Comparable Sales calculation. Unless otherwise stated, System-wide Sales Growth, System-wide Sales and Comparable Sales are presented on a system-wide basis, which means they include franchised restaurants and company restaurants. System-wide results are driven by our franchised restaurants, as over 90% of system-wide restaurants are franchised. Franchise sales represent sales at all franchised restaurants and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales. Net Restaurant Growth refers to the net change in restaurant count (openings, net of permanent closures) over a trailing twelve month period, divided by the restaurant count at the beginning of the trailing twelve month period. In determining whether a restaurant meets our definition of a restaurant that will be included in our Net Restaurant Growth, we consider factors such as scope of operations, format and image, separate franchise agreement, and minimum sales thresholds. We refer to restaurants that do not meet our definition as "alternative formats" and we believe these are helpful to build brand awareness, test new concepts and provide convenience in certain markets. Total Capex and Cash Inducements refers to the sum of payments for additions to property and equipment, tenant inducements paid to franchisees, other cash inducements (included in changes in other long-term assets and liabilities), and increase (decrease) in accruals for additions to property and equipment. These metrics are important indicators of the overall direction of our business, including trends in sales and the effectiveness of each brand's marketing, operations and growth initiatives. Total Capex and Cash Inducements is an indicator of the capital intensity of our business. Non-GAAP Measures Below, we define non-GAAP financial measures, provide a reconciliation of each measure to the most directly comparable financial measure calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), and discuss the reasons why we believe this information is useful to management and may be useful to investors. These measures do not have standardized meanings under GAAP and may differ from similarly captioned measures of other companies in our industry. We believe that these non-GAAP measures are useful to investors in assessing our operating performance or liquidity. By disclosing these non-GAAP measures, we intend to provide investors with a consistent comparison of our operating results and trends for the periods presented. AOI represents Income from Operations adjusted to exclude (i) franchise agreement and reacquired franchise right intangible asset amortization as a result of acquisition accounting, (ii) (income) loss from equity method investments, net of cash distributions received from equity method investments, (iii) other operating expenses (income), net and, (iv) income/expenses from non-recurring projects and non-operating activities. For the periods referenced in the following financial results, income/expenses from non-recurring projects and non-operating activities included (i) non-recurring fees and expenses incurred in connection with the Carrols Acquisition, the PLK China Acquisition and the BK China Acquisition, consisting primarily of professional fees, compensation related expenses and integration costs ("RH and BK China Transaction costs") and (ii) non-operating costs from professional advisory and consulting services associated with certain transformational corporate restructuring initiatives that rationalize our structure and optimize cash movements as well as services related to significant tax reform legislation and regulations ("Corporate restructuring and advisory fees"). Management believes that these types of expenses are either not related to our underlying profitability drivers or not likely to re-occur in the foreseeable future and the varied timing, size and nature of these projects may cause volatility in our results unrelated to the performance or trends of our core business and operations. AOI is used by management to measure operating performance of the business, excluding these other specifically identified items. AOI, as defined above, also represents our measure of segment income for each of our operating segments. Adjusted EBITDA is defined as earnings (net income or loss from continuing operations) before interest expense, net, (gain) loss on early extinguishment of debt, income tax expense (benefit) from continuing operations, and depreciation and amortization excluding (i) the non-cash impact of share-based compensation and non-cash incentive compensation expense, (ii) (income) loss from equity method investments, net of cash distributions received from equity method investments, (iii) other operating expenses (income), net, and (iv) income or expense from non-recurring projects and non-operating activities (as described above) and is used by management to measure leverage. Segment G&A (excluding RH) is defined as general and administrative expenses for our five franchisor segments excluding RH and BK China Transaction costs and Corporate restructuring and advisory fees. Segment F&P is defined as franchise and property expenses excluding franchise agreement amortization ("FAA") and reacquired franchise rights amortization as a result of acquisition accounting. Adjusted Net Income is defined as Net income from continuing operations excluding (i) franchise agreement and reacquired franchise right intangible asset amortization as a result of acquisition accounting, (ii) amortization of deferred financing costs and debt issuance discount, (iii) loss on early extinguishment of debt and interest expense, which represents non-cash interest expense related to amounts reclassified from accumulated comprehensive income (loss) into interest expense in connection with restructured interest rate swaps, (iv) (income) loss from equity method investments, net of cash distributions received from equity method investments, (v) other operating expenses (income), net, and (vi) income or expense from non-recurring projects and non-operating activities (as described above). Adjusted Interest Expense, net is defined as interest expense, net less (i) amortization of deferred financing costs and debt issuance discount and (ii) non-cash interest expense related to amounts reclassified from accumulated comprehensive income (loss) into interest expense in connection with restructured interest rate swaps. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by the weighted average diluted shares outstanding of RBI during the reporting period. Adjusted Net Income and Adjusted Diluted EPS are used by management to evaluate the operating performance of the business, excluding certain non-cash and other specifically identified items that management believes are not relevant to management's assessment of operating performance. Net debt is defined as Total debt less cash and cash equivalents. Total debt is defined as long-term debt, net of current portion plus (i) Finance leases, net of current portion, (ii) Current portion of long-term debt and finance leases and (iii) Unamortized deferred financing costs and deferred issue discount. Net debt is used by management to evaluate the Company's liquidity. We believe this measure is an important indicator of the Company's ability to service its debt obligations. Net Leverage is defined as Net Debt divided by Adjusted EBITDA. This metric is an operating performance measure that we believe provides investors a more complete understanding of our leverage position and borrowing capacity after factoring in cash and cash equivalents that eventually could be used to repay outstanding debt. Revenue growth, Income from Operations growth, Adjusted Operating Income growth, Net Income growth, Adjusted EBITDA growth, Adjusted Net Income growth and Adjusted Diluted EPS growth on an organic basis, are non-GAAP measures that exclude the impact of FX movements and the results of our RH segment. With respect to Adjusted Diluted EPS, growth on an organic basis also excludes the impact of incremental debt incurred as part of the Carrols transaction. Management believes that organic growth is an important metric for measuring the operating performance of our business as it helps identify underlying business trends, without distortion from the effects of FX movements and the RH segment given the Company's plans to refranchise the vast majority of the Carrols Burger King restaurants and to find a new partner for PLK China and new investors for FHS Brazil in the future. We calculate the impact of FX movements by translating prior year results at current year monthly average exchange rates. Free Cash Flow ("FCF") is the total of Net cash provided by operating activities minus Payments for property and equipment. FCF is a liquidity measure used by management as one factor in determining the amount of cash that is available for working capital needs or other uses of cash and it does not represent residual cash flows available for discretionary expenditures. Net Interest Paid is the total of cash interest paid in the period, cash proceeds (payments) related to derivatives, net from both investing activities and financing activities and cash interest income received. This liquidity measure is used by management to understand the net effect of interest paid, received and related hedging payments and receipts. With respect to our 2025 guidance, there are important components of estimated operating income and general and administrative expenses (including impact of equity method investments and other operating expenses or income from non-recurring projects and non-operating activities) that we have not determined and therefore, a reconciliation of estimated AOI to Income from operations, and Segment G&A to general and administrative expenses cannot be provided at this time. A full reconciliation of each of these measures will be provided when actual results are released. Three Months Ended June 30, Variance RH Impact FX Impact Organic Growth 2025 2024 $ % $ $ $ % Revenue TH $ 1,083 $ 1,031 $ 53 5.1 % $ — $ (10) $ 63 6.2 % BK 388 364 24 6.5 % — — 24 6.5 % PLK 210 194 16 8.3 % — — 16 8.4 % FHS 59 53 6 10.9 % — — 6 10.9 % INTL 250 232 18 7.5 % — 3 15 6.2 % RH 469 230 239 NM 239 — — NM Elimination of intersegment revenues (a) (49) (24) (25) NM (25) — — NM Total Revenues $ 2,410 $ 2,080 $ 330 15.9 % $ 214 $ (7) $ 123 6.6 % Income from Operations $ 483 $ 663 $ (180) (27.2) % $ 3 $ (1) $ (181) (27.4) % Net Income from Continuing Operations $ 264 $ 399 $ (135) (34.1) % $ (3) $ (1) $ (131) (33.2) % Adjusted Operating Income TH $ 278 $ 269 $ 9 3.5 % $ — $ (3) $ 12 4.5 % BK 121 114 7 6.1 % — — 7 6.1 % PLK 66 62 4 7.2 % — — 4 7.3 % FHS 15 13 2 19.4 % — — 2 19.5 % INTL 172 160 11 6.6 % — 1 10 6.1 % RH 16 14 2 17.1 % 2 — — NM Adjusted Operating Income $ 668 $ 632 $ 36 5.7 % $ 2 $ (2) $ 36 5.7 % Adjusted EBITDA $ 762 $ 721 $ 42 5.8 % $ 13 $ (2) $ 31 4.4 % Adjusted Net Income $ 432 $ 392 $ 40 10.1 % $ (2) $ (1) $ 43 11.1 % Adjusted Diluted Earnings per Share $ 0.94 $ 0.86 $ 0.08 9.2 % $ 0.00 $ 0.00 $ 0.09 10.3 % (a) Represents elimination of intersegment revenues that consists of royalties, property and advertising and other services revenue recognized by BK and INTL from intersegment transactions with RH. Note: Totals, variances, and percentage changes may not recalculate due to rounding. RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES Non-GAAP Financial Measures | Organic Growth Six Months Ended June 30, 2025 (In millions of U.S dollars, except per share data) (Unaudited) Six Months Ended Variance RH Impact FX Impact Organic Growth 2025 2024 $ % $ $ $ % Revenue TH $ 1,987 $ 1,969 $ 17 