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National Post
4 days ago
- Business
- National Post
Watts Water Technologies Reports Record Second Quarter 2025 Results
Article content Article content Diluted EPS of $3.01, up 23%; adjusted diluted EPS of $3.09, up 26% Article content Acquired the assets of Freije Treatment Systems (EasyWater) on June 13, 2025 Article content Note changes in performance are relative to second quarter 2024 Article content NORTH ANDOVER, Mass. — Watts Water Technologies, Inc. (NYSE: WTS) – through its subsidiaries, one of the world's leading manufacturers and providers of plumbing, heating and water quality products and solutions – today announced results for the second quarter of 2025. Article content Chief Executive Officer Robert J. Pagano Jr. said, 'We delivered another strong quarter that surpassed our expectations as we achieved record sales, operating income, operating margin and EPS. We continue to demonstrate our ability to execute through periods of uncertainty, enabled by the Watts team's unwavering focus and commitment to serving our customers. As a result of our strong first half performance and our third quarter expectations, we are increasing our full year 2025 sales and margin outlook.' Article content Mr. Pagano concluded, 'We continue to invest for the future and position ourselves to capitalize on growth opportunities aligned to favorable secular trends. We are pleased to have acquired the assets of EasyWater, which includes innovative water conditioning and filtration solutions that complement our existing water quality portfolio. The acquisition closed in June and the integration is underway and progressing well. We are confident that our differentiated capabilities and solutions as well as our resilient business strategy will drive sustainable, long-term growth and shareholder value creation.' Article content Second Quarter Ended June 29, June 30, (In millions, except per share information) 2025 2024 % Change Net sales $ 643.7 $ 597.3 8 % Organic sales growth % (1) 6 % Operating income $ 135.3 $ 111.5 21 % Operating margin % 21.0 % 18.7 % 230 bps Adjusted operating income (1) $ 139.1 $ 112.1 24 % Adjusted operating margin % (1) 21.6 % 18.8 % 280 bps Diluted earnings per share $ 3.01 $ 2.44 23 % Special items (1) 0.08 0.02 Adjusted diluted earnings per share (1) $ 3.09 $ 2.46 26 % Article content _________________________ (1) Organic sales growth, adjusted operating income, adjusted operating margin, free cash flow, special items and adjusted diluted earnings per share represent non-GAAP financial measures. For a reconciliation of GAAP to non-GAAP items, please see the tables attached to this press release. Article content Second Quarter Financial Highlights Article content Second quarter 2025 performance relative to second quarter 2024 Article content Sales of $644 million increased 8% on a reported basis and 6% on an organic basis. Organic sales increased due to price, volume and pull-forward demand in the Americas resulting from tariff-related price increases. Growth in the Americas was partly offset by continued market weakness in Europe and project timing in China. Incremental acquisition sales within the Americas were $7 million and contributed 1% to reported growth. Favorable foreign exchange movements increased sales by $5 million, or 1%. Article content Operating margin increased 230 basis points on a reported basis and 280 basis points on an adjusted basis. Operating and adjusted operating margin increased primarily due to favorable price, volume leverage in the Americas, productivity and cost actions which more than offset volume deleverage in Europe and inflation. Operating margin on a reported basis was unfavorably impacted by an increase in restructuring charges. Article content Regional Performance Article content Americas Article content Sales of $499 million increased 11% on a reported basis and 10% on an organic basis, primarily due to price, volume and pull-forward demand. The acquisitions of I-CON and EasyWater contributed $7 million of incremental sales, or 1% to reported growth. Article content Segment margin increased 290 basis points as benefits from price realization, volume leverage, productivity and cost actions more than offset inflation and investments. Article content Europe Article content Sales of $111 million decreased 3% on a reported basis and 8% on an organic basis. Sales declined as a result of lower volumes due to declining heating OEM sales and continued market weakness, which more than offset favorable price realization. Favorable foreign exchange movements increased reported sales by 5%. Article content Segment margin increased 170 basis points as price, productivity and cost actions more than offset volume deleverage and inflation. Article content APMEA Article content Sales of $34 million decreased 3% on a reported basis and 1% on an organic basis. Sales decreased due to project timing in China, partly offset by growth in Australia, New Zealand and the Middle East. Unfavorable foreign exchange movements decreased sales by 2%. Article content Segment margin was flat as benefits from productivity were offset by inflation and sales mix. Article content Cash Flow and Capital Allocation Article content For the first six months of 2025, operating cash flow was $125 million and net capital expenditures were $20 million, resulting in free cash flow of $105 million. In the comparable period last year, operating cash flow was $131 million and net capital expenditures were $11 million, resulting in free cash flow of $120 million. Operating and free cash flow decreased due to higher working capital investment related to timing of accounts receivable collections and higher inventory costs primarily related to tariffs, partially offset by higher net income. Free cash flow was also unfavorably impacted by an increase in net capital expenditures, largely due to proceeds from the sale of properties in the prior year. Sequential improvement in operating and free cash flow is expected throughout the second half of 2025 due to normal seasonality. Article content The Company repurchased approximately 18,000 shares of Class A common stock at a cost of $4.0 million during the second quarter of 2025. For the first six months of 2025, the Company repurchased approximately 37,000 shares at a cost of $7.9 million. Approximately $137 million remains available under the stock repurchase program authorized in 2023. There is no expiration date for this program. Article content Full Year 2025 Outlook Article content The Company is increasing its full year sales and organic sales growth outlook and the midpoint of its operating margin and adjusted operating margin outlook. Reported sales are expected to increase between 2% to 5% and organic sales growth to range from flat to up 3%. Full year operating margin is expected to be between 17.2% and 17.8%, or down 10 to up 50 basis points, and adjusted operating margin is expected to be between 18.2% and 18.8%, or up 50 to 110 basis points. The full year outlook incorporates estimated tariff impact and actions as of August 6, 2025. Further 2025 planning assumptions are included in the second quarter earnings materials posted in the Investor Relations section of our website at Article content For a reconciliation of GAAP to non-GAAP items and a statement regarding the usefulness of these measures to investors and management in evaluating our operating performance, please see the tables attached to this press release. Article content Watts Water Technologies, Inc. will hold a live webcast of its conference call to discuss second quarter 2025 results on Thursday, August 7, 2025 at 9:00 a.m. EDT. This press release and the live webcast can be accessed by visiting the Investor Relations section of the Company's website at Following the webcast, the call recording will be available at the same address until August 8, 2026. Article content Watts Water Technologies, Inc., through its subsidiaries, is a world leader in the manufacturing of innovative products to control the efficiency, safety, and quality of water within residential, commercial, and institutional applications. Watts' expertise in a wide variety of water technologies enables us to be a comprehensive supplier to the water industry. Article content This press release includes 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995, including statements relating to expected full year 2025 financial results, including sales and organic sales growth, operating margin and adjusted operating margin, future dividends, our strategy, investments, the benefits from and integration of recent acquisitions, improvements in operating and free cash flow throughout 2025, our ability to manage uncertainty and current market conditions, long-term growth and shareholder value creation and return of capital to stockholders. These forward-looking statements reflect our current views about future events. You should not rely on forward-looking statements because our actual results may differ materially from those predicted as a result of a number of potential risks and uncertainties. These potential risks and uncertainties include, but are not limited to: the imposition of or changes to tariff rates and related impacts to our business and the broader market; the effectiveness, timing and expected savings associated with our cost-cutting actions, restructuring and initiatives; integration of acquired businesses in a timely and cost-effective manner, retention of supplier and customer relationships and key employees, and the ability to achieve synergies and cost savings in the amounts and within the time frames currently anticipated; current economic and financial conditions, which can affect the housing and construction markets where our products are sold, manufactured and marketed; shortages in and pricing of raw materials and supplies; our ability to compete effectively; changes in variable interest rates on our borrowings; inflation; failure to expand our markets through acquisitions; failure to successfully develop and introduce new product offerings or enhancements to existing products; failure to manufacture products that meet required performance and safety standards; foreign exchange rate fluctuations; cyclicality of industries where we market our products, such as plumbing and heating wholesalers and home improvement retailers; environmental compliance costs; product liability risks and costs; changes in the status of current litigation; the war in Ukraine and other global crises; supply chain and logistical disruptions or labor shortages and workforce disruptions that could negatively affect our supply chain, manufacturing, distribution, or other business processes; and other risks and uncertainties discussed under the heading 'Item 1A. Risk Factors' and in Note 16 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission ('SEC'), as well as risk factors disclosed in our subsequent filings with the SEC. We undertake no duty to update the information contained in this press release, except as required by law. Article content WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES (Unaudited) June 29, December 31, 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 369.3 $ 386.9 Trade accounts receivable, less reserve allowances of $13.5 million at June 29, 2025 and $11.9 million at December 31, 2024 337.5 253.2 Inventories, net: Raw materials 157.4 141.9 Work in process 21.0 16.9 Finished goods 270.1 233.3 Total Inventories 448.5 392.1 Prepaid expenses and other current assets 58.7 51.3 Total Current Assets 1,214.0 1,083.5 PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment, at cost 739.6 691.6 Accumulated depreciation (474.3 ) (436.8 ) Property, plant and equipment, net 265.3 254.8 OTHER ASSETS: Goodwill 781.9 715.0 Intangible assets, net 252.0 235.0 Deferred income taxes 42.9 36.4 Other, net 88.8 72.3 TOTAL ASSETS $ 2,644.9 $ 2,397.0 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 176.9 $ 148.0 Accrued expenses and other liabilities 220.0 190.8 Accrued compensation and benefits 71.5 79.1 Total Current Liabilities 468.4 417.9 LONG-TERM DEBT 197.3 197.0 DEFERRED INCOME TAXES 11.5 10.9 OTHER NONCURRENT LIABILITIES 75.3 63.3 STOCKHOLDERS' EQUITY: Preferred Stock, $0.10 par value; 5,000,000 shares authorized; no shares issued or outstanding — — Class A common stock, $0.10 par value; 120,000,000 shares authorized; 1 vote per share; issued and outstanding, 27,418,992 shares at June 29, 2025 and 27,366,685 shares at December 31, 2024 2.7 2.7 Class B common stock, $0.10 par value; 25,000,000 shares authorized; 10 votes per share; issued and outstanding, 5,946,290 shares at June 29, 2025 and 5,953,290 shares at December 31, 2024 0.6 0.6 Additional paid-in capital 708.6 696.2 Retained earnings 1,308.7 1,184.8 Total Stockholders' Equity 1,892.4 1,707.9 Article content Segment Earnings and Non-GAAP Financial Measures Article content In this press release, segment earnings is our GAAP performance measure used by our chief operating decision-maker ('CODM') to assess and evaluate segment results. Segment earnings exclude the impact of non-recurring and unusual items, such as restructuring costs, acquisition-related costs and gain or loss on sale of assets. The CODM uses segment earnings for insight into underlying trends comparing past financial performance with current performance by reporting segment on a consistent basis. Segment margin is defined as segment earnings divided by segment revenue. Article content We refer to non-GAAP financial measures (including adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, organic sales, organic sales growth, free cash flow, cash conversion rate of free cash flow to net income and net debt to capitalization ratio) and provide a reconciliation of those non-GAAP financial measures to the corresponding financial measures contained in our consolidated financial statements prepared in accordance with GAAP. We believe these financial measures enhance the overall understanding of our historical financial performance and give insight into our future prospects. Adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per share eliminate certain expenses incurred and benefits recognized in the periods presented that relate primarily to our global restructuring programs, acquisition-related costs, gain or loss on sale of assets and the related income tax impacts on these items and tax adjustment items. Management then utilizes these adjusted financial measures to assess the run rate of the Company's operations against those of comparable periods. Organic sales and organic sales growth are non-GAAP measures of sales and sales growth excluding the impacts of foreign exchange, acquisitions and divestitures from period-over-period comparisons. Management believes reporting organic sales and organic sales growth provides useful information to investors, potential investors and others, and allows for a more complete understanding of underlying sales trends by providing sales and sales growth on a consistent basis. Free cash flow, cash conversion rate of free cash flow to net income, and the net debt to capitalization ratio, which are adjusted to exclude certain cash inflows and outlays, and include only certain balance sheet accounts from the comparable GAAP measures, are an indication of our performance in cash flow generation and also provide an indication of the Company's relative balance sheet leverage to other industrial manufacturing companies. These non-GAAP financial measures are among the primary indicators management uses as a basis for evaluating our cash flow generation and our capitalization structure. In addition, free cash flow is used as a criterion to measure and pay certain compensation-based incentives. For these reasons, management believes these non-GAAP financial measures can be useful to investors, potential investors and others. The Company's non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Article content Six Months Ended Americas Europe APMEA Total Net sales June 29, 2025 $ 916.6 $ 219.4 $ 65.7 $ 1,201.7 Net sales June 30, 2024 866.9 237.4 63.9 1,168.2 Dollar change $ 49.7 $ (18.0) $ 1.8 $ 33.5 Net sales % increase (decrease) 5.7 % (7.6) % 2.8 % 2.9 % Foreign exchange impact 0.2 % (0.8) % 2.5 % 0.1 % Acquisition impact (1.4) % — % — % (1.0) % Organic sales increase (decrease) 4.5 % (8.4) % 5.3 % 2.0 % Article content Article content Article content Article content Article content Contacts Article content
Yahoo
5 days ago
- Business
- Yahoo
Jacobs Solutions Inc (J) Q3 2025 Earnings Call Highlights: Record Backlog and Raised EPS Guidance
Adjusted EPS: Increased 25% to $1.62. Net Revenue Growth: 7% year-over-year. Backlog: Grew 14% to nearly $23 billion. Adjusted EBITDA: Increased over 13% to $314 million. Adjusted EBITDA Margin: 14.1%, up 80 basis points year-over-year. Gross Revenue: Increased 5% year-over-year. Free Cash Flow: $271 million in Q3. Share Repurchases: $101 million in Q3, $653 million fiscal year-to-date. Dividend: $0.32 per share, representing 10% year-over-year growth. Book-to-Bill Ratio: 1.2x trailing 12-month. PA Consulting Revenue Growth: 15% year-over-year. Adjusted Net Revenue Growth for Water and Environmental: Over 5% in Q3. Adjusted Net Revenue Growth for Life Sciences and Advanced Manufacturing: Approximately 5% in Q3. Adjusted Net Revenue Growth for Critical Infrastructure: Over 6% year-on-year. Fiscal Year '25 Adjusted EPS Guidance: Raised to $6 to $6.10. Warning! GuruFocus has detected 9 Warning Signs with J. Release Date: August 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Adjusted EPS grew 25% to $1.62, supported by 7% net revenue growth and meaningful year-over-year margin expansion. PA Consulting delivered double-digit revenue and operating profit growth, capitalizing on strong demand. Backlog grew 14% to nearly $23 billion, setting a new record for Jacobs Solutions Inc (NYSE:J). Strong performance in life sciences, semiconductor, data center, energy and power, and water sectors, driving upward trends in spending. The company raised its FY '25 adjusted EPS guidance for the second time this year, reflecting confidence in future performance. Negative Points The environmental sector experienced a slowdown due to regulatory uncertainties, impacting year-on-year comparisons. The pace of IIJA funding allocation has been slower than anticipated, affecting infrastructure project timelines. There are concerns about potential impacts from state and local government budget adjustments, particularly in Medicaid and education programs. The company is still incurring onetime restructuring costs related to the separation, although these are expected to decrease significantly. The adjusted net revenue growth guidance for FY '25 was slightly reduced, implying a deceleration in Q4 compared to Q3. Q & A Highlights Q: Can you expand on the data center submarket growth and the type of work involved? A: Robert Pragada, CEO: The growth involves all aspects, including design, power, and water requirements. We're seeing increased scope in projects, moving from just design to full program delivery. Our partnership with NVIDIA is transformational, as it will serve as a reference design for their customers, leading to more inquiries for Jacobs. Q: Can you discuss the backlog growth and the pace of burn expected? A: Robert Pragada, CEO: The backlog is growing fastest in advanced facilities and water sectors, which have longer burn profiles. Venkatesh Nathamuni, CFO: Life sciences and advanced manufacturing have faster burn rates, and we expect strong growth in these areas in Q4 and into fiscal 2026. Q: How does the One Big Beautiful Bill impact Jacobs, especially with federal government policy changes? A: Robert Pragada, CEO: The bill provides stability in state and local government spending, particularly in transportation and water. It also supports DoD infrastructure and FAA opportunities. While there are concerns about Medicaid cuts, the secular trends and needs are expected to prevail. Q: What are the expected one-time costs associated with the separation, and how will they impact fiscal 2026? A: Venkatesh Nathamuni, CFO: We are on track with our guidance of $75 million to $95 million in one-time restructuring costs, significantly reduced from the previous year. We expect these costs to decrease further in fiscal 2026, with more detailed guidance to be provided next quarter. Q: What gives you confidence in expecting FY '26 growth to be ahead of FY '25? A: Robert Pragada, CEO: Confidence comes from growth in life sciences, data centers, and water sectors. These areas have shown consistent backlog growth over the past four quarters, and projects are now moving into material burn phases, supporting strong growth projections for FY '26. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
