Revenue Performance - Total revenue for the three months ended April 30, 2025, was $1,948,215, a slight increase of 0.4% compared to $1,940,346 for the same period in 2024[126] - For the nine months ended April 30, 2025, total revenue increased by 13.8% to $7,008,358 from $6,161,122 in 2024, driven by an expanding customer base[127] - Logistics service revenue accounted for 98% of total revenue for the three months ended April 30, 2025, and 96% for the nine months ended April 30, 2025, indicating a continued focus on logistics[128] Cost and Profitability - Cost of revenues for the three months ended April 30, 2025, increased by 11.5% to $1,890,232 from $1,695,639 in 2024[131] - For the nine months ended April 30, 2025, total cost of revenues rose by 24.3% to $6,641,966 from $5,343,534 in 2024, reflecting rising costs from logistics vendors[131] - The gross profit for the three months ended April 30, 2025, was $57,983, a decrease of 76% compared to $244,707 in 2024[124] - Gross profit decreased from $244,707 to $57,983 for the three months ended April 30, 2025, and from $817,588 to $366,392 for the nine months ended April 30, 2025[132] - Overall gross profit margin was 2.98% and 5.23% for the three and nine months ended April 30, 2025, down from 12.61% and 13.27% during the same periods in 2024[132] Losses and Expenses - Net loss attributable to the company for the three months ended April 30, 2025, was $947,987, a significant increase from a loss of $49,974 in 2024, representing a 1,797% change[124] - General and administrative expenses surged by 614% to $960,583 for the three months ended April 30, 2025, compared to $134,473 in 2024[124] - Operating expenses increased by $826,110 for the three months and $1,002,288 for the nine months ended April 30, 2025, compared to the same periods in the previous year[133] - Net losses amounted to $959,409 and $1,162,328 for the three and nine months ended April 30, 2025, compared to a net loss of $38,797 and a net income of $55,805 for the same periods in 2024[135] Cash Flow and Capital - As of April 30, 2025, the company had working capital of $4,509,290, primarily consisting of cash of $3,630,884 from the initial public offering[136] - Net cash used in operating activities was $2,000,182 for the nine months ended April 30, 2025, primarily due to the net loss and increases in accounts receivable and prepaid expenses[141] - Net cash provided by financing activities was $5,217,937 for the nine months ended April 30, 2025, mainly from the initial public offering[143] Strategic Initiatives - The company completed a $7 million initial public offering on April 11, 2025, and became listed on Nasdaq[119] - The acquisition of RQS United Group Limited on March 3, 2023, is expected to enhance the company's logistics capabilities and market presence[113] - The company plans to diversify its service region to include long-distance shipping lines, which typically yield higher profit margins[132] - The company may seek additional cash resources in the future for investments, acquisitions, or capital expenditures[137] - The company had no investing activities during the three and nine month periods ended April 30, 2025 and 2024[142]

Financial Performance - Net sales decreased by 4.1% to $3.0 billion, with comparable sales down 3.9% in the first quarter of 2025[55] - Gross margin increased by 37 basis points to 39.9% of net sales, driven by merchandise mix and inventory management[65] - SG&A expenses decreased by 5.2% to $1.2 billion, representing 36.0% of total revenue, a decrease of 32 basis points year-over-year[55] - Operating income was $60 million, an increase from $43 million in the prior year, with an operating margin of 1.9%[55] - The company expects net sales to decrease between 5% and 7% for the full year 2025[59] - Digital sales decreased by 7.7%, with digital penetration at 24% of net sales compared to 25% in the first quarter of 2024[61] Cash Flow and Capital Expenditures - Operating activities used $92 million of cash in Q1 2025, a decrease of $85 million compared to $7 million used in Q1 2024[80] - Investing activities used $108 million in Q1 2025, down from $126 million in Q1 2024, primarily due to fewer Sephora shop openings[82] - Anticipated capital expenditures for 2025 are approximately $400 to $425 million, including investments in Sephora shops and e-fulfillment center expansion[83] - Capital expenditures are projected to be between $400 million and $425 million in 2025, including investments in Sephora shops and e-fulfillment centers[75] - Financing activities generated $219 million of cash in Q1 2025, an increase of $41 million compared to $178 million in Q1 2024[86] - Cash dividend payments were $14 million ($0.125 per share) in Q1 2025, down from $55 million ($0.50 per share) in Q1 2024[87] Inventory and Working Capital - Inventory increased by 2% year-over-year to $3.1 billion[55] - Working capital decreased to $300 million as of May 3, 2025, compared to $643 million previously[89] - Current ratio declined to 1.09 from 1.21 year-over-year, driven by increased borrowings and decreased cash[90] Tax and Credit Ratings - The effective tax rate for the first quarter was 10.4%, down from 32.5% in the prior year[70] - As of May 3, 2025, corporate credit ratings were downgraded to Ba3 (Moody's), BB- (S&P), and BB (Fitch) with a negative outlook[85] - Net borrowings on the $1.5 billion credit facility were $255 million in Q1 2025, compared to $263 million in Q1 2024[87] - The company was in compliance with all covenants of its senior secured revolving credit facility as of May 3, 2025[92]

