Financial Performance - The company reported a net loss of $1,856,421 for the three months ended March 31, 2025, compared to a net loss of $1,008,458 for the same period in 2024, indicating an increase in losses of approximately 84.2%[11] - Basic and diluted loss per share for the three months ended March 31, 2025, was $(0.22), compared to $(0.16) for the same period in 2024[61] - The net loss for the three months ended March 31, 2025, was $1,856,421, compared to a net loss of $1,008,458 for the same period in 2024[11] - The company experienced a net cash decrease of $(1,207,833) during the three months ended March 31, 2025, compared to an increase of $47,263 in the same period of 2024[21] Assets and Liabilities - Total assets decreased from $13,034,404 on December 31, 2024, to $11,525,692 on March 31, 2025, representing a decline of approximately 11.5%[9] - Cash and cash equivalents decreased from $9,719,310 at the beginning of the period to $8,511,477 at the end of the period, a reduction of approximately 12.4%[16] - The Company had cash equivalents of $8,159,472 as of March 31, 2025, with approximately $8,186,086 in cash exceeding FDIC insurance limits[31][32] - The Company reported right-of-use assets of $1,263,855 and operating lease liabilities of $1,326,424[79] - The total future payments due under operating leases as of March 31, 2025, amount to $1,560,636, with the largest payment of $378,576 due in 2028[81] Operating Costs - Total operating costs increased to $1,950,728 in Q1 2025 from $1,008,458 in Q1 2024, reflecting a rise of approximately 93.3%[11] - Cash used in operating activities was $(1,133,533) for the three months ended March 31, 2025, compared to cash provided of $281,199 in the same period of 2024, indicating a significant decline in operational cash flow[21] - Stock-based compensation for the three months ended March 31, 2025, was $317,277, compared to $142,810 for the same period in 2024[53] Research and Development - Research and development costs net of grants amounted to $575,016 for Q1 2025, up from $277,582 in Q1 2024, marking an increase of approximately 107.2%[11] - Research and development costs for the three months ended March 31, 2025, amounted to $1,150,797, compared to $986,282 for the same period in 2024, reflecting an increase of approximately 16.6%[40] - The Company received grant reimbursements of $571,822 and $674,158 for research and development costs for the three months ended March 31, 2025, and 2024, respectively[39] Shareholder Information - The weighted average number of common shares outstanding increased from 6,250,002 in Q1 2024 to 8,367,810 in Q1 2025, reflecting a growth of approximately 33.9%[11] - The Company has a total of 1,747,789 stock options outstanding as of March 31, 2025, with a weighted average remaining contractual life of 5.54 years[54] - As of March 31, 2025, stock options to purchase 632,757 shares of Common Stock were vested, with a weighted average exercise price of $4.57[53] Legal and Compliance - The company has not recorded any accrued royalties under the exclusive license agreement as of March 31, 2025[68] - The company has met all development milestones required under the license agreement as of March 31, 2025[69] - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from various reporting requirements[24] Subsidiaries and Ventures - The company established a wholly owned subsidiary, NCTx LLC, focused on developing a rare plant-derived compound relevant to metabolic health[82] - The company has filed a provisional patent application for deuterated cannabinoid molecules in a joint venture with Neuractas Therapeutics, although no business activities have occurred to date[19] Funding and Grants - The Company has a minority interest of 48% held by MDB Capital Holdings, LLC as of March 31, 2025, following the dilution from the November 2024 IPO[18] - The Company reported a significant concentration of risk, with 97% of grant reimbursements coming from the Department of Energy and 3% from the NIH for the three months ended March 31, 2025[26] - The balance of grants receivable at the end of the period was $595,160 as of March 31, 2025, down from $1,111,611 at the end of March 2024, indicating a decrease of approximately 46.5%[39]