0.9 % $ — $ (60) $ 77 4.1 % BK 744 714 30 4.2 % — (1) 31 4.3 % PLK 404 372 32 8.6 % — — 32 8.7 % FHS 113 103 10 9.5 % — — 10 9.6 % INTL 468 455 13 2.8 % — (7) 20 4.4 % RH 901 230 671 NM 671 — — NM Elimination of intersegment revenues (a) (97) (24) (73) NM (73) — — NM Total Revenues $ 4,519 $ 3,819 $ 700 18.3 % $ 598 $ (68) $ 170 4.8 % Income from Operations $ 918 $ 1,207 $ (289) (24.0) % $ — $ (22) $ (267) (22.6) % Net Income from Continuing Operations $ 487 $ 727 $ (240) (33.1) % $ (5) $ (21) $ (214) (30.4) % Adjusted Operating Income TH $ 499 $ 493 $ 6 1.2 % $ — $ (15) $ 21 4.3 % BK 224 220 4 1.8 % — — 4 2.0 % PLK 126 120 6 4.9 % — — 6 5.2 % FHS 26 23 3 14.6 % — — 3 14.8 % INTL 310 302 8 2.5 % — (7) 14 4.8 % RH 23 14 9 66.4 % 9 — — NM Adjusted Operating Income $ 1,208 $ 1,172 $ 36 3.1 % $ 9 $ (22) $ 49 4.3 % Adjusted EBITDA $ 1,404 $ 1,348 $ 57 4.2 % $ 31 $ (24) $ 50 3.8 % Adjusted Net Income $ 775 $ 723 $ 52 7.3 % $ (5) $ (18) $ 75 10.8 % Adjusted Diluted Earnings per Share $ 1.70 $ 1.60 $ 0.10 6.5 % $ (0.01) $ (0.04) $ 0.15 10.0 % (a) Represents elimination of intersegment revenues that consists of royalties, property and advertising and other services revenue recognized by BK and INTL from intersegment transactions with RH. As of Net Leverage June 30, 2025 June 30, 2024 Long-term debt, net of current portion $ 13,428 $ 13,092 Finance leases, net of current portion 282 302 Current portion of long-term debt and finance leases 221 617 Unamortized deferred financing costs and deferred issuance discount 104 126 Total debt 14,035 14,137 Cash and cash equivalents 1,026 942 Net debt 13,009 13,195 LTM Net Income from continuing operations 1,205 1,817 Net Income from continuing operations Net leverage 10.8x 7.3x LTM Adjusted EBITDA (a) 2,840 2,649 Net Leverage 4.6x 5.0x (a) Adjusted EBITDA includes Adjusted EBITDA from Carrols from May 16, 2024. Three Months Ended June 30, Six Months Ended June 30, Twelve Months Ended December 31, Twelve Months Ended June 30, 2025 2024 2025 2024 2023 2024 2023 2025 2024 A B C D E A + D - B B + E - C Net income from continuing operations $ 264 $ 399 $ 487 $ 727 $ 628 $ 1,445 $ 1,718 $ 1,205 $ 1,817 Income tax expense (benefit) from continuing operations (6) 87 85 169 153 86 364 (265) 380 (198) Loss on early extinguishment of debt — 32 — 32 — 33 16 1 48 Interest expense, net 132 147 262 295 287 577 582 544 590 Income from operations 483 663 918 1,207 1,001 2,419 2,051 2,130 2,257 Franchise agreement and reacquired franchise rights amortization (FAA) 17 11 33 19 16 53 31 67 34 RH and BK China Transaction costs (2) 16 9 22 13 — 22 — 31 13 FHS Transaction costs (3) — — — — 19 — 19 — — Corporate restructuring and advisory fees (4) 5 6 6 8 12 20 38 18 34 Impact of equity method investments (5) (1) (64) (3) (64) 24 (53) 6 8 (82) Other operating expenses (income), net 149 7 232 (11) 10 (59) 55 184 34 Adjusted Operating Income 668 632 1,208 1,172 1,082 2,402 2,200 2,438 2,290 Depreciation and amortization, excluding FAA 61 48 116 89 79 210 160 237 170 Share-based compensation and non-cash incentive compensation expense (1) 33 41 81 87 92 172 194 166 189 Adjusted EBITDA 762 721 1,404 1,348 1,253 2,784 2,554 2,840 2,649 Net income from continuing operations to Adjusted Net Income and Adjusted Diluted EPS Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income from continuing operations $ 264 $ 399 $ 487 $ 727 Income tax expense from continuing operations (6) 87 85 169 153 Income from continuing operations before income taxes 351 484 656 880 Adjustments: Franchise agreement and reacquired franchise rights amortization 17 11 33 19 Amortization of deferred financing costs and debt issuance discount 7 6 13 12 Interest expense and loss on extinguished debt (7) (6) 30 (10) 33 RH and BK China Transaction costs (2) 16 9 22 13 Corporate restructuring and advisory fees (4) 5 6 6 8 Impact of equity method investments (5) (1) (64) (3) (64) Other operating expenses (income), net 149 7 232 (11) Total adjustments 187 5 293 10 Adjusted income before income taxes 538 489 949 890 Adjusted income tax expense (6)(8) 106 97 174 167 Adjusted net income $ 432 $ 392 $ 775 $ 723 Adjusted diluted earnings per share $ 0.94 $ 0.86 $ 1.70 $ 1.60 Weighted average diluted shares outstanding (in millions) 457 453 456 453 Note: Totals may not recalculate due to rounding.
Cision Canada
8 minutes ago
- Cision Canada
BCE reports second quarter 2025 results Français
This news release contains forward-looking statements. For a description of the related risk factors and assumptions, please see the section entitled "Caution Regarding Forward-Looking Statements" later in this news release. The information contained in this news release is unaudited. Consolidated revenue up 1.3% in Q2 2025 compared with Q2 2024, while consolidated adjusted EBITDA 1 declined 0.9% reflecting higher operating costs for strong product revenue growth Net earnings of $644 million, up 6.6% with net earnings attributable to common shareholders of $579 million, up 7.8% or $0.63 per common share Adjusted net earnings 1 of $592 million yielded adjusted EPS 1 of $0.63, down 19.2% Free cash flow 1 increased 5.0% to $1,152 million; cash flows from operating activities down 8.9% to $1,947 million Wireless improvement: 94,479 total mobile phone net subscriber activations 2; postpaid churn 2 down 0.12 points to 1.06% - first quarter of year-over-year improvement since Q3 2022 26,583 consumer fibre Internet net subscriber activations 2 contributed to 3% Internet revenue growth Bell Business Markets revenue growth driven by Ateko managed services, cybersecurity and Bell AI Fabric Fifth consecutive quarter of Bell Media revenue and adjusted EBITDA growth, up 3.8% and 7.8% respectively; digital revenue 3 up 9% as digital platforms and advertising technology continue to drive growth 2025 guidance updated to reflect close of the Ziply Fiber acquisition on August 1, 2025 MONTRÉAL, Aug. 7, 2025 /CNW/ - BCE Inc. (TSX: BCE) (NYSE: BCE) today reported results for the second quarter (Q2) of 2025. "Bell's second quarter results showcase our sharp focus on executing our strategic plan and delivering value for customers and shareholders," said Mirko Bibic, President and CEO, BCE and Bell Canada. While the significant changes in our economic and operating environments that have occurred since the Fall of 2024 persist, the timely and appropriate steps we have taken are yielding results. Our consolidated revenue is up 1.3% year-over-year, and we delivered a 6.6% increase in net earnings. Q2 further represents the first quarter of year-over-year improvement in our mobile phone postpaid customer churn in nearly three years – the direct result of our customer service improvements. With more than $24 billion in capital invested since 2020, we are leading Canada's telecommunications industry. We are offering our customers and shareholders made-in-Canada services and solutions: our managed services by Ateko offering cloud and workforce automation for enterprise; Bell AI Fabric providing companies access to cutting edge AI compute in Canada; and a strategic partnership with Canadian AI leader Cohere. And while the Canadian Radio-television and Telecommunications Commission's ill-advised decision has jeopardized further investments in core fibre infrastructure, we are proud to be the third largest fibre network and broadband provider in North America, even before the acquisition of Ziply Fiber. As we turn to the second half of the year, we are pleased to announce today that we are hosting an Investor Day on October 14. This represents an important opportunity to demonstrate how each element of our strategic plan comes together to create long-term shareholder value." KEY BUSINESS DEVELOPMENTS Expanding Bell's network reach Bell completed its acquisition of Ziply Fiber, the leading fibre Internet provider in the Pacific Northwest of the United States, accelerating its North American fibre growth strategy. For the third year in a row, Bell Pure Fibre was awarded Canada's Fastest Internet in the Ookla ® Speedtest ® Awards, a global leader in fixed and mobile network testing and analysis 4. Bell was also recognized across several other categories in Ookla's latest Canada Market Report (1H 2025). Building a sovereign AI ecosystem Bell announced Bell AI Fabric, a major investment that will create Canada's largest artificial intelligence (AI) compute capacity project, increasing sovereign AI capacity and ensuring that Canadian companies can compete and win in the global AI economy. Bell AI Fabric is a national data centre supercluster aiming to provide upwards of 500 MW of hydro-electric powered AI compute capacity across six facilities. Bell announced a strategic partnership with Cohere, a Canadian enterprise AI company, to provide full-stack, sovereign AI solutions for government and enterprise customers across Canada and to deploy Cohere's agentic AI platform, North, within Bell. Strategic divestitures paving the way for key growth drivers BCE completed the previously announced sale of its 37.5% ownership stake in Maple Leaf Sports and Entertainment (MLSE) for $4.7 billion ($4.2 billion net of taxes) to Rogers Communications Inc. (Rogers). The proceeds of this transaction supported the acquisition of Ziply Fiber. As part of this agreement, Bell Media has secured access to content rights for the Toronto Maple Leafs and Toronto Raptors on TSN through the 2043/2044 season via a long-term agreement with Rogers. BCE entered into an agreement to sell its home security and monitored alarm assets to a.p.i. ALARM Inc. as part of its ongoing strategy to focus on its core telecommunications, enterprise solutions and media businesses. Completion of the sale is expected in the second half of 2025, subject to customary closing conditions. Delivering future-ready solutions through partnerships Bell introduced a managed SD-WAN-as-a-Service powered by Fortinet, integrating network and security technologies to offer Canadian businesses enhanced user experience, improved security, increased uptime, simplified management, and scalability, while supporting secure connectivity for distributed employees and hybrid work styles. Bell and Zoom have partnered to deliver Workplace from Bell and Zoom, a unique suite of communication and collaboration services for Canadian enterprises available exclusively from Bell, reinforcing Bell's objective to provide AI-powered solutions for Canadian businesses' productivity and collaboration needs. Putting customers first The 2024-2025 Complaints for Telecom-television Services (CCTS) mid-year report reflected Bell's focus on putting customers first, with Bell experiencing fewer complaints than both our major competitors. Overall, our BCE group of companies saw its share of industry complaints decrease by 1%, supported by a strong performance from Virgin Plus, which had a 5.7% decrease in complaints and a 16% decrease in its share of industry complaints. Bell introduced ahlo, a new smartphone brand designed in Canada to deliver essential features, strong performance, and smart design at an accessible price point. Building a digital media and content powerhouse Bell Media unveiled its 2025/26 English and French-language original content lineup, featuring a total of 116 key returning and anticipated new titles. Bell Media announced the expansion of Crave to offer content from Bell Media's extensive entertainment portfolio, CTV, Noovo, news, select sports and expanded kids programming, growing Crave's content portfolio by more than 30%. Bell Media announced a strategic investment with Blink49Studios through Bell Ventures. This production and distribution partnership will enhance Blink49's capabilities