Financial Performance - Sales and service fees for the second quarter of fiscal year 2025 were $40.9 million, a decrease of $4.3 million, or 10%, compared to the same period in fiscal year 2024[90]. - Orders for the second quarter of fiscal year 2025 were $43.7 million, a decrease of $0.5 million, or 1%, compared to the corresponding period in fiscal year 2024[96]. - Sales in the Americas for the second quarter of fiscal year 2025 decreased by 9%, while European sales decreased by 5%, and Asian Pacific sales decreased by 29% compared to the same period in fiscal year 2024[91][92][93]. - Gross profit for the second quarter of fiscal year 2025 was $7.8 million, or 19% of sales, compared to $8.0 million, or 18% of sales, for the corresponding prior year period[99]. - Selling, general, and administrative expenses for the second quarter of fiscal year 2025 were $10.9 million, or 27% of sales, compared to $11.5 million, or 25% of sales, in the corresponding fiscal year 2024 period[100]. - Operating loss for the second quarter of fiscal year 2025 was $3.1 million, compared to $3.4 million for the corresponding period in fiscal year 2024[101]. - Sales of computerized machine tools for the second quarter of fiscal year 2025 decreased by 10%, while sales of computer control systems and software increased by 12%[95]. - Sales and service fees for the first six months of fiscal year 2025 were $87.3 million, a decrease of $3.0 million, or 3%, compared to the prior year period[104]. - Orders for the first six months of fiscal year 2025 were $83.8 million, a decrease of $10.6 million, or 11%, compared to the prior year period[111]. - Gross profit for the first six months of fiscal year 2025 was $16.1 million, or 18% of sales, compared to $17.7 million, or 20% of sales, for the prior year period[115]. - Operating loss for the first six months of fiscal year 2025 was $5.2 million, compared to $5.3 million for the prior year period[117]. Cash Flow and Capital Management - Cash and cash equivalents at April 30, 2025, were $43.8 million, compared to $33.3 million at October 31, 2024[120]. - Working capital was $175.9 million at April 30, 2025, compared to $180.8 million at October 31, 2024[121]. - Capital expenditures of $1.4 million during the first six months of fiscal year 2025 were primarily for software development costs and capital improvements[121]. - The company announced a share repurchase program of up to $25.0 million, with $21.7 million remaining available as of April 30, 2025[122]. - The company suspended its regular quarterly cash dividend on June 14, 2024, to enhance financial flexibility and manage market volatility[123]. - As of April 30, 2025, the company had no debt or borrowings under any of its credit facilities, with approximately $50.8 million available for borrowing[129][130]. Credit Facilities and Compliance - The 2018 Credit Agreement provides for an unsecured revolving credit facility of up to $40.0 million, with a maturity date of December 31, 2025[124]. - The company has a minimum working capital requirement of $125.0 million and a minimum tangible net worth of $176.5 million under the 2018 Credit Agreement[126]. - The company is in compliance with all covenants related to its credit facilities as of April 30, 2025[130]. - The company has renewed its uncommitted revolving credit facilities in Taiwan and China on substantially similar terms in February and December 2023, respectively[128]. Market and Strategic Initiatives - The company operates in a cyclical industry with approximately 50% of revenues from Europe and 12% from the Asia Pacific region[84]. - The company derived approximately 62% of its revenues from customers located outside of the Americas in the first six months of fiscal year 2025[142]. - The company is committed to product innovation, acquisitions, and targeted penetration of developing markets as part of its strategic plan[131]. - The company continues to review potential acquisitions, including intellectual property assets[132]. Currency and Risk Management - The company seeks to mitigate cash flow risks from fluctuating currency exchange rates through the use of derivative instruments[89]. - The company has entered into foreign currency forward exchange contracts to hedge against cash flow risks related to forecasted inter-company sales and purchases, with notional amounts including €6,000,000 and £3,150,000[145]. - The company has maintained a forward contract with a notional amount of €3.0 million to hedge its net investment in Euro-denominated assets, maturing in November 2025[146]. - As of April 30, 2025, the company had seven outstanding third-party payment guarantees totaling approximately $0.8 million[135].