6 days ago
- Business
- Yahoo
FIS Reports Strong Second Quarter 2025 Results and Raises Full-Year Outlook
Second quarter GAAP Diluted EPS of $(0.90) Adjusted EPS of $1.36 increased 1% over the prior-year period Revenue increased 5% on a GAAP basis and 5% on an adjusted basis to $2.6 billion Repurchased $246 million of shares in the second quarter; reiterates goal to repurchase $1.2 billion of shares in 2025 Raises full-year 2025 outlook for Revenue, Adjusted EBITDA and Adjusted EPS1 JACKSONVILLE, Fla., August 05, 2025--(BUSINESS WIRE)--FIS® (NYSE:FIS), a global leader in financial technology, today reported its second quarter 2025 results. "Our results reflect the continued positive momentum of the business as we delivered another quarter of financial outperformance driven by our Banking segment. As a result, we are raising our full-year outlook," said FIS CEO and President Stephanie Ferris. "We are excited by the positive outcomes we are driving for our clients as our commercial excellence initiatives are resonating in the market. As the only fintech provider able to address the complexity of managing transactions across the full money lifecycle, FIS is uniquely positioned to help our clients enhance their competitive edge." Second Quarter 2025 Financial Results On a GAAP basis, revenue increased 5% as compared to the prior-year period to approximately $2.6 billion. GAAP net earnings attributable to common stockholders from continuing operations were $(470) million or $(0.90) per diluted share, including $(539) million of non-cash expense to reflect an increase in our deferred tax liability arising from our agreement to sell our remaining interest in Worldpay. On an adjusted basis, revenue increased 5% as compared to the prior-year period reflecting recurring revenue growth of 6%. Adjusted EBITDA increased 5% to approximately $1.0 billion, and Adjusted EBITDA margin was relatively flat as compared to the prior-year period at 39.8%. Adjusted net earnings from continuing operations were $716 million, and Adjusted EPS increased by 1% as compared to the prior-year period to $1.36 per diluted share. ($ millions, except per share data, unaudited) Three Months Ended June 30, % Adjusted Continuing Operations 2025 2024 Change Growth Banking Solutions Revenue 1,808 1,711 6% 6% Capital Market Solutions Revenue 765 722 6% 5% Operating Segment Total Revenue $ 2,573 $ 2,433 6% 5% Corporate and Other Revenue 43 57 (25)% - Consolidated FIS Revenue $ 2,616 $ 2,490 5% - Adjusted EBITDA $ 1,041 $ 992 5% Adjusted EBITDA Margin 39.8 % 39.8 % (3) bps Net Earnings (Loss) (GAAP) $ (470 ) $ 237 * Diluted Earnings (Loss) Per Common Share (GAAP) $ (0.90 ) $ 0.43 * Adjusted Net Earnings $ 716 $ 748 (4)% Adjusted EPS $ 1.36 $ 1.34 1% *Indicates comparison not meaningful Segment Information Banking Solutions:Second quarter revenue increased 6% on a GAAP basis and 6% on an adjusted basis as compared to the prior-year period to $1.8 billion, including recurring revenue growth of 7%. Adjusted EBITDA margin contracted by 70 basis points as compared to the prior-year period to 43.6%, primarily due to bad debt expense. Capital Market Solutions:Second quarter revenue increased by 6% on a GAAP basis and 5% on an adjusted basis as compared to the prior-year period to $765 million, reflecting recurring revenue growth of 5%. Adjusted EBITDA margin contracted by 53 basis points as compared to the prior-year period to 50.3%, reflecting the dilutive impact of a prior-year acquisition. Corporate and Other:Second quarter revenue decreased by 25% as compared to the prior-year period to $43 million. Adjusted EBITDA loss was $133 million, including $150 million of corporate expenses. Balance Sheet and Cash Flows As of June 30, 2025, debt outstanding totaled $12.9 billion. Second quarter net cash provided by operating activities was $382 million, and adjusted free cash flow was $292 million. In the second quarter, the Company returned $459 million of capital to shareholders through $246 million of share repurchases and $212 million of dividends paid. Capital Allocation Update The Company repurchased $246 million of shares in the second quarter and is reiterating its goal to repurchase approximately $1.2 billion of shares in 2025. Additionally, the Company will continue to pay quarterly dividends targeting dividend per share growth in line with Adjusted EPS growth. Third Quarter and Full-Year 2025 Outlook The Company is introducing its third quarter outlook and is raising its full-year outlook for revenue growth to 4.8 to 5.3% and Adjusted EPS growth to 10 to 11%. ($ millions, except share data) 3Q 2025 FY 2025 Revenue $2,650 - $2,665 $10,520 - $10,570 Adjusted EBITDA (Non-GAAP)1 $1,105 - $1,120 $4,315 - $4,335 Adjusted EPS (Non-GAAP)1 $1.46 - $1.50 $5.72 - $5.80 1The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. Update on Pending Strategic Transactions On April 17, 2025, FIS entered into definitive agreements to (i) buy the Issuer Solutions business from Global Payments Inc. ("Global Payments") for an enterprise value of $13.5 billion, inclusive of $1.5 billion of anticipated net present value of tax assets, or a net purchase price of $12.0 billion, subject to customary adjustments (the "Issuer Solutions Acquisition") and (ii) sell its remaining equity interest in Worldpay to Global Payments for a pre-tax value of $6.6 billion net of transaction fees and other costs (the "Worldpay Minority Interest Sale"). As noted in our July 21, 2025 8-K, the completion of the transaction is conditioned upon (among other things) the expiration or termination of the waiting period applicable to the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The HSR waiting period expired as of July 18, 2025. FIS expects to fund the Issuer Solutions Acquisition through a combination of approximately $8 billion of new debt and the after-tax proceeds from the Worldpay Minority Interest Sale. Following the closing of the transactions, the Company expects pro forma gross leverage to be approximately 3.4x, deleveraging to its target gross leverage of 2.8x within 18 months. The transactions are expected to close simultaneously in the first half of 2026, subject to regulatory approvals and other customary closing conditions. Webcast FIS will host a live webcast of its earnings conference call with the investment community beginning at 8:30 a.m. (EDT) on Tuesday, August 5, 2025. To access the webcast, go to the Investor Relations section of FIS' homepage, A replay will be available after the conclusion of the live webcast. About FIS FIS is a financial technology company providing solutions to financial institutions, businesses and developers. We unlock financial technology to the world across the money lifecycle underpinning the world's financial system. Our people are dedicated to advancing the way the world pays, banks and invests, by helping our clients to confidently run, grow and protect their businesses. Our expertise comes from decades of experience helping financial institutions and businesses of all sizes adapt to meet the needs of their customers by harnessing where reliability meets innovation in financial technology. Headquartered in Jacksonville, Florida, FIS is a member of the Fortune 500® and the Standard & Poor's 500® Index. To learn more, visit Follow FIS on LinkedIn, Facebook and X. FIS Use of Non-GAAP Financial Information Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, we have provided certain non-GAAP financial measures. These non-GAAP measures include constant currency revenue, Adjusted revenue growth, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net earnings, Adjusted EPS, and Adjusted free cash flow. These non-GAAP measures may be used in this release and/or in the attached supplemental financial information. We believe these non-GAAP measures help investors better understand the underlying fundamentals of our business. As further described below, the non-GAAP revenue and earnings measures presented eliminate items management believes are not indicative of FIS' operating performance. The constant currency revenue and Adjusted revenue growth measures adjust for the effects of exchange rate fluctuations and exclude discontinued operations, while Adjusted revenue growth also excludes revenue from Corporate and Other, giving investors further insight into our performance. Finally, Adjusted free cash flow provides further information about the ability of our business to generate cash. For these reasons, management also uses these non-GAAP measures in its assessment and management of FIS' performance. Constant currency revenue represents reported segment revenue excluding the impact of fluctuations in foreign currency exchange rates in the current period. Adjusted revenue growth reflects the percentage change in constant currency revenue for the current period as compared to the prior period. Constant currency revenue is calculated by applying prior-year period foreign currency exchange rates to current-period revenue. When referring to Adjusted revenue growth, revenue from our Corporate and Other segment is excluded. Adjusted EBITDA reflects net earnings (loss) before interest, other income (expense), taxes, equity method investment earnings (loss), and depreciation and amortization, and excludes certain costs that do not constitute normal, recurring, cash operating expenses necessary to operate our business. These excluded costs generally include purchase price amortization of acquired intangible assets, as well as acquisition, integration and certain other costs and asset impairments. These excluded costs are recorded in the Corporate and Other segment. Adjusted EBITDA for the respective segments excludes the foregoing items. This measure is reported to the chief operating decision maker, the Company's Chief Executive Officer and President, who utilizes the measure for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with FASB ASC Topic 280, Segment Reporting. Adjusted EBITDA margin reflects Adjusted EBITDA, as defined above, divided by revenue. Adjusted net earnings excludes the effect of purchase price amortization, as well as certain costs that do not constitute normal, recurring, cash operating expenses necessary to operate our business. For purposes of calculating Adjusted net earnings, our equity method investment earnings (loss) ("EMI") from Worldpay is also adjusted to exclude certain costs and other transactions in a similar manner. Adjusted EPS reflects Adjusted net earnings, as defined above, divided by weighted average diluted shares outstanding. Adjusted free cash flow reflects net cash provided by operating activities, adjusted for the net change in settlement assets and obligations and excluding certain transactions that are closely associated with non-operating activities or are otherwise non-operational in nature and not indicative of future operating cash flows, less capital expenditures. Adjusted free cash flow does not represent our residual cash flow available for discretionary expenditures since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow as presented in this earnings release excludes cash flow from discontinued operations, which our management cannot freely access following the Worldpay separation. Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. Further, FIS' non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures, including footnotes describing the adjustments, are provided in the attached schedules and in the Investor Relations section of the FIS website, Forward-Looking Statements This earnings release and today's webcast contain "forward-looking statements" within the meaning of the U.S. federal securities laws. Statements that are not historical facts, as well as other statements about our expectations, beliefs, intentions, or strategies regarding the future, or other characterizations of future events or circumstances, are forward-looking statements. Forward-looking statements include statements about anticipated financial outcomes, including any earnings outlook or projections, projected revenue or expense synergies or dis-synergies, business and market conditions, outlook, foreign currency exchange rates, deleveraging plans, expected dividends and share repurchases of the Company, the Company's sales pipeline and anticipated profitability and growth, plans, strategies and objectives for future operations, strategic value creation, risk profile and investment strategies, any statements regarding future economic conditions or performance and any statements with respect to the future impacts of the pending acquisition of Global Payments' Issuer Solutions business ("Issuer Solutions") and the pending sale of our remaining equity interest in Worldpay. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or outlook, statements of outlook and various accruals and estimates. These statements relate to future events and our future results and involve a number of risks and uncertainties. Forward-looking statements are based on management's beliefs as well as assumptions made by, and information currently available to, management. Actual results, performance or achievement could differ materially from these forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include the following, without limitation: changes in general economic, business and political conditions, a recession, intensified or expanded international hostilities, acts of terrorism, increased rates of inflation or interest, effects of announced or future tariff increases and any resulting regulatory changes in global trade relations, changes in consumer or business confidence; changes in either or both the United States and international lending, capital and financial markets or currency fluctuations; the risk that acquired businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated; the risk that cost savings and synergies anticipated to be realized from acquisitions may not be fully realized or may take longer to realize than expected or that costs may be greater than anticipated; the risks of doing business internationally; the effect of legislative initiatives or proposals, statutory changes, governmental or applicable regulations and/or changes in industry requirements, including privacy, data protection, cybersecurity, cyber resilience and AI laws and regulations; our ability to comply with climate change legal and regulatory requirements and to maintain practices that meet our stakeholders' evolving expectations; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting, the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries; changes in the growth rates of the markets for our solutions; the amount, declaration and payment of future dividends is at the discretion of our Board of Directors and depends on, among other things, our investment opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions; the amount and timing of any future share repurchases is subject to, among other things, our share price, our other investment opportunities and cash requirements, our results of operations and financial condition, our future prospects and other factors that may be considered relevant by our Board of Directors and management; failures to adapt our solutions to changes in technology or in the marketplace; internal or external security or privacy breaches of our systems, including those relating to unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events; the risk that implementation of software, including software updates, for customers or at customer locations or employee error in monitoring our software and platforms may result in the corruption or loss of data or customer information, interruption of business operations, outages, exposure to liability claims or loss of customers; the risk that partners and third parties may fail to satisfy their legal obligations to us; risks associated with managing pension cost, cybersecurity issues, IT outages and data privacy; our ability to navigate the opportunities and risks associated with using and/or incorporating AI technologies into our business; the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters; the risk that the pending acquisition of Issuer Solutions will not be completed or will not provide the expected benefits, including the anticipated cost or revenue synergies, within the expected timeframe, in full or at all; the risk that the integration of Issuer Solutions will be more difficult, time-consuming or expensive than anticipated; competitive pressures on pricing related to the decreasing number of community banks in the U.S., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry into the market by global banks and global companies with respect to certain competitive solutions, each of which may have the impact of unbundling individual solutions from a comprehensive suite of solutions we provide to many of our customers; the failure to innovate