Financial Performance - Revenue for the three months ended March 31, 2025, was $585,087,000, an increase of 8.6% compared to $538,562,000 for the same period in 2024[14] - Operating income for the three months ended March 31, 2025, was $138,740,000, representing a 23.7% increase from $112,099,000 in the prior year[14] - Net income for the three months ended March 31, 2025, was $111,108,000, up 27.5% from $87,099,000 for the same period in 2024[14] - Basic earnings per share for the three months ended March 31, 2025, increased to $1.53 from $1.20 in the same period last year, reflecting a 27.5% growth[14] - Net income for the nine months ended March 31, 2025, was $328,144,000, an increase from $280,743,000 in the same period of 2024, representing a growth of approximately 16.9%[19] - Total revenue for the nine months ended March 31, 2025, reached $1,759,916,000, compared to $1,655,631,000 for the same period in 2024, indicating a year-over-year increase of about 6.3%[40] - Diluted earnings per share for the nine months ended March 31, 2025, rose to $4.49 compared to $3.85 for the same period in 2024[80] - The company reported a segment income of $322,106,000 for Core Payments for the nine months ended March 31, 2025, indicating robust profitability in this segment[87] Assets and Liabilities - Total current assets decreased to $593,236,000 as of March 31, 2025, from $632,018,000 as of June 30, 2024[12] - Total liabilities decreased to $895,587,000 as of March 31, 2025, compared to $1,082,117,000 as of June 30, 2024[12] - Retained earnings increased to $3,287,370,000 as of March 31, 2025, from $3,081,690,000 as of June 30, 2024[12] - The company reported a total stockholders' equity of $2,036,431,000 as of March 31, 2025, up from $1,842,364,000 as of June 30, 2024[12] Expenses - Research and development expenses for the three months ended March 31, 2025, were $39,411,000, an increase of 9.9% from $35,993,000 in the same period last year[14] - Total expenses for the nine months ended March 31, 2025, were $1,346,899,000, with Selling, General, and Administrative expenses amounting to $209,839,000[86] - Research and Development expenses for the nine months ended March 31, 2025, totaled $120,192,000, highlighting the company's commitment to innovation[86] Cash Flow and Investments - Cash flows from operating activities for the nine months ended March 31, 2025, were $314,392,000, slightly down from $336,242,000 in 2024, reflecting a decrease of approximately 6.5%[19] - The company’s cash and cash equivalents at the end of the period were $39,870,000, an increase from $27,254,000 at the end of the previous year, showing a growth of about 46.4%[19] - The company’s net cash from investing activities for the nine months ended March 31, 2025, was $(176,317,000), compared to $(164,505,000) in 2024, reflecting an increase in cash outflow of approximately 7.1%[19] Dividends and Shareholder Returns - The company declared dividends of $0.58 per share for the three months ended March 31, 2025, compared to $0.55 per share in the same period in 2024[17] - The company declared a cash dividend of $0.58 per share on May 9, 2025, payable on June 18, 2025, to stockholders of record as of May 29, 2025[88] Taxation - The effective tax rate for the three months ended March 31, 2025, decreased to 21.7% from 23.7% in the prior year quarter[69] - For the nine months ended March 31, 2025, the effective tax rate decreased to 23.0% compared to 23.6% for the same period last fiscal year[70] - The company paid income taxes of $94,553 for the nine months ended March 31, 2025, compared to $70,686 for the same period in 2024[71] - As of March 31, 2025, the company had $22,851 of gross unrecognized tax benefits, with $20,735 potentially affecting the effective tax rate if recognized[71] Debt and Financing - The Company had $80,000 outstanding under the amended and restated credit facility as of March 31, 2025, up from $60,000 at June 30, 2024[64] - The Company entered into a term loan credit agreement with an outstanding balance of $90,000 as of March 31, 2025[65] - Interest paid by the Company during the nine months ended March 31, 2025, was $7,525, a decrease from $11,176 in the same period of 2024[68] - As of March 31, 2025, the company had $170,000,000 in outstanding debt with variable interest rates, with a potential increase in annual interest expense of $1,700,000 for a 1% rise in borrowing rates[152] Future Revenue Recognition - As of March 31, 2025, estimated revenue expected to be recognized in the future related to unsatisfied performance obligations totaled $7,412,480, with approximately 23% expected to be recognized over the next 12 months[46]

