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Yahoo
4 days ago
- Business
- Yahoo
HCI Group Reports Second Quarter 2025 Results
Second Quarter Pre-Tax Income of $94.4 million and Diluted EPS of $5.18Book Value Per Share Increased to $58.55Gross Loss Ratio of 21.3% TAMPA, Fla., Aug. 07, 2025 (GLOBE NEWSWIRE) -- HCI Group, Inc. (NYSE:HCI), reported pre-tax income of $94.4 million and net income of $70.3 million for the second quarter of 2025. Net income after noncontrolling interests was $66.2 million compared with $54.1 million in the second quarter of 2024. Diluted earnings per share were $5.18 in the second quarter of 2025, compared with $4.24 in the second quarter of 2024. Management Commentary'HCI Group delivered another strong quarter, marked by solid profitability, industry-leading net combined ratios, and meaningful growth in book value per share,' said HCI Group Chairman and Chief Executive Officer Paresh Patel. 'We continue to make progress on initiatives to unlock shareholder value and establish Exzeo as an independent, publicly traded entity.' Second Quarter 2025 CommentaryConsolidated gross premiums earned in the second quarter of 2025 increased by 14.8% to $302.6 million from $263.6 million in the second quarter of 2024 as a result of a higher volume of policies in force over the comparative period. Premiums ceded for reinsurance in the second quarter of 2025 were $102.5 million compared with $99.6 million in the first quarter of 2025. Losses and loss adjustment expenses in the second quarter of 2025 were $64.5 million compared with $78.3 million in the second quarter of 2024 despite the growth in gross premiums earned. The decrease was primarily driven by a decline in claims and litigation frequency. The gross loss ratio in the second quarter was 21.3% compared to 29.7% in the second quarter of 2024. Policy acquisition and other underwriting expenses in the second quarter of 2025 were $30.6 million compared with $23.5 million in the second quarter of 2024. The increase was driven by higher gross premiums. General and administrative personnel expenses in the second quarter of 2025 increased to $20.0 million from $17.5 million in the second quarter of 2024. The increase was primarily attributable to higher stock-based compensation, employee health benefits and merit increases. Other operating expenses in the second quarter of 2025 increased to $8.8 million from $7.5 million in the second quarter of 2024. The increase was primarily attributable to a $1.1 million debt conversion charge in connection with the conversion of our 4.75% Convertible Senior Notes during the second quarter of 2025. Year-to-Date 2025 Results For the six months ended June 30, 2025, the Company reported pre-tax income of $194.7 million and net income of $144.5 million. Net income after noncontrolling interests was $135.8 million compared with $101.7 million for the six months ended June 30, 2024. Diluted earnings per share were $10.57 for the six months ended June 30, 2025, compared with $8.04 for the six months ended June 30, 2024. Consolidated gross premiums earned for the six months of 2025 increased to $603.0 million from $520.2 million in the same period of 2024 as a result of a higher volume of policies in force over the comparative period. Premiums ceded for reinsurance for the six months of 2025 were $202.2 million compared with $144.8 million for the six months of 2024. Losses and loss adjustment expenses for the six months of 2025 were $123.7 million compared with $158.2 million for the six months of 2024 despite the growth in gross premiums earned. The decrease was primarily driven by a decline in claims and litigation frequency. The gross loss ratio for the six months of 2025 was 20.5% compared to 30.4% for the six months of 2024. Policy acquisition and other underwriting expenses for the six months of 2025 were $57.8 million compared with $45.6 million for the six months of 2024. The increase was driven by higher gross premiums. General and administrative personnel expenses for the six months of 2025 increased to $40.5 million from $33.7 million for the six months of 2024. The increase was primarily attributable to higher stock-based compensation, employee health benefits and merit increases. Other operating expenses for the six months of 2025 decreased to $14.4 million from $15.2 million for the six months of 2024. The decrease was partially offset by a $1.1 million debt conversion charge in connection with the conversion of our 4.75% Convertible Senior Notes during the six months of 2025. Conference CallHCI Group will hold a conference call later today, August 7, 2025, to discuss these financial results. Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman and Chief Financial Officer Mark Harmsworth will host the call starting at 4:45 p.m. Eastern time. Interested parties can listen to the live presentation by dialing the listen-only number below or by clicking the webcast link available on the Investor Information section of the company's website at Listen-only toll-free number: (888) 506-0062Listen-only international number: (973) 528-0011Entry Code: 521671 Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860. A replay of the call will be available by telephone after 8:00 p.m. Eastern time on the same day as the call and via the Investor Information section of the HCI Group website at through August 7, 2026. Toll-free replay number: (877) 481-4010International replay number: (919) 882-2331 Replay ID: 52723 About HCI Group, Group, Inc. is a holding company with two distinct operating units. The first unit includes four top-performing insurance companies, a captive reinsurance company, and operations in claims management and real estate. The second unit, called Exzeo Group, is a leading innovator of insurance technology that utilizes advanced underwriting algorithms and data analytics. Exzeo empowers property and casualty insurers to transform underwriting outcomes and achieve industry-leading results. The company's common shares trade on the New York Stock Exchange under the ticker symbol "HCI" and are included in the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc. regularly publishes financial and other information in the Investor Information section of the company's website. For more information about HCI Group and its subsidiaries, visit Forward-Looking StatementsThis news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan," "confident," "prospects" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. For example, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements. Company Contact:Bill Broomall, CFAInvestor RelationsHCI Group, (813) 776-1012wbroomall@ Investor Relations Contact:Matt GloverGateway Group, (949) 574-3860HCI@ - Tables to follow - HCI GROUP, INC. AND SUBSIDIARIESSelected Financial Metrics(Unaudited)(In thousands, except share and per share amounts) Q2 2025 Q2 2024 Gross Written Premiums: Homeowners Choice $ 227,090 $ 191,775 TypTap Insurance Company 110,412 79,093 Condo Owners Reciprocal Exchange 13,830 36,034 Tailrow Reciprocal Exchange 5,213 - Total Gross Written Premiums 356,545 306,902 Gross Premiums Earned: Homeowners Choice 156,552 143,703 TypTap Insurance Company 124,437 107,055 Condo Owners Reciprocal Exchange 12,811 12,803 Tailrow Reciprocal Exchange 8,828 - Total Gross Premiums Earned 302,628 263,561 Gross Premiums Earned Loss Ratio 21.3 % 29.7 % Per Share Metrics Diluted EPS $ 5.18 $ 4.24 Dividends per share $ 0.40 $ 0.40 Book value per share at the end of period $ 58.55 $ 42.72 Shares outstanding at the end of period 12,956,884 10,472,741 HCI GROUP, INC. AND SUBSIDIARIESConsolidated Balance Sheets(In thousands, except share amounts) June 30, 2025 December 31, 2024 (Unaudited) Assets Fixed-maturity securities, available for sale, at fair value (amortized cost: $590,666 and $719,536, respectively and allowance for credit losses: $0 and $0, respectively) $ 592,210 $ 718,537 Equity securities, at fair value (cost: $55,174 and $52,030, respectively) 58,618 56,200 Limited partnership investments 19,770 20,802 Real estate investments 85,578 79,120 Total investments 756,176 874,659 Cash and cash equivalents 947,166 532,471 Restricted cash 3,730 3,714 Accrued interest and dividends receivable 6,308 6,008 Income taxes receivable 3,130 463 Deferred income tax assets, net 361 72 Premiums receivable, net (allowance: $8,180 and $5,891, respectively) 65,826 50,582 Prepaid reinsurance premiums — 92,060 Reinsurance recoverable, net of allowance for credit losses: Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively) 62,727 36,062 Unpaid losses and loss adjustment expenses (allowance: $137 and $186, respectively) 375,198 522,379 Deferred policy acquisition costs 65,138 54,303 Property and equipment, net 29,695 29,544 Right-of-use-assets - operating leases 1,065 1,182 Intangible assets, net 3,927 5,206 Funds withheld for assumed business 8,538 11,690 Other assets 24,121 9,818 Total assets $ 2,353,106 $ 2,230,213 Liabilities, Redeemable Noncontrolling Interests and Equity Losses and loss adjustment expenses $ 696,892 $ 845,900 Unearned premiums 627,484 584,703 Advance premiums 43,677 18,867 Reinsurance payable on paid losses and loss adjustment expenses 127 2,496 Ceded reinsurance premiums payable 38,121 18,313 Assumed premiums payable 375 2,176 Accrued expenses 42,033 17,677 Income taxes payable 24,294 5,451 Deferred income tax liabilities, net 2,402 2,830 Revolving credit facility 40,000 44,000 Long-term debt 15,602 185,254 Lease liabilities - operating leases 1,072 1,185 Other liabilities 33,938 32,320 Total liabilities 1,566,017 1,761,172 Commitments and contingencies Redeemable noncontrolling interests 2,405 1,691 Equity: Common stock, (no par value, 40,000,000 shares authorized, 12,956,884 and 10,767,184shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) — — Additional paid-in capital 298,706 122,289 Retained earnings 458,713 331,793 Accumulated other comprehensive income (loss) 1,158 (749 ) Total stockholders' equity 758,577 453,333 Noncontrolling interests 26,107 14,017 Total equity 784,684 467,350 Total liabilities, redeemable noncontrolling interest and equity $ 2,353,106 $ 2,230,213 HCI GROUP, INC. AND SUBSIDIARIESConsolidated Statements of Income(Unaudited)(In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Revenue Gross premiums earned $ 302,628 $ 263,561 $ 603,011 $ 520,205 Premiums ceded (102,522 ) (76,713 ) (202,157 ) (144,819 ) Net premiums earned 200,106 186,848 400,854 375,386 Net investment income 16,445 16,881 30,196 30,948 Net realized investment gains 155 212 1,322 212 Net unrealized investment gains (losses) 1,180 533 (726 ) 3,168 Policy fee income 1,467 1,089 3,696 2,108 Other 2,567 682 3,011 1,037 Total revenue 221,920 206,245 438,353 412,859 Expenses Losses and loss adjustment expenses 64,457 78,324 123,748 158,246 Policy acquisition and other underwriting expenses 30,551 23,452 57,838 45,591 General and administrative personnel expenses 19,985 17,471 40,468 33,745 Interest expense 3,744 3,452 7,128 6,601 Other operating expenses 8,791 7,520 14,440 15,220 Total expenses 127,528 130,219 243,622 259,403 Income before income taxes 94,392 76,026 194,731 153,456 Income tax expense 24,113 18,927 50,222 39,401 Net income $ 70,279 $ 57,099 $ 144,509 $ 114,055 Net income attributable to redeemable noncontrolling interests — — — (10,149 ) Net income attributable to noncontrolling interests (4,119 ) (3,023 ) (8,665 ) (2,219 ) Net income after noncontrolling interests $ 66,160 $ 54,076 $ 135,844 $ 101,687 Basic earnings per share $ 5.57 $ 5.18 $ 12.00 $ 9.95 Diluted earnings per share $ 5.18 $ 4.24 $ 10.57 $ 8.04 Dividends per share $ 0.40 $ 0.40 $ 0.80 $ 0.80 HCI GROUP, INC. AND SUBSIDIARIES(Unaudited)(In thousands, except per share amount) A summary of the numerator and denominator of basic and diluted earnings per common share is presented below. Three Months Ended Six Months Ended June 30, 2025 June 30, 2025 Income Shares Per Share Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Net income $ 70,279 $ 144,509 Less: Net income attributable to noncontrolling interests (4,119 ) (8,665 ) Net income attributable to HCI 66,160 135,844 Less: Income attributable to participating securities (2,616 ) (5,691 ) Basic Earnings Per Share: Income attributable to common stockholders 63,544 11,400 $ 5.57 130,153 10,846 $ 12.00 Effect of Dilutive Securities: Stock options — 392 — 373 Convertible senior notes 3,170 1,084 5,500 1,611 Warrants — 7 — 7 Diluted Earnings Per Share: Income attributable to common stockholders $ 66,714 12,883 $ 5.18 $ 135,653 12,837 $ 10.57 Sign in to access your portfolio
National Post
5 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
01-08-2025
- Business
- Yahoo
Cboe Global Markets Reports Results for Second Quarter 2025