Financial Performance - Net sales for the three months ended April 30, 2025, increased to $452.5 million, up 70% from $266.2 million in the same period last year[11]. - Operating income for the six months ended April 30, 2025, was $33.9 million, compared to $28.6 million for the same period in 2024, reflecting a 18% increase[11]. - Net income for the three months ended April 30, 2025, was $20.5 million, a 33% increase from $15.4 million in the prior year[11]. - Total net sales for the six months ended April 30, 2025, were $852.5 million, compared to $505.4 million for the same period in 2024, representing a 68.4% increase[104]. - Operating income for the three months ended April 30, 2025, was $40.9 million, up from $20.6 million in the same period of 2024, reflecting a 98.5% increase[105]. - The company reported a net income of $20.5 million for the three months ended April 30, 2025, compared to $15.4 million for the same period in 2024, indicating a 33.0% increase[105]. Assets and Liabilities - Total assets as of April 30, 2025, were $2.31 billion, slightly down from $2.32 billion as of October 31, 2024[9]. - Total liabilities decreased to $1.31 billion as of April 30, 2025, from $1.31 billion as of October 31, 2024[9]. - As of April 30, 2025, the total long-term debt was $746.4 million, compared to $737.2 million as of October 31, 2024, indicating an increase of about 1.5%[59]. - Total lease liabilities as of April 30, 2025, amounted to $215.3 million, an increase from $190.7 million as of October 31, 2024[51]. Cash Flow and Capital Expenditures - Cash provided by operating activities for the six months ended April 30, 2025, was $16.0 million, down from $36.9 million in the same period last year[15]. - Capital expenditures for the six months ended April 30, 2025, were $26.5 million, compared to $17.2 million in the same period last year[15]. - Cash used for investing activities increased by $9.1 million to $26.2 million for the six months ended April 30, 2025, primarily due to increased capital expenditures[173]. Dividends and Stockholder Equity - The company paid cash dividends of $0.08 per share for both the three and six months ended April 30, 2025[11]. - As of April 30, 2024, total stockholders' equity was $566,122,000, an increase from $545,554,000 as of October 31, 2023, reflecting a growth of approximately 3.3%[18]. - Common dividends paid were $2,649,000 for the six months ended April 30, 2024, consistent with the previous period, maintaining a dividend of $0.08 per share[18]. Segment Performance - North American Fenestration segment sales decreased from $307,769,000 in the six months ended April 30, 2024, to $285,359,000 in 2025, a decline of about 7.3%[33]. - The Tyman segment, acquired on August 1, 2024, generated $365,783,000 in sales for the six months ended April 30, 2025, contributing significantly to overall revenue growth[33]. - The Tyman segment reported net sales of $190.1 million for the three months ended April 30, 2025, following its acquisition on August 1, 2024[140]. Expenses and Charges - Selling, general and administrative expenses increased by $35.6 million, or 103%, for the three months ended April 30, 2025, compared to the same period in 2024[130]. - Interest expense surged by $13.0 million, or 1,367%, for the three months ended April 30, 2025, due to increased borrowings[144]. - The company incurred restructuring charges of $0.9 million and $8.8 million for the three and six months ended April 30, 2025, respectively, primarily related to workforce alignment costs[37]. Foreign Currency and Taxation - The company reported a foreign currency translation gain of $35.3 million for the three months ended April 30, 2025[12]. - The effective income tax rate for the six months ended April 30, 2025, was 18.2%, down from 21.6% for the same period in 2024[70]. - The effective tax rate increased to 23.5% for the three months ended April 30, 2025, up from 21.9% in the same period of 2024[145]. Acquisitions and Strategic Initiatives - The acquisition of Tyman plc was completed on August 1, 2024, with total consideration of approximately $504.1 million, including 14,139,477 newly issued common shares[38]. - The company continues to evaluate business acquisitions to expand manufacturing and distribution footprint and enhance product offerings[118]. - Integration of internal controls at the recently acquired Tyman business is in progress, with completion expected during fiscal 2025[197]. Risk Management and Market Conditions - The ongoing military conflicts in Ukraine and Gaza may lead to market disruptions and increased commodity prices, impacting operational performance[123]. - The company is monitoring tariff and global trade policies to mitigate potential impacts on business operations[120]. - The company continues to assess potential supply chain vulnerabilities and implement strategies to mitigate potential tariff impacts[191].