Financial Performance - Net income for Q1 2025 was $4.9 million, down from $6.0 million in Q4 2024, with diluted earnings per share at $0.30 compared to $0.38 in the previous quarter[133]. - Return on average assets (ROA) was 0.53% for Q1 2025, down from 0.63% in Q4 2024, while return on average equity (ROE) was 4.52% compared to 5.48% in the prior quarter[133]. - Net interest income for Q1 2025 totaled $24.9 million, a decrease of $284 thousand from Q4 2024, primarily due to a $36.3 million reduction in average earning assets[142]. - Non-interest income for Q1 2025 was $2.9 million, an increase of $120 thousand or 4.4% year-over-year, primarily driven by bank-owned life insurance dividend income[158]. - Total non-interest expense for Q1 2025 was $21.3 million, reflecting a $95 thousand increase or 0.4% compared to the same period in 2024, mainly due to higher charitable contributions[163]. Interest Margin and Income - The tax-equivalent net interest margin increased to 2.86% in Q1 2025 from 2.80% in Q4 2024, and was 2.50% in the same period last year, reflecting a 36 basis point year-over-year increase[133]. - Compared to Q1 2024, net interest income rose by $2.3 million, reaching $24.9 million, attributed to higher average earning asset yields and lower deposit costs[144]. - The tax-equivalent net interest margin improved by 36 basis points from 2.50% in Q1 2024, influenced by higher yields on investment securities and lower deposit costs[145]. Loans and Credit Quality - Loan balances decreased by $9.7 million to $2.074 billion, with loan fundings of $47.4 million and payoffs of $25.5 million during Q1 2025[133]. - The provision for credit losses on loans was $75 thousand in Q1 2025, with the allowance for credit losses at 1.44% of total loans[133]. - Non-accrual loans decreased to $32.9 million, or 1.59% of total loans, with approximately 57% of non-accrual loans paying as agreed[133]. - Classified loans increased to $57.4 million as of March 31, 2025, compared to $45.1 million at December 31, 2024, primarily due to downgrades in commercial relationships[178]. - Net charge-offs for Q1 2025 totaled $825 thousand, significantly higher than $19 thousand in Q4 2024, primarily due to a charge-off of an acquired commercial real estate loan[180]. Deposits and Liquidity - Total deposits rose by $82.0 million to $3.302 billion as of March 31, 2025, with non-interest bearing deposits comprising 43.2% of total deposits[133]. - Total cash, cash equivalents, and restricted cash rose to $259.9 million as of March 31, 2025, up $122.6 million from $137.3 million at December 31, 2024, driven by an $82 million increase in deposits[168]. - Cash and cash equivalents increased by $122.6 million in Q1 2025, driven by an $82.0 million net increase in deposits and $63.0 million from investment securities[199]. - The Bank had no outstanding borrowings at March 31, 2025, maintaining a strong liquidity position[203]. - Unfunded credit commitments totaled $451.2 million as of March 31, 2025, with expectations to fund these through existing loan repayments and liquid assets[201]. Capital Ratios - Bancorp's total risk-based capital ratio was 16.69% as of March 31, 2025, indicating strong capital levels above regulatory thresholds[134]. - The total risk-based capital ratio for Bancorp was 16.69% as of March 31, 2025, up from 16.54% at the end of 2024, indicating strong capital adequacy[188]. - Bancorp's tangible common equity to tangible assets (TCE ratio) was 9.82% at March 31, 2025, down from 9.93% at December 31, 2024[189]. - The Bank's capital ratios exceed the regulatory definition of "well capitalized" as of March 31, 2025[187]. Expenses and Contributions - Salaries and related benefits increased by $2.6 million in Q1 2025, attributed to various factors including new talent acquisition and increased 401(k) contributions[162]. - Charitable contributions expense in Q1 2025 was $403 thousand, significantly higher than $30 thousand in Q4 2024 and $12 thousand in Q1 2024[162]. - Total non-interest expense rose to $21.3 million in Q1 2025, compared to $21.2 million in Q1 2024, with a significant increase in charitable contributions of $391 thousand[163]. Economic Environment - The Federal Reserve's target federal funds rate was left unchanged in early 2025, reflecting projected slower economic growth and higher inflation[148]. - The effective tax rate for Q1 2025 was 24.8%, down from 37.8% in the prior quarter, reflecting lower pre-tax income and the treatment of certain permanent tax differences[165].

