Financial Performance - Total revenues for the first quarter of 2025 were RMB1,923.3 million (US$265.0 million), representing a year-on-year increase of 12.9% from RMB1,703.8 million in the same quarter of 2024[6] - Net income for the first quarter of 2025 was RMB512.1 million (US$70.6 million), an increase of 111.9% from RMB241.7 million in the same quarter of 2024[11] - Adjusted net income for the first quarter of 2025 was RMB763.9 million (US$105.3 million), an increase of 43.9% from RMB530.7 million in the same quarter of 2024[11] - Income from operations for the first quarter of 2025 was RMB439.8 million (US$60.6 million), an increase of 324.5% from RMB103.6 million in the same quarter of 2024[9] - Adjusted income from operations for the first quarter of 2025 was RMB691.5 million (US$95.3 million), an increase of 76.1% from RMB392.6 million in the same quarter of 2024[9] - Net income attributable to ordinary shareholders of KANZHUN LIMITED for Q1 2025 was RMB 518,134, a significant increase of 111.5% from RMB 244,951 in Q1 2024[28] - Adjusted net income per ordinary share attributable to ordinary shareholders increased to RMB 0.88 for Q1 2025, up from RMB 0.61 in Q1 2024, reflecting a growth of 44.3%[34] User Metrics - Average monthly active users for the first quarter of 2025 were 57.6 million, an increase of 23.6% from 46.6 million in the same quarter of 2024[6] - The number of paid enterprise customers reached 6.4 million in the twelve months ended March 31, 2025, up 12.3% from 5.7 million in the previous year[6] Revenue Forecast - The company expects total revenues for the second quarter of 2025 to be between RMB2.05 billion and RMB2.08 billion, representing a year-on-year increase of 6.9% to 8.5%[17] Operating Costs and Expenses - Total operating costs and expenses were RMB1,491.1 million (US$205.5 million) for the first quarter of 2025, a decrease of 7.5% from RMB1,612.8 million in the same quarter of 2024[8] - Research and development expenses decreased to RMB 423,568 in Q1 2025 from RMB 467,569 in Q1 2024, a reduction of 9.4%[28] Cash and Assets - The balance of cash and cash equivalents as of March 31, 2025, was RMB14,785.2 million (US$2,037.5 million)[15] - Cash and cash equivalents at the end of Q1 2025 were RMB 2,790,420, an increase from RMB 2,747,166 at the end of Q1 2024[32] - Total current assets as of March 31, 2025, were RMB 15,681,004, up from RMB 15,100,383 as of December 31, 2024, indicating a growth of 3.8%[30] - Total assets increased to RMB 20,387,869 as of March 31, 2025, compared to RMB 19,310,672 as of December 31, 2024, reflecting a growth of 5.6%[30] Cash Flow - Net cash provided by operating activities for Q1 2025 was RMB 1,003,109, an increase of 10.8% from RMB 905,541 in Q1 2024[32] Share Information - The weighted average number of ordinary shares used in computing net income per share was 870,991,355 for Q1 2025, slightly down from 880,732,849 in Q1 2024[34]

Market Expansion and Product Development - In July 2024, the company entered the 64-bit mixed-signal microprocessor market, expanding beyond the 32-bit architecture[25] - The company targets the 8-bit, 16-bit, and 32-bit mixed-signal microcontroller and 32-bit embedded mixed-signal microprocessor markets[27] - The company plans to invest $880 million over the next several years to expand silicon carbide (SiC) and silicon production capacity at Fab 5[45] Financial Performance and Sales - Approximately 36% of sales in fiscal 2025 came from products produced at the company's own wafer fabrication facilities located in the U.S.[50] - In fiscal 2025, 45% of net sales were derived through distributors, down from 47% in fiscal 2024, while direct sales accounted for 55% in fiscal 2025 compared to 53% in fiscal 2024[59] - Arrow Electronics, the largest distributor, contributed 10% of net sales in fiscal 2025 and 12% in fiscal 2024, with no other distributor or direct customer exceeding 10% of net sales[59] Operational Efficiency and Cost Management - The closure of Fab 2 is expected to generate annual cash savings of approximately $90 million, with process technologies transferred to Fab 4 and Fab 5[43] - The company has paused its multi-year $800 million expansion plan at Fab 4 through fiscal 2026, planning to resume as the business outlook improves[44] - The company has reduced planned capital investments through fiscal 2026 due to the macroeconomic environment[46] Supply Chain and Production Risks - The company faces risks related to supply chain disruptions, including geopolitical tensions and trade restrictions, which may impact the availability of raw materials and components[100] - The company is dependent on external wafer foundries and contractors, which may limit its control over production and increase operational risks[103] - The company has experienced supply shortages in the past and may face challenges in securing necessary materials due to increased global semiconductor demand[95] Regulatory and Compliance Challenges - The company must navigate compliance with various regulations, including those related to environmental standards and data protection, which could impact its operations[90] - The company is subject to numerous privacy and data protection laws, including the EU's GDPR, which can impose fines up to 4% of worldwide revenue or €20 million, whichever is greater[170] - Compliance with government regulations, such as the Cybersecurity Maturity Model Certification, may increase operational costs and affect the ability to secure new contracts[137] Employee and Workforce Management - The company maintains a global workforce of approximately 19,400 employees, emphasizing that employees are its greatest strength[68] - The company invests in employee development through training programs, mentorship, and tuition reimbursement, fostering a culture of continuous improvement[72][73] - Competition for qualified personnel has intensified, particularly for roles in management, technical, and AI-related fields, which could delay product development[148] Cybersecurity and Data Protection - The company has experienced cyber-attacks, including a significant incident in August 2024 that temporarily impacted manufacturing operations[156] - Continuous improvements to cybersecurity measures have been implemented, but there is no assurance that future attacks can be fully prevented[158] - The company does not have specific insurance coverage for cybersecurity matters, which may leave it vulnerable to liabilities from breaches[162] Environmental and Climate Risks - The company has publicly announced environmental goals, including net zero carbon emissions, which may expose it to scrutiny and operational risks[213] - New climate-related laws and regulations could impose additional costs and risks, affecting the company's ESG goals and compliance efforts[214] - Compliance with conflict minerals regulations may lead to additional expenses and potential loss of customers if sourcing cannot be certified as responsible[209] Financial Liabilities and Tax Issues - The company incurred approximately $8.10 billion of additional debt to fund the acquisition of Microsemi, indicating significant financial leverage[140] - The company is currently involved in tax disputes that could result in liabilities up to $410 million if the Malaysian tax authority's adjustments are upheld[195] - The company received assessments from German tax authorities that could lead to income taxes and penalties up to $92 million if upheld[196] Market Competition and Pricing Pressures - The semiconductor industry is characterized by intense competition, with significant price erosion and rapid technological changes impacting market dynamics[61] - The company has experienced modest pricing declines in proprietary product lines due to competitive conditions, with cost increases passed on to customers in fiscal 2023 and fiscal 2022[115] - The introduction of long-term supply agreements (LTSAs) has resulted in some customers holding excess inventory, adversely affecting gross margins[112]