and reach in Canada and internationally as it continues to grow its slate of scripted and unscripted content. Bell Media partnered with Disney Entertainment to provide exclusive new streaming bundle offers that include Disney+, Crave, and TSN. Slated to launch later in 2025, the new bundles will provide viewers with a vast selection of premium content. Bell Media and The Trade Desk partnered to integrate the Bell Marketing Platform into the Kokai platform, providing advertisers with seamless access to Bell's premium first-party data, custom audience-building capabilities, and, in the future, advanced measurement and analytics solutions. Bell Media and Formula 1 announced a long-term extension to Bell Media's F1 media rights agreement, in conjunction with our agreement to keep the Formula 1 Canadian Grand Prix in Montréal through 2035. BCE Executive team update Mark McDonald was promoted to the role of Executive Vice President and Chief Technology Officer, responsible for Bell's network strategy and infrastructure, as well as maximizing the potential of key technologies like 5G wireless and fibre. _____________ 4 Based on Ookla ® Speedtest Intelligence ® data, 1H 2025. All rights reserved. BCE RESULTS Financial Highlights ($ millions except per share amounts) (unaudited) Q2 2025 Q2 2024 % change BCE Operating revenues 6,085 6,005 1.3 % Net earnings 644 604 6.6 % Net earnings attributable to common shareholders 579 537 7.8 % Adjusted net earnings 592 712 (16.9 %) Adjusted EBITDA 2,674 2,697 (0.9 %) Net earnings per common share (EPS) 0.63 0.59 6.8 % Adjusted EPS 0.63 0.78 (19.2 %) Cash flows from operating activities 1,947 2,137 (8.9 %) Capital expenditures (763) (978) 22.0 % Free cash flow 1,152 1,097 5.0 % BCE operating revenues were $6,085 million in Q2 2025, up 1.3% compared to Q2 2024. Service revenue was down 0.8% to $5,267 million, due to a year-over-year decline at Bell Communication & Technology Services (CTS), partly offset by growth at Bell Media. Net earnings in Q2 increased 6.6% to $644 million and net earnings attributable to common shareholders totalled $579 million, or $0.63 per share, up 7.8% and 6.8%, respectively. The year-over-year increases were mainly due to lower other expense and lower impairment of assets. These factors were partly offset by lower adjusted EBITDA, higher severance, acquisition and other costs, higher depreciation and amortization and higher interest expense. Adjusted net earnings were down 16.9% in Q2 to $592 million, resulting in a 19.2% decrease in adjusted EPS to $0.63. Adjusted EBITDA was down 0.9% in Q2 to $2,674 million, reflecting a 1.6% decrease at Bell CTS, partly offset by a 7.8% increase at Bell Media. BCE's adjusted EBITDA margin 5 declined 1.0 percentage points to 43.9% from 44.9% in Q2 2024, due to the flow-through of lower year-over-year service revenue and a higher proportion of lower margin product sales. These factors were partly offset by: decreased labour costs attributable to workforce reductions; technology and automation-enabled operating efficiencies across the organization. BCE capital expenditures in Q2 2025 were $763 million, down 22.0% from $978 million in Q2 last year, corresponding to a capital intensity 6 of 12.5%, compared to 16.3% in Q2 2024. The year-over-year decrease is consistent with a planned reduction in capital spending primarily attributable to slower FTTP footprint expansion, largely due to regulatory decisions that discourage network investment. BCE cash flows from operating activities in Q2 were $1,947 million, down 8.9% from Q2 2024. The year-over-year decrease was mainly due to higher severance and other costs paid and lower cash from working capital, partly offset by lower income taxes paid and lower interest paid. Free cash flow increased 5.0% to $1,152 million from $1,097 million in Q2 2024. The year-over-year increase was mainly due to lower capital expenditures and lower cash dividends paid by subsidiaries to non-controlling interest, despite decreased cash flows from operating activities, excluding cash from acquisition and other costs paid. OPERATING RESULTS BY SEGMENT Bell Communication and Technology Services 7 (Bell CTS) Total Bell CTS operating revenues increased 1.0% to $5,334 million in Q2 2025 compared to Q2 2024, due to higher product revenue, partially offset by lower service revenue. Product revenue was up 17.4% in Q2 to $818 million, driven by: the opening of our first Bell AI Fabric facility in Kamloops, BC; higher wireless device sales to consumers from higher upgrade volumes and contracted activations. Service revenue was down 1.5% in Q2 to $4,516 million, reflecting: ongoing declines in legacy voice, legacy data services and satellite services; greater acquisition, retention and bundle discounts on residential services compared to Q2 2024; lower mobile phone blended average revenue per user (ARPU) 8,9,10. These factors were partly offset by: expansion of our mobile phone, mobile connected device and retail Internet subscriber bases; flow through of rate increases; the financial contribution from acquisitions made over the past year; increased sales of managed services driven by growth at Ateko and in cybersecurity. Bell CTS adjusted EBITDA decreased 1.6% in Q2 to $2,439 million, due to 3.2% higher operating costs, which together with the flow-through of lower year-over-year service revenue and a higher proportion of lower-margin product sales contributed to a 1.2 pts margin decline to 45.7%. The increase in operating costs this quarter is attributed to: higher cost of goods sold and commission expenses associated with an increase in product sales; non-recurring costs associated with the 2025 G7 Leader's Summit. These cost factors were partly offset by cost reduction initiatives and operating efficiencies. Postpaid mobile phone net subscriber activations 11 totaled 44,547 in Q2, down 43.3% from 78,500 in Q2 2024. The year-over-year decrease was the result of 14.8% lower gross subscriber activations, due to a less active market, slowing population growth attributable to government immigration policies, and fewer bring-your-own-device activations reflecting our focus on higher-value subscriber loadings. This was partly offset by a lower mobile phone postpaid customer churn 11 rate, which improved 12 basis points to 1.06%, reflecting our improvements to customer service and our focus on retention. Prepaid mobile phone net subscriber activations 8,9,11 totaled 49,932 in Q2, compared to 52,543 in Q2 2024; Q2 2024 being our best Q2 result in over a decade. The decline was due to 3.7% lower gross activations reflecting slowing population growth attributable to government immigration policies. Bell's mobile phone customer base 8,9,11 totaled 10,382,457 at the end of Q2 2025, a 0.4% increase over Q2 2024, comprised of 9,565,385 postpaid subscribers, up 1.3%, and 817,072 prepaid customers, down 8.9%. Mobile phone blended ARPU was down 0.7% to $57.61 in Q2 2025 from $58.04 in Q2 2024. The decrease was due to: ongoing elevated competitive pressure on base rate plan pricing and greater impact of discounting; lower data overage revenue from customers subscribing to unlimited and larger capacity data plans; lower outbound roaming revenue as a result of decreased travel to the United States. These factors were partly offset by revenues related to the 2025 G7 Leader's Summit. Mobile connected device net activations increased 10.9% in Q2 to 97,502 from 87,917 in Q2 2024, driven by increased connected car subscriptions and fewer data device deactivations. At the end of Q2 2025, mobile connected device subscribers 11 totaled 3,176,916, an increase of 10.0% over last year. Bell added 26,583 total net consumer retail fibre Internet subscribers 11 in Q2 2025, down 55.9% from 60,229 in Q2 2024. Despite continued strong demand for Bell's fibre services and bundled offerings with mobile service, the year-over-year decrease reflects: less new fibre footprint expansion compared to last year; slowing industry growth given lower immigration and slower housing starts. Retail high-speed subscribers 7,8 totaled 4,421,961 at the end of Q2 2025, representing a 2.2% decline compared to Q2 2024. Bell's retail IPTV customer base 11 decreased by 15,851 net subscribers in Q2 2025, compared to a net loss of 1,313 in Q2 2024. The year-over-year decrease was due mainly to: less pull-through as a result of lower Internet activations; lower customer activations, particularly on our Fibe TV streaming service; greater competitive intensity. At the end of Q2 2025, Bell served 2,100,690 retail IPTV subscribers 7,12, a 1.1% decrease over Q2 2024. Retail residential NAS net losses improved by 16.1% to 44,700 in Q2 2025, due to fewer customer deactivations. Bell's retail residential NAS customer base 7,11 totalled 1,727,911 at the end of Q2 2025, representing a 10.2% decline compared to Q2 2024. __________________ 7 In Q1 2025, we reduced our retail high-speed Internet, retail IPTV and retail residential NAS lines subscriber bases by 80,666, 441, and 14,150 subscribers, respectively, as at March 31, 2025, as we stopped selling new plans for this service under the Distributel, Acanac, Oricom and B2B2C brands. Additionally, at the beginning of Q1 2025, we reduced our retail high-speed Internet subscriber base by 2,783 subscribers to adjust for prior year customer deactivations following a review of customer accounts. 8 In Q3 2024, we removed 77,971 Virgin Plus prepaid mobile phone subscribers from our prepaid mobile phone subscriber base as at September 30, 2024, as we stopped selling new plans for this service as of that date. Additionally, as a result of a recent CRTC decision on wholesale high-speed Internet access services, we are no longer able to resell cable Internet services to new customers in our wireline footprint as of September 12, 2024, and consequently we removed all of the existing 106,259 cable subscribers in our wireline footprint from our retail high-speed Internet subscriber base as of that date. 9 In Q4 2024, we removed 124,216 Bell prepaid mobile phone subscribers from our prepaid mobile phone subscriber base as at December 31, 2024, as we stopped selling new plans for this service as of that date. 10 ARPU is defined as Bell CTS wireless external services revenues, divided by the average mobile phone subscriber base for the specified period, expressed as a dollar unit per month. Refer to the Key Performance Indicators (KPIs) section in this news release for more information on blended ARPU. 11 Refer to the Key Performance Indicators (KPIs) section in this news release for more information on churn and subscriber (or customer) units. 