Financial Performance - The Company recorded a net loss of $2.7 million for Q1 2025, compared to a net loss of $2.8 million for Q1 2024, indicating a slight improvement [149]. - Non-interest income decreased by $57 thousand, or 12.6%, to $394 thousand in Q1 2025, primarily due to the absence of a gain on loan sales that occurred in the previous year [154]. - Non-interest expense increased by $387 thousand to $13.6 million in Q1 2025, driven by higher compensation and benefits expenses [155]. Interest Income and Loans - Interest income increased by $1.9 million, or 9.0%, to $22.7 million in Q1 2025, driven by higher rates on interest-earning assets [150]. - Net interest income rose to $10.7 million in Q1 2025, up from $9.4 million in Q1 2024, with a net interest rate spread of 1.62% and a net interest margin of 2.16% [152][159]. - The provision for credit losses was $201 thousand in Q1 2025, compared to a release of $535 thousand in Q1 2024, reflecting an increase in loan balances [153]. - Gross loans held for investment rose by $42.2 million to $1.63 billion at March 31, 2025, with notable increases in consumer and commercial real estate loans [162]. - Total loans increased to $1.625 billion at March 31, 2025, up from $1.583 billion at December 31, 2024, representing a growth of 2.7% [163]. Assets and Deposits - Total assets increased to $2.09 billion at March 31, 2025, from $2.06 billion at December 31, 2024 [160]. - Cash and cash equivalents increased by $3.7 million, or 9%, to $46.2 million at March 31, 2025 [160]. - Total deposits reached $1.39 billion at March 31, 2025, an increase of $43.9 million, or 3.3%, from December 31, 2024 [164]. - Core deposits accounted for 47.6% of total deposits at March 31, 2025, compared to 47.3% at December 31, 2024 [164]. Non-Performing Assets and Equity - Total non-performing assets rose to $5.723 million at March 31, 2025, compared to $5.104 million at December 31, 2024 [163]. - Total shareholders' equity decreased by $5.5 million, or 1.7%, to $326.7 million at March 31, 2025, primarily due to share repurchases [166]. Capital and Regulatory Compliance - The bank was considered "well capitalized" under regulatory guidelines as of March 31, 2025, exceeding all applicable regulatory capital requirements [181]. - Common equity tier 1 capital as of March 31, 2025, is $287,537 thousand, representing a ratio of 18.58% [182]. - Total capital as of March 31, 2025, is $300,942 thousand, with a ratio of 19.45% [182]. - Tier 1 capital as of March 31, 2025, stands at $287,537 thousand, with a ratio of 18.58% [182]. - The capital buffer for common equity tier 1 as of March 31, 2025, is $108,302 thousand, exceeding the minimum requirement of 7.00% [182]. - The total capital ratio as of March 31, 2025, exceeds the minimum requirement of 10.50% by reaching 19.45% [182]. - The leverage ratio for tier 1 capital as of March 31, 2025, is 13.73%, above the minimum requirement of 4.00% [182]. Interest Rate Risk - Estimated changes in net interest income indicate a potential increase of $1,682 thousand, or 3.4%, with a 200 basis point increase in interest rates [174]. - The estimated economic value of equity (EVE) would decrease by 33.1% with a 200 basis point increase in interest rates, indicating significant interest rate risk exposure [175].

Financial Performance - Net sales for Q1 2025 were $2,239, a decrease of $5, or 0.2%, from $2,244 in Q1 2024, primarily due to reduced sales of HazardPRO wireless products [57]. - Gross profit for Q1 2025 was $1,084, an increase of $4, or 0.4%, with a gross margin of 48.4%, up from 48.1% in Q1 2024 [58]. - Total operating expenses increased by $73, or 6.2%, to $1,253 in Q1 2025, rising as a percentage of net sales to 56.0% from 52.6% [60]. - Net non-operating income decreased by $28, or 24.1%, in Q1 2025 due to lower interest income from Treasury Bills [61]. - Loss before income tax benefit was $81 in Q1 2025, a decrease of $97 compared to income before income taxes of $16 in Q1 2024 [62]. Cash Flow and Liquidity - Cash and cash equivalents were $9,918 at March 31, 2025, down from $9,948 at December 31, 2024, primarily due to decreased cash from operating activities [65]. - Cash used in operating activities was $30 in Q1 2025, compared to cash from operating activities of $202 in Q1 2024, a decrease of $232 [66]. - The company believes its ongoing cash requirements will be met through existing cash and cash generated from operations for at least the next 12 months [67]. Strategic Outlook - The company is exploring growth opportunities through internal product development and external technology partnerships or acquisitions [70]. - Supply chain dynamics may negatively impact operations and profit margins due to unexpected price increases and delivery delays [68].