Market Expansion and Product Development - In July 2024, the company entered the 64-bit mixed-signal microprocessor market, expanding beyond the 32-bit architecture[25]. - The company targets the 8-bit, 16-bit, and 32-bit mixed-signal microcontroller markets, with a focus on providing cost-effective embedded control solutions[27]. - The company has a broad product portfolio that supports key growth trends in AI/ML, data centers, edge computing, and IoT[22]. - The company’s embedded control products compete on technical innovation, performance, and a comprehensive suite of development tools[62][63]. Financial Performance and Sales - Approximately 36% of sales in fiscal 2025 came from products produced at the company's own wafer fabrication facilities located in the U.S.[50]. - In fiscal 2025, 45% of net sales were derived through distributors, down from 47% in fiscal 2024, while direct sales accounted for 55% in fiscal 2025 compared to 53% in fiscal 2024[59]. - Arrow Electronics, the largest distributor, contributed 10% of net sales in fiscal 2025 and 12% in fiscal 2024, with no other distributor or direct customer exceeding 10% of net sales[59]. - Approximately 64% of the company's net sales in fiscal 2025 came from products produced at outside wafer foundries[101]. - The company operated at below normal capacity levels in fiscal 2024 and fiscal 2025, resulting in unabsorbed capacity charges of $40.7 million and $173.0 million, respectively[117]. Cost Management and Operational Efficiency - The closure of Fab 2 is expected to generate annual cash savings of approximately $90 million, with an additional $25 million in savings from reduced compensation costs in Fab 4 and Fab 5[43][47]. - In fiscal 2025, approximately 67% of assembly and test requirements were performed in internal facilities, with plans to increase internal capacity capabilities[51]. - The company plans to invest $880 million over the next several years to expand silicon carbide (SiC) and silicon production capacity at Fab 5[45]. - The company has paused its multi-year $800 million expansion plan at Fab 4 through fiscal 2026, planning to resume as the business outlook improves[44]. Supply Chain and External Factors - The company relies on third-party contractors for approximately 33% of its assembly and testing requirements in fiscal 2025[101]. - The company faces risks related to supply chain disruptions, including geopolitical tensions and trade restrictions, which may limit access to necessary materials[100]. - The U.S. imposed additional tariffs on imports from China and other countries in March and April 2025, which may impact operating results[96]. - The semiconductor industry is characterized by intense competition, with significant price erosion and rapid technological changes impacting market dynamics[61]. Regulatory and Compliance Issues - Environmental regulations impact operational costs, with potential liabilities arising from non-compliance with chemical and gas regulations[66][67]. - The company must navigate compliance with various regulations regarding privacy, data protection, and cybersecurity, which could pose operational risks[90]. - Compliance with government regulations, such as the Cybersecurity Maturity Model Certification, is essential for maintaining contracts and could increase operational costs[137]. - The California Consumer Privacy Act (CCPA) and its amendments, effective January 1, 2023, impose increased privacy and security obligations on entities handling personal data[173]. Employee and Workforce Management - The company maintains a global workforce of approximately 19,400 employees, emphasizing that employees are its greatest strength[68]. - The company invests in employee development through training programs, mentorship, and tuition reimbursement, fostering a culture of continuous improvement[72][73]. - Competition for qualified personnel has intensified, particularly for roles in management, technical, and AI-related fields, which could delay product development and adversely affect net sales[148][149]. - A global workforce reduction initiated in Q4 fiscal 2025 may negatively impact employee morale and the company's attractiveness as an employer[150]. Cybersecurity and Technology Risks - The company has experienced cyber-attacks, including a significant incident in August 2024 that temporarily impacted manufacturing operations[156]. - Continuous improvements to cybersecurity measures have been implemented, but there is no assurance that future attacks can be fully prevented[158]. - The company does not have specific insurance coverage for cybersecurity matters, which may leave it vulnerable to liabilities arising from breaches[162]. - Security vulnerabilities in products may expose the company to increased cybersecurity risks, particularly in applications that process data[163]. Legal and Tax Liabilities - The company faces potential income tax liabilities from ongoing disputes, with possible penalties up to $410 million related to Malaysian tax assessments[195]. - The company received assessments from German Tax Authorities that could result in income taxes and penalties up to $92 million if upheld[196]. - The company is subject to significant financial resources for defending its intellectual property rights, which may be adversely affected by foreign laws[184]. Environmental and Social Governance (ESG) - The company has publicly announced environmental goals, including greenhouse gas emissions reduction and achieving net zero carbon emissions, which may expose it to scrutiny and risks[213]. - New climate-related regulations, such as California's disclosure requirements, could impose additional costs and risks on the company[214]. - Customer demands for conflict-free minerals may result in additional expenses and potential loss of sales if compliance cannot be met[209]. - Failure to meet evolving stakeholder expectations regarding ESG could adversely affect the company's business and stock price[216].