12 In Q2 2024, we increased our retail IPTV subscriber base by 40,997 to align the deactivation policy for our Fibe TV streaming services to our traditional Fibe TV service. Bell Media Bell Media operating revenue increased 3.8% year-over-year to $843 million, driven by higher year-over-year subscriber revenue, partly offset by lower advertising revenue. Formula 1 Canadian Grand Prix growth and the acquisitions of Sphere Abacus and OUTEDGE Media Canada also contributed to higher total media revenue this quarter. Subscriber revenue increased 8.1% in Q2 2025 compared to Q2 2024, on continued Crave and sports direct-to-consumer streaming subscriber growth. Advertising revenue was down 3.1% in Q2 2025, compared to the same period last year, due to continued soft overall traditional broadcast TV advertiser demand for non-sports, as well as lower year-over-year audio advertising revenues attributable to the previously announced divestiture of 45 radio stations, of which the majority was completed within the quarter. These factors were partly offset by: higher digital video advertising revenue; the financial contribution from the acquisition of OUTEDGE Media Canada. Total digital revenues grew 9% in Q2 2025 compared to Q2 2024, driven by: continued Crave and sports direct-to-consumer streaming subscriber growth; higher digital video advertising revenue reflecting growth in Connected TV and ad-supported subscription tiers on Crave. Total Crave subscriptions increased 29% from last year to approximately 4.1 million, driven by a 72% increase in Crave direct-to-consumer streaming subscribers, while sports direct-to-consumer streaming subscribers increased 7%. Adjusted EBITDA in Q2 2025 was up 7.8% to $235 million, delivering a 1.1 percentage-point increase in margin to 27.9% compared to the same period last year. This was driven by the flow-through of higher operating revenue, despite a 2.4% increase in operating costs due to the acquisitions of Sphere Abacus and OUTEDGE Media Canada, and higher costs associated with revenue growth from the Formula 1 Canadian Grand Prix, which were partly offset by workforce reductions. COMMON SHARE DIVIDEND BCE's Board of Directors has declared a quarterly dividend of $0.4375 per common share, payable on October 15, 2025 to shareholders of record at the close of business on September 15, 2025. UPDATED OUTLOOK FOR 2025 BCE updated its financial guidance targets for 2025, as provided on February 6, 2025, and updated on May 8, 2025 with respect to the annualized common dividend per share, as per the table below, to reflect the acquisition of Ziply Fiber, which closed on August 1, 2025. The guidance ranges do not reflect the pending divestiture of Northwestel. For 2025, we expect: wireless and broadband competitive pricing flowthrough pressure from 2024, lower subscriber loadings, decreased wireless product sales and higher media content and programming costs to impact revenue and adjusted EBITDA; a slowdown of our fibre build in Canada and efficiencies from transformation initiatives to drive lower capital expenditures; increased interest expense, higher depreciation and amortization expense, and a higher number of common shares outstanding due to the implementation in January and April 2025 of a discounted treasury DRP to drive lower adjusted EPS. On May 7, 2025, BCE terminated the discounted treasury issuance feature under the DRP. Revised adjusted EPS guidance as of August 7 does not reflect any purchase price allocation (PPA) due to Ziply Fiber acquisition as valuation has not yet been completed; lower capital expenditures to drive higher free cash flow. Please see the section entitled "Caution Regarding Forward-Looking Statements" later in this news release for a description of the principal assumptions on which BCE's 2025 financial guidance targets are based, as well as the principal related risk factors. CALL WITH FINANCIAL ANALYSTS BCE will hold a conference call with the financial community to discuss Q2 2025 results on Thursday, August 7 at 8:00 am eastern. Media are welcome to participate on a listen-only basis. To participate, please dial toll-free 1-800-206-4400 or 289-514-5005. A replay will be available until midnight on September 7, 2025 by dialing 1-877-454-9859 or 647-483-1416 and entering passcode 5428649. A live audio webcast of the conference call will be available on BCE's website at BCE Q2-2025 conference call. NON-GAAP AND OTHER FINANCIAL MEASURES BCE uses various financial measures to assess its business performance. Certain of these measures are calculated in accordance with IFRS ® Accounting Standards or GAAP while certain other measures do not have a standardized meaning under GAAP. We believe that our GAAP financial measures, read together with adjusted non-GAAP and other financial measures, provide readers with a better understanding of how management assesses BCE's performance. National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure (NI 52-112), prescribes disclosure requirements that apply to the following specified financial measures: Non-GAAP financial measures Non-GAAP ratios Total of segments measures Capital management measures Supplementary financial measures This section provides a description and classification of the specified financial measures contemplated by NI 52-112 that we use in this news release to explain our financial results except that, for supplementary financial measures, an explanation of such measures is provided where they are first referred to in this news release if the supplementary financial measures' labelling is not sufficiently descriptive. Non-GAAP Financial Measures A non-GAAP financial measure is a financial measure used to depict our historical or expected future financial performance, financial position or cash flow and, with respect to its composition, either excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in BCE's consolidated primary financial statements. We believe that non-GAAP financial measures are reflective of our on-going operating results and provide readers with an understanding of management's perspective on and analysis of our performance. Below are descriptions of the non-GAAP financial measures that we use in this news release to explain our results as well as reconciliations to the most directly comparable financial measures under IFRS Accounting Standards. Adjusted net earnings – Adjusted net earnings is a non-GAAP financial measure and it does not have any standardized meaning under IFRS Accounting Standards. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We define adjusted net earnings as net earnings attributable to common shareholders before severance, acquisition and other costs, net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net equity losses (gains) on investments in associates and joint ventures, net losses (gains) on investments, early debt redemption costs (gains), impairment of assets and discontinued operations, net of tax and NCI. We use adjusted net earnings and we believe that certain investors and analysts use this measure, among other ones, to assess the performance of our businesses without the effects of severance, acquisition and other costs, net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net equity losses (gains) on investments in associates and joint ventures, net losses (gains) on investments, early debt redemption costs (gains), impairment of assets and discontinued operations, net of tax and NCI. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring. The most directly comparable financial measure under IFRS Accounting Standards is net earnings attributable to common shareholders. The following table is a reconciliation of net earnings attributable to common shareholders to adjusted net earnings on a consolidated basis. ($ millions) Free cash flow and free cash flow after payment of lease liabilities – Free cash flow and free cash flow after payment of lease liabilities are non-GAAP financial measures and they do not have any standardized meaning under IFRS Accounting Standards. Therefore, they are unlikely to be comparable to similar measures presented by other issuers. We define free cash flow as cash flows from operating activities, excluding cash from discontinued operations, acquisition and other costs paid (which include significant litigation costs) and voluntary pension funding, less capital expenditures, preferred share dividends and dividends paid by subsidiaries to NCI. We exclude cash from discontinued operations, acquisition and other costs paid and voluntary pension funding because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring. We define free cash flow after payment of lease liabilities as cash flows from operating activities, excluding cash from discontinued operations, acquisition and other costs paid (which include significant litigation costs) and voluntary pension funding, less principal payment of lease liabilities, capital expenditures, preferred share dividends and dividends paid by subsidiaries to NCI. We exclude cash from discontinued operations, acquisition and other costs paid and voluntary pension funding because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring. We consider free cash flow and free cash flow after payment of lease liabilities to be important indicators of the financial strength and performance of our businesses. Free cash flow and free cash flow after payment of lease liabilities show how much cash is available to pay dividends on common shares, repay debt and reinvest in our company. We believe that certain investors and analysts use free cash flow and free cash flow after payment of lease liabilities to value a business and its underlying assets and to evaluate the financial strength and performance of our businesses. The most directly comparable financial measure under IFRS Accounting Standards is cash flows from operating activities. The following tables are reconciliations of cash flows from operating activities to free cash flow and free cash flow after payment of lease liabilities on a consolidated basis. ($ millions) ($ millions) Non-GAAP Ratios A non-GAAP ratio is a financial measure disclosed in the form of a ratio, fraction, percentage or similar representation and that has a non-GAAP financial measure as one or more of its components. Below is a description of the non-GAAP ratio that we use in this news release to explain our results. Adjusted EPS – Adjusted EPS is a non-GAAP ratio and it does not have any standardized meaning under IFRS Accounting Standards. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We define adjusted EPS as adjusted net earnings per BCE common share. Adjusted net earnings is a non-GAAP financial measure. For further details on adjusted net earnings, refer to Non-GAAP Financial Measures above. We use adjusted EPS, and we believe that certain investors and analysts use this measure, among other ones, to assess the performance of our businesses without the effects of severance, acquisition and other costs, net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net equity losses (gains) on investments in associates and joint ventures, net losses (gains) on investments, early debt redemption costs (gains), impairment of assets and discontinued operations, net of tax and NCI. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring. Total of Segments Measures A total of segments measure is a financial measure that is a subtotal or total of 2 or more reportable segments and is disclosed within the Notes to BCE's consolidated primary financial statements. Below is a description of the total of segments measure that we use in this news release to explain our results as well as a reconciliation to the most directly comparable financial measure under IFRS Accounting Standards. Adjusted EBITDA – Adjusted EBITDA is a total of segments measure. We define adjusted EBITDA as operating revenues less operating costs as shown in BCE's consolidated income statements. The most directly comparable financial measure under IFRS Accounting Standards is net earnings. The following table is a reconciliation of net earnings to adjusted EBITDA on a consolidated basis. ($ millions) Capital Management Measures A capital management measure is a financial measure that is intended to enable a reader to evaluate our objectives, policies and processes for managing our capital and is disclosed within the Notes to BCE's consolidated financial statements. The financial reporting framework used to prepare the financial statements requires disclosure that helps readers assess the company's capital management objectives, policies, and processes, as set out in IFRS Accounting Standards in IAS 1 – Presentation of Financial Statements. BCE has its own methods for managing capital and liquidity, and IFRS Accounting Standards do not prescribe any particular calculation method. Supplementary Financial Measures A supplementary financial measure is a financial measure that is not reported in BCE's consolidated financial statements, and is, or is intended to be, reported periodically to represent historical or expected future financial performance, financial position, or cash flows. An explanation of such measures is provided where they are first referred to in this news release if the supplementary financial measures' labelling is not sufficiently descriptive. KEY PERFORMANCE INDICATORS (KPIs) We use adjusted EBITDA margin, blended ARPU, capital intensity, churn and subscriber (or customer or NAS) units to measure the success of our strategic imperatives. These key performance indicators are not accounting measures and may not be comparable to similar measures presented by other issuers. About BCE BCE is Canada's largest communications company 14, providing advanced Bell broadband Internet, wireless, TV, media and business communications services. To learn more, please visit or Through Bell for Better, we are investing to create a better today and a better tomorrow by supporting the social and economic prosperity of our communities. This includes the Bell Let's Talk initiative, which promotes Canadian mental health with national awareness and anti-stigma campaigns like Bell Let's Talk Day and significant Bell funding of community care and access, research and workplace initiatives throughout the country. To learn more, please visit Media inquiries Ellen Murphy [email protected] Investor inquiries Krishna Somers [email protected] CAUTION REGARDING FORWARD-LOOKING STATEMENTS Certain statements made in this news release are forward-looking statements. These statements include, without limitation, statements relating to: BCE's updated 2025 guidance (including revenue, adjusted EBITDA, capital intensity, adjusted EPS, free cash flow and annualized common dividend per share); BCE's objective to create long-term value for its shareholders; the acquisition of Northwest Fiber Holdco, LLC (doing business as Ziply Fiber (Ziply Fiber)); Bell Canada's launch of Bell AI Fabric intended to create Canada's largest AI compute capacity project, the benefits expected to result therefrom and the expected size of the investment intended to be made by Bell Canada in Bell AI Fabric; the proposed disposition of BCE's home security and monitored alarm assets to a.p.i. ALARM Inc. and the expected timing and completion thereof; and BCE's business outlook, objectives, plans and strategic priorities, and other statements that are not historical facts. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, project, strategy, target, commitment and other similar expressions or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, seek, should, strive and will. All such forward-looking statements are made pursuant to the 'safe harbour' provisions of applicable Canadian securities laws and of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements and that our business outlook, objectives, plans and strategic priorities may not be achieved. These statements are not guarantees of future performance or events, and we caution you against relying on any of these forward-looking statements. The forward-looking statements contained in this news release describe our expectations as of August 7, 2025 and, accordingly, are subject to change after such date. Except as may be required by applicable securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. We regularly consider potential acquisitions, dispositions, mergers, business combinations, investments, monetizations, joint ventures and other transactions, some of which may be significant. Except as otherwise indicated by us, forward-looking statements do not reflect the potential impact of any such transactions or of special items that may be announced or that may occur after August 7, 2025. The financial impact of these transactions and special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Forward-looking statements are presented in this news release for the purpose of assisting investors and others in understanding certain key elements of our expected financial results, as well as our objectives, strategic priorities and business outlook, and in obtaining a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Material Assumptions A number of economic, market, operational and financial assumptions were made by BCE in preparing its forward-looking statements contained in this news release, including, but not limited to the following: Canadian Economic Assumptions Our forward-looking statements are based on certain assumptions concerning the Canadian economy. Given ongoing uncertainty around U.S. trade policy, the economic outlook remains clouded. While the risk of a severe and escalating global trade conflict has diminished and there is some clarity around what tariffs will look like, how U.S. trade policy will unfold remains highly uncertain. It is still too early to confidently project the effects of tariffs on economic growth and inflation. We have assumed current trade policies remain in place. In particular, we have assumed: Slowing economic growth, given the Bank of Canada's most recent estimated growth in Canadian gross domestic product of 1.3% in 2025 under the current tariff scenario, representing a decrease from the earlier estimate of 1.8% Slower population growth because of government policies designed to slow immigration Slowdown in consumer spending reflecting ongoing trade policy uncertainty Slowing business investment, particularly by businesses in sectors most reliant on U.S. markets Stable consumer price index (CPI) inflation Ongoing labour market softness Interest rates expected to remain at or near current levels Canadian dollar expected to remain near current levels. Further movements may be impacted by the degree of strength of the U.S. dollar, interest rates and changes in commodity prices U.S. Economic Assumptions Following our acquisition of Ziply Fiber, our forward-looking statements are now based on certain assumptions concerning the U.S. economy. In particular, we have assumed: Stable consumer spending, but emerging concerns about upward pricing pressure stemming from evolving trade policies Slowing business investment due to trade policy uncertainty Stable CPI inflation Slower population growth than recent historical trends Canadian Market Assumptions Our forward-looking statements also reflect various Canadian market assumptions. In particular, we have made the following assumptions: A higher level of wireline and wireless competition in consumer, business and wholesale markets Higher, but slowing, wireless industry penetration A shrinking data and voice connectivity market as business customers migrate to lower-priced telecommunications solutions or alternative over-the-top (OTT) competitors The Canadian traditional TV and radio advertising markets are expected to be impacted by audience declines as the advertising market growth continues to shift towards digital Declines in broadcasting distribution undertaking (BDU) subscribers driven by increasing competition from the continued rollout of subscription video on demand (SVOD) streaming services together with further scaling of OTT aggregators U.S. Market Assumptions Following our acquisition of Ziply Fiber, our forward-looking statements now reflect various U.S. market assumptions for our products and services. In particular, we have made the following assumptions: A higher level of wireline pricing competition in consumer, business and wholesale markets Increased demand for colocation and datacenter connectivity services A shrinking traditional voice services market as customers migrate to wireless or Voice over Internet Protocol (VoIP) offerings Assumptions Applicable to our Bell CTS Segment (Excluding Ziply Fiber) Our forward-looking statements are also based on the following internal operational assumptions with respect to our Bell CTS segment (excluding Ziply Fiber): Stable or slight decrease in our market share of national operators' wireless mobile phone net additions as we manage increased competitive intensity and promotional activity across all regions and market segments Ongoing expansion and deployment of Fifth Generation (5G) and 5G+ wireless networks, offering competitive coverage and quality Continued diversification of our distribution strategy with a focus on expanding direct-to-consumer (DTC) and online transactions Slightly declining mobile phone blended average revenue per user (ARPU) due to competitive pricing pressure Continuing business customer adoption of advanced 5G, 5G+ and Internet of Things (IoT) solutions Continued scaling of technology services from recent acquisitions made in the enterprise market through leveraging our sales channels with the acquired businesses' technical expertise Improving wireless handset device availability in addition to stable device pricing and margins Moderating deployment of direct fibre to incremental homes and businesses within our wireline footprint Continued growth in retail Internet subscribers Increasing wireless and Internet-based technological substitution Continued focus on the consumer household and bundled service offers for mobility, Internet and content services Continued large business customer migration to Internet protocol (IP)-based systems Ongoing competitive repricing pressures in our business and wholesale markets Traditional high-margin product categories challenged by large global cloud and OTT providers of business voice and data solutions expanding into Canada with on-demand services, which, in many cases, are also sold as a service by Bell Business Markets (BBM) to ensure continuity of customer relationships and adjacent revenue growth opportunities Increasing customer adoption of OTT services resulting in downsizing of television (TV) packages and fewer consumers purchasing BDU subscriptions services Realization of cost savings related to operating efficiencies enabled by our direct fibre footprint, changes in consumer behaviour and product innovation, digital and AI adoption, product and service enhancements, expanding self-serve capabilities, new call centre and digital investments, other improvements to the customer service experience, management workforce reductions including attrition and retirements, and lower contracted rates from our suppliers No adverse material financial, operational or competitive consequences of changes in or implementation of regulations affecting our communication and technology services business Assumptions Applicable to Ziply Fiber Following our acquisition of Ziply Fiber, our forward-looking statements are also based on the following internal operational assumptions with respect to Ziply Fiber: Continued growth in retail Internet customers with continued deployment of direct fibre to incremental homes and businesses within our footprint Increasing retail Internet ARPU through continued migration of customers to higher speed tiers and rate increases Ongoing competitive repricing pressures in our business and wholesale markets Realization of cost savings related to operational efficiencies enabled by our direct fibre footprint, digital and AI adoption, expanding self service capabilities, and other improvements to the customer service experience Assumptions Applicable to our Bell Media Segment Our forward-looking statements are also based on the following internal operational assumptions with respect to our Bell Media segment: Overall digital revenue expected to reflect scaling of Connected TV, DTC advertising and subscriber growth, as well as digital growth in our out-of-home (OOH) business contributing towards the advancement of our digital-first media strategy Leveraging of first-party data to improve targeting, advertisement delivery including personalized viewing experience and attribution Continued escalation of media content costs to secure quality content Continued scaling of Crave, TSN, TSN+ and RDS through expanded distribution, optimized content offering and user experience improvements Continued support in original French content with a focus on digital platforms such as Crave, and iHeartRadio Canada, to better serve our French-language customers through a personalized digital experience Ability to successfully acquire and produce highly-rated programming and differentiated content Building and maintaining strategic supply arrangements for content across all screens and platforms No adverse material financial, operational or competitive consequences of changes in or implementation of regulations affecting our media business Financial Assumptions Concerning BCE 15 Our forward-looking statements are also based on the following internal financial assumptions with respect to BCE for 2025: An estimated post-employment benefit plans service cost of approximately $205 million An estimated net return on post-employment benefit plans of approximately $100 million Depreciation and amortization expense of approximately $5,200 million to $5,250 million Interest expense of approximately $1,800 million to $1,850 million Interest paid of approximately $1,875 million to $1,925 million An average effective tax rate of approximately 17% Non-controlling interest of approximately $60 million Contributions to post-employment benefit plans of approximately $40 million Payments under other post-employment benefit plans of approximately $60 million Income taxes paid (net of refunds) of approximately $700 million to $800 million Weighted average number of BCE common shares outstanding of approximately 930 million An annualized common share dividend of $1.75 per share Assumptions underlying expected continuing contribution holiday in 2025 in the majority of our pension plans We have made the following principal assumptions underlying the expected continuing contribution holiday in 2025 in the majority of our pension plans: At the relevant time, our defined benefit (DB) pension plans will remain in funded positions with going concern surpluses and maintain solvency ratios that exceed the minimum legal requirements for a contribution holiday to be taken for applicable DB and defined contribution (DC) components No significant declines in our DB pension plans' financial position due to declines in investment returns or interest rates No material experience losses from other events such as through litigation or changes in laws, regulations or actuarial standards The foregoing assumptions, although considered reasonable by BCE on August 7, 2025, may prove to be inaccurate. Accordingly, our actual results could differ materially from our expectations as set forth in this news release. Material Risks Important risk factors that could cause our assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in, or implied by, our forward-looking statements, including our 2025 guidance, are listed below. The realization of our forward-looking statements, including our ability to meet our 2025 guidance targets, essentially depends on our business performance, which, in turn, is subject to many risks. Accordingly, readers are cautioned that any of the following risks could have a material adverse effect on our forward-looking statements. These risks include, but are not limited to: the negative effect of adverse economic conditions, including from trade tariffs and other protective government measures, including the imposition of U.S. tariffs on imports from Canada and retaliatory tariffs by the Canadian government on goods coming from the U.S., recessions, inflation, reductions in immigration levels, high housing support costs relative to income, and financial and capital market volatility, and the resulting negative impact on customer spending and the demand for our products and services, higher costs and supply chain disruptions; the negative effect of adverse conditions associated with geopolitical events; the intensity of competitive activity and the failure to effectively respond to evolving competitive dynamics; the level of technological substitution and the presence of alternative service providers contributing to disruptions and disintermediation in each of our business segments; changing customer behaviour and the expansion of cloud-based, over-the-top (OTT) and other alternative solutions; advertising market pressures from economic conditions, fragmentation and non-traditional/global digital services; rising content costs and challenges in our ability to acquire or develop key content; high Canadian Internet and smartphone penetration; regulatory initiatives, proceedings and decisions, government consultations and government positions that negatively affect us and influence our business including, without limitation, concerning mandatory access to networks, spectrum auctions, the imposition of consumer-related codes of conduct, approval of acquisitions, broadcast and spectrum licensing, foreign ownership requirements, privacy and cybersecurity obligations and control of copyright piracy; the inability to implement enhanced compliance frameworks and to comply with legal and regulatory obligations; unfavourable resolution of legal proceedings; the failure to evolve and transform our networks, systems and operations using next-generation technologies while lowering our cost structure, including the failure to meet customer expectations of product and service experience; the inability to drive a positive customer experience; the inability to protect our physical and non-physical assets from events such as information security attacks, unauthorized access or entry, fire and natural disasters; the failure to implement an effective security and data governance framework; the risk that we may need to incur significant capital expenditures to provide additional capacity and reduce network congestion; service interruptions or outages due to network failures or slowdowns; events affecting the functionality of, and our ability to protect, test, maintain, replace and upgrade, our networks, information technology (IT) systems, equipment and other facilities; the failure by other telecommunications carriers on which we rely to provide services to complete planned and sufficient testing, maintenance, replacement or upgrade of their networks, equipment and other facilities, which could disrupt our operations including through network or other infrastructure failures; the complexity of our operations and IT systems and the failure to implement, maintain or manage highly effective processes and IT systems; in-orbit and other operational risks to which the satellites used to provide our satellite television (TV) services are subject; the failure to attract, develop and retain a talented team capable of furthering our strategic imperatives and operational transformation; the potential deterioration in employee morale and engagement resulting from staff reductions, cost reductions or reorganizations and the de-prioritization of transformation initiatives due to staff reductions, cost reductions or reorganizations; the failure to adequately manage health and safety concerns; labour disruptions and shortages; the inability to access adequate sources of capital and generate sufficient cash flows from operating activities to meet our cash requirements, fund capital expenditures and provide for planned growth; uncertainty as to whether our dividend payout policy will be maintained or achieved, or that the dividend on common shares will be maintained or dividends on any of BCE's outstanding shares will be declared by BCE's board of directors (the Board); the failure to reduce costs and adequately assess investment priorities, as well as unexpected increases in costs; the inability to manage various credit, liquidity and market risks; the failure to evolve practices to effectively monitor and control fraudulent activities; new or higher taxes due to new tax laws or changes thereto or in the interpretation thereof, and the inability to predict the outcome of government audits; the impact on our financial statements and estimates from a number of factors; pension obligation volatility and increased contributions to post-employment benefit plans; the expected timing and completion of the proposed disposition of Northwestel Inc. (Northwestel) are subject to closing conditions, termination rights and other risks and uncertainties, including, without limitation, the purchaser securing financing and the completion of confirmatory due diligence, which may affect its completion, terms or timing and, as such, there can be no assurance that the proposed disposition will occur, or that it will occur on the terms and conditions, or at the time, currently contemplated, or that the potential benefits expected to result from the proposed disposition will be realized; the expected timing and completion of the transaction relating to the formation of Network FiberCo, a long-term strategic partnership to accelerate the development of fibre infrastructure through Ziply Fiber in underserved markets in the U.S., are subject to customary closing conditions and other risks and uncertainties, which may affect its completion, terms or timing and, as such, there can be no assurance that the transaction relating to the formation of Network FiberCo will occur, or that it will occur on the terms and conditions, or at the time, currently contemplated, or that the potential benefits expected to result therefrom will be realized; reputational risks and the inability to meaningfully integrate environmental, social and governance (ESG) considerations into our business strategy, operations and governance; the adverse impact of various internal and external factors on our ability to achieve our ESG targets including, without limitation, those related to greenhouse gas (GHG) reduction and supplier engagement; the failure to take appropriate actions to adapt to current and emerging environmental impacts, including climate change; the failure to develop and implement sufficient corporate governance practices; the inability to adequately manage social issues; health risks, including pandemics, epidemics and other health concerns, such as radio frequency emissions from wireless communications devices and equipment; our dependence on third-party suppliers, outsourcers and consultants to provide an uninterrupted supply of the products and services we need; the failure of our vendor selection, governance and oversight processes, including our management of supplier risk in the areas of security, data governance and responsible procurement; the quality of our products and services and the extent to which they may be subject to defects or fail to comply with applicable government regulations and standards; the failure to successfully expand Ziply Fiber's fibre network and optimize its existing copper network; the inability of Ziply Fiber's current and future initiatives or programs to generate the level of returns, or to occur on the timeline, we anticipate; the intensity of competitive activity in Ziply Fiber's services market in the U.S., and the failure to effectively respond to fragmented and rapidly evolving competitive dynamics; the failure to successfully integrate Ziply Fiber as a subsidiary of BCE, and to generate the anticipated benefits from the acquisition of Ziply Fiber; the failure to accurately anticipate fluctuations in the exchange rate between the Canadian dollar and U.S. dollar and our inability to successfully implement currency hedging strategies; Ziply Fiber is subject to significant regulation in the U.S. which may reduce the amount of subsidies or revenues it receives, increase its compliance burdens or constrain its ability to compete; the failure to comply with the non-U.S. ownership rules and our regulatory obligations imposed by the Federal Communications Commission; changes to tax legislation in the U.S., Canada, or other relevant jurisdictions, or to its interpretation or enforcement, may affect Ziply Fiber's income tax position, as well as our effective tax rate and the after-tax returns we derive from Ziply Fiber's U.S. operations. We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. We encourage investors to also read BCE's 2024 Annual MD&A dated March 6, 2025 and BCE's 2025 First and Second Quarter MD&As dated May 7, 2025 and August 6, 2025, respectively, for additional information with respect to certain of these and other assumptions and risks, filed by BCE with the Canadian provincial securities regulatory authorities (available at and with the U.S. Securities and Exchange Commission (available at These documents are also available at