Revenue Growth - Revenue increased by 13.7% to $117.5 million, marking the sixth consecutive quarter of double-digit growth[5] - Revenue for Q1 2025 was $117,506,000, an increase of 13.3% compared to $103,366,000 in Q1 2024[22] - Total revenue for Q1 2025 reached $117,506, an increase of 13.7% from $103,366 in Q1 2024[30] - Campus Operations segment generated revenue of $117,506 in Q1 2025, a 16.0% increase from $101,321 in Q1 2024[30] Profitability - Net income improved to $1.9 million, compared to a net loss of $0.2 million in the previous year[5] - Net income for Q1 2025 was $1,944,000, compared to a net loss of $214,000 in Q1 2024, marking a turnaround in profitability[22] - Basic and diluted net income per share for Q1 2025 was $0.06, compared to a loss of $0.01 per share in Q1 2024[22] - Operating income for Q1 2025 was $3,413,000, a significant improvement from an operating loss of $458,000 in Q1 2024[22] - Operating income for Campus Operations improved to $21,671 in Q1 2025, a 71.9% increase from $12,609 in Q1 2024[30] Adjusted EBITDA - Adjusted EBITDA rose to $10.6 million, compared to $6.5 million in the prior year, reflecting a 63% increase[5] - Adjusted EBITDA for Q1 2025 was $10,636, up from $6,545 in Q1 2024, indicating a growth of 62.5%[29] - Adjusted EBITDA guidance for 2025 was increased to between $58 million and $63 million[13] - The company projects adjusted EBITDA for 2025 to be in the range of $58,000 to $63,000, with a midpoint of $60,500[34] Student Enrollment - Student starts grew by 16.2%, with a 20.9% increase excluding the Transitional segment[5] - The number of starts in Campus Operations increased by 20.9% to 4,610 in Q1 2025, compared to 3,812 in Q1 2024[32] - The average population in Campus Operations grew by 16.2% to 15,469 in Q1 2025, up from 13,311 in Q1 2024[32] Liquidity and Financial Position - Total liquidity reached nearly $90 million, with no debt outstanding as of March 31, 2025[5] - Total liquidity as of March 31, 2025, was $88,655, consisting of cash and cash equivalents of $28,655 and a credit facility of $60,000[29] - Cash used in operating activities for Q1 2025 was $(8,378,000), an improvement from $(14,934,000) in Q1 2024[24] - Total costs and expenses for Q1 2025 were $114,093,000, up from $103,824,000 in Q1 2024, reflecting a 9.5% increase[22] Capital Expenditures and Investments - Capital expenditures for Q1 2025 were $(19,889,000), significantly higher than $(1,684,000) in Q1 2024, indicating increased investment in growth[24] - New campus and campus relocation costs for 2025 are estimated at $8,900, which includes pre-opening costs and net operating losses[35] - The Nashville campus relocation was completed, enhancing operational efficiency and supporting the launch of two new programs[5] - The company plans to open a new campus in Houston, Texas by year-end 2025 and in Hicksville, New York by the end of 2026[7] Marketing Efficiency - Marketing cost per student start was approximately 20% lower compared to the prior year, indicating improved efficiency[10] Credit Losses - The company reported a provision for credit losses of $11,835,000 in Q1 2025, slightly down from $12,213,000 in Q1 2024[24] Guidance and Projections - The company raised its full-year 2025 revenue guidance to between $485 million and $495 million[13] - Adjusted EBITDA and other non-GAAP measures are used by the company to assess performance and make strategic decisions[26][27] - Total liquidity, defined as cash and cash equivalents plus available borrowings, is a key measure for the company's ability to meet capital expenditures and debt service[28]