Financial Performance - Net sales for the year ended March 31, 2025, were $2,068,789, a decrease of 7.1% compared to $2,225,302 in 2024[169]. - Gross profit increased to $569,121 for the year ended March 31, 2025, up from $550,793 in 2024, resulting in a gross margin of 27.5%[169]. - Operating income margin decreased to 6.8% for the year ended March 31, 2025, compared to 7.1% in 2024[169]. - Net earnings for the year ended March 31, 2025, were $107,978, down from $115,776 in 2024, maintaining a net earnings margin of 5.2%[169]. - Non-GAAP net earnings for the year ended March 31, 2025, were $124,475, compared to $131,327 in 2024[169]. - Adjusted EBITDA for the year ended March 31, 2025, was $178,234, a decrease from $190,441 in 2024, with an adjusted EBITDA margin of 8.6%[169]. - Total gross billings for the year ended March 31, 2025, were $3,280,447, slightly down from $3,329,764 in 2024[169]. - For the year ended March 31, 2025, net sales decreased by $156.5 million compared to the prior fiscal year, driven by lower product revenues, although managed services and professional services revenue increased[177]. - Consolidated gross profit increased by $18.3 million year-over-year, with gross margins up by 270 basis points to 27.5%, primarily due to a shift in product mix towards higher-margin services[178]. - Operating income decreased by $16.8 million, with operating margin declining by 30 basis points to 6.8%[180]. - Adjusted EBITDA for the year ended March 31, 2025, decreased by $12.2 million, while the Adjusted EBITDA margin remained flat at 8.6%[181]. - GAAP net earnings per common share—diluted decreased by $0.28 to $4.05, while Non-GAAP net earnings per common share—diluted decreased by $0.25 to $4.67[182]. - Basic earnings per common share for the year ended March 31, 2025, were $4.07, a decrease of 6.4% compared to $4.35 for the year ended March 31, 2024[214]. - Diluted earnings per common share for the year ended March 31, 2025, were $4.05, a decrease of 6.5% compared to $4.33 for the year ended March 31, 2024[214]. - The effective income tax rate for the year ended March 31, 2025, was 27.5%, lower than 28.1% for the year ended March 31, 2024, primarily due to lower state taxes[212]. Business Segments - For the year ended March 31, 2025, technology business segments accounted for 97% of net sales, with 78% from the product segment, 11% from professional services, and 8% from managed services[25]. - The financing business segment accounted for 3% of net sales and 25% of operating income for the year ended March 31, 2025[25]. - The technology business segments include product, professional services, and managed services, with a focus on gross profit and operating expenses[183]. - The financing business segment offers solutions primarily to corporations and government contractors, with a focus on leasing IT and medical equipment[187]. - Net sales for the technology business segments decreased by 7.7% to $2,009,145, compared to $2,175,886 in the previous year[190]. - Product sales declined by 14.6% to $1,608,768, while professional services increased by 48.2% to $229,030, and managed services rose by 24.6% to $171,347[190]. - Gross profit for the technology business segments increased by 1.4% to $515,381, with a gross profit margin of 25.7%, up 230 basis points from the prior year[196]. - Portfolio earnings in the financing business segment increased by 30.8% to $18,229, while transactional gains rose by 51.8% to $28,866[206]. - Total proceeds from sales of financing receivables decreased to $634.9 million from $762.6 million in the previous year[206]. Customer and Market Insights - ePlus serves 4,600 customers, with revenue distribution by end market: 23% telecommunications, media and entertainment, 17% state and local education, 15% technology, 14% healthcare, and 9% financial services[23]. - Sales to Verizon Communications Inc. represented 16%, 19%, and 22% of net sales for the years ended March 31, 2025, 2024, and 2023, respectively[23]. - Approximately 17% of accounts receivable-trade balance was due from Verizon Communications Inc. as of March 31, 2025[58]. - The company is experiencing an increase in federal contract terminations, which may lead to claims and increased costs[125]. - Sales to SLED customers are highly regulated, and funding cuts from the federal government may decrease spending from these customers[127]. Employee and Operational Insights - ePlus employs 714 sales, marketing, and sales support personnel as of March 31, 2025, organized regionally across the US, UK, and India[36]. - As of March 31, 2025, the company employed a total of 2,199 employees, an increase of 299 from 1,900 in the previous year[48]. - The professional and managed services segment saw an increase of 277 employees from the previous year, totaling 1,093 as of March 31, 2025[51]. - The company added 300 employees, bringing the total to 2,166, with a focus on increasing customer-facing personnel[201]. - Operating expenses increased by $35.2 million, largely due to higher salaries, benefits, and acquisition-related expenses from the acquisition of Bailiwick, resulting in a total of 2,199 employees, a 15.7% increase from the previous year[179]. Risk Management and Compliance - The company has a conservative risk management approach, including credit quality analysis and monitoring of customer financial results[46]. - The company relies heavily on the accuracy and reliability of its IT, telecommunication, and cybersecurity platforms for various operational functions, and any inadequacies could materially affect its business and financial condition[98]. - A significant portion of employees working from home increases the risk of data loss and operational disruptions due to potential cybersecurity attacks or failures in information systems[74]. - The company may face challenges in hiring and retaining qualified personnel due to a competitive labor market, which could adversely impact its ability to serve customers and manage costs[79]. - The company is dependent on creditworthy customers to maintain its financial health, and any deterioration in customer credit quality could negatively affect its operating results[84]. - Vendor incentives and funding are crucial for offsetting costs, and any reduction or discontinuation of these incentives could materially impact the company's financial results[86]. - The company may incur significant expenses related to cybersecurity breaches, which could damage its reputation and financial condition[78]. - Advances in technology, particularly in AI and cybersecurity, present both opportunities and risks, and failure to address these could harm the company's competitive position[94]. - The evolving nature of cybersecurity threats makes it increasingly challenging for the company to adequately mitigate risks, potentially leading to significant operational disruptions[73]. - The company maintains cybersecurity insurance coverage deemed appropriate for its business size and complexity[141]. - The company is not aware of any cybersecurity threats that have materially affected its operations as of the report date[143]. - The company relies on the competency of its internal IT personnel, and failure to secure data could significantly interrupt business operations[102]. - The company is subject to numerous US and foreign laws and regulations, which may increase compliance costs and impact business operations[124]. - The company faces risks of claims for intellectual property infringement, which could lead to substantial costs in defending against such claims[128]. Strategic Initiatives - ePlus has invested in engineering and technology resources to stay at the forefront of technology trends, focusing on cloud and managed services[21]. - The company offers a wide portfolio of technology and capital asset financing solutions tailored to customer needs[22]. - The company focuses on automating the IT procurement process to reduce customers' costs and improve efficiency[34]. - Mergers and acquisitions are key to the company's growth strategy, and failure to identify suitable candidates or integrate them effectively could negatively impact earnings[88]. - The company plans to continue expanding by hiring additional staff in targeted market areas and pursuing acquisitions that align with strategic objectives[189]. - The company has a credit facility with an aggregate limit of $500 million, and any loss or reduction in this facility could adversely affect its operational capabilities[92]. Market Trends and Economic Factors - Key business trends indicate a focus on AI, security, and cloud solutions, with increasing customer demand for digital transformation and modernization[168]. - The company may face adverse effects on its business due to general economic weakness, including inflation and rising interest rates[114]. - The company anticipates that supply chain disruptions could adversely impact financial results due to reliance on vendor performance and shipping services[67][71]. - The company is exposed to financial losses due to fluctuations in foreign currency rates, although operations in foreign countries are not material[103]. - The company’s operations could be negatively impacted by natural disasters or adverse events at its configuration centers, warehouses, or data centers[105]. - The company’s ability to monetize financing receivables may be affected by changes in interest rates or the loss of key lenders[120].