Second Quarter Highlights* Diluted EPS for the Quarter of $2.23, Up 68 percent, primarily due to the non-recurring 2024 impairment of intangible assets recognized in the Digital reporting unit Adjusted Diluted EPS¹ for the Quarter of $2.46, Up 14 percent Record Net Revenue for the Quarter of $587.3 million, Up 14 percent Increases 2025 Organic Total Net Revenue Growth Target2 to high single digits, from mid to high single digits; Reaffirms Cboe Data Vantage3 Organic Net Revenue Growth Target2 of mid to high single digits Decreases 2025 Adjusted Operating Expense Guidance2 to $832 to $847 million, from $837 to $852 million CHICAGO, Aug. 1, 2025 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the second quarter of 2025. "In the second quarter, Cboe reported record quarterly net revenue of $587 million, diluted EPS of $2.23, and adjusted diluted EPS1 of $2.46. Strong double-digit net revenue growth across Derivatives, Data Vantage, and Cash and Spot Markets drove our outstanding results," said Craig Donohue, Cboe Global Markets Chief Executive Officer. "Net revenue grew 14 percent and adjusted diluted EPS1 increased 14 percent year-over-year, bringing year-to-date growth to 13 percent and 15 percent, respectively, as compared to the first half of 2024. Since taking over as CEO in early May, I have been impressed by our team's ability to thrive in a constantly evolving environment. I am excited to build on the exceptional first half results as we work towards delivering long-term value for shareholders." "Cboe achieved another quarter of record net revenue and strong adjusted earnings growth, highlighting the durability across our exchange ecosystem," said Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer. "Derivatives net revenue grew 17 percent, driven by robust volumes across our options business. Data Vantage produced 11 percent net revenue growth, and Cash and Spot Markets net revenue increased 11 percent on a year-over-year basis. Moving forward, we are increasing our organic total net revenue growth2 guidance range to high single digits from mid to high single digits, and we are reaffirming our Data Vantage organic net revenue growth2 range of mid to high single digits for 2025. In addition, we are lowering our full year adjusted operating expense guidance2 range to $832 million to $847 million from $837 to $852 million. Following our strong first half performance, we remain well-positioned to advance our financial priorities and deliver meaningful impact across our global markets." *All comparisons are second quarter 2025 compared to the same period in 2024. (1) A full reconciliation of our non-GAAP results to our GAAP ("Generally Accepted Accounting Principles") results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables. (2) Specific quantifications of the amounts that would be required to reconcile the company's organic net revenue growth guidance and adjusted operating expenses guidance are not available. The company believes that there is uncertainty and unpredictability with respect to certain of its GAAP measures, primarily related to acquisition-related revenues and costs that would be required to reconcile to GAAP revenues less cost of revenues, GAAP operating expenses and GAAP effective tax rate, which preclude the company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The company believes that providing estimates of the amounts that would be required to reconcile the range of the company's organic net revenue growth guidance and adjusted operating expenses would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above. (3) Cboe Data Vantage refers to the company's Cboe Data Vantage business (formerly known as Data and Access Solutions). Cboe Data Vantage is subsequently referred to as Data Vantage throughout this press release. Consolidated Second Quarter Results -Table 1Table 1 below presents summary selected unaudited condensed consolidated financial information for the company as reported and on an adjusted basis for the three months ended June 30, 2025 and 2024. Table 1 Consolidated Second Quarter Results($ in millions except per share and percentages) 2Q25 2Q24 Change 2Q25 Adjusted¹ 2Q24 Adjusted¹ Change Total Revenues Less Cost of Revenues $ 587.3 $ 513.8 14 % $ 587.3 $ 512.8 15 % Total Operating Expenses $ 248.2 $ 303.7 (18) % $ 213.3 $ 197.1 8 % Operating Income $ 339.1 $ 210.1 61 % $ 374.0 $ 315.7 18 % Operating Margin % 57.7 % 40.9 % 16.8 pp 63.7 % 61.4 % 2.3 pp Net Income Allocated to Common Stockholders $ 233.9 $ 139.7 67 % $ 257.8 $ 226.2 14 % Diluted Earnings Per Share $ 2.23 $ 1.33 68 % $ 2.46 $ 2.15 14 % Operating EBITDA¹ $ 369.0 $ 241.9 53 % $ 386.7 $ 326.3 19 % Operating EBITDA Margin %¹ 62.8 % 47.1 % 15.7 pp 65.8 % 63.5 % 2.3 pp EBITDA¹ $ 364.9 $ 242.3 51 % $ 382.3 $ 340.7 12 % EBITDA Margin %¹ 62.1 % 47.2 % 14.9 pp 65.1 % 66.3 % (1.2) pp Total revenues less cost of revenues (referred to as "net revenue"2) of $587.3 million increased 14 percent, compared to $513.8 million in the prior-year period, a result of increases in derivatives markets, Data Vantage, and cash and spot markets net revenue2. Total operating expenses were $248.2 million versus $303.7 million in the second quarter of 2024, a decrease of $55.5 million. This decrease was primarily related to the impairment of intangible assets recognized in the former Digital reporting segment in the second quarter of 2024. Adjusted operating expenses1 of $213.3 million were up compared to $197.1 million in the second quarter of 2024. The increase was primarily due to higher compensation and benefits, depreciation and amortization, and technology support services, partially offset by lower travel and promotional expenses and professional fees and outside services. The effective tax rate for the second quarter of 2025 was 29.7 percent as compared with 30.8 percent in the second quarter of 2024. The lower effective tax rate in 2025 is primarily due to the valuation allowance associated with the impairment of the Globacap investment, which drove the higher effective tax rate in the second quarter of 2024. The effective tax rate on adjusted earnings1 was 29.8 percent, an increase of 0.3 percentage points when compared with 29.5 percent in last year's second quarter. Diluted EPS for the second quarter of 2025 increased 68 percent to $2.23 compared to the second quarter of 2024. Adjusted diluted EPS1 of $2.46 increased 14 percent compared to 2024 second quarter results. Business Segment Information: Table 2Total Revenues Less Cost of Revenues by Business Segment (in millions) 2Q25 2Q24 Change Options $ 364.8 $ 306.7 19 % North American Equities 98.4 98.3 0 % Europe and Asia Pacific 70.4 54.3 30 % Futures 30.1 34.8 (14) % Global FX 23.6 19.8 19 % Digital³ — (0.1) * % Total $ 587.3 $ 513.8 14 %(1)A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables. (2)See the attached tables on page 10 for "Net Revenue by Revenue Caption." (3)The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. Digital results from 2024 have been retained in the former Digital segment for comparative purposes. *Not meaningful Discussion of Results by Business Segment1: Options: Record Options net revenue of $364.8 million was up $58.1 million, or 19 percent, from the second quarter of 2024. Net transaction and clearing fees2 increased primarily as a result of a 20 percent increase in total options average daily volume ("ADV") versus the second quarter of 2024. Market data fees were 15 percent higher and access and capacity fees were 9 percent higher as compared to the second quarter of 2024. Net transaction and clearing fees2 increased $53.9 million, or 20 percent, reflecting a 22 percent increase in multi-listed options ADV and a 17 percent increase in index options ADV. Total options revenue per contract ("RPC") increased 1 percent compared to the second quarter of 2024. The increase in total options RPC was due to an increase in both multi-listed options and index options RPC. Cboe's Options exchanges had total market share of 30.2 percent for the second quarter of 2025, down compared to 31.2 percent in the second quarter of 2024. North American (N.A.) Equities: Record N.A. Equities net revenue of $98.4 million increased $0.1 million from the second quarter of 2024, reflecting higher access and capacity fees and industry market data fees, offset by lower net transaction and clearing fees2. Net transaction and clearing fees2 decreased $7.8 million, or 22 percent, compared to the second quarter of 2024. The decrease was driven by lower market share and lower net capture for U.S. Equities exchanges versus the second quarter of 2024. Cboe's U.S. Equities exchanges had market share of 10.5 percent for the second quarter of 2025 compared to 11.4 percent in the second quarter of 2024 as a result of higher industry off-exchange market share. Cboe's U.S. Equities off-exchange market share was 15.2 percent, down from 17.8 percent in the second quarter of 2024. Canadian Equities market share declined to 12.7 percent as compared to 15.0 percent in the second quarter of 2024. Europe and Asia Pacific (APAC): Record Europe and APAC net revenue of $70.4 million increased by 30 percent compared to the second quarter of 2024, reflecting growth in net transaction and clearing fees2 and non-transaction revenues. On a constant currency basis3, net revenues were $67.1 million, up 24 percent on a year-over-year basis. European Equities average daily notional value ("ADNV") traded on Cboe European Equities was $13.7 billion, up 43 percent compared to the second quarter of 2024 given a 28 percent increase in industry market volumes. Japanese Equities ADNV was 32 percent lower and Australian Equities ADNV was 25 percent higher than the second quarter of 2024. For the second quarter of 2025, Cboe European Equities had 25.1 percent market share, up from 22.5 percent in the second quarter of 2024. Cboe Australia had 20.0 percent market share for the second quarter of 2025, down from 20.8 percent in the second quarter of 2024. Cboe Japan had 3.6 percent market share in the second quarter of 2025, down from 5.5 percent in the second quarter of 2024. Announced decision to wind down Cboe's Japanese equities business, including the operations of its Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform. Cboe expects to suspend operations for these businesses on August 29, 2025 and formally close the businesses subject to consultation with regulators. The company anticipates that the wind down of the Cboe Japan equities operations will have an immaterial impact on Cboe's organic total net revenue growth4 and adjusted operating expense4 guidance in 2025. Adjusted operating expense4 savings are estimated to be in the range of $2 million to $4 million in 2025, with savings expected to be in the $10 million to $12 million range on a normalized annual basis.4 Futures: Futures net revenue of $30.1 million decreased $4.7 million, or 14 percent, from the second quarter of 2024 driven by a 19 percent decrease in net transaction and clearing fees2. Net transaction and clearing fees2 decreased $5.2 million, reflecting a 13 percent decrease in ADV during the quarter. Global FX: Record Global FX net revenue of $23.6 million increased 19 percent as compared to the second quarter of 2024. The increase was due to higher net transaction and clearing fees2. ADNV traded on the Cboe FX platform was $55.9 billion for the quarter, up 17 percent compared to last year's second quarter, and net capture rate per one million dollars traded was $2.81 for the second quarter of 2025, up 5 percent compared to $2.69 in the second quarter of 2024. (1) The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. Digital results from 2024 have been retained in the former Digital segment for comparative purposes. (2) See the attached tables on page 10 for "Net Transaction and Clearing Fees by Business Segment." (3) A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables. (4) Specific quantifications of the amounts that would be required to reconcile the company's organic net revenue growth guidance and adjusted operating expenses guidance are not available. The company believes that there is uncertainty and unpredictability with respect to certain of its GAAP measures, primarily related to acquisition-related revenues and costs that would be required to reconcile to GAAP revenues less cost of revenues, GAAP operating expenses and GAAP effective tax rate, which preclude the company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The company believes that providing estimates of the amounts that would be required to reconcile the range of the company's organic net revenue growth guidance and adjusted operating expenses would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above. 2025 Fiscal Year Financial Guidance Cboe provided guidance for the 2025 fiscal year as noted below. Organic total net revenue growth1 is expected to be in the high single digit range in 2025, up from previous guidance calling for mid to high single digits. Reaffirms Data Vantage organic net revenue growth1 range of mid to high single digits in 2025. Adjusted operating expenses1 are expected to be in the range of $832 to $847 million in 2025, down from previous guidance of $837 to $852 million. The guidance excludes the expected amortization of acquired intangible assets of $70 million; the company reflects the exclusion of this amount in its non-GAAP reconciliation. Depreciation and amortization expense is expected to be in the range of $53 to $57 million in 2025, down from previous guidance of $55 to $59 million, excluding the expected amortization of acquired intangible assets. Reaffirms the effective tax rate on adjusted earnings1 for the full year 2025 is expected to be in the range of 28.5 to 30.5 percent. Significant changes in trading volume, expenses, tax laws or rates, and other items could materially impact this expectation. Reaffirms capital expenditures in 2025 are expected to be in the range of $75 to $85 million. (1) Specific quantifications of the amounts that would be required to reconcile the company's organic and inorganic growth guidance, adjusted operating expenses guidance, annualized adjusted operating expenses guidance, and the effective tax rate on adjusted earnings guidance are not available. Acquisitions are considered organic after 12 months of closing. The company believes that there is uncertainty and unpredictability with respect to certain of its GAAP measures, primarily related to acquisition-related revenues and costs that would be required to reconcile to GAAP revenues less cost of revenues, GAAP operating expenses and GAAP effective tax rate, which preclude the company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The company believes that providing estimates of the amounts that would be required to reconcile the range of the company's organic growth, adjusted operating expenses, annualized adjusted operating expenses, and the effective tax rate on adjusted earnings would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above. Capital Management At June 30, 2025, the company had cash and cash equivalents of $1,256.3 million and adjusted cash2 of $1,238.2 million. Total debt as of June 30, 2025 was $1,442.0 million. The company paid cash dividends of $66.4 million, or $0.63 per share, during the second quarter of 2025 and utilized $35.3 million, excluding commissions and excise taxes, to repurchase