in order to keep up with new emerging technologies, which could impact our solutions and our ability to attract new, or retain existing, customers; an operational or natural disaster at one of our major operations centers; failure to comply with applicable requirements of payment networks or changes in those requirements; fraud by bad actors; and other risks detailed elsewhere in the "Risk Factors" section and other sections of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our other filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition, results of operations and prospects. Accordingly, readers should not place undue reliance on these forward-looking statements. These forward-looking statements are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Except as required by applicable law or regulation, we do not undertake (and expressly disclaim) any obligation and do not intend to publicly update or review any of these forward-looking statements, whether as a result of new information, future events or otherwise. Fidelity National Information Services, Inc. Earnings Release Supplemental Financial Information August 5, 2025 Exhibit A Condensed Consolidated Statements of Earnings (Loss) - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit B Condensed Consolidated Balance Sheets - Unaudited as of June 30, 2025, and December 31, 2024 Exhibit C Condensed Consolidated Statements of Cash Flows - Unaudited for the six months ended June 30, 2025 and 2024 Exhibit D Supplemental Non-GAAP Adjusted Revenue Growth - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit E Supplemental Disaggregation of Revenue - Recast and Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit F Supplemental Non-GAAP Adjusted Free Cash Flow Measures - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit G Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit H Supplemental Financial Information of Worldpay Holdco, LLC - Unaudited for the three months ended June 30, 2025 and 2024, six months ended June 30, 2025, and five months ended June 30, 2024 FIDELITY NATIONAL INFORMATION SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)— UNAUDITED (In millions, except per share amounts) Exhibit A Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 2,616 $ 2,490 $ 5,148 $ 4,958 Cost of revenue 1,664 1,546 3,317 3,106 Gross profit 952 944 1,831 1,852 Selling, general, and administrative expenses 572 609 1,130 1,182 Asset impairments — 4 2 18 Other operating (income) expense, net - related party (28 ) (40 ) (56 ) (73 ) Operating income 408 371 755 725 Other income (expense): Interest expense, net (110 ) (43 ) (190 ) (120 ) Other income (expense), net (159 ) (13 ) (195 ) (184 ) Total other income (expense), net (269 ) (56 ) (385 ) (304 ) Earnings (loss) before income taxes and equity method investment earnings (loss) 139 315 370 421 Provision (benefit) for income taxes 10 87 93 108 Equity method investment earnings (loss), net of tax (598 ) 10 (669 ) (76 ) Net earnings (loss) from continuing operations (469 ) 238 (392 ) 237 Earnings (loss) from discontinued operations, net of tax — 1 — 709 Net earnings (loss) (469 ) 239 (392 ) 946 Net (earnings) loss attributable to noncontrolling interest from continuing operations (1 ) (1 ) (1 ) (1 ) Net earnings (loss) attributable to FIS $ (470 ) $ 238 $ (393 ) $ 945 Net earnings (loss) attributable to FIS: Continuing operations $ (470 ) $ 237 $ (393 ) $ 236 Discontinued operations — 1 — 709 Total $ (470 ) $ 238 $ (393 ) $ 945 Basic earnings (loss) per common share attributable to FIS: Continuing operations $ (0.90 ) $ 0.43 $ (0.75 ) $ 0.42 Discontinued operations — — — 1.25 Total $ (0.90 ) $ 0.43 $ (0.75 ) $ 1.67 Diluted earnings (loss) per common share attributable to FIS: Continuing operations $ (0.90 ) $ 0.43 $ (0.75 ) $ 0.42 Discontinued operations — — — 1.25 Total $ (0.90 ) $ 0.43 $ (0.75 ) $ 1.67 Weighted average common shares outstanding: Basic 525 554 527 565 Diluted 525 557 527 567 Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED (In millions, except per share amounts) Exhibit B June 30,2025 December 31,2024 ASSETS Current assets: Cash and cash equivalents $ 581 $ 834 Settlement assets 774 479 Trade receivables, net 2,075 1,876 Other receivables 128 160 Receivable from related party 43 84 Prepaid expenses and other current assets 769 638 Current assets held for sale — 1,115 Total current assets 4,370 5,186 Property and equipment, net 692 646 Goodwill 17,577 17,260 Intangible assets, net 1,172 1,318 Software, net 2,639 2,526 Equity method investment 3,873 3,858 Other noncurrent assets 1,805 1,749 Deferred contract costs, net 1,245 1,241 Total assets $ 33,373 $ 33,784 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued and other liabilities $ 1,698 $ 1,994 Settlement payables 795 500 Deferred revenue 918 902 Short-term borrowings 1,719 636 Current portion of long-term debt 2,318 968 Current liabilities held for sale — 1,094 Total current liabilities 7,448 6,094 Long-term debt, excluding current portion 8,868 9,686 Deferred income taxes 1,203 863 Other noncurrent liabilities 1,682 1,441 Total liabilities 19,201 18,084 Equity: FIS stockholders' equity: Preferred stock $0.01 par value — — Common stock $0.01 par value 6 6 Additional paid in capital 47,229 47,129 (Accumulated deficit) retained earnings (23,075 ) (22,257 ) Accumulated other comprehensive earnings (loss) (399 ) (364 ) Treasury stock, at cost (9,593 ) (8,816 ) Total FIS stockholders' equity 14,168 15,698 Noncontrolling interest 4 2 Total equity 14,172 15,700 Total liabilities and equity $ 33,373 $ 33,784 Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED (In millions) Exhibit C Six months ended June 30, 2025 2024 Cash flows from operating activities from continuing operations: Net earnings (loss) $ (392 ) $ 946 Less earnings (loss) from discontinued operations, net of tax — 709 Net earnings (loss) from continuing operations (392 ) 237 Adjustment to reconcile net earnings (loss) from continuing operations to net cash provided by operating activities: Depreciation and amortization 936 859 Amortization of debt issuance costs 29 11 Asset impairments 2 18 Loss on extinguishment of debt — 174 Loss (gain) on sale of businesses, investments and other 100 32 Stock-based compensation 96 87 Loss from equity method investment 669 76 Deferred income taxes (42 ) (118 ) Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: Trade and other receivables (142 ) 126 Receivable from related party 40 (169 ) Settlement activity 1 (3 ) Prepaid expenses and other assets 65 (122 ) Deferred contract costs (180 ) (234 ) Deferred revenue 5 (6 ) Accounts payable, accrued liabilities and other liabilities (348 ) (216 ) Net cash provided by operating activities from continuing operations 839 752 Cash flows from investing activities from continuing operations: Additions to property and equipment (76 ) (43 ) Additions to software (375 ) (342 ) Settlement of net investment hedge cross-currency interest rate swaps — (8 ) Net proceeds from sale of businesses and investments — 12,796 Cash divested from sale of business (1,417 ) (3,137 ) Acquisitions, net of cash acquired (197 ) (56 ) Coupon payments on interest rate swaps (64 ) (54 ) Distributions from equity method investments 66 29 Other investing activities, net (63 ) (17 ) Net cash provided by (used in) investing activities from continuing operations (2,126 ) 9,168 Cash flows from financing activities from continuing operations: Borrowings 24,757 13,441 Repayment of borrowings and other financing arrangements (23,832 ) (21,396 ) Debt issuance costs (27 ) — Net proceeds from stock issued under stock-based compensation plans 8 1 Treasury stock activity (824 ) (2,522 ) Dividends paid (432 ) (409 ) Other financing activities, net — 40 Net cash provided by (used in) financing activities from continuing operations (350 ) (10,845 ) Cash flows from discontinued operations: Net cash provided by (used in) operating activities 208 (345 ) Net cash provided by (used in) investing activities — (39 ) Net cash provided by (used in) financing activities — (65 ) Net cash provided by (used in) discontinued operations 208 (449 ) Effect of foreign currency exchange rate changes on cash from continuing operations 64 (19 ) Effect of foreign currency exchange rate changes on cash from discontinued operations — (26 ) Net increase (decrease) in cash, cash equivalents and restricted cash (1,365 ) (1,419 ) Cash, cash equivalents and restricted cash, beginning of period 1,946 4,414 Cash, cash equivalents and restricted cash, end of period $ 581 $ 2,995 FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL NON-GAAP ADJUSTED REVENUE GROWTH — UNAUDITED (In millions) Exhibit D Three months ended June 30, 2025 2024 Constant Currency Adjusted Revenue FX Revenue Revenue Growth (1) Banking Solutions $ 1,808 $ (2 ) $ 1,806 $ 1,711 6 % Capital Market Solutions 765 (8 ) 757 722 5 % Operating segment total 2,573 (10 ) 2,563 2,433 5 % Corporate and Other 43 (1 ) 42 57 Consolidated FIS $ 2,616 $ (11 ) $ 2,605 $ 2,490 Six months ended June 30, 2025 2024 Constant Currency Adjusted Revenue FX Revenue Revenue Growth (1) Banking Solutions $ 3,526 $ 4 $ 3,530 $ 3,395 4 % Capital Market Solutions 1,529 (6 ) 1,523 1,428 7 % Operating segment total 5,055 (2 ) 5,053 4,823 5 % Corporate and Other 93 1 94 135 Consolidated FIS $ 5,148 $ (1 ) $ 5,147 $ 4,958 Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. (1) Adjusted growth excludes Corporate and Other. The Corporate and Other segment includes certain non-strategic businesses that we plan to wind down or sell. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL DISAGGREGATION OF REVENUE — UNAUDITED (In millions) Exhibit E In the following tables, revenue is disaggregated by primary geographical market and type of revenue. The tables also include a reconciliation of the disaggregated revenue with the Company's reportable segments. For the three months ended June 30, 2025 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 1,564 $ 452 $ 23 $ 2,039 All others 244 313 20 577 Total $ 1,808 $ 765 $ 43 $ 2,616 Type of Revenue: Recurring revenue: Transaction processing and services $ 1,351 $ 390 $ 35 $ 1,776 Software maintenance 98 150 — 248 Other recurring 74 21 1 96 Total recurring 1,523 561 36 2,120 Software license 48 96 — 144 Professional services 128 102 1 231 Other non-recurring 109 6 6 121 Total $ 1,808 $ 765 $ 43 $ 2,616 For the three months ended June 30, 2024 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 1,471 $ 452 $ 23 $ 1,946 All others 240 270 34 544 Total $ 1,711 $ 722 $ 57 $ 2,490 Type of Revenue: Recurring revenue: Transaction processing and services (1) $ 1,273 $ 373 $ 51 $ 1,697 Software maintenance 90 143 1 234 Other recurring (1) 63 15 1 79 Total recurring 1,426 531 53 2,010 Software license 37 91 — 128 Professional services 136 99 1 236 Other non-recurring 112 1 3 116 Total $ 1,711 $ 722 $ 57 $ 2,490 (1) Revenue related primarily to software licenses requiring frequent, integral updates has been classified as Transaction processing and services revenue commencing in the quarter ended December 31, 2024, and related prior-period amounts have been reclassified from Other recurring revenue to Transaction processing and services for comparability. Revenue reclassified for the three months ended June 30, 2024, was $5 million, $7 million and $9 million within Banking, Capital Markets and Corporate and Other, respectively. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. Exhibit E (continued) FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL DISAGGREGATION OF REVENUE — UNAUDITED (In millions) For the six months ended June 30, 2025 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 3,056 $ 927 $ 44 $ 4,027 All others 470 602 49 1,121 Total $ 3,526 $ 1,529 $ 93 $ 5,148 Type of Revenue: Recurring revenue: Transaction processing and services $ 2,641 $ 783 $ 78 $ 3,502 Software maintenance 193 298 1 492 Other recurring 143 45 2 190 Total recurring 2,977 1,126 81 4,184 Software license 75 198 — 273 Professional services 252 193 2 447 Other non-recurring 222 12 10 244 Total $ 3,526 $ 1,529 $ 93 $ 5,148 For the six months ended June 30, 2024 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 2,903 $ 897 $ 64 $ 3,864 All others 492 531 71 1,094 Total $ 3,395 $ 1,428 $ 135 $ 4,958 Type of Revenue: Recurring revenue: Transaction processing and services (1) $ 2,539 $ 751 $ 107 $ 3,397 Software maintenance 180 286 1 467 Other recurring (1) 123 30 2 155 Total recurring 2,842 1,067 110 4,019 Software license 87 165 — 252 Professional services 268 195 2 465 Other non-recurring 198 1 23 222 Total $ 3,395 $ 1,428 $ 135 $ 4,958 (1) Revenue related primarily to software licenses requiring frequent, integral updates has been classified as Transaction processing and services revenue commencing in the quarter ended December 31, 2024, and related prior-period amounts have been reclassified from Other recurring revenue to Transaction processing and services for comparability. Revenue reclassified for the six months ended June 30, 2024, was $9 million, $14 million and $18 million within Banking, Capital Markets and Corporate and Other, respectively. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL NON-GAAP CASH FLOW MEASURES — UNAUDITED (In millions) Exhibit F Three months ended Six months ended June 30, 2025 June 30, 2025 Net cash provided by operating activities $ 382 $ 839 Non-GAAP adjustments: Acquisition, integration and other payments (1) 139 273 Settlement activity (11 ) (1 ) Adjusted cash flows from operations 510 1,111 Capital expenditures (218 ) (451 ) Adjusted free cash flow $ 292 $ 660 Three months ended Six months ended June 30, 2024 June 30, 2024 Net cash provided by operating activities $ 546 $ 752 Non-GAAP adjustments: Acquisition, integration and other payments (1) 126 230 Settlement activity 15 3 Adjusted cash flows from operations 687 985 Capital expenditures (183 ) (385 ) Adjusted free cash flow $ 504 $ 600 Adjusted free cash flow reflects adjusted cash flows from operations less capital expenditures (additions to property and equipment and additions to software from the statement of cash flows). Adjusted free cash flow does not represent our residual cash flows available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow as presented in this earnings release excludes cash flows from discontinued operations. (1) Adjusted cash flows from operations and adjusted free cash flow for the three and six months ended June 30, 2025 and 2024, exclude cash payments for certain acquisition, integration and other costs (see Note 2 to Exhibit G), net of related tax impact. The related tax impact totaled $19 million and $21 million for the three months and $37 million and $39 million for the six months ended June 30, 2025 and 2024, respectively. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Net earnings (loss) attributable to FIS from continuing operations $ (470 ) $ 237 $ (393 ) $ 236 Provision (benefit) for income taxes 10 87 93 108 Interest expense, net 110 43 190 120 Equity method investment (earnings) loss, net of tax 598 (10 ) 669 76 Other, net 160 14 196 185 Operating income (loss), as reported 408 371 755 725 Depreciation and amortization, excluding purchase accounting amortization 309 263 596 525 Non-GAAP adjustments: Purchase accounting amortization (1) 172 168 340 334 Acquisition, integration and other costs (2) 152 186 306 344 Asset impairments (3) — 4 2 18 Indirect Worldpay business support costs (4) — — — 14 Adjusted EBITDA from continuing operations $ 1,041 $ 992 $ 1,999 $ 1,960 Net earnings (loss) attributable to FIS from discontinued operations $ — $ 1 $ — $ 709 Provision (benefit) for income taxes — — — (991 ) Interest expense, net — — (1 ) (1 ) Other, net — 1 (1 ) 470 Operating income (loss) — 2 (2 ) 187 Depreciation and amortization, excluding purchase accounting amortization — — — 1 Non-GAAP adjustments: Acquisition, integration and other costs (2) — — — 13 Indirect Worldpay business support costs (4) — — — (14 ) Adjusted EBITDA from discontinued operations $ — $ 2 $ (2 ) $ 187 Adjusted EBITDA $ 1,041 $ 994 $ 1,997 $ 2,147 See Notes to Exhibit G. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G (continued) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Earnings (loss) attributable to FIS from continuing operations $ (470 ) $ 237 $ (393 ) $ 236 Equity method investment (earnings) loss, net of tax 598 (10 ) 669 76 Earnings (loss) attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 128 227 276 312 Non-GAAP adjustments from continuing operations: Purchase accounting amortization (1) 172 168 340 334 Acquisition, integration and other costs (2) 172 186 326 344 Asset impairments (3) — 4 2 18 Indirect Worldpay business support costs (4) — — — 14 Non-operating (income) expense (5) 159 13 195 184 Non-GAAP tax (provision) benefit (6) (67 ) (12 ) (54 ) (83 ) Total non-GAAP adjustments from continuing operations 436 359 809 811 Adjusted net earnings attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 564 586 1,085 1,123 Equity method investment earnings (loss), net of tax (7) (598 ) 10 (669 ) (76 ) Non-GAAP adjustments on equity method investment earnings (loss), net of related (provision) benefit for income taxes (7) (8) 750 152 944 331 Adjusted equity method investment earnings (loss) (7) 152 162 275 255 Adjusted net earnings attributable to FIS from continuing operations $ 716 $ 748 $ 1,360 $ 1,378 Earnings (loss) attributable to FIS from discontinued operations, net of tax $ — $ 1 $ — $ 709 Non-GAAP adjustments from discontinued operations: Acquisition, integration and other costs (2) — — — 13 Loss on sale of disposal group (10) — — — 466 Indirect Worldpay business support costs (4) — — — (14 ) Amortization on long-lived assets held for sale (9) — — — (30 ) Non-operating (income) expense (5) — 1 — 7 Non-GAAP tax (provision) benefit (6) — — — (1,015 ) Total non-GAAP adjustments from discontinued operations — 1 — (573 ) Adjusted net earnings attributable to FIS from discontinued operations $ — $ 2 $ — $ 136 Adjusted net earnings attributable to FIS common stockholders $ 716 $ 750 $ 1,360 $ 1,514 See Notes to Exhibit G. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G (continued) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Earnings (loss) attributable to FIS from continuing operations $ (0.89 ) $ 0.43 $ (0.74 ) $ 0.42 Equity method investment (earnings) loss, net of tax 1.13 (0.02 ) 1.26 0.13 Earnings (loss) attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 0.24 0.41 0.52 0.55 Non-GAAP adjustments from continuing operations: Purchase accounting amortization (1) 0.33 0.30 0.64 0.59 Acquisition, integration and other costs (2) 0.33 0.33 0.62 0.61 Asset impairments (3) — 0.01 — 0.03 Indirect Worldpay business support costs (4) — — — 0.02 Non-operating (income) expense (5) 0.30 0.02 0.37 0.32 Non-GAAP tax (provision) benefit (6) (0.13 ) (0.02 ) (0.10 ) (0.15 ) Total non-GAAP adjustments from continuing operations 0.83 0.64 1.53 1.43 Adjusted net earnings attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 1.07 1.05 2.05 1.98 Equity method investment earnings (loss) (7) (1.13 ) 0.02 (1.26 ) (0.13 ) Non-GAAP adjustments on equity method investment earnings (loss), net of related (provision) benefit for income taxes (7) (8) 1.42 0.27 1.78 0.58 Adjusted equity method investment earnings (loss) (7) 0.29 0.29 0.52 0.45 Adjusted net earnings attributable to FIS from continuing operations $ 1.36 $ 1.34 $ 2.57 $ 2.43 Earnings (loss) attributable to FIS from discontinued operations, net of tax $ — $ — $ — $ 1.25 Non-GAAP adjustments from discontinued operations: Acquisition, integration and other costs (2) — — — 0.02 Loss on sale of disposal group (10) — — — 0.82 Indirect Worldpay business support costs (4) — — — (0.02 ) Amortization on long-lived assets held for sale (9) — — — (0.05 ) Non-operating (income) expense (5) — — — 0.01 Non-GAAP tax (provision) benefit (6) — — — (1.79 ) Total non-GAAP adjustments from discontinued operations — — — (1.01 ) Adjusted net earnings attributable to FIS from discontinued operations $ — $ — $ — $ 0.24 Adjusted net earnings attributable to FIS common stockholders $ 1.36 $ 1.34 $ 2.57 $ 2.67 Weighted average shares outstanding-diluted (11) 527 557 529 567 See Notes to Exhibit G. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G (continued) Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliations for the three and six months ended June 30, 2025 and 2024. (1) This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions, including customer relationships, contract value, technology assets, trademarks and trade names. The Company has excluded the impact of purchase price amortization expense as such amounts can be significantly impacted by the timing and/or size of acquisitions. Although the Company excludes these amounts from its non-GAAP expenses, the Company believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of assets that relate to past acquisitions will recur in future periods until such assets have been fully amortized. Any future acquisitions may result in the amortization of future assets. (2) This item represents costs comprised of the following: Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Continuing operations: Acquisition and integration $ 43 $ 24 $ 51 $ 49 Enterprise transformation, including Future Forward and platform modernization 10 56 56 129 Severance and other termination expenses 46 9 105 27 Separation of the Worldpay Merchant Solutions business 21 80 42 109 Incremental stock compensation directly attributable to specific programs 14 15 24 26 Other, including divestiture-related expenses and enterprise cost control and other initiatives 18 2 28 4 Subtotal 152 186 306 344 Financing fees - Issuer Solutions acquisition (a) 20 — 20 — Total 172 186 326 344 Discontinued operations: Acquisition and integration $ — $ — $ — $ — Enterprise transformation, including Future Forward and platform modernization — — — 1 Severance and other termination expenses — — — 1 Separation of the Worldpay Merchant Solutions business — — — 8 Other, including divestiture-related expenses and enterprise cost control and other initiatives — — — 3 Total from discontinued operations — — $ — $ 13 Total consolidated $ 172 $ 186 $ 326 $ 357 (a) This item represents bridge facility fees incurred to secure funding for the pending Issuer Solutions business acquisition from Global Payments. These fees are recorded as a component of Interest expense, net on our consolidated statements of earnings (loss). Accordingly, this item is included in Acquisition, integration and other costs for purposes of calculating Adjusted net earnings but not Adjusted EBITDA. Amounts in table may not sum due to rounding. (3) For the three and six months ended June 30, 2024, this item includes impairments primarily related to the termination of certain internally developed software projects. (4) For the six months ended June 30, 2024, this item represents costs that were incurred in support of the Worldpay Merchant Solutions business prior to the separation but are not directly attributable to it and thus were not recorded in discontinued operations. The Company is being reimbursed for these expenses as part of Transition Services Agreements with the buyer and/or eliminated them post separation; therefore, the expenses have been adjusted out of continuing operations and added to discontinued operations. (5) Non-operating (income) expense primarily consists of other income and expense items outside of the Company's operating activities, including fair value adjustments on certain non-operating assets and liabilities and foreign currency transaction remeasurement gains and losses. For the three and six months ended June 30, 2025, earnings from continuing operations also includes a $108 million write down, triggered by the Worldpay Minority Interest Sale agreement, of the contingent consideration included as part of the 2024 sale of a 55% ownership interest in its Worldpay Merchant Solutions business (the "2024 Worldpay Sale"). For the six months ended June 30, 2024, earnings from continuing operations also includes loss on extinguishment of debt of approximately $174 million relating to tender discounts and fees; the write-off of unamortized bond discounts, debt issuance costs and fair value basis adjustments; and gains on related derivative instruments. (6) This adjustment is based on an adjusted effective tax rate of 12.0% and 14.5% for the periods ended June 30, 2025 and 2024, respectively, which reflects adjustments to our GAAP effective tax rate to take into account primarily certain cash tax benefits from our equity method investment in Worldpay. For the six months ended June 30, 2024, the Company recorded a tax benefit of $991 million in its earnings from discontinued operations primarily from the write-off of U.S. deferred tax liabilities that were not transferred in the 2024 Worldpay Sale, net of the estimated U.S. tax cost that the Company expects to incur as a result of the 2024 Worldpay Sale. This adjustment includes the removal of the impact of this tax benefit from our earnings from discontinued operations for this period. (7) FIS completed the separation of Worldpay on January 31, 2024, retaining a non-controlling 45% ownership interest that is recorded under the equity method of accounting, net of investor-level tax. FIS' share of Worldpay's results under the equity method of accounting reflects activity beginning on February 1, 2024. For the three and six months ended June 30, 2025, our investor-level tax includes $539 million of expense to reflect an increase in our deferred tax liability arising from our agreement to sell our remaining interest in Worldpay, which represented a change in our intent to hold the investment long term. (8) This item represents FIS' proportionate share of Worldpay's non-GAAP adjustments on its earnings (loss) consistent with FIS' non-GAAP measures and is comprised of the following: Three months ended June 30, Six months ended June 30, Five months ended June 30, 2025 2024 2025 2024 FIS' share of Worldpay: Purchase accounting amortization $ 158 $ 174 $ 316 $ 309 Acquisition, integration and other costs (a) 36 26 85 111 Non-operating (income) expense 35 (11 ) 46 (19 ) Non-GAAP tax (provision) benefit 521 (37 ) 497 (70 ) Non-GAAP adjustments on equity method investment earnings (loss), net of related (provision) benefit for income taxes $ 750 $ 152 $ 944 $ 331 (a) Worldpay acquisition, integration, and other costs for the three and six months ended June 30, 2025 and 2024, consist primarily of transaction and transition costs related to the separation from FIS. Amounts in table may not sum due to rounding. (9) The Company stopped recording depreciation and amortization on the long-lived assets classified as held for sale beginning July 5, 2023. The amount of depreciation and amortization that would have been recorded in discontinued operations had these assets not been classified as held for sale has been deducted from adjusted net earnings for the three and six months ended June 30, 2024, for comparability purposes. (10) During the six months ended June 30, 2024, an initial loss on sale of disposal group of $466 million was recorded upon closing of the 2024 Worldpay Sale to reflect the impact of the excess of the carrying value of the disposal group over the estimated fair value less cost to sell. (11) For the three and six months ended June 30, 2025, Adjusted net earnings is a gain, while the corresponding GAAP amount for this period is a loss. As a result, in calculating Adjusted net earnings per share-diluted for this period, the weighted average shares outstanding-diluted amount of approximately 527 million and 529 million used in the calculation includes approximately 2 million and 2 million shares for the three and six months ended June 30, 2025, respectively, that in accordance with GAAP are excluded from the calculation of the GAAP Net loss per share-diluted for the periods, due to their anti-dilutive impact. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL FINANCIAL INFORMATION OF WORLDPAY HOLDCO, LLC — UNAUDITED (In millions) Exhibit H Summary Worldpay Holdco, LLC financial information is as follows: Three months ended June 30, Six months ended June 30, Five months ended June 30, 2025 2024 2025 2024 (1) Revenue $ 1,487 $ 1,349 $ 2,768 $ 2,181 Gross profit $ 721 $ 668 $ 1,333 $ 1,053 Earnings (loss) before income taxes $ (119 ) $ 3 $ (300 ) $ (227 ) Net earnings (loss) attributable to Worldpay Holdco, LLC $ (140 ) $ (28 ) $ (357 ) $ (271 ) FIS share of net earnings (loss) attributable to Worldpay Holdco, LLC, net of tax (2) $ (598 ) $ 10 $ (669 ) $ (76 ) The following is a GAAP to Non-GAAP reconciliation of Adjusted EBITDA for Worldpay Holdco LLC. Three months ended June 30, Six months ended June 30, Five months ended June 30, 2025 2024 2025 2024 (1) Net earnings (loss) attributable to Worldpay Holdco, LLC $ (140 ) $ (28 ) $ (357 ) $ (271 ) Provision (benefit) for income taxes 21 30 57 42 Interest expense, net 146 148 290 264 Other, net 71 (24 ) 102 (41 ) Operating income (loss) 98 126 92 (6 ) Depreciation and amortization, excluding purchase accounting amortization 51 19 98 29 Non-GAAP adjustments: Purchase accounting amortization 351 386 702 687 Transition, acquisition, integration and other costs (3) 81 58 189 246 Adjusted EBITDA $ 581 $ 589 $ 1,081 $ 956 (1) FIS completed the separation of Worldpay on January 31, 2024. Accordingly, Worldpay's results reflect activity beginning on February 1, 2024. (2) Amounts include our share of the net income attributable to Worldpay and our investor-level tax (expense) benefit of $(533) million and $22 million for the three months ended June 30, 2025 and 2024, and $(511) million and $45 million for the six months ended June 30, 2025 and five months ended June 30, 2024, respectively, as well as, intra-entity eliminations, and is reported as equity method investment earnings (loss), net of tax on our consolidated statements of earnings (loss). For the three and six months ended June 30, 2025, our investor-level tax includes $539 million of expense to reflect an increase in our deferred tax liability arising from our agreement to sell our remaining interest in Worldpay, which represented a change in our intent to hold the investment long term. (3) This item represents primarily transaction and transition costs associated with the separation of Worldpay from FIS. View source version on Contacts For More Information Ellyn Raftery, 904.438.6083Chief Marketing & Communications OfficerFIS Global Marketing & Corporate George Mihalos, 904.438.6438Senior Vice PresidentFIS Investor Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Edgewell Personal Care Announces Third Quarter Fiscal 2025 Results
Net Sales decreased 3.2%, Organic Net Sales decreased 4.2% GAAP EPS $0.62, Adjusted EPS $0.92 Updates Full Year Outlook SHELTON, Conn., Aug. 5, 2025 /PRNewswire/ -- Edgewell Personal Care Company (NYSE: EPC) today announced results for its third fiscal quarter 2025 ended June 30, 2025. Executive Summary Net sales were $627.2 million, a decrease of 3.2% compared to the prior year quarter. Organic net sales decreased 4.2% (Organic basis excludes the impact from currency movements.) GAAP Diluted Net Earnings Per Share ("EPS") were $0.62, compared to $0.98 in the prior year quarter. Adjusted EPS were $0.92, compared to $1.22 in the prior year quarter. Ended the third quarter with $199.6 million in cash on hand, access to an additional $289.9 million under the Company's U.S. revolving credit facility available and a net debt leverage ratio of 3.7x. Returned $31.7 million to shareholders in the form of $24.5 million in share repurchases and $7.2 million of dividends in the third quarter. The Board of Directors declared a cash dividend of $0.15 per common share on August 5, 2025 for the third quarter. The Company reports and forecasts results on a GAAP and non-GAAP basis and has reconciled non-GAAP results and outlook to the most directly comparable GAAP measures later in this release. See non-GAAP Financial Measures for a more detailed explanation, including definitions of various non-GAAP terms used in this release. All comparisons used in this release are for the same period in the prior fiscal year unless otherwise stated. "This was a challenging quarter, with our top and bottom-line performance falling below expectations, significantly impacted by very weak Sun Care seasons in North America and certain Latin American markets. Furthermore, the operating environment remains challenging with both tariffs and foreign exchange contributing to full-year profit headwinds," said Rod Little, Edgewell's President and Chief Executive Officer. "Despite these transitory headwinds, we continued strong performance in our International business with growth and strengthened market share, and strong supply chain execution led to further productivity gains. Importantly, in North America, we saw improved market share performance from targeted, stepped-up investments in Hawaiian Tropic, Cremo, and Hydro Silk brands, as we continued to take actions across the U.S. business to strengthen our portfolio for the longer term. While these investments weigh on profitability in the near term, they serve to strengthen our business and better position our portfolio for a stronger 2026 and beyond. I am confident that these changes, along with continued disciplined execution of our strategic priorities will drive significant value creation for our shareholders." Fiscal 3Q 2025 Operating Results (Unaudited)Net sales were $627.2 million in the quarter, a decrease of 3.2%, including a $6.9 million favorable impact from currency movements. Organic net sales decreased $27.5 million, or 4.2%. Organic growth in international markets was 2.2%, largely driven by price gains, seen across Wet Shave and Sun & Skin Care. Organic sales declined in North America by 8.0%, due to volume declines and increased promotional levels in Sun Care, Wet Shave, and Feminine Care. Gross profit was $268.5 million, as compared to $287.1 million in the prior year quarter. Adjusted gross margin as a percent of net sales decreased 150-basis points, to 42.8% in the quarter, inclusive of approximately 110-basis points of negative impact from currency movements. At constant currency, adjusted gross margin decreased 40-basis points. Productivity savings of approximately 270-basis points were more than offset by 180-basis points of core inflation and volume absorption, 90-basis points of increased promotional levels (net of pricing) and 40-basis points of unfavorable mix and other. Advertising and sales promotion expense ("A&P") was $80.4 million, or 12.8% of net sales, an increase of $3.8 million, compared to $76.6 million, or 11.8% of net sales in the prior year quarter. Selling, general and administrative expense ("SG&A") was $104.4 million, or 16.6% of net sales, as compared to $110.1 million, or 17.0% of net sales in the prior year quarter. Adjusted SG&A was 16.2% of net sales, flat to prior year quarter, which was primarily driven by lower incentive compensation expense and favorable currency impacts, partly offset by higher consulting expenses and the impact of lower net sales. The Company recorded pre-tax restructuring and related charges in support of cost efficiency and effectiveness programs of $17.8 million in the quarter. Operating income, was $53.7 million, or 8.6% of net sales, inclusive of a $6.3 million, or 100-basis points negative impact from negative currency movements, compared to $82.7 million, or 12.8% of net sales in the prior year quarter. Adjusted operating income was $75.1 million, or 12.0% of net sales, compared to $94.8 million, or 14.6% of net sales in the prior year quarter. Interest expense associated with debt was $19.4 million, compared to $18.8 million in the prior year quarter. The increase in interest expense was the result of higher borrowing levels on the Company's U.S. revolving credit facility. Other (income) expense, net was income of $2.9 million compared to expense of $1.4 million in the prior year quarter. Currency hedge and remeasurements gains were $1.1 million in the current quarter, compared to a gain of $3.3 million in the prior year quarter. The current year quarter included $2.7 million of other project gains, compared to the prior year quarter which included a loss on investment of $3.1 million. Adjusted other (income) expense, net was income of $0.2 million compared to income of $1.7 million in the prior year quarter. The effective tax rate for the first nine months of fiscal 2025 was 27.0% compared to 22.2% in the prior year period. The fiscal 2025 effective tax rate reflects the impact of net unfavorable discrete items compared to the prior year period which included net favorable discrete items. The adjusted effective tax rate for the first nine months of fiscal 2025 was 26.4%, up from the prior year period adjusted effective tax rate of 22.3%. GAAP net earnings were $29.1 million or $0.62 per diluted share compared to $49.0 million or $0.98 per diluted share in the prior year quarter. Adjusted net earnings were $43.4 million or $0.92 per share, inclusive of a $0.12 unfavorable currency impact, compared to $61.2 million or $1.22 per share in the prior year quarter. Adjusted EBITDA was $96.4 million, inclusive of a $7.8 million unfavorable currency impact, compared to $117.2 million in the prior year quarter. Net cash provided by operating activities was $44.3 million for the nine months ending June 30, 2025, compared to $157.3 million in the prior year period. The decrease in cash provided by operating activities was largely driven by changes in net working capital and lower earnings. Capital Allocation On August 5, 2025, the Board of Directors