Financial Performance and Projections - The company has not generated any revenue from product sales and may never be profitable[168] - The company has incurred net losses since inception and anticipates continuing substantial losses in the foreseeable future, with no products approved for commercial sale to date[243] - For the years ended March 31, 2025 and 2024, the company reported net losses of $247.3 million and $215.8 million, respectively, with an accumulated deficit of $948.6 million as of March 31, 2025[244] - The company anticipates continuing to incur significant losses in the foreseeable future, particularly as it continues research and development for RP1 and other product candidates[244] - Future capital requirements will depend on various factors, including the costs of research and development, obtaining marketing approvals, and commercialization activities[250] - The company may need to expand its internal manufacturing, marketing, and sales capabilities as operations grow, which could impose significant responsibilities on management[228] - Future reimbursement for approved product candidates may be less than projected, impacting net revenue and profitability[238] - The potential market for the company's product candidates is difficult to estimate, and actual markets may be smaller than projected due to reliance on various assumptions[239] Product Development and Regulatory Risks - The FDA has accepted and granted priority review for the company's lead product candidate, RP1[170] - The company faces risks related to product development, including the potential for negative or inconclusive results from clinical trials[171] - The company’s ability to commercialize product candidates is contingent on successful clinical trials demonstrating safety and efficacy[171] - The regulatory approval process is lengthy and unpredictable, potentially impacting the ability to generate revenue[190] - The company may experience delays in testing or approvals, impacting development costs and timelines[176] - The company’s product candidates are in various stages of development and are not approved for commercial sale[168] - The company may require additional financing to achieve its goals due to a history of losses and the likelihood of incurring substantial future losses[168] - The company faces intense competition from other biopharmaceutical and biotechnology companies, which may hinder its ability to commercialize products successfully[219] Collaboration and Supply Chain Challenges - The company has entered into agreements with BMS and Regeneron for the supply of anti-PD-1 therapies for ongoing clinical trials[178] - The company relies on third-party suppliers like BMS and Regeneron for anti-PD-1 therapies, and any failure in these relationships could delay the development and commercialization of its product candidates[270] - Collaboration agreements with partners may not be successful, potentially affecting the company's ability to develop and commercialize its product candidates[271] - The company relies on third-party manufacturers for raw materials and product candidates, which may lead to delays in clinical development and commercialization if performance failures occur[285] - The company has only one in-house manufacturing site, and lacks long-term commitments from suppliers, which could result in supply limitations and potential revenue losses[286] Legal and Compliance Risks - The company faces risks related to intellectual property, including potential infringement claims from third parties and the need to maintain and protect its intellectual property rights[253] - The company may incur substantial costs and face delays if it needs to replace third-party service providers due to performance issues[282] - The company is subject to various healthcare laws, and violations could result in significant penalties and adversely affect financial results[304] - The company is exposed to risks of employee misconduct, which could lead to significant fines or sanctions affecting its financial condition[310] - The company faces potential liabilities under environmental, health, and safety laws, which could result in substantial costs and impact business success[311] Market and Economic Conditions - The stock price of the company has been volatile, influenced by factors such as clinical trial results, regulatory developments, and competition in the biopharmaceutical sector[341] - Unfavorable market conditions could adversely affect the company's ability to raise capital and strain suppliers, impacting overall business performance[359] - Global financial markets are experiencing extreme disruption, leading to volatility in securities prices and potential adverse economic conditions affecting the company's liquidity[360] - Unfavorable global economic conditions and geopolitical events, including military conflicts and trade disputes, could adversely impact the company's operations and objectives[364] Internal Control and Governance - The company has identified material weaknesses in its internal control over financial reporting, which could lead to misstatements in financial statements[330] - The company is implementing comprehensive control protocols to address identified weaknesses in internal controls over financial reporting[334] - Ineffective internal control could increase the risk of financial reporting fraud and misappropriation of assets, potentially leading to regulatory investigations and civil or criminal sanctions[336] - The company did not maintain effective IT general controls relevant to financial statement preparation, increasing the risk of misstatements[332] Environmental and Regulatory Compliance - Compliance with FDA regulations is critical; failure to meet these standards could result in delays in product approvals and commercialization[291] - Legislative and regulatory changes in healthcare could increase compliance costs and adversely affect the ability to market products and achieve profitability[307] - Compliance with the Drug Supply Chain Security Act (DSCSA) may increase operational expenses and impose significant administrative burdens[309] - The company is subject to stringent data privacy and security obligations, with potential penalties for non-compliance that could adversely affect financial condition[313]