approximately 161 thousand shares of its common stock under its share repurchase program at an average price of $219.77 per share. As of June 30, 2025, the company had approximately $614.5 million of availability remaining under its existing share repurchase authorizations. Earnings Conference Call Executives of Cboe Global Markets will host a conference call to review its second-quarter financial results today, August 1, 2025, at 8:30 a.m. ET/7:30 a.m. CT. The conference call and any accompanying slides will be publicly available via live webcast from the Investor Relations section of the company's website at under Events & Presentations. Participants may also listen via telephone by dialing (800) 715-9871 (toll-free) or (646) 307-1963 (toll) and using the Conference ID 6775785. Telephone participants should place calls 10 minutes prior to the start of the call. The webcast will be archived on the company's website for replay. (2) A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables. About Cboe Global Markets Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, and FX, across North America, Europe, and Asia Pacific. Above all, Cboe is committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit Cautionary Statements Regarding Forward-Looking Information This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," or "continue," and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Some factors that could cause actual results to differ include: the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes or changes in tax regimes; our ability to protect our systems and communication networks from security vulnerabilities and breaches; our ability to attract and retain skilled management and other personnel, increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; factors that impact the quality and integrity of our and other applicable indices; our ability to manage our global operations, growth, and strategic acquisitions or alliances effectively; increases in the cost of the products and services we use; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to minimize the risks, including our credit, counterparty investment, and default risks, associated with operating our clearinghouses; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing our business interests and our regulatory responsibilities; the loss of key customers or a significant reduction in trading or clearing volumes by key customers; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; the accuracy of our estimates and expectations; and litigation risks and other liabilities. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2024 and other filings made from time to time with the SEC. We do not undertake, and we expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The condensed consolidated statements of income and balance sheets are unaudited and subject to revision. Cboe Media Contacts:Analyst Contact: Angela TuTim CaveKenneth Hill, CFA (646) 856-8734+44 (0) 7593 506 719(312) 786-7559 atu@ CBOE-F Trademarks: Cboe®, Cboe Global Markets®, CFE®, Cboe Volatility Index®, Cboe Clear®, Cboe Datashop®, BIDS Trading®, BZX®, BYX®, EDGX®, EDGA®, The Exchange for the World Stage®, and VIX® are registered trademarks and Cboe Data VantageSM is a service mark of Cboe Global Markets, Inc. and its subsidiaries. All other trademarks and service marks are the property of their respective owners. Cboe Global Markets, Performance Statistics by Business Segment2Q 2025 1Q 2025 4Q 2024 3Q 2024 2Q 2024 OptionsTotal industry ADV (in thousands) 57,20358,44451,63548,73346,129 Total Company Options ADV (in thousands): 17,30118,18315,67314,88214,384 Multi-listed options 12,61513,41211,63310,65510,367 Index options 4,6864,7714,0404,2274,017 Total Options market share 30.2 %31.1 %30.4 %30.5 %31.2 % Multi-listed options 24.0 %25.0 %24.5 %24.0 %24.6 % Total Options RPC: $ 0.300$ 0.287$ 0.281$ 0.298$ 0.295 Multi-listed options $ 0.068$ 0.066$ 0.064$ 0.063$ 0.062 Index options $ 0.923$ 0.908$ 0.905$ 0.892$ 0.898 North American EquitiesU.S. Equities - Exchange:Total industry ADV (shares in billions) 18.415.713.611.511.8 Market share % 10.5 %10.5 %10.8 %10.9 %11.4 % Net capture (per 100 touched shares) $ 0.012$ 0.014$ 0.018$ 0.024$ 0.027 U.S. Equities - Off-Exchange:ADV (touched shares, in millions) 125.590.680.079.374.7 Off-Exchange ATS Block Market Share % (reported on a one-month lag) 15.2 %17.1 %16.5 %17.6 %17.8 % Net capture (per 100 touched shares) $ 0.082$ 0.117$ 0.126$ 0.135$ 0.136 Canadian Equities:ADV (matched shares, in millions) 150.6159.6157.4135.9150.6 Total market share % 12.7 %13.8 %14.3 %14.6 %15.0 % Net capture (per 10,000 shares, in Canadian Dollars) $ 4.222$ 4.250$ 4.008$ 4.240$ 4.046 Europe and Asia PacificEuropean Equities:Total industry ADNV (Euros - in billions) € 54.5€ 55.8€ 42.3€ 38.9€ 42.6 Market share % 25.1 %24.8 %24.6 %23.8 %22.5 % Net capture (per matched notional value (bps), in Euros) € 0.261€ 0.252€ 0.261€ 0.257€ 0.251 Cboe Clear Europe:Trades cleared (in thousands) 400,935.8412,072.2328,976.1306,882.5299,019.3 Fee per trade cleared (in Euros) € 0.008€ 0.008€ 0.008€ 0.008€ 0.008 Net settlement volume (shares in thousands) 3,289.33,200.72,962.62,947.62,764.0 Net fee per settlement (in Euros) € 0.956€ 0.951€ 1.002€ 1.026€ 1.038 Australian Equities:ADNV (AUD - in billions) $ 1.0$ 0.8$ 0.8$ 0.8$ 0.8 Market share - Continuous 20.0 %19.4 %20.8 %20.8 %20.8 % Net capture (per matched notional value (bps), in Australian Dollars) $ 0.160$ 0.156$ 0.154$ 0.156$ 0.155 Japanese Equities:ADNV (JPY - in billions) ¥ 213.7¥ 323.8¥ 263.8¥ 323.3¥ 315.2 Market share - Lit Continuous 3.6 %5.4 %4.9 %5.4 %5.5 % Net capture (per matched notional value (bps), in Yen) ¥ 0.215 ¥ 0.242 ¥ 0.233 ¥ 0.221 ¥ 0.229 FuturesADV (in thousands) 220.8249.4206.4273.7253.6 RPC $ 1.673$ 1.740$ 1.765$ 1.767$ 1.757 Global FXADNV ($ - in billions) $ 55.9$ 51.9$ 45.6$ 48.3$ 47.7 Net capture (per one million dollars traded) $ 2.81$ 2.77$ 2.72$ 2.66$ 2.69*In the second quarter of 2025, Digital futures products were transitioned to Cboe Futures Exchange. Futures metrics prior to the second quarter of 2025 exclude Digital futures products. ADV = average daily volume; ADNV = average daily notional value. RPC, average revenue per contract, for options and futures represents total net transaction fees recognized for the period divided by total contracts traded during the period. Touched volume represents the total number of shares of equity securities and ETFs internally matched on our exchanges or routed to and executed on an external market center. Matched volume represents the total number of shares of equity securities and ETFs executed on our exchanges. U.S. Equities - Exchange, "net capture per 100 touched shares" refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number of trading days. U.S. Equities – Off-Exchange data reflects BIDS Trading. For U.S. Equities – Off-Exchange, "net capture per 100 touched shares" refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period. Canadian Equities, "net capture per 10,000 shares" refers to transaction fees divided by the product of one-ten thousandth ADV of shares for Cboe Canada and the number of trading days. Total market share represents Cboe Canada volume divided by the total volume of the Canadian Equities market. European Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in Euros divided by the product of ADNV in Euros of shares matched on Cboe Europe Equities and the number of trading days. "Trades cleared" refers to the total number of non-interoperable trades cleared, "Fee per trade cleared" refers to clearing fees divided by number of non-interoperable trades cleared, "Net settlement volume" refers to the total number of settlements executed after netting, and "Net fee per settlement" refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting. Asia Pacific data reflects data from Cboe Australia and Cboe Japan. Australian Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in Australian dollars divided by the product of ADNV in Australian dollars of shares matched on Cboe Australia and the number of Australian Equities trading days. Japanese Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in Japanese Yen divided by the product of ADNV in Japanese Yen of shares matched on Cboe Japan and the number of Japanese Equities trading days. Global FX, "net capture per one million dollars traded" refers to transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction. Average transaction fees per contract can be affected by various factors, including exchange fee rates, volume-based discounts, and transaction mix by contract type and product type. Cboe Global Markets, Inc. and SubsidiariesCondensed Consolidated Statements of Income (Unaudited)Three and Six Months Ended June 30, 2025 and 2024Three Months Ended June 30,Six Months Ended June 30, (in millions, except per share amounts) 2025202420252024 Revenues:Cash and spot markets $ 487.6$ 386.4$ 988.5$ 767.3 Data Vantage 158.3142.1310.8282.3 Derivatives markets 527.6445.51,069.2881.6 Total Revenues 1,173.5974.02,368.51,931.2 Cost of Revenues:Liquidity payments 418.0307.0812.8645.8 Routing and clearing 20.716.640.332.6 Section 31 fees 85.377.7238.4119.8 Royalty fees and other cost of revenues 62.258.9124.5117.1 Total Cost of Revenues 586.2460.21,216.0915.3 Revenues Less Cost of Revenues 587.3513.81,152.51,015.9 Operating Expenses:Compensation and benefits 127.9116.1244.1231.4 Depreciation and amortization 29.931.860.269.1 Technology support services 26.724.652.348.8 Professional fees and outside services 24.825.845.647.3 Travel and promotional expenses 8.29.314.616.8 Facilities costs 7.06.113.212.6 Acquisition-related costs —0.60.21.2 Impairment of intangible assets 17.181.017.181.0 Other expenses 6.68.412.215.2 Total Operating Expenses 248.2303.7459.5523.4 Operating Income 339.1210.1693.0492.5 Non-operating (Expenses) Income:Interest expense (12.9)(12.8)(25.7)(25.8) Interest income 11.34.619.78.7 (Loss) earnings on investments, net (1.1)14.2(4.4)28.2 Other (expense) income, net (1.8)(13.1)2.2(8.5) Total Non-operating (Expenses) Income (4.5)(7.1)(8.2)2.6 Income Before Income Tax Provision 334.6203.0684.8495.1 Income tax provision 99.562.6199.1145.2 Net Income 235.1140.4485.7349.9 Net income allocated to participating securities (1.2)(0.7)(2.4)(1.9) Net Income Allocated to Common Stockholders $ 233.9$ 139.7$ 483.3$ 348.0 Net Income Per Share Allocated to Common Stockholders:Basic earnings per share $ 2.23$ 1.33$ 4.62$ 3.30 Diluted earnings per share 2.231.334.603.29 Weighted average shares used in computing income per share:Basic 104.7105.1104.7105.4 Diluted 105.0105.4105.0105.8 Cboe Global Markets, Inc. and SubsidiariesCondensed Consolidated Balance Sheets (Unaudited)June 30, 2025 and December 31, 2024 (in millions) June 30,2025December 31,2024 AssetsCurrent Assets:Cash and cash equivalents $ 1,256.3$ 920.3 Financial investments 207.6110.3 Accounts receivable, net 444.3444.6 Margin deposits, clearing funds, and interoperability funds 1,670.4845.5 Income taxes receivable 40.673.8 Other current assets (includes restricted cash of $30.2 at June 30, 2025 and $— at December 31, 2024) 123.784.6 Total Current Assets 3,742.92,479.1 Investments 379.6383.7 Property and equipment, net 127.9118.0 Operating lease right of use assets 122.2124.5 Goodwill 3,155.93,124.2 Intangible assets, net 1,356.21,376.9 Other assets, net 163.6182.7 Total Assets $ 9,048.3$ 7,789.1 Liabilities and Stockholders' EquityCurrent Liabilities:Accounts payable and accrued liabilities $ 467.3$ 359.7 Section 31 fees payable 238.4182.0 Deferred revenue 10.56.4 Margin deposits, clearing funds, and interoperability funds 1,670.4845.5 Income taxes payable —1.6 Total Current Liabilities 2,386.61,395.2 Long-term debt 1,442.01,441.0 Non-current unrecognized tax benefits 212.6305.0 Deferred income taxes 175.1186.8 Non-current operating lease liabilities 133.8138.4 Other non-current liabilities 33.143.1 Total Liabilities 4,383.23,509.5 Stockholders' Equity:Preferred stock —— Common stock 1.01.0 Treasury stock, at cost (90.5)(1.4) Additional paid-in capital 1,543.31,512.5 Retained earnings 3,168.92,815.9 Accumulated other comprehensive income (loss), net 42.4(48.4) Total Stockholders' Equity 4,665.14,279.6 Total Liabilities and Stockholders' Equity $ 9,048.3$ 7,789.1 Table 3 Net Transaction and Clearing Fees by Business SegmentThree Months EndedJune 30, 2025 and 2024(in millions) ConsolidatedJune 30, OptionsJune 30, N.A. EquitiesJune 30, Europe and APACJune 30, FuturesJune 30, Global FXJune 30, Digital1June 30, 20252024 20252024 20252024 20252024 20252024 20252024 20252024 Transaction and clearing fees $ 867.7$ 697.6 $ 468.3$ 385.9 $ 300.2$ 227.2 $ 54.0$ 38.9 $ 24.3$ 28.1 $ 20.9$ 17.1 $ —$ 0.4 Liquidity payments (418.0)(307.0) (142.7)(114.2) (262.3)(184.4) (11.6)(7.9) (1.4)— —— —(0.5) Routing and clearing (20.7)(16.6) (4.0)(4.0) (10.4)(7.5) (5.8)(4.6) —— (0.5)(0.5) —— Net transaction and clearing fees $ 429.0$ 374.0 $ 321.6$ 267.7 $ 27.5$ 35.3 $ 36.6$ 26.4 $ 22.9$ 28.1 $ 20.4$ 16.6 $ —$ (0.1) Table 4 Net Revenue by Revenue Caption Three Months Ended June 30, 2025 and 2024 (in millions) Cash and Spot MarketsJune 30, Data VantageJune 30, Derivatives MarketsJune 30, TotalJune 30, 2025 2024 2025 2024 2025 2024 2025 2024 Transaction and clearing fees $ 375.1 $ 283.6 $ — $ — $ 492.6 $ 414.0 $ 867.7 $ 697.6 Access and capacity fees — — 101.2 90.5 — — 101.2 90.5 Market data fees 17.0 14.6 56.4 50.9 9.0 8.2 82.4 73.7 Regulatory fees 71.3 63.2 — — 25.5 22.7 96.8 85.9 Other revenue 24.2 25.0 0.7 0.7 0.5 0.6 25.4 26.3 Total revenues $ 487.6 $ 386.4 $ 158.3 $ 142.1 $ 527.6 $ 445.5 $ 1,173.5 $ 974.0Liquidity payments $ 273.1 $ 192.0 $ — $ — $ 144.9 $ 115.0 $ 418.0 $ 307.0 Routing and clearing fees 16.7 12.6 — — 4.0 4.0 20.7 16.6 Section 31 fees 70.7 63.1 — — 14.6 14.6 85.3 77.7 Royalty fees and other cost of revenues 11.5 15.0 3.2 2.5 47.5 41.4 62.2 58.9 Total cost of revenues $ 372.0 $ 282.7 $ 3.2 $ 2.5 $ 211.0 $ 175.0 $ 586.2 $ 460.2Revenues less cost of revenues (netrevenue) $ 115.6 $ 103.7 $ 155.1 $ 139.6 $ 316.6 $ 270.5 $ 587.3 $ 513.8 (1) The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. Digital results from 2024 have been retained in the former Digital segment for comparative purposes. Non-GAAP Information In addition to disclosing results determined in accordance with GAAP, Cboe Global Markets has disclosed certain non-GAAP measures of operating performance. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. The non-GAAP measures provided in this press release include adjusted revenue less cost of revenue, adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income allocated to common stockholders, adjusted diluted earnings per share, effective tax rate on adjusted earnings, operating EBITDA, operating EBITDA margin, adjusted operating EBITDA, adjusted operating EBITDA margin, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted cash, and net revenues in constant currency. Management believes that the non-GAAP financial measures presented in this press release provide additional and comparative information to assess trends in our core operations and a means to evaluate period-to-period comparisons. Non-GAAP financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing our financial condition and operating results. Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Amortization of intangible assets is inconsistent in amount and frequency, and is significantly affected by the timing and size of our acquisitions. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses, the relative operating performance of the businesses between periods and the earnings power of the company. Therefore, we believe performance measures excluding intangible asset amortization expense provide investors with an additional basis for comparison across accounting periods. Acquisition-related costs: From time to time, we have pursued acquisitions, which have resulted in expenses which would not otherwise have been incurred in the normal course of the company's business operations. These expenses include compensation and benefits, integration costs, as well as legal, due diligence, impairment charges, and other third-party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing, and complexity of the transaction. Accordingly, we exclude these costs for purposes of calculating non-GAAP measures which provide an additional analysis of Cboe's ongoing operating performance or comparisons in Cboe's performance between periods. The tables below show the reconciliation of each financial measure from GAAP to non-GAAP. The non-GAAP financial measures exclude the impact of those items detailed below and are referred to as adjusted financial measures. Reconciliation of GAAP and Non-GAAP Information Table 5Three Months Ended June 30,Six Months EndedJune 30, (in millions, except percentages and per share amounts)2025202420252024 Reconciliation of Net Income Allocated to Common Stockholders toNon-GAAP (As shown on Table 1) Net income allocated to common stockholders$ 233.9$ 139.7$ 483.3$ 348.0 Non-GAAP adjustments Acquisition-related costs (1)—0.60.21.2 Amortization of acquired intangible assets (2)17.221.235.647.4 Gain on Cboe Digital non-recourse notes and warrants wind down (3)—(1.0)—(1.4) Cboe Digital syndication wind down (4)—(1.0)—(1.0) Change in contingent consideration (5)—3.0—3.0 Impairment of intangible assets (6)17.181.017.181.0 Impairment of investment (7)—16.0—16.0 Executive compensation adjustment (8)0.4—0.4— Gain on sale of property held for sale (9)—(1.0)—(1.0) Costs related to Cboe Digital wind down (10)0.20.80.50.8 Earnings on investments adjustments (11)(0.3)—(0.7)— Total Non-GAAP adjustments34.6119.653.1146.0 Income tax expense related to the items above(9.5)(32.7)(14.2)(39.6) Tax reserves (12)—(4.0)—(4.0) Deferred tax re-measurements (13)(1.0)—(1.0)— Valuation allowances (14)—4.1—4.1 Net income allocated to participating securities - effect on reconciling items(0.2)(0.5)(0.3)(0.6) Adjusted earnings$ 257.8$ 226.2$ 520.9$ 453.9Reconciliation of Diluted EPS to Non-GAAP Diluted earnings per common share$ 2.23$ 1.33$ 4.60$ 3.29 Per share impact of non-GAAP adjustments noted above0.230.820.361.01 Adjusted diluted earnings per common share$ 2.46$ 2.15$ 4.96$ 4.30Reconciliation of Operating Margin to Non-GAAP Revenue less cost of revenue$ 587.3$ 513.8$ 1,152.5$ 1,015.9 Non-GAAP adjustments noted above—(1.0)—(1.0) Adjusted revenue less cost of revenue$ 587.3$ 512.8$ 1,152.5$ 1,014.9 Operating expenses (15)$ 248.2$ 303.7$ 459.5$ 523.4 Non-GAAP adjustments noted above34.9106.653.8133.4 Adjusted operating expenses$ 213.3$ 197.1$ 405.7$ 390.0 Operating income$ 339.1$ 210.1$ 693.0$ 492.5 Non-GAAP adjustments noted above34.9105.653.8132.4 Adjusted operating income$ 374.0$ 315.7$ 746.8$ 624.9 Adjusted operating margin (16)63.7 %61.4 %64.8 %61.5 %Reconciliation of Income Tax Rate to Non-GAAP Income before income taxes$ 334.6$ 203.0$ 684.8$ 495.1 Non-GAAP adjustments noted above34.6119.653.1146.0 Adjusted income before income taxes$ 369.2$ 322.6$ 737.9$ 641.1Income tax expense$ 99.5$ 62.6$ 199.1$ 145.2 Non-GAAP adjustments noted above10.532.615.239.5 Adjusted income tax expense$ 110.0$ 95.2$ 214.3$ 184.7 Adjusted income tax rate29.8 %29.5 %29.0 %28.8 % (1) This amount includes acquisition-related costs primarily from the Company's Cboe Digital, Cboe Canada, and Cboe Asia Pacific acquisitions, which is included in acquisition-related costs on the condensed consolidated statements of income. (2) This amount represents the amortization of acquired intangible assets related to the Company's acquisitions, which is included in depreciation and amortization on the condensed consolidated statements of income. (3) This amount represents the revaluation and gain associated with the wind down of the Cboe Digital non-recourse notes and warrants, which is included in other (expense) income, net on the condensed consolidated statements of income. (4) This amount represents the contra-revenue that was reversed as a result of the Cboe Digital syndication wind down, which is included in transaction and clearing fees on the condensed consolidated statements of income. (5) This amount represents the loss related to contingent consideration liabilities achieved related to the acquisition of Cboe Asia Pacific, which is included in other expenses on the condensed consolidated statements of income. (6) This amount represents the impairment of customer relationships intangible assets related to Cboe Japan in 2025, as well as the impairment of intangible assets related to the Cboe Digital wind down in 2024, which are included in impairment of intangible assets on the condensed consolidated statements of income. (7) This amount represents the impairment related to the Company's minority investment in Globacap Technology Limited, which is included in other (expense) income, net on the condensed consolidated statements of income. (8) This amount represents the CEO sign-on long-term equity awards with a grant date value of $6.0 million (comprised of a mixture of time- and performance-based awards) and subject to a 3-year cliff vesting requirement associated with the hiring of Craig Donohue as Chief Executive Officer, which is included in compensation and benefits on the condensed consolidated statements of income. This amount does not include the CEO's annual long-term equity incentive awards that were prorated for 2025. (9) This amount represents the gain on the sale of the Company's former headquarters, which is included in other (expense) income, net on the condensed consolidated statements of income. (10) This amount represents certain wind down costs related to Cboe Digital, which are included in compensation and benefits on the condensed consolidated statements of income. (11) This amount represents the gains associated with the partial sale of PYTH token intangible assets and from the Company's minority investment in American Financial Exchange, LLC, which are included in (loss) earnings on investments, net on the condensed consolidated statements of income. (12) This amount represents the tax reserves related to Section 199 matters. (13) This amount represents remeasurements of deferred tax assets and liabilities at prevailing effective tax rates. (14) This amount represents the valuation allowance related to the impairment of the Company's minority investment in Globacap Technology Limited. (15) The company sponsors deferred compensation plans held in a trust. The expenses or income related to the deferred compensation plans are included in "Compensation and benefits" ($3.1 million and $1.4 million in expense for the three months ended June 30, 2025 and 2024, respectively, and $9.3 million and $0.1 million in expense for the six months ended June 30, 2025 and 2024, respectively), and are directly offset by deferred compensation income, expenses, and dividends included within "Other (expense) income, net" ($3.1 million and $1.4 million in income, expense, and dividends in the three months ended June 30, 2025 and 2024, respectively, and $9.3 million and $0.1 million in income, expense, and dividends in the six months ended June 30, 2025 and 2024, respectively), on the condensed consolidated statements of income. The deferred compensation plans' expenses are not excluded from "adjusted operating expenses" and do not have an impact on "Income before income taxes." (16) Adjusted operating margin represents adjusted operating income divided by revenues less cost of revenues. EBITDA Reconciliations EBITDA (earnings before interest, income taxes, depreciation and amortization) and Adjusted EBITDA are widely used non-GAAP financial measures of operating performance. These metrics are presented as supplemental information that the company believes are useful to investors to evaluate the company's results because they exclude certain items that are not directly related to the company's core operating performance. Operating EBITDA is calculated by adding back to operating income depreciation and amortization. Adjusted Operating EBITDA is calculated by adding back to Operating EBITDA acquisition-related costs, change in contingent consideration, impairment of intangible assets, executive compensation adjustment, Cboe Digital syndication wind down, and costs related to the Cboe Digital wind down. Operating EBITDA margin represents Operating EBITDA divided by revenues less cost of revenues. Adjusted Operating EBITDA margin represents Adjusted Operating EBITDA divided by revenues less cost of revenues. EBITDA is calculated by adding back to net income interest expense, net, income tax expense, depreciation and amortization. EBITDA margin represents EBITDA divided by revenues less cost of revenues. Adjusted EBITDA is calculated by adding back to EBITDA acquisition-related costs, change in contingent consideration, impairment of intangible assets, impairment of investment, executive compensation adjustment, costs related to Cboe Digital wind down, gain on sale of property held for sale, earnings on investments adjustments, gain on Cboe Digital non-recourse notes and warrants wind down, and Cboe Digital syndication wind down. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenues less cost of revenues. Operating EBITDA, Adjusted Operating EBITDA, EBITDA, and Adjusted EBITDA should not be considered as substitutes either for net income, as an indicator of the company's operating performance, or for cash flow, as a measure of the company's liquidity. In addition, because Operating EBITDA, Adjusted Operating EBITDA, EBITDA, and Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. Table 6 (in millions, except percentages)Three Months Ended June 30,Six Months Ended June 30, Reconciliation of Operating Income to Operating EBITDA and Adjusted Operating EBITDA (Per Table 1)2025202420252024 Operating income$ 339.1$ 210.1$ 693.0$ 492.5 Depreciation and amortization29.931.860.269.1 Operating EBITDA$ 369.0$ 241.9$ 753.2$ 561.6 Operating EBITDA Margin62.8 %47.1 %65.4 %55.3 %Non-GAAP adjustments not included in above line items Acquisition-related costs$ —$ 0.6$ 0.2$ 1.2 Change in contingent consideration—3.0—3.0 Impairment of intangible assets17.181.017.181.0 Executive compensation adjustment0.4—0.4— Cboe Digital syndication wind down—(1.0)—(1.0) Costs related to Cboe Digital wind down0.20.80.50.8 Adjusted Operating EBITDA$ 386.7$ 326.3$ 771.4$ 646.6 Adjusted Operating EBITDA Margin65.8 %63.5 %66.9 %63.6 %Reconciliation of Net Income Allocated to Common Stockholders to EBITDA and Adjusted EBITDA (Per Table 1)2025202420252024 Net income allocated to common stockholders$ 233.9$ 139.7$ 483.3$ 348.0 Interest expense, net1.68.26.017.1 Income tax provision99.562.6199.1145.2 Depreciation and amortization29.931.860.269.1 EBITDA$ 364.9$ 242.3$ 748.6$ 579.4 EBITDA Margin62.1 %47.2 %65.0 %57.0 %Non-GAAP adjustments not included in above line items Acquisition-related costs$ —$ 0.6$ 0.2$ 1.2 Change in contingent consideration—3.0—3.0 Impairment of intangible assets17.181.017.181.0 Impairment of investment—16.0—16.0 Executive compensation adjustment0.4—0.4— Costs related to Cboe Digital wind down0.20.80.50.8 Gain on sale of property held for sale—(1.0)—(1.0) Earnings on investments adjustments(0.3)—(0.7)— Gain on Cboe Digital non-recourse notes and warrants wind down—(1.0)—(1.4) Cboe Digital syndication wind down—(1.0)—(1.0) Adjusted EBITDA$ 382.3$ 340.7$ 766.1$ 678.0 Adjusted EBITDA Margin65.1 %66.3 %66.5 %66.7 % Table 7 (in millions)June 30,December 31, Reconciliation of Cash and Cash Equivalents to Adjusted Cash20252024 Cash and cash equivalents$ 1,256.3$ 920.3 Financial investments207.6110.3 Less deferred compensation plan assets(31.0)(40.3) Less cash collected for Section 31 Fees(194.7)(110.8) Adjusted Cash$ 1,238.2$ 879.5 Table 8 (in millions) Reconciliation of GAAP Net Revenues to Net Revenues in Constant Currency – Three and Six Months Ended June 30, 2025 and 2024Three Months EndedJune 30,Six Months EndedJune 30, 2025202420252024 Europe and Asia Pacific net revenues$ 70.4$ 54.3$ 134.5$ 108.4 Constant currency adjustment(3.3)—(1.5)— Europe and Asia Pacific net revenues in constant currency1$ 67.1$ 54.3$ 133.0$ 108.4 (1) Net revenues in constant currency is calculated by converting the current period GAAP net revenues in local currency using the foreign currency exchange rates that were in effect during the previous comparable period. 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Yahoo