Revenue Performance - Total revenue for the three months ended April 30, 2025, was $763.654 million, a 7.6% increase from $709.640 million in the same period of 2024[92] - Total revenue for the three months ended April 30, 2025, was $763.7 million, an increase of 8% compared to $709.6 million in the same period of 2024[116] - Subscription revenue accounted for 98% of total revenue in Q1 2025, compared to 97% in Q1 2024[87] - Subscription revenue increased by $54.7 million, or 8%, driven by expansion in commercial and enterprise accounts as well as the digital channel[116] - Non-GAAP billings for the same period were $739,612,000, compared to $709,538,000 in 2024, reflecting an increase in customer sales and renewals[156] Customer Growth - The number of customers with annualized contract values over $300,000 increased to 1,123 as of April 30, 2025, up from 1,059 a year earlier[91] - The number of total customers reached over 1.7 million as of April 30, 2025, an increase from over 1.5 million in the previous year[97] Profitability - Net income for the three months ended April 30, 2025, was $72.087 million, compared to $33.760 million in the same period of 2024[92] - For the three months ended April 30, 2025, Docusign reported a GAAP gross profit of $606,385,000, up from $560,194,000 in the same period of 2024, resulting in a GAAP gross margin of 79.4%[152] - Non-GAAP gross profit for the same period was $628,727,000, compared to $582,170,000 in 2024, with a non-GAAP gross margin of 82.3%[152] - GAAP net income for the three months ended April 30, 2025, was $72,087,000, an increase from $33,760,000 in 2024, while non-GAAP net income was $190,851,000, up from $172,843,000[154] - Free cash flow for the three months ended April 30, 2025, was $227,815,000, slightly down from $232,073,000 in 2024[155] Expenses and Investments - Operating expenses increased to $546.1 million, representing 71% of total revenue, compared to 76% in the same period of 2024[118] - Research and development expenses rose by $25.1 million, or 19%, primarily due to workforce investments to support product innovation[120] - The total stock-based compensation expense for Q1 2025 was $145.596 million, slightly up from $142.504 million in Q1 2024[92] Cash and Financing - Cash, cash equivalents, restricted cash, and investments totaled $1.1 billion as of April 30, 2025[92] - The company had $948.7 million in cash and cash equivalents as of April 30, 2025, along with $160.1 million in long-term investments[124] - Cash provided by operating activities was $251.4 million for the three months ended April 30, 2025, slightly down from $254.8 million in 2024[134] - Net cash used in financing activities was $223.5 million, primarily due to stock repurchases and tax withholding payments[138] - The stock repurchase program resulted in the repurchase of 2.3 million shares for $183.4 million during the three months ended April 30, 2025[131] - The company may seek additional equity or debt financing in the future to support growth and operational needs[128] Strategic Initiatives - The company plans to invest in product innovation and enhance its go-to-market strategies to support long-term growth[93][94] - The company aims to strengthen its omnichannel go-to-market approach by optimizing direct sales, partner-assisted sales, and digital self-service channels[94] International Revenue - International revenue grew by 10% year-over-year, representing 28% of total revenue for both Q1 2025 and Q1 2024[100] Tax and Financial Projections - The projected non-GAAP tax rate for fiscal 2025 and 2026 is set at 20%[148] - The company entered into a new secured revolving credit facility of $750 million in May 2025, which may be increased by an additional $250 million[159] - Docusign has not engaged in hedging foreign currency transactions to date, but may consider it in the future, with no material effect expected from a 10% change in the U.S. dollar's value against other currencies[160]