Financial Performance - The Corporation's net income for Q1 2025 was $177.5 million, an increase of $74.2 million from $103.3 million in Q1 2024[305]. - Adjusted net income for the quarter ended March 31, 2024, was $135.2 million, reflecting a significant increase from U.S. GAAP net income of $103.3 million[314]. - For the quarter ended March 31, 2025, total income increased to $208,019,000, up 24% from $168,078,000 in the same quarter of 2024[427]. - Net income for the quarter ended March 31, 2025, was $194,098,000, representing a 52% increase compared to $127,864,000 in the prior year[427]. Interest Income and Margin - Net interest income reached $605.6 million, up $54.9 million compared to Q1 2024, with a net interest margin expansion of 24 basis points to 3.40%[307]. - Net interest income for the quarter ended March 31, 2025, was $605.6 million, an increase of $54.9 million compared to $550.7 million in the same quarter of 2024[323]. - Net interest margin for the first quarter of 2025 was 3.40%, an increase of 24 basis points from the previous year[323]. - Net interest income on a taxable equivalent basis for Q1 2025 was $663.9 million, up by $74.3 million from the same period in 2024[323]. Credit Quality and Losses - The provision for credit losses decreased to $64.1 million, down $8.5 million from Q1 2024, reflecting improved credit quality[307]. - For the quarter ended March 31, 2025, the Corporation recorded a provision for credit losses of $63.9 million, a decrease of $8.2 million compared to the same quarter of the previous year[331]. - The provision for loan losses was $52.7 million in 2025, down from $61.0 million in the same quarter of 2024, reflecting a favorable variance of $8.3 million[346]. - The allowance for credit losses (ACL) increased by $16.1 million to $762.1 million from December 31, 2024, driven by changes in economic scenario probability weights and qualitative reserves[478]. Operating Expenses - Operating expenses totaled $471.0 million, a decrease of $12.1 million compared to Q1 2024, driven by lower FDIC special assessments[307]. - Total operating expenses decreased by $12.1 million to $471.0 million for the quarter ended March 31, 2025, compared to $483.1 million in the same quarter of 2024[338]. - Technology and software expenses rose by $4.2 million due to higher software amortization related to transformation initiatives[337]. Assets and Liabilities - Total assets increased to $74.0 billion as of March 31, 2025, up $993.2 million from December 31, 2024, mainly due to higher AFS securities and loans[307]. - Total liabilities increased to $68.2 billion at March 31, 2025, an increase of $806.6 million compared to December 31, 2024[357]. - Loans held-in-portfolio increased by $146.4 million to $37.3 billion at March 31, 2025, compared to December 31, 2024[353]. Deposits and Equity - Deposits rose to $65.8 billion, an increase of $934.9 million from December 31, 2024, attributed to higher interest-bearing deposits[308]. - Stockholders' equity increased to $5.8 billion, up $186.6 million from December 31, 2024, with a tangible book value per share of $72.02[307]. - Average deposit balances grew by $1.6 billion, with Puerto Rico public deposits at $19.6 billion, up approximately $159.2 million from the previous quarter[358]. Non-Performing Assets - Non-Performing Assets (NPAs) decreased by $41.9 million from December 31, 2024, with Non-Performing Loans (NPLs) decreasing by $36.7 million[455]. - The ratio of NPLs to total loans held-in-portfolio improved to 0.84% as of March 31, 2025, down from 0.95% on December 31, 2024[456]. - The total non-performing loans held-in-portfolio amounted to $314,069 thousand, with an ACL to NPLs ratio of 242.67% as of March 31, 2025, up from 212.68% at the end of 2024[482]. Dividends and Share Repurchase - The Corporation repurchased 1,270,569 shares for $122.3 million at an average price of $96.24 per share during Q1 2025[301]. - Dividends declared per share increased to $0.70, reflecting a 13% rise compared to the previous quarter[302]. - During the quarter ended March 31, 2025, the Corporation declared cash dividends of $0.70 per share, totaling approximately $48 million[411]. Market and Economic Conditions - The U.S. Consumer Price Index showed a year-over-year increase of 2.4% as of March 2025, while Puerto Rico's Consumer Price Index increased by 1.8% over the 12 months ending in January 2025[435]. - The Corporation's financial flexibility may be adversely affected if the banking subsidiaries cannot maintain access to funding or if adequate funding is not available[400].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Esquire Financial Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) Maryland 27-5107901 (State or Other Jurisdiction of Incorpor ...