Globe and Mail
8 minutes ago
- Globe and Mail
Zai Lab Announces Second Quarter 2025 Financial Results and Recent Corporate Updates
Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) today announced financial results for the second quarter of 2025, along with recent product highlights and corporate updates. 'Zai Lab is entering a pivotal period – defined by innovation, scale and strong execution,' said Dr. Samantha Du, Founder, Chairperson, and CEO of Zai Lab. 'We are making meaningful progress throughout our business – expanding patient impact, accelerating global innovation, and operating with financial discipline. Updated ASCO data for ZL-1310 (DLL3 ADC) reaffirm its best-in-class potential in second-line SCLC, and we are moving swiftly into pivotal development while exploring opportunities in first-line SCLC and other neuroendocrine carcinomas. We were also encouraged by positive data for bemarituzumab in first-line gastric cancer and by emerging preclinical results for our IL-13/IL-31 bispecific antibody in atopic dermatitis, reinforcing both our near-term commercial opportunities and the potential of our global pipeline, respectively. With multiple launches ahead, a robust pipeline, and profitability 1 within reach, Zai Lab is executing on its vision to become a leading global biopharma company.' 'VYVGART continues to lead our commercial momentum, with record patient utilization driven by longer treatment durations and growing adoption in the maintenance setting,' said Josh Smiley, President and COO of Zai Lab. 'The July update to national MG guidelines further strengthens VYVGART's role in both acute and chronic care, and we expect momentum to accelerate in the second half. We are also preparing for several high-impact launches – including KarXT and bemarituzumab – that, together with pipeline-in-a-product assets like VYVGART and povetacicept, will fuel our next wave of growth. With a 28% year-over-year reduction in operating loss and a 37% improvement on an adjusted basis, we are on track to achieve profitability 1 in the fourth quarter. Backed by a strong cash position 2, a growing commercial business, and an advancing global pipeline, Zai Lab is well equipped to deliver long-term shareholder value.' 1 Refers to adjusted income (loss) from operations (non-GAAP), calculated as GAAP income (loss) from operations adjusted to exclude certain non-cash expenses, including depreciation, amortization, and share-based compensation. For additional information on this adjusted profitability measure, refer to the 'Non-GAAP Measures' section. 2 Cash position includes cash and cash equivalents, current restricted cash, and short-term investments. Second Quarter 2025 Financial Results Product revenue, net was $109.1 million in the second quarter of 2025, compared to $100.1 million for the same period in 2024, representing 9% y-o-y growth, 10% y-o-y growth at constant exchange rate (CER). This increase was primarily driven by increased sales for VYVGART, XACDURO, and NUZYRA, partially offset by softer sales for ZEJULA: VYVGART and VYVGART Hytrulo were $26.5 million in the second quarter of 2025, compared to $18.1 million in the first quarter of 2025. Sales grew 46% quarter over quarter driven by an extension of duration of therapy and increasing market penetration. ZEJULA was $41.0 million in the second quarter of 2025, compared to $45.0 million for the same period in 2024. Sales were softer due to evolving competitive dynamics within the PARPi class. XACDURO, which was launched since the fourth quarter of 2024, was $4.6 million in the second quarter of 2025. NUZYRA was $14.3 million in the second quarter of 2025, compared to $12.3 million for the same period in 2024. This growth was supported by increasing market coverage and penetration. Research and Development (R&D) expenses were $50.6 million in the second quarter of 2025, compared to $61.6 million for the same period in 2024. The decrease reflects reduced personnel and clinical trial costs, driven by ongoing resource prioritization and efficiency efforts. Selling, General and Administrative expenses were $71.0 million in the second quarter of 2025, compared to $79.7 million for the same period in 2024. The decrease was primarily driven by reduced personnel costs because of resource prioritization and efficiency efforts. Loss from operations was $54.9 million in the second quarter of 2025, $34.2 million when adjusted to exclude certain non-cash expenses including depreciation, amortization, and share-based compensation. A reconciliation of loss from operations (GAAP) to adjusted loss from operations (non-GAAP) is included at the end of this release. Net loss was $40.7 million in the second quarter of 2025, or a loss per ordinary share attributable to common stockholders of $0.04 (or loss per American Deposit Share (ADS) of $0.37), compared to a net loss of $80.3 million for the same period in 2024, or a loss per ordinary share of $0.08 (or loss per ADS of $0.82). These decreases in net loss were primarily due to product revenue growing faster than net operating expenses. Cash and cash equivalents, short-term investments, and current restricted cash totaled $832.3 million as of June 30, 2025, compared to $857.3 million as of March 31, 2025. Below are key product updates since our last earnings release: Oncology Pipeline ZL-1310 (DLL3 ADC): In June 2025, Zai Lab presented positive data from an ongoing, global Phase 1a/1b clinical trial of ZL-1310 for the treatment of patients with extensive-stage small cell lung cancer (ES-SCLC) at the 2025 American Society of Clinical Oncology (ASCO) Annual Meeting. In second-line (2L) SCLC, objective response rate (ORR) was 67% across all dose levels (n=33) and 79% at 1.6 mg/kg dose (n=14). ZL-1310 demonstrated a well-tolerated safety profile at target doses of less than 2.0 mg/kg, with Grade ≥3 treatment-related adverse events (TRAEs) of 6%, no Grade ≥2 interstitial lung disease, and no drug discontinuations. In May 2025, the U.S. Food and Drug Administration (FDA) granted Fast Track designation to ZL-1310 for treatment of ES-SCLC. Bemarituzumab (FGFR2b): In June 2025, Zai Lab announced the Phase 3 FORTITUDE-101 clinical trial evaluating first-line bemarituzumab plus chemotherapy (mFOLFOX6) met its primary endpoint of overall survival (OS) at a pre-specified interim analysis. At the interim analysis, bemarituzumab plus chemotherapy significantly improved OS in patients with FGFR2b overexpression compared to chemotherapy alone. The most common treatment-emergent adverse events (>25%) in patients treated with bemarituzumab plus chemotherapy were reduced visual acuity, punctate keratitis, anemia, neutropenia, nausea, corneal epithelium defect and dry eye. While ocular events were consistent with the Phase 2 experience and observed in both arms, they occurred with greater frequency and severity in the Phase 3 bemarituzumab arm. Detailed results from FORTITUDE 101 will be shared at a future medical meeting. Zai Lab plans to move rapidly toward regulatory submission in China in the second half of 2025. Tumor Treating Fields (TTFields): In May 2025, Zai Lab partner Novocure presented results from the Phase 3 PANOVA-3 trial for pancreatic cancer as a late-breaking oral presentation at the 2025 ASCO Annual Meeting. The data demonstrated that TTFields therapy, when added to standard of care, achieved an OS benefit supported by significantly improved quality of life and extended pain-free survival, a key outcome for patients with pancreatic cancer. Zai Lab participated in the study in Greater China (mainland China, Hong Kong, Macau and Taiwan, collectively) and plans to file for regulatory approval in China in the second half of 2025. Immunology Pipeline Efgartigimod (FcRn): In July 2025, the China Guidelines for the Diagnosis and Treatment of Myasthenia Gravis (MG) (2025) was published, emphasizing the importance of Minimal Symptom Expression (MSE), as the primary treatment goal in MG. The guidelines have highlighted VYVGART's ability to achieve MSE rapidly and provide durable benefit. VYVGART is now recommended for early use in mild-to-moderate and highly active patients, and for sustained long-term treatment to maximize potential benefit. ZL-1503 (IL-13/IL-31R): In June 2025, Zai Lab announced new preclinical data highlighting the potential of ZL-1503 as a promising treatment for moderate-to-severe atopic dermatitis and other IL-13 and IL-31-driven diseases. Its favorable preclinical safety profile, prolonged half-life and durable suppression of both inflammatory and pruritogenic pathways support the continued advancement of ZL-1503 toward clinical development. Anticipated Major Milestones in 2025 and the First Half of 2026 Upcoming Potential NMPA Submissions Bemarituzumab (FGFR2b) in first-line gastric cancer in the second half of 2025 Tumor Treating Fields (TTFields) in first-line pancreatic cancer in the second half of 2025 Efgartigimod (FcRn) for prefilled syringe in generalized myasthenia gravis (gMG) and chronic inflammatory demyelinating polyneuropathy (CIDP) in the second half of 2025 Upcoming Potential NMPA Approvals Xanomeline-Trospium (or KarXT) (M1/M4-agonist) in schizophrenia Tisotumab Vedotin (Tissue Factor ADC) in recurrent or metastatic cervical cancer following progression on or after chemotherapy Repotrectinib (ROS1/TRK) in NTRK + solid tumors Expected Clinical Developments and Data Readouts Global Pipeline ZL-1310 or Zocilurtatug pelitecan (DLL3 ADC) Second-Line ES-SCLC: Zai Lab to provide data update and to initiate a global registrational study of ZL-1310 monotherapy in the second half of 2025. First-Line ES-SCLC: Zai Lab to provide data readout for dose escalation of ZL-1310 doublet in combination with atezolizumab. Other neuroendocrine carcinomas: Zai Lab to provide data readout from the global Phase 1/2 study in patients with selected solid tumors. ZL-1503 (IL-13/IL-31R) Zai Lab to advance into a global Phase 1 study in moderate-to-severe atopic dermatitis in the second half of 2025. ZL-6201 (LRRC15 ADC) Zai Lab to advance into global Phase 1 development for patients with sarcoma and potentially other LRRC15-positive solid tumors, such as breast cancer and other malignancies. Regional Pipeline