declared a quarterly cash dividend of $0.15 per common share for the third fiscal quarter of fiscal 2025. The dividend will be payable on October 8, 2025 to shareholders of record as the close of business on September 4, 2025. During the third quarter of fiscal 2025, the Company paid dividends totaling $7.2 million to stockholders and completed share repurchases of approximately 0.9 million shares at a total cost of $24.5 million. As of June 30, 2025, the Company had 0.2 million shares of common stock available for repurchase in the future under the Board's 2018 authorization. Fiscal 3Q 2025 Operating Segment Results (Unaudited) Wet Shave (Men's Systems, Women's Systems, Disposables, and Shave Preps) Net sales increased $0.7 million, or 0.2%. Organic net sales decreased $5.7 million or 1.8%, as growth in international markets, driven by higher price, was more than offset by volume declines and increased promotional levels in North America. Segment profit decreased $3.5 million, or 7.4%. Organic segment profit, excluding the unfavorable impact from currency, increased $1.1 million, or 2.3%, as higher gross margins and lower SG&A spend were partly offset by higher marketing expenses. Sun and Skin Care (Sun Care, Men's and Women's Grooming Products, and Wet Ones) Net sales decreased $13.5 million, or 5.3%. Organic net sales decreased $14.1 million, or 5.5%, largely driven by weather related volume declines and increased competition in North America Sun Care. Grooming increased 6.1% driven by increased volumes. Segment profit decreased $18.2 million, or 28.3%, including an unfavorable impact from foreign currency of $1.3 million, or 2.0%. Organic segment profit decreased $16.9 million, or 26.3%, driven by lower gross margin and higher marketing and SG&A expenses. Feminine Care (Tampons, Pads, and Liners) Net sales decreased $7.8 million, or 10.5% with minimal currency impact, largely driven by a decline in Pads and Tampons. Segment profit decreased $2.1 million, or 31.8%. Organic segment profit decreased $1.7 million, or 25.7%, primarily driven by lower gross profit, partially offset by lower marketing and SG&A expenses. Full Fiscal Year 2025 Financial Outlook The Company is providing the following outlook assumptions for fiscal 2025* Organic net sales are now expected to decrease approximately 1.3% (previously in the range of flat to 1%) Currency is now expected to positively impact reported net sales by 10-basis points (previously, 10-basis points negative) GAAP EPS is now expected to be approximately $1.73 (previously in the range of $2.09 to $2.29) Includes: Restructuring and re-positioning charges**, Sun Care reformulation, Other costs Adjusted EPS is now expected to be approximately $2.65 (previously in the range of $2.85 to $3.05) Includes an estimated $0.46 per share unfavorable impact from foreign currency changes (previously $0.35) Adjusted gross margin is expected to decrease approximately 60-basis points (previously increase 10-basis points), or increase 30-basis points (previously 70-basis points) at constant currency, primarily reflecting increased promotional levels, increased tariff impact, unfavorable mix, and incremental transactional currency headwinds. Adjusted operating margin is expected to decrease approximately 150 basis points (previously decrease 65-basis points), or 60 basis points at constant currency (previously decrease 10 basis points) The EPS outlook reflects the impact of expected share repurchases of approximately $90 million Adjusted EBITDA is expected to be approximately $312 million (previously in the range of $329 to $341 million) Includes an estimated $29 million unfavorable (previously $22 million unfavorable) impact from foreign currency changes Other Expense (Income), net is now expected to be expense of $2 million (previously expense of $3 million), inclusive of interest income of $2 million Interest expense associated with debt is expected to be approximately $76 million (previously $74 million) Adjusted effective tax rate is expected to be approximately 16.5% (previously 20%) Total depreciation and amortization expense expected to be approximately $88 million (previously $87 million) Capital expenditures expected to be approximately 2.5% to 3.0% of net sales Free cash flow is expected to be approximately $80 million (previously in the range of $130 million to $140 million) * This outlook reflects all known tariffs, including tariffs placed by the U.S., on other countries and tariffs announced by other countries, on the U.S. This outlook does not include tariffs that have been announced and delayed, or other additional tariffs which could result in additional costs incurred. ** In fiscal 2025, the Company is taking specific actions to strengthen its operating model, simplify the organization and improve manufacturing and supply chain efficiency through restructuring and repositioning actions, including the organizational and operational changes in Mexico and North America commercial changes. As a result of these actions, the Company expects to incur pre-tax charges of approximately $44 million (previously $33 million) for the full fiscal year. Webcast Information In conjunction with this announcement, the Company will hold an investor conference call beginning at 8:00 a.m. Eastern Time today. All interested parties may access a live webcast of this conference call at under the "Investors," and "News and Events" tabs or by using the following link: For those unable to participate during the live webcast, a re-play will be available on under the "Investors," "Financial Reports," and "Quarterly Earnings" tabs. This release includes references to the Company's website and references to additional information and materials found on its website. The Company's website and such information and materials are not incorporated by reference in, and are not part of, this release. About Edgewell Edgewell is a leading pure-play consumer products company with an attractive, diversified portfolio of established brand names such as Schick®, Wilkinson Sword® and Billie® men's and women's shaving systems and disposable razors; Edge and Skintimate® shave preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine care products; Banana Boat®, Hawaiian Tropic®, Bulldog®, Jack Black®, and CREMO® sun and skin care products; and Wet Ones® products. The Company has a broad global footprint and operates in more than 50 markets, including the U.S., Canada, Mexico, Germany, Japan, the U.K. and Australia, with approximately 6,700 employees worldwide. Forward-Looking Statements. This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on these statements. Forward-looking statements generally can be identified by the use of words or phrases such as "believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict," "likely," "will," "should," "forecast," "outlook," or other similar words or phrases. These statements are not based on historical facts, but instead reflect the Company's expectations, estimates or projections concerning future results or events, including, without limitation, the future earnings and performance of Edgewell or any of its businesses. Many factors outside our control could affect the realization of these estimates. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause the Company's actual results to differ materially from those indicated by those statements. The Company cannot assure you that any of its expectations, estimates or projections will be achieved. The forward-looking statements included in this document are only made as of the date of this document and the Company disclaims any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. You should not place undue reliance on these statements. In addition, other risks and uncertainties not presently known to the Company or that it presently considers immaterial could significantly affect the accuracy of any such forward-looking statements. Risks and uncertainties include those detailed from time to time in the Company's publicly filed documents, including in Item 1A. Risk Factors of Part I of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on November 14, 2024 and in Item 1A. Risk Factors of Part II of the Company's Quarterly Report on Form 10-Q filed with the SEC on May 7, 2025. Non-GAAP Financial Measures. While the Company reports financial results in accordance with generally accepted accounting principles ("GAAP") in the U.S., this discussion also includes non-GAAP measures. These non-GAAP measures are referred to as "adjusted" or "organic" and exclude items which are considered by the Company as unusual or non-recurring and which may have a disproportionate positive or negative impact on the Company's financial results in any particular period. Reconciliations of non-GAAP measures, including reconciliations of measures related to the Company's fiscal 2025 financial outlook, are included within the Notes to Condensed Consolidated Financial Statements included with this release. This non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The Company uses this non-GAAP information internally to make operating decisions and believes it is helpful to investors because it allows more meaningful period-to-period comparisons of ongoing operating results. The information can also be used to perform analysis and to better identify operating trends that may otherwise be masked or distorted by the types of items that are excluded. This non-GAAP information is a component in determining management's incentive compensation. Finally, the Company believes this information provides a higher degree of transparency. The following provides additional detail on the Company's non-GAAP measures: The Company utilizes "adjusted" non-GAAP measures including gross margin, SG&A, operating income, operating margin, effective tax rate, net earnings, earnings per share, EBITDA, and other (income) expense to internally make operating decisions. Constant currency measures are calculated by removing the impact of translational and transactional foreign currencies changes, net of foreign currency hedges compared to the prior year. Transactional foreign currency changes are driven by foreign legal entities' transactions not denominated in local currency. The Company analyzes its net sales and segment profit on an organic basis to better measure the comparability of results between periods. Organic net sales and organic segment profit exclude the impact of changes in foreign currency and the impact of acquisitions. Segment profit will be impacted by fluctuations in translation and transactional foreign currency. The impact of currency was applied to segments using management's best estimate. Free cash flow is defined as net cash from operating activities, less capital expenditures plus collections of deferred purchase price of accounts receivable sold and proceeds from sales of fixed assets. Free cash flow conversion is defined as free cash flow as a percentage of net earnings adjusted for the net impact of non-cash impairments. Net debt is defined as Gross debt less cash. Net debt leverage ratio is defined as net debt divided by trailing twelve month adjusted EBITDA. Basis of Presentation. Please refer to the Annual Report on Form 10-K filed with the SEC on November 14, 2024, as amended by the Company on November 21, 2024. EDGEWELL PERSONAL CARE COMPANY CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited, in millions, except per share data) Three Months Ended June 30,Nine Months Ended June 30,2025202420252024 Net sales $ 627.2$ 647.8$ 1,686.3$ 1,736.1 Cost of products sold 358.7360.7970.0993.2 Gross profit 268.5287.1716.3742.9 Selling, general and administrative expense 104.4110.1313.0320.9 Advertising and sales promotion expense 80.476.6196.2187.9 Research and development expense 14.014.641.842.1 Restructuring charges 16.03.132.413.1 Operating income 53.782.7132.9178.9 Interest expense associated with debt 19.418.858.459.0 Other (income) expense, net (2.9)1.4(2.3)4.4 Earnings before income taxes 37.262.576.8115.5 Income tax provision 8.113.520.825.7 Net earnings $ 29.1$ 49.0$ 56.0$ 89.8 Earnings per share: Basic net earnings per share $ 0.62$ 0.99$ 1.17$ 1.80 Diluted net earnings per share $ 0.62$ 0.98$ 1.17$ 1.79 Weighted-average shares outstanding: Basic 46.849.547.849.8 Diluted 47.050.148.050.3See Accompanying Notes. EDGEWELL PERSONAL CARE COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions) June 30,2025September 30,2024 AssetsCurrent assetsCash and cash equivalents $ 199.6$ 209.1 Trade receivables, less allowance for doubtful accounts 153.2109.4 Inventories 488.4477.3 Other current assets 163.5140.2 Total current assets 1,004.7936.0 Property, plant and equipment, net 355.7349.1 Goodwill 1,342.91,338.6 Other intangible assets, net 929.3948.5 Other assets 160.7158.7 Total assets $ 3,793.3$ 3,730.9 Liabilities and Shareholders' EquityCurrent liabilitiesNotes payable $ 23.2$ 24.5 Accounts payable 224.5219.3 Other current liabilities 319.7319.8 Total current liabilities 567.4563.6 Long-term debt 1,372.71,275.0 Deferred income tax liabilities 133.7133.2 Other liabilities 151.5175.0 Total liabilities 2,225.32,146.8 Shareholders' equityCommon shares 0.70.7 Additional paid-in capital 1,573.51,586.0 Retained earnings 1,124.41,090.1 Common shares in treasury at cost (1,003.7)(937.9) Accumulated other comprehensive loss (126.9)(154.8) Total shareholders' equity 1,568.01,584.1 Total liabilities and shareholders' equity $ 3,793.3$ 3,730.9See Accompanying Notes. EDGEWELL PERSONAL CARE COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) Nine Months EndedJune 30,20252024 Cash Flow from Operating ActivitiesNet earnings $ 56.0$ 89.8 Depreciation and amortization 65.666.6 Share-based compensation expense 18.820.4 Loss on sale of assets 1.70.3 Deferred compensation payments (2.4)(1.6) Deferred income taxes (0.5)1.3 Other, net (12.2)(11.0) Changes in current assets and liabilities used in operations (82.7)(8.5) Net cash provided by operating activities $ 44.3$ 157.3 Cash Flow from Investing ActivitiesCapital expenditures $ (49.4)$ (30.6) Collection of deferred purchase price on accounts receivable sold 5.60.2 Other, net (1.5)(6.5) Net cash used for investing activities $ (45.3)$ (36.9) Cash Flow from Financing ActivitiesCash proceeds from debt with original maturities greater than 90 days $ 774.0$ 633.0 Cash payments on debt with original maturities greater than 90 days (678.0)(705.0) (Payments for) proceeds from debt with original maturities of 90 days or less (0.8)1.9 Repurchase of shares (90.2)(40.2) Dividends to common shareholders (22.4)(23.3) Net financing inflow from the Accounts Receivable Facility 14.24.3 Employee shares withheld for taxes (7.4)(7.1) Other, net (0.3)(2.9) Net cash used for financing activities $ (10.9)$ (139.3) Effect of exchange rate changes on cash 2.4(1.4) Net decrease in cash and cash equivalents (9.5)(20.3) Cash and cash equivalents, beginning of period 209.1216.4 Cash and cash equivalents, end of period $ 199.6$ 196.1See Accompanying Notes. EDGEWELL PERSONAL CARE COMPANYNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited, in millions, except per share data) Note 1 — Segments The Company conducts its business in the following three segments: Wet Shave, Sun and Skin Care, and Feminine Care (collectively, the "Segments," and each individually, a "Segment"). Segment performance is evaluated based on segment profit, exclusive of general corporate expenses, share-based compensation costs, items which are considered by the Company to be unusual or non-recurring and which may have a disproportionate positive or negative impact on the Company's financial results in any particular period and the amortization of intangible assets. Financial items, such as interest income and expense, are managed on a global basis at the corporate level. The exclusion of such charges from segment results reflects management's view on how it evaluates segment performance. Segment net sales and profitability are presented below:Three Months EndedJune 30,Nine Months EndedJune 30,2025202420252024 Net SalesWet Shave $ 317.0$ 316.3$ 897.0$ 911.1 Sun and Skin Care 243.4256.9595.1608.1 Feminine Care 66.874.6194.2216.9 Total net sales $ 627.2$ 647.8$ 1,686.3$ 1,736.1 Segment ProfitWet Shave $ 44.1$ 47.6$ 137.3$ 141.7 Sun and Skin Care 46.064.293.4117.3 Feminine Care 4.56.610.822.6 Total segment profit 94.6118.4241.5281.6 General corporate and other expenses (11.6)(15.8)(39.3)(47.0) Amortization of intangibles (7.8)(7.7)(23.3)(23.3) Interest and other expense, net (19.3)(17.2)(58.6)(60.4) Restructuring and related charges (17.8)(3.2)(34.2)(13.2) Acquisition and integration costs —(0.7)(0.5)(2.1) Sun Care reformulation costs (0.5)(1.3)(2.2)(2.2) Wet Ones manufacturing plant fire —(2.7)—(8.0) Legal matters —(2.5)—(3.9) Gain on investment —(3.1)0.9(3.1) Commercial realignment 0.1—(3.0)— Vendor bankruptcy (1.2)—(1.6)— Other project and related costs 0.7(1.7)(2.9)(2.9) Total earnings before income taxes $ 37.2$ 62.5$ 76.8$ 115.5 Refer to Note 2 - GAAP to Non-GAAP Reconciliations below for the income statement location of non-GAAP adjustments to earnings before income taxes. Note 2 — GAAP to Non-GAAP Reconciliations The following tables provide a GAAP to Non-GAAP reconciliation of certain line items from the Condensed Consolidated Statement of Earnings:Three Months Ended June 30, 2025Gross ProfitSG&AOperating IncomeEBIT (1)IncometaxesNet EarningsDiluted EPS GAAP — Reported $ 268.5$ 104.4$ 53.7$ 37.2$ 8.1$ 29.1$ 0.62 Restructuring and related charges 1.2(0.6)17.817.84.413.40.28 Sun Care reformulation costs ——0.50.50.10.40.01 Commercial realignment (0.1)—(0.1)(0.1)—(0.1)— Vendor bankruptcy 1.2—1.21.20.30.90.02 Other project and related costs —(2.0)2.0(0.7)(0.4)(0.3)(0.01) Total Adjusted Non-GAAP $ 270.8$ 101.8$ 75.1$ 55.9$ 12.5$ 43.4$ 0.92Adjusted Non-GAAP Constant Currency$ 1.04 GAAP as a percent of net sales 42.8 %16.6 %8.6 %GAAP effective tax rate 21.7 % Adjusted as a percent of net sales 43.2 %16.2 %12.0 %Adjusted effective tax rate 22.4 % Adjusted Constant Currency as a percent of net sales 44.3 %13.0 % Three Months Ended June 30, 2024Gross ProfitSG&AOperating IncomeEBIT (1)IncometaxesNetEarningsDiluted EPS GAAP — Reported $ 287.1$ 110.1$ 82.7$ 62.5$ 13.5$ 49.0$ 0.98 Restructuring and related charges —(0.1)3.23.20.82.40.04 Acquisition and integration costs —(0.7)0.70.70.20.50.01 Sun Care reformulation costs ——1.31.30.31.00.02 Wet Ones manufacturing plant fire 2.7—2.72.70.72.00.04 Legal matter —(2.5)2.52.50.71.80.04 Loss on investment ———3.1—3.10.06 Other project and related costs —(1.7)1.71.70.31.40.03 Total Adjusted Non-GAAP $ 289.8$ 105.1$ 94.8$ 77.7$ 16.5$ 61.2$ 1.22 GAAP as a percent of net sales 44.3 %17.0 %12.8 %GAAP effective tax rate 21.6 % Adjusted as a percent of net sales 44.7 %16.2 %14.6 %Adjusted effective tax rate 21.2 % (1) EBIT is defined as Earnings before Income