Business Combination Agreements - The Company entered into a Business Combination Agreement with AUM Biosciences Pte. Ltd. on October 19, 2022, which was later terminated on June 8, 2023[185][186]. - The Company issued a non-binding term sheet with CUBEBIO Co., Ltd. for a proposed business combination on May 2, 2024[195]. - The Company entered into a Business Combination Agreement with CUBEBIO Co., Ltd. on August 29, 2024, which includes a SPAC Merger and a Share Swap[206]. Financial Performance - The Company reported a net loss of $181,378 for the three months ended March 31, 2025, compared to a net loss of $25,537 for the same period in 2024[213]. - The Company generated gross proceeds of $60,000,000 from its Initial Public Offering of 6,000,000 Units at $10.00 per Unit[214]. - The Company incurred transaction costs of $5,090,361 related to its Initial Public Offering, including $1,380,000 in underwriting fees[216]. Compliance and Listing - The Company received approval from Nasdaq to transfer its listing from The Nasdaq Global Market to The Nasdaq Capital Market, effective October 27, 2023[187]. - The Company has successfully regained compliance with Nasdaq Listing Rule after timely filing its Form 10-K and Form 10-Q[200][201]. - The Company did not complete its initial business combination by November 12, 2024, resulting in delisting from Nasdaq[204]. Trust Account and Cash Management - As of March 31, 2025, the Company had marketable securities in the Trust Account totaling $1,169,431, including $102,268 of interest income[219]. - As of March 31, 2025, the Company had cash of $27,943 held outside the Trust Account for general working capital purposes[221]. - The Company has no off-balance sheet financing arrangements as of March 31, 2025[233]. Promissory Notes and Debt - The Company issued an unsecured promissory note of up to $400,000 to the Sponsor on October 30, 2023, for working capital purposes[188]. - The Company issued an unsecured promissory note of up to $500,000 to the Sponsor on August 14, 2024, with an outstanding amount of $390,000 as of March 31, 2025[199]. - The Company issued a non-interest bearing promissory note of $300,000 to the Sponsor, which was converted into 75,000 shares of Common Stock[222]. - The Company issued an unsecured promissory note of up to $300,000 on April 3, 2024, with no interest, due upon business combination or liquidation[226]. - As of March 31, 2025, there was $300,000 outstanding under the April 2024 Note issued on April 30, 2024[229]. - The August 2024 Note issued on August 14, 2024, has an outstanding amount of $390,000 as of March 31, 2025[230]. - The underwriters are entitled to a deferred fee of $2,070,000, payable only if a Business Combination is completed[235]. Extensions and Deadlines - The Company extended the Combination Period to February 16, 2024, by depositing $51,932 into its trust account[190]. - The Company has extended the Combination Period multiple times, with the latest extension to November 16, 2024[196]. - The Company extended the deadline to complete its initial Business Combination to November 16, 2025, by depositing $51,932 on specified dates[232]. Other Financial Information - The Company has no long-term debt or capital lease obligations, with a monthly payment of up to $10,000 for office-related expenses[234]. - As of March 31, 2025, the Company did not have any dilutive securities, making diluted income (loss) per share the same as basic income (loss) per share[239]. - The Company does not expect the adoption of recently issued accounting standards to have a material impact on its financial statements[244].

Business Combination Agreements - The Company entered into a Business Combination Agreement with AUM Biosciences Pte. Ltd. on October 19, 2022, which was later terminated on June 8, 2023[185][186]. - The Company issued a non-binding term sheet for a proposed business combination with CUBEBIO Co., Ltd. on May 2, 2024[195]. - The Company entered into a Business Combination Agreement with CUBEBIO Co., Ltd. on August 29, 2024, which includes a SPAC Merger and a Share Swap[206]. - The Business Combination is expected to close no later than May 15, 2025, or by the deadline for the initial business combination under its Governing Documents[209]. Financial Performance - As of March 31, 2025, the Company reported a net loss of $181,378, with operating costs of $191,225 and interest income of $12,119 from investments[213]. - The Company has not generated any operating revenues to date and does not expect to do so until after the completion of the Business Combination[212]. Trust Account and Capital - The Company generated gross proceeds of $60,000,000 from its Initial Public Offering of 6,000,000 Units at $10.00 per Unit[214]. - Following the IPO, a total of $69,000,000 was placed in the Trust Account after the full exercise of the underwriters' over-allotment option[216]. - The Company intends to use substantially all funds in the Trust Account to complete the Business Combination and for working capital of the target business[220]. Promissory Notes and Financing - The Company issued an unsecured promissory note of up to $400,000 to the Sponsor on October 30, 2023, for working capital purposes[188]. - The Company issued an unsecured promissory note of up to $500,000 to the Sponsor on August 14, 2024, with an outstanding amount of $390,000 as of March 31, 2025[199]. - The Company issued a non-interest bearing promissory note of $300,000 to the Sponsor, which was converted into 75,000 shares of Common Stock[222]. - The Company issued an unsecured promissory note in the aggregate principal amount up to $300,000 on April 3, 2024, with no interest, to be used for working capital purposes[226]. - The Company issued another unsecured promissory note for up to $500,000 on August 14, 2024, with $390,000 outstanding as of March 31, 2025[230]. Compliance and Regulatory Matters - The Company received approval from Nasdaq to transfer its listing from The Nasdaq Global Market to The Nasdaq Capital Market, effective October 27, 2023[187]. - The Company regained compliance with the $35,000,000 market value of listed securities requirement on June 5, 2024[197]. - The Company has successfully regained compliance with Nasdaq Listing Rule after filing the necessary reports[200][201][202]. - The Company received a notice from Nasdaq on November 14, 2024, regarding non-compliance with IM-5101-2, leading to delisting of its securities[204]. Extensions and Deadlines - The Company extended the Combination Period to February 16, 2024, by depositing $51,932 into its trust account[190]. - The Company has extended the Combination Period multiple times, with the latest extension to November 16, 2024[196]. - The Company extended the time to complete its initial Business Combination to November 16, 2025, by depositing $51,932 into its trust account on specified dates[232]. Other Financial Information - As of March 31, 2025, the Company had cash of $27,943 held outside the Trust Account for general working capital purposes[221]. - The Company has no off-balance sheet financing arrangements as of March 31, 2025[233]. - The Company has no long-term debt or capital lease obligations, with a monthly payment agreement of up to $10,000 for office-related expenses[234]. - The underwriters are entitled to a deferred fee of $2,070,000, payable only if the Company completes a Business Combination[235]. - As of March 31, 2025, the Company did not have any dilutive securities, making diluted income (loss) per share the same as basic income (loss) per share[239]. - The Company does not expect the adoption of recently issued accounting standards to have a material impact on its financial statements[244].