Financial Performance - Total revenues for Q1 2025 were $5,956 million, a decrease of 3.4% compared to $6,169 million in Q1 2024[10]. - Net income for Q1 2025 was $1,868 million, down 3.2% from $1,929 million in Q1 2024[12]. - Earnings per common share (diluted) for Q1 2025 were $2.60, compared to $2.66 in Q1 2024, reflecting a decrease of 2.3%[10]. - Total operating income decreased to $2,648 million from $2,736 million, reflecting a decline of 3.2% year-over-year[52]. - Net income decreased 3% to $1,868 million, with diluted earnings per share down 2% to $2.60[87]. - Consolidated revenues decreased 3% to $5,956 million, with a 2% decrease in constant currencies[78]. - The effective income tax rate was 19.8% for Q1 2025, slightly down from 19.9% in Q1 2024[36]. Cash Flow and Assets - Cash provided by operations in Q1 2025 was $2,428 million, an increase of 1.6% from $2,390 million in Q1 2024[14]. - Total assets increased to $56,329 million as of March 31, 2025, up from $55,182 million at the end of 2024[9]. - Cash and equivalents at the end of Q1 2025 were $1,238 million, an increase from $838 million at the end of Q1 2024[14]. - The fair value of the company's debt obligations was estimated at $37.2 billion, compared to a carrying amount of $38.9 billion[38]. Dividends and Share Repurchase - The company declared dividends of $1.77 per common share in Q1 2025, compared to $1.67 in Q1 2024, representing a 6% increase[10]. - Common stock cash dividends for the quarter were $1.77 per share, totaling $1,266 million, an increase from $1.67 per share in the previous year[21]. - The company repurchased 1.5 million shares for $447 million and paid a quarterly dividend of $1.77 per share, totaling $1.3 billion[89]. - The total value of shares that may yet be purchased under the repurchase program is approximately $14.55 billion[185]. - The company's Board of Directors approved a share repurchase program on November 21, 2024, authorizing the purchase of up to $15.0 billion of outstanding common stock[186]. Restaurant Operations and Growth - Total Systemwide restaurants increased to 43,756 as of March 31, 2025, up from 42,018 in 2024, representing a growth of about 4.1%[20]. - The total number of conventional franchised restaurants increased to 22,126 in 2025 from 21,841 in 2024, marking a growth of approximately 1.3%[20]. - The company plans to open approximately 2,200 new restaurants globally in 2025, contributing to a net growth of slightly over 4%[73]. - The company expects net restaurant unit expansion to contribute slightly over 2% to 2025 Systemwide sales growth[117]. Expenses and Cost Management - Total capital expenditures for the quarter were $551 million, slightly up from $547 million in the previous year[52]. - The company reported total selling, general, and administrative expenses of $682 million, down from $720 million, indicating a reduction of 5.3%[52]. - Selling, general and administrative expenses decreased by $38 million or 5%, reflecting investments in digital and technology[102]. Market and Economic Conditions - Global comparable sales decreased 1.0%, with U.S. sales down 3.6% and International Operated Markets down 1.0%[77]. - The war in the Middle East is expected to continue negatively impacting Systemwide sales and revenue until conditions improve[83]. - Economic conditions, including inflationary pressures, can significantly impact consumer disposable income levels and spending habits, affecting the company's financial results[163]. - Labor challenges, including availability and cost, could adversely impact the company's operations and customer satisfaction levels[142]. - Supply chain interruptions could lead to increased costs or reduced revenues, impacting the overall business performance[136]. Strategic Initiatives - The company is focused on enhancing its digital experience, with plans to increase mobile app delivery sales to 30% by the end of 2027[73]. - The company is implementing a "Best Burger" initiative to improve its burger offerings, aiming for rollout in nearly all markets by the end of 2026[71]. - The company aims to increase its 90-day active loyalty users to 250 million by the end of 2027, with a target of $45.0 billion in annual Systemwide sales to loyalty members[73]. - The company is undergoing a multi-year transformation of its technology and operating model to modernize processes and create efficiencies[179]. Risks and Challenges - The company faces intense competition in the "informal eating out" segment, which may affect its market share and financial performance[128]. - The company acknowledges the need to effectively anticipate and respond to industry trends and evolving consumer preferences to avoid adverse impacts on financial results[124]. - The company is under increasing scrutiny regarding environmental and social impact matters, which could affect brand perception and operational costs[171]. - Changes in commodity costs, including food and labor, can adversely affect restaurant profitability and overall operating results[166]. - The company is subject to fluctuations in currency exchange rates, which could negatively impact reported earnings[164]. Internal Controls and Governance - There were no material changes to the company's internal control over financial reporting during the fiscal quarter ended March 31, 2025[181]. - The company's management confirmed the effectiveness of its disclosure controls and procedures as of March 31, 2025[178]. - The company has implemented modifications to enhance the quality of internal control over financial reporting as part of its technology transformation[180].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-15087 HEARTLAND EXPRESS INC. (Exact Name of Registrant as Specified in Its Charter) Nevada 93-0926999 (State or Other Jurisdicti ...