taxes. Nine months ended June 30, 2025Gross ProfitSG&AOperating IncomeEBIT (1)IncometaxesNetEarningsDiluted EPS GAAP — Reported $ 716.3$ 313.0$ 132.9$ 76.8$ 20.8$ 56.0$ 1.17 Restructuring and related charges 1.2(0.6)34.234.28.525.70.53 Acquisition and integration costs —(0.5)0.50.50.10.40.01 Sun Care reformulation costs ——2.22.20.51.70.04 Gain on investment ———(0.9)—(0.9)(0.02) Commercial realignment 3.0—3.03.00.92.10.04 Vendor bankruptcy 1.6—1.61.60.41.20.02 Other project and related costs —(4.4)4.42.90.62.30.05 Total Adjusted Non-GAAP $ 722.1$ 307.5$ 178.8$ 120.3$ 31.8$ 88.5$ 1.84Adjusted Non-GAAP Constant Currency$ 2.13 GAAP as a percent of net sales 42.5 %18.6 %7.9 %GAAP effective tax rate 27.0 % Adjusted as a percent of net sales 42.8 %18.2 %10.6 %Adjusted effective tax rate 26.4 % Adjusted Constant Currency as a percent of net sales 43.7 %11.5 % Nine Months Ended June 30, 2024GrossProfitSG&AOperating IncomeEBIT (1)IncometaxesNetEarningsDiluted EPS GAAP — Reported $ 742.9$ 320.9$ 178.9$ 115.5$ 25.7$ 89.8$ 1.79 Restructuring and related charges —(0.1)13.213.23.39.90.20 Acquisition and integration costs —(2.1)2.12.10.51.60.03 Sun Care reformulation costs ——2.22.20.51.70.03 Wet Ones manufacturing plant fire 8.0—8.08.02.06.00.12 Legal matter —(3.9)3.93.91.02.90.06 Loss on investment ———3.1—3.10.06 Other project and related costs —(2.9)2.92.90.72.20.04 Total Adjusted Non-GAAP $ 750.9$ 311.9$ 211.2$ 150.9$ 33.7$ 117.2$ 2.33 GAAP as a percent of net sales 42.8 %18.5 %10.3 %GAAP effective tax rate 22.2 % Adjusted as a percent of net sales 43.3 %18.0 %12.2 %Adjusted effective tax rate 22.3 % (1) EBIT is defined as Earnings before Income taxes. Note 3 - Net Sales and Profit by Segment Operations for the Company are reported via three Segments. The following tables present changes in net sales and segment profit for the three and nine months ended June 30, 2025, as compared to the corresponding period in the prior year quarter. Net Sales Quarter ended June 30, 2025Wet ShaveSun and Skin CareFeminine CareTotal Net Sales - Q3 2024 $ 316.3$ 256.9$ 74.6$ 647.8 Organic (5.7)(1.8) %(14.1)(5.5) %(7.7)(10.4) %(27.5)(4.2) % Impact of currency 6.42.0 %0.60.2 %(0.1)(0.1) %6.91.1 % Net Sales - Q3 2025 $ 317.00.2 %$ 243.4(5.3) %$ 66.8(10.5) %$ 627.2(3.2) % Net Sales Nine months ended June 30, 2025Wet ShaveSun and Skin CareFeminine CareTotal Net Sales - Q3 2024 $ 911.1$ 608.1$ 216.9$ 1,736.1 Organic (12.2)(1.3) %(8.4)(1.3) %(22.3)(10.3) %(42.9)(2.5) % Impact of currency (1.9)(0.2) %(4.6)(0.8) %(0.4)(0.2) %(6.9)(0.4) % Net Sales - Q3 2025 $ 897.0(1.5) %$ 595.1(2.1) %$ 194.2(10.5) %$ 1,686.3(2.9) % Segment Profit Quarter Ended June 30, 2025Wet ShaveSun and Skin CareFeminine CareTotal Segment Profit - Q3 2024 $ 47.6$ 64.2$ 6.6$ 118.4 Organic 1.12.3 %(16.9)(26.3) %(1.7)(25.7) %(17.5)(14.8) % Impact of currency (4.6)(9.7) %(1.3)(2.0) %(0.4)(6.1) %(6.3)(5.3) % Segment Profit - Q3 2025 $ 44.1(7.4) %$ 46.0(28.3) %$ 4.5(31.8) %$ 94.6(20.1) % Segment Profit Nine months ended June 30, 2025Wet ShaveSun and Skin CareFeminine CareTotal Segment Profit - Q3 2024 $ 141.7$ 117.3$ 22.6$ 281.6 Organic 7.65.4 %(19.5)(16.6) %(11.3)(50.0) %(23.2)(8.2) % Impact of currency (12.0)(8.5) %(4.4)(3.8) %(0.5)(2.2) %(16.9)(6.0) % Segment Profit - Q3 2025 $ 137.3(3.1) %$ 93.4(20.4) %$ 10.8(52.2) %$ 241.5(14.2) % For all tables, the impact of currency to segment profit includes both the translational and transactional currency changes during the quarter. Note 4 - Net Debt and EBITDA The Company reports financial results on a GAAP and adjusted basis. The tables below are used to reconcile Net Debt and Net earnings to EBITDA and Adjusted EBITDA, which are non-GAAP measures, to improve comparability of results between 30,2025September 30,2024 Notes payable $ 23.2$ 24.5 Long-term debt 1,372.71,275.0 Gross debt $ 1,395.9$ 1,299.5 Less: Cash and cash equivalents 199.6209.1 Net debt $ 1,196.3$ 1,090.4 Three Months Ended June 30,Nine Months Ended June 30,2025202420252024 Net earnings $ 29.1$ 49.0$ 56.0$ 89.8 Income tax provision 8.113.520.825.7 Interest expense, net 19.017.856.956.6 Depreciation and amortization 22.121.765.666.6 EBITDA $ 78.3$ 102.0$ 199.3$ 238.7 Restructuring and related charges (1) 17.23.233.013.2 Acquisition & integration costs —0.70.52.1 Sun Care reformulation costs 0.51.32.22.2 Wet Ones manufacturing plant fire —2.7—8.0 Legal matter —2.5—3.9 (Gain) loss on investment —3.1(0.9)3.1 Commercial realignment (0.1)—3.0— Vendor bankruptcy 1.2—1.6— Other project and related costs (0.7)1.72.92.9 Adjusted EBITDA $ 96.4$ 117.2$ 241.6$ 274.1 Adjusted EBITDA Constant Currency $ 104.2$ 260.7 (1) Excludes $0.6 million and $1.2 million of accelerated depreciation, which is included within Depreciation and amortization during the three and nine months ended June 30, 2025, respectively. Note 5 - Outlook The following tables provide reconciliations of Adjusted EPS and Adjusted EBITDA, Non-GAAP measures, included within the Company's outlook for projected fiscal 2025 results: Adjusted EPS Outlook Fiscal 2025 GAAP EPS approx. $1.73Restructuring and related charges approx. 0.96 Sun Care reformulation costs approx. 0.09 Commercial realignment approx. 0.06 Vendor bankruptcy approx. 0.04 Other costs approx. 0.09 Income taxes(1) approx. (0.32)Fiscal 2025 Adjusted EPS Outlook (Non-GAAP) approx. 2.65 (1) Income tax effect of the adjustments to Fiscal 2025 GAAP EPS noted above. Adjusted EBITDA Outlook Fiscal 2025 GAAP Net Income approx. $83 Income tax provision approx. 10 Interest expense, net approx. 74 Depreciation and amortization approx. 88 EBITDA approx. $255Restructuring and related charges (2) approx. 44 Sun Care reformulation costs approx. 4 Commercial realignment approx. 3 Vendor bankruptcy approx. 2 Other costs approx. 4 Fiscal 2025 Adjusted EBITDA approx. $312 (2) Excludes accelerated depreciation, which is included within Depreciation and amortization. View original content to download multimedia: SOURCE Edgewell Personal Care Company Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
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V2X (VVX) Q2 2025 Earnings Call Transcript
DATE Monday, August 4, 2025 at 8:30 p.m. ET CALL PARTICIPANTS President and Chief Executive Officer — Jeremy Wensinger Senior Vice President and Chief Financial Officer — Shawn Mural Moderator — Mike Smith Need a quote from a Motley Fool analyst? Email pr@ TAKEAWAYS Revenue: $1.08 billion for Q2 2025, reflecting new program growth and partial offset from sunsetting contracts. Adjusted EBITDA: $82 million, representing a 7.6% adjusted EBITDA margin and a 14% increase year over year, driven by the early conclusion of a nonrecurring contractual commitment. Adjusted EPS: $1.33, a 59% increase year over year in adjusted diluted EPS. Diluted EPS: $0.70 (GAAP), based on 31.9 million weighted average shares. Interest expense: $20.6 million, with cash interest expense of $19.1 million improving 29% year over year due to repricing and debt paydown. Adjusted operating cash flow: $58.3 million, highlighting strong free cash flow with low capital expenditures. Total backlog: $11.3 billion, excluding the $4.3 billion T-6 award, CENTCOM, and INDOPACOM extensions. Funded backlog: $2.3 billion, supporting 2025 commitments. Share repurchase authorization: $100 million approved as part of the capital allocation strategy. Raised adjusted EPS guidance: Guidance increased due to realized interest expense savings and tax benefits; revenue, EBITDA, and cash flow guidance reaffirmed. Three-year pipeline: Management reported a three-year pipeline valued at over $50 billion, now balanced with more fixed-price and outcome-based contracts. T-6 award: $4.3 billion, nine-year T-6 award; this contract uses commercial-based supply chain management for multi-service pilot training across more than 700 aircraft, with no impact to 2025 financials and transition period ending early 2026. Recent large awards: Army's largest warfighter training program reached full operational capability in July, and F-16 foreign military sales cited as expanding international opportunities. Hiring activity: Nearly 1,200 employees hired in the last 30 days to support major program ramps. Book to bill: 0.5, with net bookings of $517 million; management expects seasonally lumpy awards and targets trailing twelve-month (TTM) book to bill over one. SUMMARY V2X (NYSE:VVX) raised adjusted EPS guidance for 2025, citing realized interest expense savings and tax benefits, while reaffirming revenue, EBITDA, and cash flow targets. Management emphasized a shift toward a pipeline with greater fixed-price and outcome-based contract concentration, supported by the T-6 and F-16 awards. CFO Shawn Mural clarified that total backlog at the end of Q2 2025 excludes several major awards and extensions, including the $4.3 billion T-6 award and recent CENTCOM and INDOPACOM extensions, which may further strengthen reported metrics once reflected. Capital allocation priorities include strategic M&A, debt reduction, internal investment, and a newly authorized $100 million share repurchase plan, all within a targeted 2--3x net leverage ratio range. CEO Wensinger said, "Our strategy is clear, and it is evident to me that our teams are delivering on mission readiness outcomes," referring to strategic clarity and operational execution. CFO Mural explained T-6 margin contribution will begin below company average and is expected to rise to average levels over 18--24 months. The recently awarded T-6 contract was one of five billion-dollar-plus pursuits highlighted previously, indicating sequential progress on key pipeline goals. Foreign military sales and international demand, supported by the recent F-16 award, are becoming a more material source of margin enhancement and global expansion. Management confirmed that delays in the Asia Pacific region were due to contracting exercise postponements, not lost opportunities. Book to bill was below one for both Q2 2025 and year-to-date 2025, but management reiterated its expectation of reaching or exceeding a book to bill ratio of one by year-end 2025, contingent on several "binary" awards in the pipeline. Fixed-price contract concentration is increasing through both customer conversions and selective new bids, aligning with V2X's stated operational strengths. No disruptions were reported from the current government budget cycle or contract protest activity; cadence of new awards has met internal expectations to date. INDUSTRY GLOSSARY Fixed-price contract: A contract type in which the service provider agrees to deliver specified services or products at a set price, regardless of incurred costs, shifting performance and cost risk to the contractor. Outcome-based contract: An agreement structured so payment depends on achieving predefined customer outcomes or performance metrics rather than strictly on inputs or cost reimbursement. ID/IQ (Indefinite delivery, indefinite quantity): A contract that provides for an indefinite quantity of supplies or services during a fixed period, allowing for multiple task orders but with unspecified timing and amounts at contract award. Book to bill: The ratio of the value of new orders received (bookings) to revenue billed within a given period, used to assess future business momentum. FOC (Full operational capability): The point at which a program or system is fully available to consumers and can perform all intended functions as required in contracts. FMS (Foreign military sales): U.S. government program for selling defense services and equipment to allied foreign governments. Full Conference Call Transcript Mike Smith: Thank you. Good afternoon, everyone. Welcome to the V2X, Inc. Second Quarter 2025 Earnings Conference Call. Joining us today are Jeremy Wensinger, President and Chief Executive Officer, and Shawn Mural, Senior Vice President and Chief Financial Officer. Slides for today's presentation are available on the Investor Relations section of our website Please turn to slide two. During today's presentation, management will be making forward-looking statements pursuant to the safe harbor provisions of the federal securities laws. Please review our safe harbor statements in our press release and presentation materials for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward-looking statements. The company assumes no obligation to update its forward-looking statements. In addition, in today's remarks, we will refer to certain non-GAAP financial measures because management believes such measures are useful to investors. You can find a reconciliation of these measures to the most comparable measure calculated and presented in accordance with GAAP on our slide presentation and in our earnings release filed with the SEC, both of which are available on the Investor Relations section of our website. At this time, I'd like to turn the call over to Jeremy. Jeremy Wensinger: Thank you, Mike, and good afternoon, everyone. Thank you for joining us today. I'd like to start by thanking our entire team for their hard work, dedication, and commitment to our customer's mission. Please turn to slide three. During today's call, I'm going to recap our second quarter results, talk about our strategic execution, and why we are optimistic about our future. Starting with the second quarter results, revenue is $1.08 billion. Profitability was strong with adjusted EBITDA of $82 million or 7.6% margin and adjusted net income of $42 million. Adjusted EPS was $1.33, increasing 59% year over year. Our financial performance, cash generation, and balance sheet strength are providing significant flexibility and optionality for V2X, Inc. We are now positioned to enhance value creation through an active capital allocation strategy. As part of this strategy, we recently established a $100 million share repurchase authorization, which Shawn will discuss in more detail shortly. Given our year-to-date performance, we remain confident in our ability to achieve our 2025 commitments and are seeing additional positive uplift to earnings per share. As such, we are increasing our adjusted EPS guidance and reaffirming our revenue, adjusted EBITDA, and cash flow guidance. Reflecting on our recent operational performance, we are delivering on our commitments, executing on our strategy, and bringing innovation and new approaches to rapidly deploy solutions for improved readiness. Our dedication to execution excellence was demonstrated during my recent visits with our customers. I witnessed firsthand the outcomes that our team is delivering. It is seamless support for the mission. Our customers have acknowledged our performance, and my visit reaffirms our strategy for growth. Our strategy is clear, and it is evident to me that our teams are delivering on mission readiness outcomes. The takeaway from my engagements reinforces what V2X, Inc. is bringing in performance, reliability, and mission readiness. This is also reflected in our robust pipeline, which reflects the strategy we have put in place. Finally, our recent awards are validation of our customer intimacy and the commitment by the team to the execution of our strategy. Please turn to slide four. We are making excellent progress executing our strategic growth initiative. Starting with optimizing the core, we are delivering proven performance excellence to strengthen the base. This is reflected by our ability to transition and support critical missions, such as recently reaching full operational capability on the Army's largest training program. This program will ensure the delivery of training solutions to Army warfighters worldwide by infusing cutting-edge innovations to adapt to an ever-evolving mission. Next, growth and adjacencies. This is best described as a demand pull on our customers' recognition of our ability to deliver. An exemplar of this is our growing presence in the US Space Force at Ascension Island, which is a key Space Force tracking and instrumentation station. Another example, foreign military sales continue to represent a large and growing opportunity with international customers seeking out our performance, solutions, agility, and value that V2X, Inc. is delivering for our customers. This was evidenced by the recent award of the Iraq F-16 program. Moving to extended offerings. This is demonstrated by our collaboration with Bell Helicopter to support the training of a new generation of Army aviators. This pursuit is notable as it combines our capabilities in training, operational readiness, with platform renewal. It also reflects an extension of a new customer in the aerospace domain. Lastly, strategic investments refer to the investments we are making in talent, capabilities that differentiate our offerings, and the optimization of our tools and processes to deliver on our commitments and drive growth. The combination of these initiatives was exemplified firsthand with the $4.3 billion nine-year T-6 award. This is fundamentally a V2X, Inc. approach to customer engagement and demonstration of past performance as a differentiator for our customer. The T-6 aircraft is widely used in a multi-service aviation training program that is critical to ensure new pilots are ready. This award is an example of the strategy we are executing, and it is an honor to have been selected to help ensure that every single pilot in the US Air Force, Navy, and Army will be trained and ready for their next mission. V2X, Inc. will use commercial-based approaches to provide full-spectrum supply chain management solutions to enable this essential training mission. Over 700 aircraft. Additionally, we believe the fixed-price contract will allow V2X, Inc. to leverage the power of data and decades of operational expertise to deliver enhanced readiness for our customer. In summary, we are executing these initiatives today. They are creating differentiation, driving value, and fueling opportunities in the form of a robust pipeline. Please turn to slide five. As mentioned, these initiatives on the prior page are driving significant opportunities for V2X, Inc., which is reflective in our three-year pipeline valued at over $50 billion. This pipeline reflects large franchise programs and opportunities to deliver solutions across all domains. It also reflects a greater percentage of fixed-price or outcome-based contracts, which is at the heart of the V2X, Inc. execution excellence value proposition. We see this as beneficial in proving out our operational excellence and institutional knowledge from successfully supporting global missions at scale for over seventy years. Lastly, while the pipeline of opportunity focuses on leveraging all of V2X, Inc.'s capability, it also reflects a greater balance of platform modernization and renewal capabilities. We are optimistic in our ability to capture these opportunities, which we believe is supported by the progress we have demonstrated so far in converting key pursuits into long-term programs. V2X, Inc. is