Revenue and Sales Performance - In Fiscal 2025, net revenues from apparel, footwear, and accessories represented 67%, 23%, and 8% of total revenues, respectively, with licensing arrangements contributing 2%[22]. - North America accounted for approximately 60% of total net revenues, with $2.8 billion generated from sales in the United States[39][40]. - Direct-to-consumer sales represented 40% of net revenues, while wholesale sales accounted for 58%[36]. - In Fiscal 2025, sales through the wholesale channel represented approximately 58% of the company's net revenues[96]. - Total net revenues for Fiscal 2025 decreased by 9.4% to $5,164.3 million compared to $5,701.9 million in Fiscal 2024[195]. - Direct-to-consumer revenue decreased by 10.5%, while wholesale revenue decreased by 8.1%[190]. - North America net revenue decreased by 11.4%, while EMEA increased by 0.4%[190]. - Total net revenues decreased by $537.6 million, or 9.4%, to $5.16 billion during Fiscal 2025 from $5.70 billion in Fiscal 2024[196]. - Net sales decreased by $509.9 million, or 9.1%, to $5.07 billion during Fiscal 2025, primarily due to lower unit sales in apparel and footwear[198]. - License revenues decreased by $16.7 million, or 15.0%, to $94.6 million during Fiscal 2025, mainly due to lower revenues from North American licensing partners[199]. Operational and Strategic Initiatives - The company aims to enhance consumer engagement through a digital strategy that strengthens brand connectivity[19]. - The company is focused on expanding its wholesale distribution and increasing direct-to-consumer sales channels for long-term growth[19]. - The company has a license agreement with partners in Japan and Australia to expand its market presence in those regions[46]. - The company is investing significantly in enhancing digital shopping capabilities and consumer loyalty programs to adapt to evolving consumer preferences[101]. - The company plans to enhance its digital strategy to improve consumer engagement and brand connectivity[185]. - The company has invested in expanding its network of Brand and Factory House stores and enhancing its digital strategy, which requires substantial cash investments[116]. Financial Performance and Challenges - Net income for Fiscal 2025 was a loss of $201.27 million, compared to a net income of $232.04 million in Fiscal 2024[195]. - Gross profit decreased by $155.5 million to $2.5 billion during Fiscal 2025, while gross margin increased to 47.9% from 46.1%[202]. - Selling, general and administrative expenses increased by $201.5 million, or 8.4%, to $2.60 billion during Fiscal 2025, representing 50.4% of net revenues[205][206]. - The company incurred restructuring charges of $57.97 million in Fiscal 2025, with total estimated charges expected to be between $140 million and $160 million[187][190]. - Restructuring charges increased by $58.0 million during Fiscal 2025, primarily due to employee-related and facility-related charges[208]. - Interest expense, net increased by $6.4 million to $6.1 million during Fiscal 2025, primarily due to a decrease in interest income[210]. - Other expense, net increased by $45.5 million to $13.4 million during Fiscal 2025, primarily due to an earn-out recorded in connection with the sale of MyFitnessPal[214]. - Income tax expense decreased by $32.9 million to a tax benefit of $2.9 million during Fiscal 2025, with an effective tax rate of 1.4%[215]. Market and Competitive Landscape - The competitive landscape includes major brands like NIKE, adidas, and PUMA, with the company focusing on brand image and product quality to differentiate itself[59]. - The company operates in a highly competitive market, with competitors having greater resources and brand recognition, which may lead to a loss of market share[88]. - The company faces intense competition for employees and regularly collects feedback to improve the teammate experience[71]. - The company faces significant pricing pressure due to intense competition, which may negatively impact margins and profitability[91]. Supply Chain and Manufacturing - The top five suppliers provided approximately 38% of the fabric used in apparel and accessories, primarily sourced from Taiwan, China, Malaysia, and Vietnam[51]. - In Fiscal 2025, 67% of apparel and accessories products were manufactured in Jordan, Vietnam, Cambodia, and Indonesia[52]. - The company generated approximately 69% of its apparel and accessories products from ten manufacturers in Fiscal 2025, with nine manufacturers producing nearly all of its footwear products[109]. - The company relies on third-party suppliers for raw materials, and disruptions in supply could adversely affect its ability to meet consumer demand and result in lower revenues[110]. - Labor disruptions at ports or suppliers could create significant risks for the company's operations, leading to canceled orders and increased expenses[114]. - The company evaluates all manufacturers for quality systems, social compliance, and financial strength before selection and on an ongoing basis[53]. Human Capital and Organizational Structure - As of March 31, 2025, the company had approximately 14,400 teammates worldwide, with about 6,500 being full-time employees[64]. - The total rewards strategy aims to provide competitive pay and benefits, with approximately 64% of the workforce located in the United States[69]. - The company has a human capital management strategy focused on creating an engaging workplace and retaining talent through development opportunities[63]. - The leadership team includes experienced executives, with Kevin Plank serving as President and CEO since April 2024[72]. - The company has experienced significant changes in its executive management team, which could disrupt business operations and customer relationships[125]. Risks and Regulatory Compliance - Global events, including public health emergencies, can disrupt operations and negatively affect financial results[94]. - Fluctuations in the cost of raw materials and transportation can adversely affect profit margins and financial condition[93]. - Economic downturns or inflation can materially impact consumer discretionary spending, affecting sales and growth expectations[82]. - The company may not be able to mitigate cost increases from tariffs and trade restrictions, which could adversely impact financial results[87]. - Compliance with evolving regulatory standards and data privacy laws could result in significant costs and impact profitability[138]. - The company is exposed to currency exchange rate fluctuations, which could materially impact financial results[134]. - The company has identified a material weakness in its internal control over financial reporting as of March 31, 2025, which could lead to material misstatements in financial statements and a decline in stock price[149]. - The company is actively engaged in remediation efforts to address the identified material weakness, but there is no guarantee of success in promptly resolving it[151]. - The company has significant ongoing legal proceedings that could adversely affect its business, reputation, financial condition, and stock price[147]. Cybersecurity and Technology - The company has implemented a cybersecurity program aligned with its enterprise risk management program to mitigate data security threats[156]. - The company engages independent third parties for regular penetration testing and cybersecurity audits to enhance its information security[157]. - The company maintains cyber liability insurance to help cover financial losses from cybersecurity incidents, although it may not cover all types of incidents[156]. - The company depends heavily on information technology for its operations, and any failure or interruption could harm its business effectiveness[121]. Real Estate and Facilities - The company leases approximately 3.5 million square feet of distribution facilities across Maryland, Tennessee, and California, with plans to exit the Rialto, California facility by March 2026[165]. - The company operates 441 Brand and Factory House retail stores across various countries, with lease termination dates extending through 2038[166]. - The company has moved its principal executive and administrative offices to a newly owned complex in Baltimore, Maryland, while evaluating options for its previous office space[164].