31-07-2025
- Business
- Yahoo
AMG Reports Financial and Operating Results for the Second Quarter and First Half of 2025
Company reports Diluted EPS of $2.80, Economic EPS of $5.39 in the second quarter of 2025 Positive net client cash flows of more than $8 billion, driven by ongoing momentum in private markets and liquid alternatives New partnership with Montefiore Investment further diversifies AMG's business and expands its participation in private markets Economic Earnings per share of $5.39 for the quarter, an increase of 15% relative to prior-year quarter Repurchased ~$100 million in common stock, bringing total share repurchases to ~$273 million in the first half of the year WEST PALM BEACH, Fla., July 31, 2025 (GLOBE NEWSWIRE) -- AMG, a strategic partner to leading independent investment management firms globally, today reported its financial and operating results for the second quarter and six months ended June 30, 2025. Jay C. Horgen, Chief Executive Officer of AMG, said:'In the second quarter, AMG reported growth of 15% in Economic Earnings per share relative to the year-ago quarter, reflecting the disciplined execution of our capital allocation strategy and the increasing momentum in our business. Net client cash flows of more than $8 billion firmwide were driven by record flows into alternatives, reflecting ongoing strength in private markets fundraising and growing client demand for liquid alternative strategies. 'Through strong ongoing execution of our strategy, we are accelerating the evolution of AMG's business toward areas of secular growth. AMG's Affiliates managing private markets and liquid alternative strategies generated net client inflows of approximately $33 billion in the first half of the year, reflecting the ongoing demand for our Affiliates' specialized strategies. In addition, we recently announced a new partnership with Montefiore, a leading European private equity firm focused on the services sector. So far in 2025, we have announced four new partnerships with firms collectively managing approximately $24 billion in alternative strategies, underscoring the ongoing demand for AMG's unique approach, which magnifies the competitive advantages of partner-owned firms while also preserving their independence. 'With our excellent capital position and distinct competitive advantages, including our worldwide reputation as a collaborative strategic partner to the highest-quality independent firms, we are uniquely positioned to execute on our opportunity set. We remain confident in our ability to generate meaningful additional shareholder value over time, as we invest in new and existing Affiliates while also returning excess capital to shareholders within our disciplined capital allocation framework.' FINANCIAL HIGHLIGHTS Three Months Ended Six Months Ended (in millions, except as noted and per share data) 6/30/2024 6/30/2025 6/30/2024 6/30/2025 Operating Performance Measures AUM (at period end, in billions) $ 701.0 $ 771.0 $ 701.0 $ 771.0 Average AUM (in billions) 693.1 736.6 686.5 724.3 Net client cash flows (in billions) 0.9 8.1 (2.9 ) 7.7 Aggregate fees 1,098.1 1,173.5 2,569.7 2,443.9 Financial Performance Measures Net income (controlling interest) $ 76.0 $ 84.3 $ 225.8 $ 156.6 Earnings per share (diluted)(1) 2.26 2.80 6.49 5.01 Supplemental Performance Measures(2) Adjusted EBITDA (controlling interest) $ 217.5 $ 219.7 $ 477.3 $ 447.9 Economic net income (controlling interest) 155.9 159.2 342.6 317.9 Economic earnings per share 4.67 5.39 10.06 10.58 For additional information on our Supplemental Performance Measures, including reconciliations to GAAP, see the Financial Tables and Notes. Capital Management During the second quarter of 2025, the Company repurchased approximately $100 million in common stock, bringing total share repurchases to approximately $273 million in the first half of the year, and announced a second-quarter cash dividend of $0.01 per share of common stock, payable August 25, 2025 to stockholders of record as of the close of business on August 11, 2025. About AMGAMG (NYSE: AMG) is a strategic partner to leading independent investment management firms globally. AMG's strategy is to generate long‐term value by investing in high-quality independent partner-owned firms, through a proven partnership approach, and allocating resources across AMG's unique opportunity set to the areas of highest growth and return. Through its distinctive approach, AMG magnifies its Affiliates' existing advantages and actively supports their independence and ownership culture. As of June 30, 2025, AMG's aggregate assets under management were approximately $771 billion across a diverse range of private markets, liquid alternative, and differentiated long-only investment strategies. For more information, please visit the Company's website at Conference Call, Replay, and Presentation InformationA conference call will be held with AMG's management at 11:00 a.m. Eastern time today. Parties interested in listening to the conference call should dial 1-877-407-8291 (U.S. calls) or 1-201-689-8345 (non-U.S. calls) shortly before the call begins. The conference call will also be available for replay beginning approximately one hour after the conclusion of the call. To hear a replay of the call, please dial 1-877-660-6853 (U.S. calls) or 1-201-612-7415 (non-U.S. calls) and provide conference ID 13754341. The live call and replay of the session and a presentation highlighting the Company's performance can also be accessed via AMG's website at Investor and Media Relations: Patricia Figueroa+1 (617) 747-3300ir@ Financial Tables FollowASSETS UNDER MANAGEMENT - STATEMENTS OF CHANGES Alternatives Differentiated Long-Only BY STRATEGY - QUARTER TO DATE Private Markets Liquid Alternatives Equities Multi-Asset & Fixed Income Total AUM, March 31, 2025 $ 140.3 $ 154.8 $ 302.1 $ 115.0 $ 712.2 Client cash inflows and commitments 7.8 16.8 10.7 5.0 40.3 Client cash outflows (0.0 ) (5.3 ) (21.2 ) (5.7 ) (32.2 ) Net client cash flows 7.8 11.5 (10.5 ) (0.7 ) 8.1 New investments — 12.4 — — 12.4 Market changes 1.3 1.3 24.0 3.8 30.4 Foreign exchange 0.7 2.9 5.4 1.1 10.1 Realizations and distributions (net) (0.7 ) (0.1 ) (0.0 ) (0.1 ) (0.9 ) Other — (1.1 ) (0.0 ) (0.2 ) (1.3 ) AUM, June 30, 2025 $ 149.4 $ 181.7 $ 321.0 $ 118.9 $ 771.0 Alternatives Differentiated Long-Only BY STRATEGY - YEAR TO DATE Private Markets Liquid Alternatives Equities Multi-Asset &Fixed Income Total AUM, December 31, 2024 $ 135.4 $ 140.7 $ 316.2 $ 115.6 $ 707.9 Client cash inflows and commitments 11.3 32.7 19.5 9.8 73.3 Client cash outflows (0.1 ) (11.0 ) (43.7 ) (10.8 ) (65.6 ) Net client cash flows 11.2 21.7 (24.2 ) (1.0 ) 7.7 New investments 1.7 12.4 — — 14.1 Market changes 1.8 3.6 22.0 3.5 30.9 Foreign exchange 0.9 4.4 7.1 1.4 13.8 Realizations and distributions (net) (1.6 ) (0.0 ) (0.1 ) (0.3 ) (2.0 ) Other — (1.1 ) 0.0 (0.3 ) (1.4 ) AUM, June 30, 2025 $ 149.4 $ 181.7 $ 321.0 $ 118.9 $ 771.0 CONSOLIDATED STATEMENTS OF INCOME Three Months Ended (in millions, except per share data) 6/30/2024 6/30/2025 Consolidated revenue $ 500.3 $ 493.2 Consolidated expenses: Compensation and related expenses 215.3 263.7 Selling, general and administrative 89.4 95.7 Intangible amortization and impairments 7.3 6.3 Interest expense 33.5 34.5 Depreciation and other amortization 3.1 2.5 Other expenses (net) 10.8 10.0 Total consolidated expenses 359.4 412.7 Equity method income (net)(3) 18.1 65.6 Investment and other income 19.3 25.5 Income before income taxes 178.3 171.6 Income tax expense 43.3 35.7 Net income 135.0 135.9 Net income (non-controlling interests) (59.0 ) (51.6 ) Net income (controlling interest) $ 76.0 $ 84.3 Average shares outstanding (basic) 31.5 28.5 Average shares outstanding (diluted) 35.3 31.4 Earnings per share (basic) $ 2.42 $ 2.96 Earnings per share (diluted)(1) $ 2.26 $ 2.80 RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE MEASURES(2) Three Months Ended (in millions, except per share data) 6/30/2024 6/30/2025 Net income (controlling interest) $ 76.0 $ 84.3 Intangible amortization and impairments 65.6 31.0 Intangible-related deferred taxes 14.7 14.6 Other economic items(4) (0.4 ) 29.3 Economic net income (controlling interest) $ 155.9 $ 159.2 Average shares outstanding (adjusted diluted) 33.4 29.5 Economic earnings per share $ 4.67 $ 5.39 Net income (controlling interest) $ 76.0 $ 84.3 Interest expense 33.5 34.4 Income taxes 42.3 35.1 Intangible amortization and impairments 65.6 31.0 Other items(4) 0.1 34.9 Adjusted EBITDA (controlling interest) $ 217.5 $ 219.7 See Notes for additional information. CONSOLIDATED STATEMENTS OF INCOME Six Months Ended (in millions, except per share data) 6/30/2024 6/30/2025 Consolidated revenue $ 1,000.3 $ 989.8 Consolidated expenses: Compensation and related expenses 455.7 494.1 Selling, general and administrative 181.1 190.4 Intangible amortization and impairments 14.5 89.6 Interest expense 63.4 68.6 Depreciation and other amortization 6.1 5.3 Other expenses (net) 19.9 21.6 Total consolidated expenses 740.7 869.6 Equity method income (net)(3) 135.7 140.9 Investment and other income 37.2 37.1 Income before income taxes 432.5 298.2 Income tax expense 98.7 63.1 Net income 333.8 235.1 Net income (non-controlling interests) (108.0 ) (78.5 ) Net income (controlling interest) $ 225.8 $ 156.6 Average shares outstanding (basic) 32.1 28.9 Average shares outstanding (diluted) 36.0 32.3 Earnings per share (basic) $ 7.02 $ 5.43 Earnings per share (diluted)(1) $ 6.49 $ 5.01 RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE MEASURES(2) Six Months Ended (in millions, except per share data) 6/30/2024 6/30/2025 Net income (controlling interest) $ 225.8 $ 156.6 Intangible amortization and impairments 91.2 116.8 Intangible-related deferred taxes 30.9 13.9 Other economic items(4) (5.3 ) 30.6 Economic net income (controlling interest) $ 342.6 $ 317.9 Average shares outstanding (adjusted diluted) 34.0 30.0 Economic earnings per share $ 10.06 $ 10.58 Net income (controlling interest) $ 225.8 $ 156.6 Interest expense 63.4 68.5 Income taxes 99.7 65.4 Intangible amortization and impairments 91.2 116.8 Other items(4) (2.8 ) 40.6 Adjusted EBITDA (controlling interest) $ 477.3 $ 447.9 See Notes for additional information. CONSOLIDATED BALANCE SHEETS Period Ended (in millions) 12/31/2024 6/30/2025 Assets Cash and cash equivalents $ 950.0 $ 361.0 Receivables 409.7 571.0 Investments 595.6 644.1 Goodwill 2,504.9 2,537.6 Acquired client relationships (net) 1,777.8 1,716.1 Equity method investments in Affiliates (net) 2,246.6 2,618.3 Fixed assets (net) 57.6 56.7 Other assets 288.7 302.8 Total assets $ 8,830.9 $ 8,807.6 Liabilities and Equity Payables and accrued liabilities $ 639.1 $ 692.4 Debt 2,620.2 2,621.2 Deferred income tax liability (net) 520.5 544.3 Other liabilities 402.4 474.9 Total liabilities 4,182.2 4,332.8 Redeemable non-controlling interests 350.5 336.1 Equity: Common stock 0.6 0.6 Additional paid-in capital 733.1 701.2 Accumulated other comprehensive loss (163.6 ) (125.0 ) Retained earnings 6,899.8 7,055.9 7,469.9 7,632.7 Less: treasury stock, at cost (4,124.6 ) (4,394.0 ) Total stockholders' equity 3,345.3 3,238.7 Non-controlling interests 952.9 900.0 Total equity 4,298.2 4,138.7 Total liabilities and equity $ 8,830.9 $ 8,807.6 Notes (1) Earnings per share (diluted) adjusts for the dilutive effect of the potential issuance of incremental shares of our common assume the settlement of all of our Redeemable non-controlling interests using the maximum number of shares permitted under our arrangements. The issuance of shares and the related income acquired are excluded from the calculation if an assumed purchase of Redeemable non-controlling interests would be anti-dilutive to diluted earnings per are required to apply the if-converted method to our outstanding junior convertible securities when calculating Earnings per share (diluted). Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are contractually convertible into our common stock at that time. For this calculation, the interest expense (net of tax) attributable to these dilutive securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted. Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per following table provides a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share: Three Months Ended Six Months Ended (in millions) 6/30/2024 6/30/2025 6/30/2024 6/30/2025 Numerator Net income (controlling interest) $ 76.0 $ 84.3 $ 225.8 $ 156.6 Income (loss) from hypothetical settlement of Redeemable non-controlling interests, net of taxes 0.3 0.3 0.7 (1.5 ) Interest expense on junior convertible securities, net of taxes 3.4 3.4 6.7 6.7 Net income (controlling interest), as adjusted $ 79.7 $ 88.0 $ 233.2 $ 161.8 Denominator Average shares outstanding (basic) 31.5 28.5 32.1 28.9 Effect of dilutive instruments: Stock options and restricted stock units 1.9 1.0 1.9 1.1 Hypothetical issuance of shares to settle Redeemable non-controlling interests 0.2 0.2 0.3 0.6 Junior convertible securities 1.7 1.7 1.7 1.7 Average shares outstanding (diluted) 35.3 31.4 36.0 32.3 (2) As supplemental information, we provide non-GAAP performance measures of Adjusted EBITDA (controlling interest), Economic net income (controlling interest), and Economic earnings per share. We believe that many investors use our Adjusted EBITDA (controlling interest) when comparing our financial performance to other companies in the investment management industry. Management utilizes these non-GAAP performance measures to assess our performance before our share of certain non-cash GAAP expenses primarily related to the acquisition of interests in Affiliates and to improve comparability between periods. Economic net income (controlling interest) and Economic earnings per share are used by management and our Board of Directors as our principal performance benchmarks, including as one of the measures for determining executive compensation. These non-GAAP performance measures are provided in addition to, but not as a substitute for, Net income (controlling interest), Earnings per share, or other GAAP performance measures. For additional information on our non-GAAP measures, see our most recent Annual and Quarterly Reports on Form 10-K and 10-Q, respectively, which are accessible on the SEC's website at EBITDA (controlling interest) represents our performance before our share of interest expense, income and certain non-income based taxes, depreciation, amortization, impairments, gains and losses related to Affiliate Transactions, and non-cash items such as certain Affiliate equity activity, gains and losses on our contingent payment obligations, and unrealized gains and losses on seed capital, general partner commitments, and other strategic investments. Adjusted EBITDA (controlling interest) is also adjusted to include realized economic gains and losses related to these seed capital, general partner commitments, and other strategic our Economic net income (controlling interest) definition, we adjust Net income (controlling interest) for our share of pre-tax intangible amortization and impairments related to intangible assets (including the portion attributable to equity method investments in Affiliates) because these expenses do not correspond to the changes in the value of these assets, which do not diminish predictably over time. We also adjust for deferred taxes attributable to intangible assets because we believe it is unlikely these accruals will be used to settle material tax obligations. Further, we adjust for gains and losses related to Affiliate Transactions, net of tax, and other economic items. Other economic items include certain Affiliate equity activity, gains and losses related to contingent payment obligations, tax windfalls and shortfalls from share-based compensation, unrealized gains and losses on seed capital, general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed capital, general partner commitments, and other strategic earnings per share represents Economic net income (controlling interest) divided by the Average shares outstanding (adjusted diluted). In this calculation, we exclude the potential shares issued upon settlement of Redeemable non-controlling interests from Average shares outstanding (adjusted diluted) because we intend to settle those obligations without issuing shares, consistent with all prior Affiliate equity purchase transactions. The potential share issuance in connection with our junior convertible securities is measured using a 'treasury stock' method. Under this method, only the net number of shares of common stock equal to the value of the junior convertible securities in excess of par, if any, are deemed to be outstanding. We believe the inclusion of net shares under a treasury stock method best reflects the benefit of the increase in available capital resources (which could be used to repurchase shares of our common stock) that occurs when these securities are converted and we are relieved of our debt following table provides a reconciliation of Average shares outstanding (adjusted diluted): Three Months Ended Six Months Ended (in millions) 6/30/2024 6/30/2025 6/30/2024 6/30/2025 Average shares outstanding (diluted) 35.3 31.4 36.0 32.3 Hypothetical issuance of shares to settle Redeemable non-controlling interests (0.2 ) (0.2 ) (0.3 ) (0.6 ) Junior convertible securities (1.7 ) (1.7 ) (1.7 ) (1.7 ) Average shares outstanding (adjusted diluted) 33.4 29.5 34.0 30.0 (3) The following table presents pre-tax equity method earnings, equity method intangible amortization and impairments, and equity method income tax, which in aggregate form Equity method income (net): Three Months Ended Six Months Ended (in millions) 6/30/2024 6/30/2025 6/30/2024 6/30/2025 Pre-tax equity method earnings $ 80.3 $ 94.1 $ 222.8 $ 193.6 Equity method intangible amortization and impairments (60.8 ) (27.0 ) (81.6 ) (45.6 ) Equity method income tax (1.4 ) (1.5 ) (5.5 ) (7.1 ) Equity method income (net) $ 18.1 $ 65.6 $ 135.7 $ 140.9 (4) For the three and six months ended June 30, 2025, other economic items and other items include a one-time expense of $30.5 million which resulted from a modification of Affiliate equity which, consistent with the definitions of our non-GAAP performance measures, has been added back to Economic net income (controlling interest) and Adjusted EBITDA (controlling interest). Forward-Looking Statements and Other Matters Certain matters discussed in this press release issued by Affiliated Managers Group, Inc. ('AMG' or the 'Company') may constitute forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as 'outlook,' 'guidance,' 'believes,' 'expects,' 'potential,' 'preliminary,' 'continues,' 'may,' 'will,' 'should,' 'seeks,' 'approximately,' 'predicts,' 'projects,' 'positioned,' 'prospects,' 'intends,' 'plans,' 'estimates,' 'pending investments,' 'anticipates,' or the negative version of these words or other comparable words. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including changes in the securities or financial markets or in general economic conditions, global trade tensions and changes in trade policies, the availability of equity and debt financing, competition for acquisitions of interests in investment management firms, uncertainties relating to closing of pending investments or transactions and potential changes in the anticipated benefits thereof, the investment performance and growth rates of our Affiliates and their ability to effectively market their investment strategies, the mix of Affiliate contributions to our earnings, and other risks, uncertainties, and assumptions, including those described under the section entitled 'Risk Factors' in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such factors may be updated from time to time in our periodic filings with the SEC. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by applicable law. This press release does not constitute an offer of any products, investment vehicles, or services of any AMG Affiliate. From time to time, AMG may use its website as a distribution channel of material Company information. AMG routinely posts financial and other important information regarding the Company in the Investor Relations section of its website at and encourages investors to consult that section in to access your portfolio
Yahoo
29-07-2025
- Business
- Yahoo
P&G Announces Fourth Quarter and Fiscal Year 2025 Results
Q4 '25: Net Sales +2%; Organic Sales +2%; Diluted EPS +17%; Core EPS +6% FY '25: Net Sales 0%; Organic Sales +2%; Diluted EPS +8%; Core EPS +4% CINCINNATI, July 29, 2025--(BUSINESS WIRE)--The Procter & Gamble Company (NYSE:PG) reported fourth quarter and fiscal year 2025 results. "We grew sales and profit in fiscal 2025 and returned high levels of cash to shareowners in a dynamic, difficult and volatile environment," said Jon Moeller, Chairman of the Board, President and Chief Executive Officer. "We've put in place strong plans to continue to deliver for all stakeholders in the current environment. In fiscal 2026, we expect to deliver another year of organic sales growth, Core EPS growth and strong adjusted free cash flow productivity. We remain committed to our integrated strategy – a focused product portfolio of daily use categories where performance drives brand choice, superiority – across product performance, packaging, brand communication, retail execution and consumer and customer value – productivity, constructive disruption and an agile and accountable organization, all aimed at delivering sustainable, balanced growth and value creation." Fiscal Year ($ billions, except EPS) GAAP 2025 2024 % Change Non-GAAP* 2025 2024 % Change Net Sales $84.3 $84.0 —% Organic Sales n/a n/a +2% Diluted EPS $6.51 $6.02 +8% Core EPS $6.83 $6.59 +4% Fourth Quarter ($ billions, except EPS) GAAP 2025 2024 % Change Non-GAAP* 2025 2024 % Change Net Sales $20.9 $20.5 2% Organic Sales n/a n/a +2% Diluted EPS $1.48 $1.27 17% Core EPS $1.48 $1.40 +6% * Please refer to Exhibit 1 - Non-GAAP Measures for the definition and reconciliation of these measures to the related GAAP measures. Fiscal Year 2025 Results The Company reported fiscal year 2025 net sales of $84.3 billion, unchanged versus the prior year. A one percent increase due to higher pricing was offset by a one percent decrease from unfavorable foreign exchange impacts. All-in volume was unchanged versus prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, increased two percent. Higher pricing and organic volume each contributed one point of growth to organic sales. Mix was unchanged versus the prior year. Diluted net earnings per share were $6.51, an increase of eight percent versus prior year as a reduction in selling, general and administrative costs (SG&A) in the current year and the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year were partially offset by higher non-core restructuring charges in the current year. Core net earnings per share increased by 4% to $6.83. Currency-neutral core EPS increased 4% versus the prior year core EPS. The Company generated operating cash flow of $17.8 billion and net earnings of $16.1 billion for the fiscal year. Adjusted free cash flow productivity was 87%, which is calculated as operating cash flow less capital spending and certain other items, as a percentage of net earnings excluding the non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina. The Company returned over $16 billion of value to shareholders in fiscal 2025 via $9.9 billion in dividend payments and $6.5 billion of share repurchases. With the dividend increase in April 2025, this marks the 69th consecutive year that P&G has increased its dividend and the 135th consecutive year that P&G has paid a dividend since its incorporation in 1890. April-June Quarter Results The Company reported fiscal year 2025 fourth quarter net sales of $20.9 billion, an increase of two percent versus the prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, also increased two percent. Higher pricing and favorable mix impacts each contributed a one percent increase to sales growth. Volume and foreign exchange each had a neutral impact on sales growth for the quarter. Diluted net earnings per share were $1.48, an increase of seventeen percent versus the prior year driven primarily by higher restructuring charges in the prior year related to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria. Core net earnings per share increased six percent to $1.48. Currency-neutral core EPS increased five percent versus the prior year EPS. Operating cash flow was $5.0 billion and net earnings were $3.6 billion, with adjusted free cash flow productivity of 110%. April-June Quarter Business Discussion April - June 2025 Volume ForeignExchange Price Mix Other (2) Net Sales OrganicVolume OrganicSales Net Sales Drivers (1) Beauty 1% (1)% 1% (1)% —% —% 1% 1% Grooming —% —% 4% (1)% (1)% 2% (1)% 1% Health Care (2)% —% 1% 3% —% 2% (2)% 2% Fabric & Home Care —% 1% 1% —% —% 2% —% 1% Baby, Feminine & Family Care —% 1% 1% —% —% 2% —% 1% Total P&G —% —% 1% 1% —% 2% —% 2% (1) Net sales percentage changes are approximations based on quantitative formulas that are consistently applied. (2) Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales. Beauty segment organic sales increased one percent versus year ago. Hair Care organic sales were unchanged as innovation-driven growth in Latin America and Europe was offset by volume declines in North America and Greater China. Personal Care organic sales increased low single digits driven by volume growth in North America, partially offset by negative impacts from unfavorable geographic mix. Skin Care organic sales were unchanged as volume growth in Greater China was offset by a volume decline in North America and unfavorable mix. Grooming segment organic sales increased one percent versus year ago driven by innovation-based pricing, partially offset by an appliances volume decline. Health Care segment organic sales increased two percent versus year ago. Oral Care organic sales increased low single digits driven by product mix from premium innovation. Personal Health Care organic sales also increased low single digits driven by growth due to pricing, partially offset by a volume decline due to lower average incidence of cough and cold in North America. Fabric and Home Care segment organic sales increased one percent versus year ago. Fabric Care organic sales increased low single digits driven primarily by innovation-driven growth in North America. Home Care organic sales also increased low single digits due to volume growth in North America and Europe. Baby, Feminine and Family Care segment organic sales increased one percent versus year ago. Baby Care organic sales declined low single digits driven by volume declines in North America. Feminine Care organic sales increased low single digits driven by increased pricing and favorable product mix. Family Care organic sales increased low single digits driven by volume growth. Reported gross margin for the quarter decreased 50 basis points versus year ago. Core gross margin for the quarter decreased 70 basis points versus year ago, 50 basis points on a currency-neutral basis. The decrease was driven by 150 basis points of unfavorable product mix, 70 basis points of product/package reinvestments, 40 basis points of higher commodity costs, 40 basis points of higher costs from tariffs and 40 basis points of other miscellaneous items and rounding. These were partially offset by 240 basis points of productivity savings and 50 basis points of pricing benefit. Reported selling, general and administrative expense (SG&A) as a percentage of sales declined 240 basis points versus the prior year. Core and currency-neutral selling, general and administrative expense (SG&A) as a percentage of sales declined 220 basis points versus year ago. The decline was driven by 320 basis points of productivity savings, which includes reductions across marketing and overhead costs