Bemarituzumab (FGFR2b) Zai Lab partner Amgen to provide detailed results from the Phase 3 FORTITUDE-101 study of bemarituzumab combined with chemotherapy versus chemotherapy alone in first-line gastric cancer at an upcoming medical meeting. Zai Lab participated in the study in Greater China. Zai Lab partner Amgen to provide potential data readout from the Phase 1b/3 FORTITUDE-102 study of bemarituzumab plus chemotherapy and nivolumab versus chemotherapy and nivolumab in first-line gastric cancer. Zai Lab participated in the study in Greater China. Xanomeline-Trospium (or KarXT) (M1/M4-agonist) Zai Lab partner Bristol Myers Squibb to provide data readout from the Phase 3 ADEPT-2 study of KarXT in Alzheimer's Disease Psychosis in the second half of 2025. Zai Lab participated in the study in Greater China. Efgartigimod (FcRn) Lupus Nephritis (LN): Zai Lab and partner argenx to provide topline results from the Phase 2 study in LN in the fourth quarter of 2025. Seronegative gMG: Zai Lab partner argenx to provide topline results from the global Phase 3 ADAPT-SERON study in seronegative gMG in the second half of 2025. Zai Lab participated in the study in Greater China. Ocular myasthenia gravis: Zai Lab partner argenx to provide topline results from the global Phase 3 ADAPT-OCULUS study in the first half of 2026. Zai Lab participated in the study in Greater China. Sjogren's disease: Zai Lab to join the registrational UNITY study of efgartigimod subcutaneous given by prefilled syringe in Sjogren's disease in Greater China in the third quarter of 2025. Povetacicept (APRIL/BAFF) Primary Membranous Nephropathy (pMN): Zai Lab plans to partner with Vertex to execute the global pivotal Phase 2/3 study of povetacicept in pMN in Greater China. The study is expected to start in the second half of 2025. IgA Nephropathy (IgAN): Zai Lab partner Vertex will conduct an interim analysis of the global Phase 3 RAINIER study following 36 weeks of treatment with the potential to file for U.S. accelerated approval in the first half of 2026. VRDN-003 (IGF-1R, subcutaneous) Zai Lab to initiate a registrational study in thyroid eye disease in Greater China in the second half of 2025. Zai Lab partner Viridian to provide topline results from the global registrational REVEAL-1 and REVEAL-2 studies in the first half of 2026. Conference Call and Webcast Information Zai Lab will host a live conference call and webcast today, August 7, 2025, at 8:00 a.m. ET (8:00 p.m. HKT). Listeners may access the live webcast by visiting the Company's website at Participants must register in advance of the conference call. Details of registration links are as follows: For webcast: For dial-in: All participants must use the link provided above to complete the online registration process in advance of the conference call. Dial-in details will be in the confirmation email which the participant will receive upon registering. A replay will be available shortly after the call and can be accessed by visiting the Company's website. About Zai Lab Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) is an innovative, research-based, commercial-stage biopharmaceutical company based in China and the United States. We are focused on discovering, developing, and commercializing innovative products that address medical conditions with significant unmet needs in the areas of oncology, immunology, neuroscience, and infectious disease. Our goal is to leverage our competencies and resources to positively impact human health worldwide. For additional information about Zai Lab, please visit or follow us at Non-GAAP Measures In addition to results presented in accordance with GAAP, we disclose growth rates that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars. We have also presented a measure of adjusted loss from operations that adjusts GAAP loss from operations to exclude the impact of certain non-cash expenses including depreciation, amortization, and share-based compensation, which we refer to as 'profitability.' These adjusted growth rates and adjusted loss from operations are non-GAAP financial measures. We believe that these non-GAAP financial measures are important for an understanding of the performance of our business operations and financial results and provide investors with an additional perspective on operational trends and greater transparency into our historical and projected operating performance. Although we believe the non-GAAP financial measures enhance investors' understanding of our business and performance, these non-GAAP financial measures should not be considered an exclusive alternative to the corresponding GAAP financial measures. Zai Lab Forward-Looking Statements This press release contains certain forward-looking statements, including statements relating to our strategy and plans; potential of and expectations for our business, commercial products, and pipeline programs; our goals, objectives, and priorities and our expectations under our growth strategy (including our expectations regarding our commercial products and launches, clinical stage products, revenue growth, profitability, and cash flow); clinical development programs and related clinical trials; clinical trial data, data readouts, and presentations; risks and uncertainties associated with drug development and commercialization; regulatory discussions, submissions, filings, and approvals and the timing thereof; the potential benefits, safety, and efficacy of our products and product candidates and those of our collaboration partners; the anticipated benefits and potential of investments, collaborations, and business development activities; our profitability and timeline to profitability; our future financial and operating results; and financial guidance, including with respect to our capital allocation and investment strategy and our expected path to profitability. All statements, other than statements of historical fact, included in this press release are forward-looking statements, and can be identified by words such as 'aim,' 'anticipate,' 'believe,' 'could,' 'estimate,' 'expect,' 'forecast,' 'goal,' 'intend,' 'may,' 'plan,' 'poised,' 'positioned,' 'possible,' 'potential,' 'will,' 'would,' and other similar expressions. Such statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees or assurances of future performance. Forward-looking statements are based on our expectations and assumptions as of the date of this press release and are subject to inherent uncertainties, risks, and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. We may not actually achieve the plans, carry out the intentions, or meet the expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including but not limited to (1) our ability to successfully commercialize and generate revenue from our approved products; (2) our ability to obtain funding for our operations and business initiatives; (3) the results of our clinical and pre-clinical development of our product candidates; (4) the content and timing of decisions made by the relevant regulatory authorities regarding regulatory approvals of our product candidates; (5) risks related to doing business in China; and (6) other factors identified in our most recent annual and quarterly reports and in other reports we have filed with the U.S. Securities and Exchange Commission (SEC). We anticipate that subsequent events and developments will cause our expectations and assumptions to change, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Our SEC filings can be found on our website at and on the SEC's website at Zai Lab Limited June 30, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents 732,159 449,667 Restricted cash, current 100,111 100,000 Short-term investments — 330,000 Accounts receivable (net of allowance for credit losses of $26 and $25 as of June 30, 2025 and December 31, 2024, respectively) 88,499 85,178 Notes receivable 10,843 4,233 Inventories, net 61,700 39,875 Prepayments and other current assets 40,750 41,527 Total current assets 1,034,062 1,050,480 Restricted cash, non-current 1,114 1,114 Property and equipment, net 50,160 47,961 Operating lease right-of-use assets 16,787 21,496 Land use rights, net 2,860 2,907 Intangible assets, net 56,519 56,027 Other non-current assets 2,599 5,768 Total assets 1,164,101 1,185,753 Liabilities and shareholders' equity Current liabilities Accounts payable 107,357 100,906 Current operating lease liabilities 5,584 8,048 Short-term debt 174,509 131,711 Other current liabilities 44,051 58,720 Total current liabilities 331,501 299,385 Deferred income 29,233 31,433 Non-current operating lease liabilities 11,307 13,712 Other non-current liabilities 325 325 Total liabilities 372,366 344,855 Commitments and contingencies Shareholders' equity Ordinary shares (par value of $0.000006 per share; 5,000,000,000 shares authorized; 1,104,032,910 and 1,082,614,740 shares issued as of June 30, 2025 and December 31, 2024, respectively; 1,099,112,890 and 1,077,702,540 shares outstanding as of June 30, 2025 and December 31, 2024, respectively) 7 7 Additional paid-in capital 3,308,491 3,264,295 Accumulated deficit (2,542,248 ) (2,453,083 ) Accumulated other comprehensive income 46,348 50,515 Treasury Stock (at cost, 4,920,020 and 4,912,200 shares as of June 30, 2025 and December 31, 2024, respectively) (20,863 ) (20,836 ) Total shareholders' equity 791,735 840,898 Total liabilities and shareholders' equity 1,164,101 1,185,753 Zai Lab Limited Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenues Product revenue, net 109,085 100,106 214,735 187,255 Collaboration revenue 892 398 1,729 398 Total revenues 109,977 100,504 216,464 187,653 Expenses Cost of product revenue (43,003 ) (35,148 ) (81,455 ) (68,767 ) Cost of collaboration revenue (217 ) (85 ) (412 ) (85 ) Research and development (50,614 ) (61,625 ) (111,343 ) (116,270 ) Selling, general, and administrative (71,038 ) (79,710 ) (134,460 ) (148,904 ) Loss from operations (54,895 ) (76,064 ) (111,206 ) (146,373 ) Interest income 8,843 9,330 17,449 18,988 Interest expenses (1,262 ) (492 ) (2,449 ) (605 ) Foreign currency gains (losses) 2,837 (4,108 ) 3,488 (6,176 ) Other income (expense), net 3,750 (8,943 ) 3,553 418 Loss before income tax (40,727 ) (80,277 ) (89,165 ) (133,748 ) Income tax expense — — — — Net loss (40,727 ) (80,277 ) (89,165 ) (133,748 ) Loss per share - basic and diluted (0.04 ) (0.08 ) (0.08 ) (0.14 ) Weighted-average shares used in calculating net loss per ordinary share - basic and diluted 1,091,933,150 975,937,790 1,086,413,130 974,541,780 Zai Lab Limited (in thousands of $) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net loss (40,727 ) (80,277 ) (89,165 ) (133,748 ) Other comprehensive (loss) income, net of tax of nil: Foreign currency translation adjustments (2,955 ) 3,605 (4,167 ) 5,147 Comprehensive loss (43,682 ) (76,672 ) (93,332 ) (128,601 ) Zai Lab Limited Non-GAAP Measures (unaudited) ($ in thousands) Growth on a Constant Exchange Rate (CER) Basis Three Months Ended June 30, Year over Year % Growth Six Months Ended June 30, Year over Year % Growth 2025 2024 As reported At CER* 2025 2024 As reported At CER* Product revenue, net 109,085 100,106 9 % 10 % 214,735 187,255 15 % 16 % Loss from operations (54,895 ) (76,064 ) (28 )% (28 )% (111,206 ) (146,373 ) (24 )% (24 )% * The growth rates at CER were calculated assuming the same foreign currency exchange rates were in effect for the current and prior year periods. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 GAAP loss from operations (54,895 ) (76,064 ) (111,206 ) (146,373 ) Plus: Depreciation and amortization expenses 3,735 2,941 7,193 5,953 Plus: Share-based compensation 16,973 18,638 32,773 36,618