capitalizing on our large and growing market opportunities while investing to be a leader in data-enabled mission solutions across all domains. Now I'd like to turn the call over to Shawn for a review of the financials. Shawn Mural: Thank you, Jeremy. Please turn to Slide six. We are exceptionally pleased with our second quarter and year-to-date results. Our results continue to demonstrate the focus on disciplined execution and the strategic positions of the business. We are proud of the accomplishments and excited about the future. Revenue in the second quarter was $1.078 billion. This reflects the expected growth in the WTRS and F5 programs as well as the sunsetting of the KC-10, T1A, and the reaction of a task order in The Middle East. Adjusted EBITDA in the quarter was $82.4 million, increasing 14% year over year and delivering a margin of 7.6%. The strong EBITDA performance was driven primarily by the conclusion of a nonrecurring contractual commitment, which was contemplated in our full-year guidance but occurred earlier than anticipated. Interest expense in the second quarter was $20.6 million. Cash interest expense was $19.1 million, improving $7.8 million or 29% year over year, driven by our successful repricing activities, debt paydown, and cash generation. Net income for the quarter was $22.4 million. Adjusted net income was $42.3 million, increasing 61% year over year. Second quarter diluted EPS was $0.70 based on 31.9 million weighted average shares. Adjusted diluted EPS in the quarter was $1.33, increasing approximately 59% from the prior year. The ability to generate strong free cash flow with low capital expenditures remains a strength of the business. This was demonstrated in the second quarter with adjusted operating cash flow of $58.3 million. Total backlog at the end of the second quarter was $11.3 billion. Funded backlog was $2.3 billion, which provides additional confidence in our ability to meet our 2025 commitments. It's important to note that at the current time, total backlog does not reflect a $4.3 billion T-6 award. It also does not include any value associated with the recent CENTCOM and INDOPACOM extensions. Please turn to slide seven, where I'll discuss our year-to-date results. Year-to-date revenue was $2.094 billion, up slightly reflecting new program starts and partially offset by sunsetting programs. Adjusted EBITDA for the first half of the year was $149.4 million, increasing approximately 6% year over year with a margin of 7.1%. Interest expense through June was $40.3 million. Cash interest expense was $37.3 million, improving approximately $15 million compared to 2024. Year-to-date net income was $30.5 million. Adjusted net income was $73.8 million, increasing 34% year over year. Diluted EPS in the first half was $0.96. Adjusted diluted EPS was $2.31, up 34% compared to last year. Year-to-date net cash used by operating activities was $66.9 million. Adjusted net cash used by operating activities was $59.8 million, reflecting our normal seasonal patterns. Please turn to Slide eight. We have made significant progress improving our balance sheet, leverage ratio, and capital structure. This successful evolution provides flexibility in how we can allocate capital and accelerate value creation. We thought it important to highlight how we are thinking about things as we move forward. Our capital allocation strategy centers on three key pillars: Generate, deploy, and maintain. As it relates to the first pillar, we believe part of our value proposition is the company's ability to deliver strong cash conversion. Our target is to generate strong adjusted net income to cash conversion that you can see in our trailing twelve-month performance. This cash generation facilitates optionality as it relates to our second component, deploy. There are four methods by which we plan to deploy capital. The first is to strategically acquire complementary capabilities, access to new channels, and solutions that accelerate our growth strategy. The second is increasing shareholder value by executing the recently authorized $100 million share repurchase plan. The third avenue consists of internal investments that would further advance our position as a differentiated provider of solutions. The Fourth Avenue is utilizing cash to further reduce debt via accelerating payments of our term loans. The deployment of capital in these areas is connected to the third component of our strategy, maintain, which is to deploy capital while maintaining a target net leverage ratio of approximately two to three times. We have started the next phase of our capital allocation journey and believe this strategy will yield strong returns for our shareholders. Please turn to Slide nine. Jeremy Wensinger: We are pleased with our performance. As such, the company is reaffirming revenue, adjusted EBITDA, and cash flow guidance for 2025 and increasing its adjusted EPS guidance due to previously executed debt refinancing and tax benefits. At the midpoint, this reflects revenue of $4.4 billion, adjusted EBITDA of $313 million, adjusted EPS of $4.8. In summary, we are continuing to execute and believe V2X, Inc. is well-positioned to meet our customers' critical mission requirements. Jeremy, I'll throw it back to you for some closing comments and thoughts. Jeremy Wensinger: Thank you, Shawn. The team's performance has me excited. We are delivering on our commitments and executing with excellence. Our robust pipeline reflects the strategy of the company going forward, and our awards are validating that strategy. Our strategic intent is nothing more than mission excellence. My team is aligned and executing to our global strategy. It is an honor to be at V2X, Inc. Now let's open it up for questions. Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, At this time, we will pause momentarily to assemble our roster. The first question today comes from Ken Herbert with RBC Capital Markets. Please go ahead. Ken Herbert: Yeah. Hey, Jeremy and Shawn and Mike. Nice quarter. Jeremy Wensinger: Thanks, Ken. Thank you, Ken. Ken Herbert: Hey, Jeremy, maybe just to kick off for Shawn, how do we think about the T-6 contract in terms of sort of incremental revenues this year and next year in particular? And how does that ramp and how does that scale up? Shawn Mural: Yeah. Hey. Thanks, Ken. Yeah. We're very excited about the award that was announced last week. We think it's a franchise that, you know, the team clearly demonstrated the execution and strategy that Jeremy has laid out for the company. From a revenue standpoint and impact, you know, so we began transition. I expect no impact to the financials this year. That transition period goes until early 2026. And then I think when we look at the historicals, the program has been somewhere between $203 million to $1 billion a year. Is kinda how we're thinking about it going forward. But, obviously, you know, that's subject to a lot of variables, funding profiles, we've gotta get through the protest period, that sort of stuff. So we'll see how things play out. Jeremy Wensinger: Kevin, hey, Jeremy. I would add to his comments just that this team did exactly what we have laid out in terms of strategy. I could not be happier with that team and what they've been able to accomplish. And I think their past performance was the driver here. And so we're excited about the opportunity to stand the program up. But, you know, it really goes down to the past performance this team has been able to demonstrate. And I think the customer recognized that, and we're just honored to be a part of it. Ken Herbert: That's great. And the full-year guide implies sort of a bit of a step down in lease off the second quarter into the second half EBITDA margins. Was there anything in particular in the second quarter? Or maybe how do we think about sort of the EBITDA margins in the second half? And maybe upward potential to the guidance? Shawn Mural: Yes. I said in the prepared remarks, there was a, you know, the conclusion of a contractual commitment that was worth about $6 million in the quarter, Ken. And so we had contemplated that previously. We did have it in the back half of the year. The team did a great job of, you know, closing on those actions and facilitating that. So that was realized in Q2. So that's really why you see the jump to the 7.6%. You know, absent that, we'd have been at 7.1%, you know, for the quarter. But, again, those things are we knew it. The team did a great job of executing it. They happen, you know, I say they're nonrecurring, but somewhat reoccurring in nature. It's just the types of contractual closeout activities, settlements, things of that nature that happen. And it happened in the second quarter. So we're really happy with being able to capture that early. Ken Herbert: No. That's great. Nice work, Shawn. I'll pass it back there. Thank you. Operator: Thank you. Next question comes from Andre Madrid with BTIG. Please go ahead. Andre Madrid: Jeremy, Shawn, Mike, good afternoon, and thanks for taking the question. Jeremy Wensinger: Yeah. Great, Andre. Andre Madrid: To stay on T-6 for a bit, I guess looking at it, was this one of the five different one billion plus opportunities that you called out for 2025 that you were bidding on? And maybe just, I guess, more broadly, a status update on how we are across those five. Jeremy Wensinger: It was. And we're honored to have the opportunity to have it awarded right now. We continue to make progress on the other ones. Again, I think the team has aligned itself around, you know, the ones I've laid out before, and they continue to the strategy. And this is just a proof point on that strategy in terms of being able to capture it. So again, I think I'm excited about, you know, what the business development team is doing. I'm really excited about what the execution team is doing to provide that past performance that customers are recognizing. So again, I think we are, we continue to be excited about the pipeline that I've shared with you. And also those major pursuits that are kinda near term in nature. Andre Madrid: Got it. Got it. And then obviously, you also called out, you know, strategic acquisitions in the cap deployment strategy. It was the top point actually, and, you know, a peer of yours did you know, it was reported that earlier this quarter or this past quarter that they were looking to possibly sell their aircraft maintenance business. I mean, how are you thinking about the legacy Vertex business? And is this something that you were looking to build out further inorganically? Would this be something of interest? Jeremy Wensinger: No. I mean, I you know, we have we love our aircraft maintenance business. I think we'll continue to look at building out the MRO and mission modernization side and renewal side of the business. Again, I think we're positioned right now. I like what we're doing. I like the awards we have. And, you know, whatever capital allocation strategy we put forward is gonna be in the best interest of the shareholder. Andre Madrid: Incubator. Shawn Mural: Andre, I you know, I think the way we view things a bit as complementary components that enable solutions for our customers. You know, I think those are the things that we would initially start to look at from an M&A and, you know, again, I think I said in the remarks, have a target ratio of staying between approximately two and three. You know, I think Jeremy's used the word optionality since he's been here. And to do things beyond that, I think constrain some of that optionality. To do other things from an investment standpoint either in the business or other things. Jeremy Wensinger: Yeah. I mean, again, I think keeping that optionality on the table is important to me. I think whatever we do is gonna be very thoughtfully done. To add to the overall value of what we're offering. Again, I'm not trying to use words that, you know, sound somewhat flowery, but you kinda get where I'm going in terms of I like having optionality on the table. I like the idea of doing, if we were to do any acquisitions that are gonna add to the value that we offer to a customer today or extend to a customer's that we desire. So, again, I look at the capital allocation strategy as one that keeps us within, as Shawn said, that two to three range, but also adds value like I said, to either what we're doing today or things that we wanna do for someone going forward. Andre Madrid: Got it. That's very helpful. I'll leave it there. You, gentlemen, for the time. Operator: The next question comes from Jonathan Sigman with Stifel. Please go ahead. Jonathan Sigman: Hey, good afternoon, Jeremy, Shawn, and Mike. Thank you for taking the question. Jeremy Wensinger: Hi. Shawn Mural: Hey, thank you. Jonathan Sigman: So just back on the T-6 contract. Congratulations. A great takeaway win. Bo Ken asked about how the revenue ramps. You talk about how you're thinking about managing the risk? It is a new program, not new type of work course. But how do margins kinda flow relative to the company as a whole? Thank you. Jeremy Wensinger: I'll let Shawn talk the margin side. I will tell you, this team does this exceptionally well. One of the things that I have come to appreciate about this company is our ability to manage the execution of programs from really cradle to grave. And they have, you know, a tremendous ability on a global basis to support these programs, whether it's supply chain, whether it's the deployment of people. You know, if you think about, you know, just what we've hired in the last, I wanna say, thirty days, we've hired almost 1,200 people in the last thirty days in terms of standing up various programs. You know, this team does an amazing job at this. And I am greatly impressed by their ability to manage the program startup, the execution of the program, and deliver on customer commitments. And that was what we were talking about with regards to the warfighter training program. You know, they went FOC in July. And, you know, that customer couldn't be any happier with that team's performance. And I think what Aileen and that team are doing is a demonstration of our ability to stand up these larger programs flawlessly. And so I'm expecting nothing less than that on the T-6 program. Shawn Mural: When we think about the margin specifically, John, so they will ramp. You know? Traditionally, what we see on a program of this nature is, you know, they will start at less than the company's composite average. And grow over time. And by time, I would bound that in eighteen to twenty-four months. And why do I say that? It takes some time to establish, and we've seen it. In a program that we set up late last year like F-5. Get on the ground, understand how the supply chains work, understand the workflow, understand the schedules to maintain aircraft availability, and that's absolutely what we're about bringing to our customers. And so it will take some time to go do those things. We expect nothing less on T-6. And I can tell you that, you know, Jeremy, myself, Roger Mason personally went down, worked with the team on that proposal and engaged, and the team's got a very good plan. That they'll begin executing, exactly like Jeremy stated. Jonathan Sigman: Excellent. Maybe if I could ask just on the budget environment. The big beautiful bill had quite a few things that seemed right online with readiness and areas that you could benefit from. Just any comments on that. And we're hearing some other companies in the space talk about some frictions around contracting actions, anything like that. Is there anything that you're seeing pause in the environment that you would flag for us? Thank you very much. Jeremy Wensinger: No. Thank you. It's a great question. I think what we have talked about, which is our focus on readiness, whether it's aircraft or whether it's, you know, mission support side that we do, we have seen that what we have as a strategy and what we have is capability aligns well with this administration's goal on readiness. We're excited on T-6. Look. We deliver some of the best readiness rates in the industry. We're excited to deliver those readiness rates to this customer. And so we think this budget aligns well with what we do. We have not seen friction, to date. On what we do. Because, again, what we do aligns exceptionally well to this administration's goal. And we're all aligned with it. Thank you. Jonathan Sigman: Thanks, John. Operator: The next question comes from Peter Arment with Baird. Please go ahead. Peter, your line is open. You may ask your question. Peter Arment: Do you have me now? Jeremy Wensinger: Yep. We got you here. Got you, Peter. Peter Arment: Okay. Hey, Mung. Hey, Jeremy, Shawn, Mike, nice results. Good to chat with you. Hey. So just to follow-up on John's kinda comment around the budget. Jeremy, you've made it a kind of a point to bid on a lot more, and you've kind of highlighted that on a much bigger pipeline. Maybe you and T-6 is a great example. But what else are you seeing that's kind of that you think is in V2X, Inc.'s wheelhouse? Are you getting a lot more opportunities? Jeremy Wensinger: Well, I think we're seeing very good demand for and we referenced it in the comments in the earnings call, from FMS. We're seeing customers want us to deliver what we do for the US government to them. And so we're seeing nice demand pull there. I think we're seeing good demand pull from renewal and modernization. I think those are areas where we are, you know, from a budgetary standpoint, we're a good value proposition. You know, we're extending the life of these assets. We are giving them optionality on the extension of these assets. And I think that is something that has resonated well with the customers. So, again, when I look at the overall portfolio, we are well-positioned, but I am seeing certain customers that are, like I said, on the FMS side, wanting more of what we do for the, you know, in terms of, hey. You're delivering these type of readiness rates. You're delivering this type of capability. We see that, and we want that. And so they're pulling that, you know, through us. And, again, I think on the renewal and modernization front, this is just something that extends the life of assets and gives them modernization of those assets. And better lethality. So, again, I think everything we're doing is aligned very well with this administration. To give them value for the dollars they're spending and giving them better, you know, outcomes as a result of that. Peter Arment: Know, past history of the way customers are buying from you? Shawn Mural: Yeah. I'd say Peter Arment: Got it. That's helpful. And then is or should we think of FMS as a margin enhancer, or are we and you're still dealing with kind of Shawn Mural: Know, it's a little bit of both. The recent award for the F-16 that we announced earlier, you know, is an example