and adjustments to expected variable compensation payouts, and 60 basis points of net sales growth leverage and rounding, partially offset by 160 basis points of reinvestments. Reported operating margin for the quarter increased 190 basis points due primarily to productivity savings. Excluding 40 basis points of non-core restructuring charges in the prior year, core operating margin for the quarter increased 150 basis points versus the prior year and 170 basis points on a currency-neutral basis. Core operating margin included gross productivity savings of 560 basis points. Limited Market Portfolio Restructuring In fiscal year 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In the July-September 2024 quarter of fiscal year 2025, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina and recorded incremental restructuring charges of $0.8 billion after tax, comprised primarily of non-cash charges for accumulated foreign currency translation losses. Focused Portfolio, Supply Chain and Productivity Plan In June 2025, the Company announced a portfolio and productivity plan to focus its portfolio and organization to improve its cost structure and competitiveness. In connection with this announcement, the Company said that it expects to incur non-core restructuring costs of approximately $1 to $1.6 billion before-tax over a two-year period. These restructuring activities include a plan for a reduction in non-manufacturing overhead personnel of up to 7,000 by the end of fiscal 2027. The Company expects to incur half of the costs under this plan by the end of fiscal 2026, with the remainder incurred in fiscal 2027. Fiscal Year 2026 Guidance P&G expects fiscal year 2026 all-in sales growth in the range of one to five percent versus the prior year. This includes a one percent benefit from the net impacts of foreign exchange rates and acquisitions and divestitures. The Company expects organic sales growth in the range of flat to up four percent versus prior year. Included in organic sales is a growth headwind of 30 to 50 basis points from brand and product form discontinuations. P&G expects fiscal 2026 diluted net earnings per share growth in the range of 3% to 9% versus fiscal 2025 GAAP EPS of $6.51. GAAP EPS includes an expected gain from the exit of the Glad Joint Venture with Clorox in the range of $0.10 to $0.13 per share and non-core restructuring charges of $0.12 to $0.25 per share. P&G expects its fiscal 2026 core earnings per share growth in the range of flat to up four percent versus fiscal 2025 core EPS of $6.83. This outlook equates to a range of $6.83 to $7.09 per share, with a mid-point estimate of $6.96, or an increase of 2%. The Company estimates a headwind of around $200 million after-tax from unfavorable commodity costs and a net headwind of roughly $250 million after-tax from modestly higher net interest expense and its core effective tax rate. In addition, the Company's outlook includes around $1 billion dollars before-tax, or approximately $800 million after-tax, in higher costs from tariffs. The Company said it expects a tailwind from foreign exchange rates of approximately $300 million dollars after-tax. Combined, the net of these impacts equates to a headwind of $0.39 per share for fiscal 2026, or a six percent drag on core EPS growth. The Company is not able to reconcile its forward-looking non-GAAP cash flow and tax rate measures without unreasonable efforts given the unpredictability of the timing and amounts of discrete items, such as acquisitions, divestitures, or impairments, which could significantly impact GAAP results. P&G said it expects a core effective tax rate to be in the range of 20% to 21% in fiscal 2026, at the mid-point of the range, approximately one point higher than the fiscal 2025 level. Capital spending is estimated to be in the range of four to five percent of fiscal 2026 net sales. P&G said it expects adjusted free cash flow productivity of 85% to 90% and expects to pay around $10 billion in dividends and to repurchase approximately $5 billion of common shares in fiscal 2026. Forward-Looking Statements Certain statements in this release, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result" and similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, except to the extent required by law. Risks and uncertainties to which our forward-looking statements are subject include, without limitation: (1) the ability to successfully manage global financial risks, including foreign currency fluctuations, changes in global interest rates and rate differentials, currency exchange, pricing controls or tariffs; (2) the ability to successfully manage local, regional or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow the Company to effect the expected share repurchases and dividend payments; (3) the ability to successfully manage uncertainties related to changing political and geopolitical conditions and potential implications such as exchange rate fluctuations, market contraction, boycotts, variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; (4) the ability to manage disruptions in credit markets or to our banking partners or changes to our credit rating; (5) the ability to maintain key manufacturing and supply arrangements (including execution of supply chain optimizations and sole supplier and sole manufacturing plant arrangements) and to manage disruption of business due to various factors, including ones outside of our control, such as natural disasters, acts of war or terrorism or disease outbreaks; (6) the ability to successfully manage cost fluctuations and pressures, including prices of commodities and raw materials and costs of labor, transportation, energy, pension and healthcare; (7) the ability to compete with our local and global competitors in new and existing sales channels, including by successfully responding to competitive factors such as prices, promotional incentives and trade terms for products; (8) the ability to manage and maintain key customer relationships; (9) the ability to protect our reputation and brand equity by successfully managing real or perceived issues, including concerns about safety, quality, ingredients, efficacy, packaging content, supply chain practices, social or environmental practices or similar matters that may arise; (10) the ability to successfully manage the financial, legal, reputational and operational risk associated with third-party relationships, such as our suppliers, contract manufacturers, distributors, contractors and external business partners; (11) the ability to rely on and maintain key company and third-party information and operational technology systems, networks and services and maintain the security and functionality of such systems, networks and services and the data contained therein; (12) the ability to successfully manage the demand, supply and operational challenges, as well as governmental responses or mandates, associated with a disease outbreak, including epidemics, pandemics or similar widespread public health concerns; (13) the ability to stay on the leading edge of innovation, obtain necessary intellectual property protections and successfully respond to changing consumer habits, evolving digital marketing and selling platform requirements and technological advances attained by, and patents granted to, competitors; (14) the ability to successfully manage our ongoing acquisition, divestiture and joint venture activities, in each case to achieve the Company's overall business strategy and financial objectives, without impacting the delivery of base business objectives; (15) the ability to successfully achieve productivity improvements and cost savings and manage ongoing organizational changes while successfully identifying, developing and retaining key employees, including in key growth markets where the availability of skilled or experienced employees may be limited; (16) the ability to successfully manage current and expanding regulatory and legal requirements and matters (including, without limitation, those laws, regulations, policies and related interpretations involving product liability, product and packaging composition, manufacturing processes, intellectual property, labor and employment, antitrust, privacy, cybersecurity, data protection and data transfers, artificial intelligence, tax, the environment, due diligence, risk oversight, accounting and financial reporting) and to resolve new and pending matters within current estimates; (17) the ability to manage changes in applicable tax laws and regulations; and (18) the ability to continue delivering progress towards our environmental sustainability ambitions. For additional information concerning factors that could cause actual results and events to differ materially from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports. About Procter & Gamble P&G serves consumers around the world with one of the strongest portfolios of trusted, quality, leadership brands, including Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Fairy®, Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®, Tide®, Vicks®, and Whisper®. The P&G community includes operations in approximately 70 countries worldwide. Please visit for the latest news and information about P&G and its brands. For other P&G news, visit us at THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Consolidated Earnings Information Three Months Ended June 30 Fiscal Year Ended June 30 2025 2024 % Chg 2025 2024 % Chg NET SALES $ 20,889 $ 20,532 2% $ 84,284 $ 84,039 —% Cost of products sold 10,631 10,348 3% 41,164 40,848 1% GROSS PROFIT 10,258 10,183 1% 43,120 43,191 —% Selling, general and administrative expense 5,903 6,299 (6)% 22,669 23,305 (3)% Indefinite-lived intangible asset impairment charge — — — 1,341 OPERATING INCOME 4,355 3,884 12% 20,451 18,545 10% Interest expense (212 ) (220 ) (4)% (907 ) (925 ) (2)% Interest income 104 107 (3)% 469 473 (1)% Other non-operating income, net 274 98 180% 154 668 (77)% EARNINGS BEFORE INCOME TAXES 4,521 3,870 17% 20,167 18,761 7% Income taxes 895 726 23% 4,102 3,787 8% NET EARNINGS 3,626 3,144 15% 16,065 14,974 7% Less: Net earnings/(loss) attributable to non controlling interests 11 7 57% 91 95 (4)% NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 3,615 $ 3,137 15% $ 15,974 $ 14,879 7% EFFECTIVE TAX RATE 19.8 % 18.8 % 20.3 % 20.2 % NET EARNINGS PER COMMON SHARE: (1) Basic $ 1.51 $ 1.30 16% $ 6.67 $ 6.18 8% Diluted $ 1.48 $ 1.27 17% $ 6.51 $ 6.02 8% DIVIDENDS PER COMMON SHARE $ 1.0568 $ 1.0065 5% $ 4.0763 $ 3.8286 6% Diluted Weighted Average Common Shares Outstanding 2,443.8 2,472.2 2,454.4 2,471.9 COMPARISONS AS A % OF NET SALES Basis Pt Change Basis Pt Change Gross margin 49.1 % 49.6 % (50) 51.2 % 51.4 % (20) Selling, general and administrative expense 28.3 % 30.7 % (240) 26.9 % 27.7 % (80) Operating margin 20.8 % 18.9 % 190 24.3 % 22.1 % 220 Earnings before income taxes 21.6 % 18.8 % 280 23.9 % 22.3 % 160 Net earnings 17.4 % 15.3 % 210 19.1 % 17.8 % 130 Net earnings attributable to Procter & Gamble 17.3 % 15.3 % 200 19.0 % 17.7 % 130 (1) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. Amounts in millions of dollars except per share amounts or as otherwise specified. Certain columns and rows may not add due to rounding. THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Consolidated Earnings Information Three Months Ended June 30, 2025 Net Sales % ChangeVersus YearAgo Earnings/(Loss) BeforeIncome Taxes % ChangeVersus YearAgo Net Earnings/(Loss) % ChangeVersus YearAgo Beauty $3,733 —% $708 3% $557 4% Grooming 1,683 2% 458 16% 371 19% Health Care 2,722 2% 487 12% 372 14% Fabric & Home Care 7,385 2% 1,751 10% 1,375 11% Baby, Feminine & Family Care 5,093 2% 1,217 10% 948 12% Corporate 274 N/A (100) N/A 4 N/A TOTAL $20,889 2% $4,521 17% $3,626 15% Three Months Ended June 30, 2025 (Percent Change vs. Year Ago) (1) Volume withAcquisitions &Divestitures Volume ExcludingAcquisitions &Divestitures ForeignExchange Price Mix Other (2) Net SalesGrowth Beauty 1% 1% (1)% 1% (1)% —% —% Grooming —% (1)% —% 4% (1)% (1)% 2% Health Care (2)% (2)% —% 1% 3% —% 2% Fabric & Home Care —% —% 1% 1% —% —% 2% Baby, Feminine & Family Care —% —% 1% 1% —% —% 2% TOTAL —% —% —% 1% 1% —% 2% Fiscal Year Ended June 30, 2025 Net Sales % ChangeVersus YearAgo Earnings/(Loss) BeforeIncome Taxes % ChangeVersus YearAgo Net Earnings/(Loss) % ChangeVersus YearAgo Beauty $14,964 (2)% $3,454 (9)% $2,715 (8)% Grooming 6,662 —% 1,952 6% 1,577 7% Health Care 11,998 2% 3,149 7% 2,440 8% Fabric & Home Care 29,617 —% 7,459 2% 5,848 3% Baby, Feminine & Family Care 20,248 —% 5,214 (1)% 4,013 —% Corporate 794 N/A (1,061) N/A (527) N/A TOTAL $84,284 —% $20,167 7% $16,065 7% Fiscal Year Ended June 30, 2025 (Percent Change vs. Year Ago) (1) Volume withAcquisitions &Divestitures Volume ExcludingAcquisitions &Divestitures ForeignExchange Price Mix Other (2) Net SalesGrowth Beauty (1)% 1% (1)% 2% (2)% —% (2)% Grooming 2% 2% (2)% 2% (1)% (1)% —% Health Care (1)% (1)% (1)% 1% 3% —% 2% Fabric & Home Care —% 1% (1)% —% 1% —% —% Baby, Feminine & Family Care —% —% (1)% —% 1% —% —% TOTAL —% 1% (1)% 1% —% —% —% (1) Net sales percentage changes are approximations based on quantitative formulas that are consistently applied. (2) Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales. Amounts in millions of dollars except per share amounts or as otherwise specified. Certain columns and rows may not add due to rounding. THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Consolidated Statements of Cash Flows Fiscal Year Ended June 30 2025 2024 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR $ 9,482 $ 8,246 OPERATING ACTIVITIES (1) Net earnings 16,065 14,974 Depreciation and amortization 2,847 2,896 Share-based compensation expense 476 562 Deferred income taxes 149 (244 ) Loss/(gain) on sale of assets 755 (215 ) Indefinite-lived intangible asset impairment charge — 1,341 Change in accounts receivable 45 (766 ) Change in inventories (324 ) (70 ) Change in accounts payable (542 ) 878 Other (1,653 ) 491 TOTAL OPERATING ACTIVITIES 17,817 19,846 INVESTING ACTIVITIES Capital expenditures (3,773 ) (3,322 ) Proceeds from asset sales 107 346 Acquisitions, net of cash acquired (11 ) (21 ) Other investing activity (141 ) (507 ) TOTAL INVESTING ACTIVITIES (3,818 ) (3,504 ) FINANCING ACTIVITIES Dividends to shareholders (9,872 ) (9,312 ) Additions to short-term debt with original maturities of more than three months 8,020 3,528 Reductions in short-term debt with original maturities of more than three months (6,512 ) (7,689 ) Net additions/(reductions) to other short-term debt (1,138 ) 857 Additions to long-term debt 2,237 3,197 Reductions of long-term debt (1,977 ) (2,335 ) Treasury stock purchases (6,500 ) (5,006 ) Impact of stock options and other 1,707 1,905 TOTAL FINANCING ACTIVITIES (14,036 ) (14,855 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH 112 (251 ) CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 75 1,235 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR $ 9,556 $ 9,482 (1) Certain prior period amounts within Operating Activities have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the previously reported Total Operating Activities. Amounts in millions of dollars except per share amounts or as otherwise specified. Certain columns and rows may not add due to rounding. THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Condensed Consolidated Balance Sheets June 30, 2025 June 30, 2024 Cash and cash equivalents $ 9,556 $ 9,482 Accounts receivable 6,185 6,118 Inventories 7,551 7,016 Prepaid expenses and other current assets 2,100 2,095 TOTAL CURRENT ASSETS 25,392 24,709 PROPERTY, PLANT AND EQUIPMENT, NET 23,897 22,152 GOODWILL 41,650 40,303 TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 21,910 22,047 OTHER NONCURRENT ASSETS 12,381 13,158 TOTAL ASSETS $ 125,231 $ 122,370 Accounts payable $ 15,227 $ 15,364 Accrued and other liabilities 11,318 11,073 Debt due within one year 9,513 7,191 TOTAL CURRENT LIABILITIES 36,058 33,627 LONG-TERM DEBT 24,995 25,269 DEFERRED INCOME TAXES 5,774 6,516 OTHER NONCURRENT LIABILITIES 6,120 6,398 TOTAL LIABILITIES 72,946 71,811 TOTAL SHAREHOLDERS' EQUITY 52,284 50,559 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 125,231 $ 122,370 The Procter & Gamble Company Exhibit 1: Non-GAAP Measures The following provides definitions of the non-GAAP measures used in Procter & Gamble's July 29, 2025, earnings release and the reconciliation to the most closely related GAAP measure. We believe that these measures provide useful perspective on underlying business trends (i.e., trends excluding non-recurring or unusual items) and results and provide a supplemental measure of period-to-period results. The non-GAAP measures described below are used by management in making operating decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors, as they provide supplemental information about business performance and provide investors a view of our business results through the eyes of management. These measures are also used to evaluate senior management and are a factor in determining their at-risk compensation. These non-GAAP measures are not intended to be considered by the user in place of the related GAAP measures but rather as supplemental information to our business results. These non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted. The Company is not able to reconcile its forward-looking non-GAAP cash flow and tax rate measures because the Company cannot predict the timing and amounts of discrete items such as acquisition and divestitures, which could significantly impact GAAP results. Note that certain columns and rows may not add due to rounding. The Core earnings measures included in the following reconciliation tables refer to the equivalent GAAP measures adjusted as applicable for the following items: Incremental restructuring: The Company has historically had an ongoing level of restructuring activities of approximately $250 - $500 million before tax. In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina. The adjustment to Core earnings includes the restructuring charges that exceed the normal, recurring level of restructuring charges. Intangible asset impairment: In the fiscal year ended June 30, 2024, the Company recognized a non-cash, after-tax impairment charge of $1.0 billion ($1.3 billion before tax) to adjust the carrying value of the Gillette intangible asset acquired as part of the Company's 2005 acquisition of The Gillette Company. We do not view the above items to be part of our sustainable results, and their exclusion from core earnings measures provides a more comparable measure of year-on-year results. These items are also excluded when evaluating senior management in determining their at-risk compensation. Organic sales growth: Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions and divestitures and foreign exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. This measure is used in assessing the achievement of management goals for at-risk compensation. Core EPS and Currency-neutral Core EPS: Core net earnings per share, or Core EPS, is a measure of diluted net earnings per common share (diluted EPS) adjusted for items as indicated. Currency-neutral Core EPS is a measure of the Company's Core EPS excluding the incremental current year impact of foreign exchange. We view these non-GAAP measures as useful supplemental measures of Company performance over time. Core gross margin and Currency-neutral Core gross margin: Core gross margin is a measure of the Company's gross margin adjusted for items as indicated. Currency-neutral Core gross margin is a measure of the Company's Core gross margin excluding the incremental current year impact of foreign exchange. We believe these non-GAAP measures provide a supplemental perspective to the Company's operating efficiency over time. Core selling, general and administrative (SG&A) expense as a percentage of sales and Currency-neutral Core SG&A expense as a percentage of sales: Core SG&A expense as a percentage of sales is a measure of the Company's selling, general and administrative expense as a percentage of net sales adjusted for items as indicated. Currency-neutral Core SG&A expense as a percentage of sales is a measure of the Company's Core selling, general and administrative expense as a percentage of net sales excluding the incremental current year impact of foreign exchange. We believe these non-GAAP measures provides a supplemental perspective to the Company's operating efficiency over time. Core operating margin and Currency-neutral Core operating margin: Core operating margin is a measure of the Company's operating margin adjusted for items as indicated. Currency-neutral Core operating margin is a measure of the Company's Core operating margin excluding the incremental current year impact of foreign exchange. We believe these non-GAAP measures provide a supplemental perspective to the Company's operating efficiency over time. Adjusted free cash flow: Adjusted free cash flow is defined as operating cash flow less capital spending and excluding payments for the transitional tax resulting from the 2017 U.S. Tax Act. Adjusted free cash flow represents the cash that the Company is able to generate after taking into account planned maintenance and asset expansion. We view adjusted free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investments. Adjusted free cash flow productivity: Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow to net earnings excluding the non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria and Argentina, and the Gillette intangible asset impairment charge. We view adjusted free cash flow productivity as a useful measure to help investors understand P&G's ability to generate cash. This measure is used by management in making operating decisions, in allocating financial resources and for budget planning purposes. This measure is also used in assessing the achievement of management goals for at-risk compensation. THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures Three MonthsEnded June 30, 2025 Three Months Ended June 30, 2024 Amounts in millions except per share amounts As Reported(GAAP) (1) As Reported (GAAP) Incremental Restructuring Core (Non-GAAP) Cost of products sold $ 10,631 $ 10,348 $ (45 ) $ 10,303 Gross profit 10,258 10,183 45 10,229 Gross margin 49.1 % 49.6 % 0.2 % 49.8 % Currency impact to gross margin 0.2 % Currency-neutral gross margin 49.3 % Selling, general and administrative expense 5,903 6,299 (28 ) 6,271 Selling, general and administrative expense as a % of net sales 28.3 % 30.7 % (0.2 )% 30.5 % Currency impact to selling, general and administrative expense as a % of net sales 0.1 % Currency-neutral selling, general and administrative expense as a % of net sales 28.3 % Operating income 4,355 3,884 73 3,958 Operating margin 20.8 % 18.9 % 0.4 % 19.3 % Currency impact to operating margin 0.1 % Currency-neutral operating margin 21.0 % Other non-operating income, net 274 98 248 346 Income taxes 895 726 (6 ) 720 Net earnings attributable to P&G 3,615 3,137 327 3,464 Core EPS Diluted net earnings per common share (2) $ 1.48 $ 1.27 $ 0.13 $ 1.40 Currency impact to earnings $ (0.01 ) Currency-neutral EPS $ 1.47 Diluted weighted average common shares outstanding 2,443.8 2,472.2 Common shares outstanding - June 30, 2025 2,342.0 (1) For the period ending June 30, 2025, there were no adjustments to or reconciling items for Core EPS. (2) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. CHANGE VERSUS YEAR AGO Gross margin (50 ) BPS Core gross margin (70 ) BPS Currency-neutral Core gross margin (50 ) BPS Selling, general and administrative expense as a % of net sales (240 ) BPS Core selling, general and administrative expense as a % of net sales (220 ) BPS Currency-neutral Core selling, general and administrative as a % of net sales (220 ) BPS Operating margin 190 BPS Core operating margin 150 BPS Currency-neutral Core operating margin 170 BPS Diluted EPS 17 % Core EPS 6 % Currency-neutral Core EPS 5 % THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures Fiscal Year Ended June 30, 2025 Fiscal Year Ended June 30, 2024 Amounts in millions except per share amounts AsReported(GAAP) Incremental Restructuring Core(Non-GAAP) AsReported(GAAP) Incremental Restructuring IntangibleImpairment Core(Non-GAAP) Cost of products sold $ 41,164 $ 20 $ 41,184 $ 40,848 $ (70 ) $ — $ 40,778 Gross profit 43,120 (20 ) 43,099 43,191 70 — 43,261 Gross margin 51.2 % — % 51.1 % 51.4 % 0.1 % — % 51.5 % Currency impact to Core gross margin 0.2 % Currency-neutral Core gross margin 51.3 % Selling, general and administrative expense 22,669 (25 ) 22,643 23,305 (33 ) — 23,273 Selling, general and administrative expense as a % of net sales 26.9 % — % 26.9 % 27.7 % — % — % 27.7 % Currency impact to Core selling, general and administrative expense as a % of net sales 0.2 % Currency-neutral Core selling, general and administrative expense as a % of net sales 27.0 % Operating income 20,451 5 20,456 18,545 103 1,341 19,988 Operating margin 24.3 % — % 24.3 % 22.1 % 0.1 % 1.6 % 23.8 % Currency impact to Core operating margin — % Currency-neutral Core operating margin 24.3 % Other non-operating income, net 154 789 943 668 248 — 916 Income taxes 4,102 (7 ) 4,094 3,787 (25 ) 315 4,077 Net earnings attributable to P&G 15,974 801 16,775 14,879 376 1,026 16,281 Core EPS Core EPS Diluted net earnings per common share (1) $ 6.51 $ 0.33 $ 6.83 $ 6.02 $ 0.15 $ 0.42 $ 6.59 Currency impact to Core EPS $ 0.02 Currency-neutral Core EPS $ 6.85 Diluted weighted average common shares outstanding 2,454.4 2,471.9 Common shares outstanding - June 30, 2025 2,342.0 (1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. CHANGE VERSUS YEAR AGO Gross margin (20 ) BPS Core gross margin (40 ) BPS Currency-neutral Core gross margin (20 ) BPS Selling, general and administrative expense as a % of net sales (80 ) BPS Core selling, general and administrative expense as a % of net sales (80 ) BPS Currency-neutral Core selling, general and administrative as a % of net sales (70 ) BPS Operating margin 220 BPS Core operating margin 50 BPS Currency-neutral Core operating margin 50 BPS Diluted EPS 8 % Core EPS 4 % Currency-neutral Core EPS 4 % Organic sales growth: The reconciliation of reported sales growth to organic sales is as follows: April - June 2025 Net Sales Growth Foreign ExchangeImpact Acquisition &DivestitureImpact/Other (1) Organic Sales Growth Beauty —% 1% —% 1% Grooming 2% —% (1)% 1% Health Care 2% —% —% 2% Fabric & Home Care 2% (1)% —% 1% Baby, Feminine & Family Care 2% (1)% —% 1% Total Company 2% —% —% 2% (1) Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales. Total Company Net Sales Growth Foreign Exchange Impact Acquisition & DivestitureImpact/Other (1) Organic Sales Growth FY 2025 —% 1% 1% 2% (1) Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales. Total Company Net Sales Growth Combined Foreign Exchange &Acquisition/Divestiture Impact Organic Sales Growth FY 2026 (Estimate) +1% to +5% -1% -% to +4% Core EPS growth: Total Company Diluted EPS Growth Impact of change in Non-Core Items Core EPS Growth FY 2026 (Estimate) +3% to +9% -3% to -5% -% to +4% Adjusted free cash flow (dollars in millions): Three Months Ended June 30, 2025 Operating Cash Flow Capital Spending Adjusted Free Cash Flow $4,985 $(996) $3,989 Fiscal Year Ended June 30, 2025 Operating Cash Flow Capital Spending 2017 U.S. Tax Act Payments Adjusted Free Cash Flow $17,817 $(3,773) $562 $14,606 Adjusted free cash flow productivity (dollars in millions): Three Months Ended June 30, 2025 Adjusted Free Cash Flow Net Earnings Adjusted Free Cash Flow Productivity $3,989 $3,626 110% Fiscal Year Ended June 30, 2025 Adjusted Free Cash Flow Net Earnings Adjustments to NetEarnings (1) Net Earnings as Adjusted Adjusted Free Cash FlowProductivity $14,606 $16,065 $752 $16,817 87% (1) Adjustments to Net Earnings relate to a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina. Category: PG-IR View source version on Contacts P&G Media Contacts: Wendy Kennedy, 513.780.7212Henry Molski, 513.505.3587 P&G Investor Relations Contact: John Chevalier, 513.983.9974 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