Revenue Breakdown - In Fiscal 2025, net revenues from apparel, footwear, and accessories represented 67%, 23%, and 8% of total revenues, respectively, with licensing arrangements contributing 2%[22]. - North America accounted for approximately 60% of net revenues, with U.S. sales reaching $2.8 billion in Fiscal 2025[39][40]. - Direct-to-consumer sales comprised 40% of net revenues, while wholesale sales accounted for 58% in Fiscal 2025[36]. - In Fiscal 2025, sales through the wholesale channel represented approximately 58% of the company's net revenues[96]. - Total net revenues for Fiscal 2025 decreased by 9.4% to $5,164.3 million compared to $5,701.9 million in Fiscal 2024[190]. - Total net revenues decreased by $537.6 million, or 9.4%, to $5.2 billion during Fiscal 2025 from $5.7 billion in Fiscal 2024[196]. - Net sales decreased by $509.9 million, or 9.1%, to $5.1 billion during Fiscal 2025, primarily due to lower unit sales in apparel and footwear[198]. - License revenues decreased by $16.7 million, or 15.0%, to $94.6 million during Fiscal 2025, mainly due to lower revenues from North American licensing partners[199]. Manufacturing and Sourcing - The top five suppliers provided approximately 38% of the fabric used in apparel and accessories, primarily sourced from Taiwan, China, Malaysia, and Vietnam[51]. - In Fiscal 2025, 67% of apparel and accessories were manufactured in Jordan, Vietnam, Cambodia, and Indonesia, with ten manufacturers producing 69% of these products[52]. - The company is exploring ways to diversify sourcing in response to global trade policy changes[52]. - The company evaluates all manufacturers for quality systems, social compliance, and financial strength before selection and on an ongoing basis[53]. - The company generated approximately 69% of its apparel and accessories products from ten manufacturers in Fiscal 2025, with nine manufacturers producing nearly all footwear products[109]. Digital Strategy and Consumer Engagement - The company aims to enhance consumer engagement through a digital strategy that includes multiple digital touchpoints[19]. - The company is investing significantly in enhancing digital shopping capabilities and consumer loyalty programs to adapt to evolving consumer preferences[101]. Marketing and Brand Strategy - The marketing strategy focuses on high-performing athletes and teams, leveraging sponsorships and grassroots events to drive brand awareness[31][30]. - The company owns major trademarks, including UA Logo® and UNDER ARMOUR®, and actively protects its intellectual property[56][57]. - The competitive landscape includes major brands like NIKE, adidas, and PUMA, with challenges from both global and regional competitors[59][60]. Financial Performance and Challenges - Net income for Fiscal 2025 was a loss of $201.27 million, compared to a net income of $232.04 million in Fiscal 2024[195]. - The company incurred restructuring charges of $57.97 million in Fiscal 2025, with total estimated charges expected to be between $140 million and $160 million[187][188]. - Selling, general and administrative expenses increased by 8.4% to $2,601.99 million[190]. - The company faces significant pricing pressure due to intense competition, which may negatively impact margins and profitability[91]. - Fluctuations in raw material costs and supply chain disruptions can adversely affect the company's profit margins and financial results[93]. - The company must successfully execute its long-term strategies, including expanding its direct-to-consumer business and enhancing digital offerings, to achieve growth objectives[99]. - A decline in sales to key customers could result in a material loss of net revenues, negatively impacting growth prospects[102]. Operational Efficiency and Management - Inventory management is crucial, with a focus on improving efficiency and reducing lead times to meet consumer demand[54]. - The company is executing a restructuring plan aimed at improving financial and operational efficiencies, but may not fully realize the expected benefits, potentially impacting profitability[127]. - The company has faced significant changes in its executive management team, which could disrupt operations and affect business goals[125]. - The company relies heavily on information technology, and any failure or interruption could harm its operational effectiveness[121]. - The company experienced operational disruptions due to cyberattacks, which could lead to delays in product fulfillment and reduced operational efficiency[122]. Sustainability and Compliance - The sustainability strategy aims to drive performance through sustainable innovations across product, home field, and team pillars[62]. - Climate change and increased regulatory focus on sustainability may adversely affect the company's brand, product sales, and operational results[117]. - Legal and regulatory compliance is critical, as failure to adhere to laws could lead to significant penalties and reputational damage[135]. Workforce and Culture - The workforce consists of approximately 14,400 teammates, with about 6,500 being full-time employees[64]. - The company emphasizes a culture of engagement and ethical practices, supported by various training and development programs[65][66]. - Total rewards strategy includes competitive pay and benefits, with a focus on pay equity and performance-based compensation[68][69]. - The company is committed to enhancing its leadership capabilities through mentoring and training programs[67]. Cash Flow and Financial Position - As of March 31, 2025, the company's cash and cash equivalents totaled $501 million, indicating a need for additional capital to manage and grow the business[130]. - The company anticipates no cash dividends will be declared or paid in the foreseeable future[175]. - The company is actively monitoring macroeconomic factors, including inflation and global trade policies, which may materially impact results in Fiscal 2026[192][193]. Risks and Vulnerabilities - The company relies heavily on consumer discretionary spending, which can decline during economic downturns, impacting sales and growth expectations[82]. - The company has limited brand recognition and operational experience in certain international markets, which may hinder its growth strategy and operational efficiency[105]. - The company relies on a limited number of distribution facilities, making it vulnerable to disruptions from natural disasters or operational difficulties[120]. - The company has experienced challenges with maintaining quality control standards, risking loss of net revenues and brand reputation[113]. - The company has historically provided supply chain finance support, but disruptions in financial markets could impact cash flow and liquidity for its partners[111].