of, again, that pull that Jeremy mentioned from customers. There are opportunities for margin enhancement. Absolutely. We think it's a big lever for us going forward from the, like, a global capability and that stickiness of, you know, kinda land and expand, Peter. There. And this is, again, a great demonstrated capability for the team that leverages CLS support for a platform as well as base support. You're seeing the breadth of capability that is V2X, Inc. brought to these customers and the ability to deliver. We think it's a good economic case for the company. As well as for the customers. Jeremy Wensinger: And Shawn makes a good point. They're not pulling one side of this business. They're pulling the entire company. So the entire company was on that F-16 award. And so I think it's important to realize that doesn't happen unless V2X, Inc. is who it is today. We are bringing the entire solution to the customer, and the customers recognize that and are asking for that. Peter Arment: Terrific to hear. I'll jump back in the queue. Thanks, guys. Jeremy Wensinger: Nice part. Thank you, Peter. Operator: The next question comes from Tobey Sommer with Truist. Please go ahead. Tobey Sommer: Thanks. Could you speak to your expectations for a seasonally strong contract award quarter in calendar 3Q from here? And I understand we've already got the T-6 award, so I kinda mean above and beyond that. Do you think we're in store for a strong seasonal quarter? Or are there puts and takes? Jeremy Wensinger: You know, our awards tend to be fairly episodic. Again, we're thrilled T-6 came out when it did. But, again, in terms of the other ones that we're pursuing, you know, we're always gonna be a little lumpy when it comes to our book to bill. Just because of the episodic nature of these awards. We'll always have a steady flow of on-contract growth and, you know, some smaller awards. But, again, as we pursue these larger and, you know, more franchise-based programs, they're gonna be more episodic. And so I don't worry about the current order book to bill. I look more at the TTM because I think that's a better reflection of who we are and the type of business we're in. So I hope that's helpful because, again, in any given quarter, we may see very, very limited amount of new awards that are of any size. And then, again, you get something like T-6 and some other awards that come through any given quarter. That make a quarter kinda pop. But, again, I think on a TTM basis, that's the way I kinda look at the business. Tobey Sommer: Thanks. It's nice to see the Army training contract ramp. But, clearly, there are some headwinds, some sunsetting, and a task order reduction that you cited. Are there any known incremental drags to '26 revenue growth? Just kinda wanna get your sense now for what those other things on the other side of the ledger might look like. Shawn Mural: Yeah. Great question. The yeah. A couple of call it, headwinds sunsetting. Know, I'll remind folks, we do participate in, you know, contingency support operations. Those things can be episodic in nature. That's exactly what we have today in The Middle East. You will have noticed The Middle East is down slightly, you know, year over year. Beyond that, the headwinds that we've previously talked about, KC-10, T-1A, you know, there's a modest amount of that in the remaining of this year. For next year, you know, we just kicked off the planning cycle, you know, where we're going through those details. There's nothing that gives me tremendous, you know, pause or concern right now about 26. I think there's better visibility in light of the T-6 award, the F-16 award, how those things will play out. We're going through the planning phases because they are just now obviously ramping up and award notifications within the last thirty days. Tobey Sommer: Thank you. And if I could sneak two in, you mentioned a shift to fixed price. How is that occurring? Because it could happen because the customer is converting the cost plus to a fixed price or could simply be bidding on different kind of work that's contracted differently. Or maybe a blend of the two. And then with respect to your share repurchase, do you anticipate that being open market, or would the company participate should there be any future secondary offerings? Shawn Mural: I'll start with the fixed price question. So it's a little bit of both, right? We have said previously and the team continues to put what are today cost-type contracts in front of customers to convert to fixed price. We get mixed reactions to that. I'm encouraged by some of the things that I'm hearing, but it hasn't resulted in contractual actions yet. And then I think to Jeremy's point on the, you know, that he made in the prepared remarks on that pipeline, I think we're seeing more of a shift of the programs that we are pursuing that are fixed price in nature. Jeremy Wensinger: You do a great job of that. Shawn Mural: Absolutely. And, again, we welcome it. I've said that, you know, before. I have the utmost confidence in our team's ability to deliver. And I think when you get to outcome-based contracts, this is what this company does best. We love contracts where it is entirely outcome-based. Because our performance demonstrates to a customer that they can trust us, they can rely on us, and we'll deliver. Shawn Mural: And then your question on the share repurchase, I think it could be both. You know, we'll see. We'll do, again, what's in the best interest of the shareholders. Very happy to have the plan placed. You know, we talk about these things regularly. We think it's the next evolution for the company. And, again, we think we're extremely well-positioned. We're very excited about the growth, and, you know, we'll take advantage of what we can. Tobey Sommer: Thank you. Operator: The next question comes from Joe Gomes with Noble Capital. Please go ahead. Joe Gomes: Good afternoon. Congrats on the quarter. Jeremy Wensinger: Thanks, Joe. Shawn Mural: Joe, thank you. Joe Gomes: First question is, looking at the release, it looked like revenues in the Asia Pacific sector declined about 10%, a little over 9%, I guess, in the quarter. Just wondering, is that due to an absence of exercises, or is there something else going on there? Shawn Mural: No. I'd say there's been some delays in some of those exercises. So, you know, when we think about the contractual, the contracting environment, you know, there have been some delays in initiating some actions on the part of our customers. The team has wonderful opportunity sets in front of us. Not all of them have been acted on. I think they will be at some point, but we have seen you're exactly right. A little bit of decline. I'm not worried about it. Really for, you know, when I think longer term and as I think about 2026. But this quarter, we did experience a modest amount of reduction. Joe Gomes: Okay. Thanks for that. And then on the backlog, I wonder if you could just, you know, kinda provide some more color here. So, you know, in the first quarter backlog was approximately $12 billion. That did not include log cap, Ascension Island, or the full value of the training. I think you mentioned this quarter, it's $11.3 billion. It does not include log cap, but you didn't mention Ascension or the full value of training. So I just wonder if you could kinda walk me through that would be a fairly substantial decline in the backlog quarter over quarter. Shawn Mural: Sure. Yes. So for Q2, the net bookings were $517 million for the quarter. That's a book to bill of 0.5 and the backlog, as you rightly point out, at 11.3. Ascension Island is in that, you know, bookings number. And the award for the next, you know, year of WTRS will fall into the order for that will fall into Q3. So, you know, not really, I'll say, surprised where we are when we think about the bookings for the year. It's played out almost exactly to where we thought it would. You know, in terms of its weight distribution, kinda seventy-thirty, back half first half. So, yeah, there's plenty of things that are not in it as we pointed out. But, you know, I think we'll see that pick up here in the back half of the year. Joe Gomes: K. Great. Thanks for that. Again, congrats. Shawn Mural: Great. Thank you. Operator: The next question comes from Mariana Perez Mora with Bank of America. Please go ahead. Samantha Styro: Hi. Good afternoon. This is Samantha Styro on for Mariana today. I was wondering if you could talk about the protest environment a little more broadly with the 45-55, one half, two half split we discussed last quarter. How do we think about the risks of new awards being pushed to the and slipping into 2026? Jeremy Wensinger: Well, it's always a risk. Right? We manage those risks quite well. But, again, we don't control the outcome of those protests. But, again, we follow the process. We support our customers. Again, I'm, you know, I'm not surprised by protests when they happen. But I think the team does a very good job in supporting protests as they get adjudicated. But, again, it's the nature of this business, and, like I said, I think the team does a good job in terms of supporting whatever is required in support of those protests. Shawn Mural: You know, what's encouraging is the cadence of the new awards that we expected has held. From a timing standpoint. Which has been very encouraging, you know, in terms of when you would expect to see new awards itself, whether or not, you know, folks protest. I don't know. They'll make their own decisions, you know, on those things. We think our offerings stand on their own and believe we offer great value to our customers. Samantha Styro: Thank you. And then switching gears a little bit, you highlighted using more of a commercial-based approach on this latest T-6 award. Can you kind of dive into that and what that looks like? Jeremy Wensinger: Well, I mean, the supply chain side of this business is a fairly significant part of the overall business that we run. I think the procurement team, again, I don't wanna overemphasize the commercial aspect of it as much as it is commercial by nature. You know, what they procure on a global basis and their ability to deliver those goods and services on a global basis, you know, I'll stand up against anybody. So when I look at what we have in front of us on T-6 and the number of aircraft that we need to continue to fly, it will just leverage what we do best already, which is a commercial-based approach to procurement. Operator: The next question comes from Christine Liwag with Morgan Stanley. Please go ahead. Christine Liwag: Hey. Good afternoon, everyone. You know, a quick follow-on question on the T-6. So, I mean, this is an IDIQ award. You gave the revenue waterfall earlier. But I was wondering, with the IDIQ, like, what's a sure revenue waterfall versus where could you potentially see plus-ups or downside risk to the numbers that you gave? Shawn Mural: Yeah. So think of it as a, it's listed as an IDIQ. A lot of it will be dependent on funding availability. Right? So, obviously, Jeremy mentioned the fleet, 700. You know, there are always things to go do on these platforms to maintain readiness. I think it will come down to the funding availability. It is, you know, we are the only contractor that has been selected to execute this. So it's not like you're competing for task orders or things of that nature. It will be, you know, due to customers having the funding to improve availability, maintain it, that's what this will be. I only go off of what, you know, what the program has historically executed. We'll see what the priorities are in a more defined budget. And once we get beyond the transition, which was, you know, announced last week. Jeremy Wensinger: Yeah. I kind of view it the way if you think about the warfighter training, that was a single award IDIQ. There are dozens and dozens of task orders that we bid. It has to do with individual tasks that you go after in terms of supporting various, you know, aspects of the program. I would envision this one to be the same way. And I think Shawn's right. You know, they're spending between $200 to $300 million a year on this program today. I would envision that those same task orders would manifest itself, again, in the new award. Christine Liwag: Great. That's really helpful. And maybe following on what you guys said about the contract, award pace, it seems to be progressing as you had expected. But if we look at book to bill, book to bill was 0.4 in 1Q and 0.5 this quarter. And, you know, this is taking aside, you know, the T-6 order. But it seems like outside of T-6, the book to bill, you know, continues to be below one. Can you provide some context regarding what your expectations are for book to bill for the second half of the year? And if there are holdups, in those contract structures, where are those? And does the big beautiful bill, you know, address some of those uncertainties? Ultimately, when we look at your full-year outlook for revenue and EBITDA, they didn't change for the full year even though you've had a very strong second quarter. So just want to understand the movers and shakers for your full-year outlook. Thanks. Jeremy Wensinger: I think publishing the, you know, the pipeline, I'll give you a line sight on, you know, the size of things that we are pursuing, which is, you know, pretty impressive. I think when I look at, like I said, book to bill, I look at the TTM on book to bill because the episodic nature of our awards. I don't think any one quarter is truly reflective of the business as much as it is on a twelve-month basis. You know, our goal is to be obviously well over one. In a book to bill in any twelve-month period. And, you know, that's what we're tracking to. And when I look at the number of, you know, major pursuits that I have in front of me, it supports that. So, again, I think a quarter is interesting, but I think the TTM is much more reflective of a business like this. Shawn Mural: Think, you know, you mentioned I'll call it a muted environment from a book to bill in the first two quarters. It's not dissimilar to what we thought when we came into the year, to be very candid with you. You know, we forecast bookings, revenue, profitability, all those things. You know, and it's played out, you know, kinda in line with what we thought. As Jeremy said, you know, by the end of this year, at or above one, there's lots of variables that will go into that. But we're not seeing anything as we sit here right now, I think, that changes our perspective on being there at the end of the year. Christine Liwag: Great. And to get to that or above one for the full year, you'd have to have a pretty chunky order activity in the second half. Are there particular programs we should monitor or milestones we should track? Jeremy Wensinger: Well, I've, you know, I mean, one obviously was the T-6, how that plays out. That is what I would consider kind of a binary event, right, when we think about that. We'll see how it plays out and what that would look like. The other one that, you know, I mentioned earlier that would happen here in the quarter would be the WTRS next year. Or the second year of it. And, you know, we're off in that transition. So I would expect something there as well. And there's some other ones that, obviously, we wouldn't share because they're competitive sensitive. But are some other awards that we're expecting in the second half of the year. But, again, when I look at the business on a twelve-month basis, it is performing exactly where I would expect it to be. Christine Liwag: Thank you very much. Operator: The next question comes from Noah Poponak with Goldman Sachs. Please go ahead. Noah Poponak: Hey. Good evening, everyone. Maybe just staying on that, I think you said you expected the booking split first half, second half to be 30%, 70%. And I guess the specific math on that would imply $2 billion of bookings in the back half, which would keep the book to bill below one. Is that more of a very directional statement? And as you mentioned, there's some sort of binary-ish things that could make it better than that. I guess to have book to bill at one for the year, it has to be one and a half in the back half. Jeremy Wensinger: Yeah. Yes. It was more of a directional comment, Noah, but I think we have line of sight to a book to bill that is greater than one. Between now and the end of the year. There are some variables that will come into play. That I would consider, you know, somewhat binary. But again, we have line of sight into those things. I think the back half of the year will play out such that we end at or above one. Noah Poponak: Okay. Well, will the T-6 award likely have a protest, or is there a scenario where that goes clean without a protest? Shawn Mural: You know, I don't think we know. You know, like I said, we were awarded. The team's begun transition. And that transition ends in January 2026. So we'll see how some things play out. Noah Poponak: Okay. Can you remind us the drivers behind the pickup in the top-line organic revenue growth in the back half versus the first half? Shawn Mural: Sure. So F-5, the contract that we had a year ago, has some modest, had some modest growth. Think of that as $2,020,000,000 ish or so. The WTRS award from a year ago, think of that as, you know, a $140,125 in that range depending on how some things go. So those are some of the big ones. And the F-16 award that we had. That we mentioned earlier. So those are some of the bigger awards here in the back half of the year. That, you know, we're under contract. We're executing. And we expect to deliver. And I think now that of note, which I highlighted earlier, you know, you we hired about almost 1,200 people in the last thirty days. In support of those programs. So, you know, we're off and running on those programs. Noah Poponak: Okay. Excellent. And then last one, what are the mechanics behind raising the EPS guidance but not the EBITDA or cash flow? Just it didn't look like interest expense or tax rate or the normal below the operating line things were unusual year to date. Shawn Mural: Yeah. It's the interest expense from earlier the year when we did some refinancing. It's about 15¢. That contributed there in a very modest, maybe a penny or so of tax benefit. So that was the basis for the raise from some refinancing that we did kinda back in Q1. That we now flow through to the total year. Noah Poponak: Okay. Got it. Thank you. Shawn Mural: Sure. Operator: This concludes our question and answer session. I would like to turn the conference back over for any closing remarks. Jeremy Wensinger: Great quarter. Thank you for your support. Thank you for taking the time to take the call. We're excited about the second half of the year, and we look forward to talking to you further. Thank you. 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