Production and Operations - Talos achieved record production of approximately 101 MBoe/d in Q1 2025, with 68% being oil and 78% liquids[3][11] - Talos expects average daily production for Q2 2025 to be between 92.0 to 96.0 MBoe/d, with full-year guidance of 90.0 to 95.0 MBoe/d[21][23] - Talos completed well operations on the Sunspear discovery, with first production expected in late Q2 2025, projecting 8-10 MBoe/d gross[5][7] - The Katmai West 2 well is currently in completion operations, with first production also expected in late Q2 2025, and an estimated ultimate recovery of approximately 50 MMBoe gross[5][8] - Talos increased its interest in the Monument discovery to 29.76%, expecting first production of 20-30 MBoe/d gross by late 2026[9] Financial Performance - Adjusted EBITDA for Q1 2025 was $363.0 million, with a net loss of $9.9 million or $0.05 per diluted share[5][10] - The company reported total revenues of $513.1 million for Q1 2025, with average realized prices of $71.73 per barrel for oil and $4.32 per Mcf for natural gas[10][12] - Total revenues for Q1 2025 reached $513.1 million, a 19.4% increase from $429.9 million in Q1 2024[39] - Oil revenues increased to $440.7 million, up 12.1% from $393.2 million in the same period last year[39] - Net loss for Q1 2025 was $9.9 million, compared to a net loss of $112.4 million in Q1 2024, representing a significant improvement[39] - Operating income for Q1 2025 was $43.5 million, down from $67.8 million in Q1 2024, indicating a decrease of 35.8%[39] - Cash flows from operating activities for Q1 2025 were $268.2 million, compared to $96.4 million in Q1 2024, showing a substantial increase[41] - Adjusted Free Cash Flow before changes in working capital was $194,472 thousand for the three months ended March 31, 2025[56] Liquidity and Capital Expenditures - The company maintained a strong cash balance of $203.0 million and an undrawn credit facility, resulting in total liquidity of approximately $960.2 million[4][19] - Capital expenditures for Q1 2025 totaled $117.6 million, with plans to allocate up to 50% of annual free cash flow to share repurchases[5][15][6] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 totaled $310.0 million, up from $124.4 million at the end of Q1 2024[41] - Total current assets increased to $708.8 million as of March 31, 2025, up from $659.4 million at the end of 2024[37] - Total liabilities decreased to $3.4 billion as of March 31, 2025, down from $3.4 billion at the end of 2024[37] - Total Debt as of March 31, 2025, was $1,250,000 thousand, with Net Debt calculated at $1,047,050 thousand[68] - LTM Adjusted EBITDA reached $1,393,160 thousand, resulting in a Net Debt to LTM Adjusted EBITDA ratio of 0.8x[68] Risk Factors and Strategic Focus - The company is subject to various risks including commodity price volatility and geopolitical events that may impact its operations[30] - Talos Energy focuses on maximizing long-term value through its Exploration & Production business in the U.S. Gulf of America and offshore Mexico[28] - The company emphasizes safe and efficient operations, environmental responsibility, and community impact in its business strategy[28] - Future production estimates are based on assumptions of capital expenditure levels and market demand for oil and gas[31] - Reserve estimates are subject to significant uncertainty and may differ from actual recoverable quantities[32] Conference and Investor Relations - The company plans to host a conference call on May 6, 2025, at 10:00 AM Eastern Time to discuss earnings and future outlook[27] - Talos Energy's investor relations contact is Clay Jeansonne, available via email for inquiries[29] Non-GAAP Measures and Adjustments - Talos Energy utilizes non-GAAP financial measures such as EBITDA and Adjusted EBITDA to provide additional insights into its financial performance[34] - The adjustments for derivative fair value loss amounted to $15,853 thousand, impacting the overall financial performance[61] - Non-cash equity-based compensation expense for the period was $4,141 thousand, contributing to the Adjusted Net Income of $10,466 thousand[61] - The company reported a transaction expense of $(4,579) thousand related to severance costs and acquisition expenses[61] - Adjusted General & Administrative Expenses for Q1 2025 were $30.3 million, down from $34.6 million in Q1 2024[44] - Adjusted EBITDA for the same period was $363,003 thousand, compared to $361,814 thousand in the previous quarter, reflecting a stable operational performance[49] - Production for the three months ended March 31, 2025, was 9,080 Boe, with an Adjusted EBITDA per Boe of $39.98[49] - The company did not pay any cash income taxes during the period, which had no impact on the reported Adjusted Free Cash Flow[55]