Financial Performance - Revenues for the three months ended April 30, 2025, were $250,000, up 25% from $200,000 in the same period of 2024[20] - Net loss for the nine months ended April 30, 2025, was $3,859,571, compared to a net loss of $1,840,689 for the same period in 2024, indicating an increase in losses of approximately 109%[20] - For the nine months ended April 30, 2025, the Company reported a net loss of approximately $3.9 million, compared to a net loss of $1.8 million for the same period in 2024, indicating a 116.67% increase in losses year-over-year[32] - Net loss for the three months ended April 30, 2025, was approximately $1.6 million, an increase of $781,452, or 97%, from a net loss of $807,588 for the same period in 2024[126] - Loss before income taxes for the nine months ended April 30, 2025, was approximately $3.9 million, an increase of $2.0 million, or 110%, from $1.8 million for the same period in 2024[135] Assets and Liabilities - Total current assets increased to $8,687,975 as of April 30, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 200%[19] - Cash and cash equivalents rose significantly to $6,681,402 as of April 30, 2025, from $1,249,376 as of July 31, 2024, marking a 435% increase[19] - Total liabilities decreased to $278,073 as of April 30, 2025, from $1,258,834 as of July 31, 2024, a reduction of approximately 78%[19] - As of April 30, 2025, the Company had cash of approximately $6.7 million and short-term investments in trading securities of approximately $1.1 million, which could cover current liabilities of approximately $0.3 million[35] Share Issuance and Capital - The company issued 5,400,000 ordinary shares during the nine months ended April 30, 2025, raising $5,456,769 in capital[22] - The Company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, generating gross proceeds of $4.8 million[33] - In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of $1 per share, along with warrants, for gross proceeds of $2.5 million[34] - The company had 100,000,000,000 authorized ordinary shares, with 17,317,452 ordinary shares issued and outstanding as of April 30, 2025[78] Operating Expenses - The company reported total operating expenses of $1,510,918 for the nine months ended April 30, 2025, down from $2,075,577 in the same period of 2024, a decrease of approximately 27%[20] - General and administrative expenses decreased by $196,270, or 31%, from approximately $635,282 for the three months ended April 30, 2024, to $439,012 for the same period in 2025[122] - Selling expenses for the nine months ended April 30, 2025, were $120,000, a decrease of $131,000, or 52%, from $251,000 for the same period in 2024[130] - The Company incurred rent expenses of $12,000 for the nine months ended April 30, 2025, compared to $291,771 for the same period in 2024[75] Investment Losses - Loss from investment in trading securities for the nine months ended April 30, 2025, was $2,538,592, compared to a loss of $338,255 for the same period in 2024, reflecting a significant increase in losses[20] - The Company recognized a loss of $1,400,028 from investments in trading securities for the three months ended April 30, 2025, compared to a loss of $309,521 for the same period in 2024[41] - Loss from investment in trading securities increased by approximately $1.1 million, or 352%, from $309,521 for the three months ended April 30, 2024, to $1,400,028 for the same period in 2025[123] Customer Concentration - One customer accounted for 100% of the Company's consolidated revenue for the three months ended April 30, 2025, highlighting significant revenue concentration risk[60] - For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company's consolidated revenue, indicating a high dependency on a limited customer base[60] - As of April 30, 2025, one customer accounted for 100% of the Company's consolidated accounts receivable[61] Future Plans and Strategic Direction - The Company plans to transition its consulting services from PRC-based customers to more international customers to mitigate risks[62] - The company plans to strategically expand into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC, having purchased 0.19 BTC to date[110] - The company aims to expand operations to other Asian countries, including Malaysia, Vietnam, and Singapore, while maintaining a focus on the North American market[111] Legal and Regulatory Matters - The company is facing substantial doubt about its ability to continue as a going concern due to a history of net losses and the need for additional capital[137] - A lawsuit filed by J.P. Morgan Securities LLC claims damages of $5,064,160 related to a stock transaction, with ongoing mediation efforts[103][104] - The parties involved in a dispute have agreed to mediate before litigation, with mediation held on May 6, 2024, but no resolution was reached[165] - Defendants filed a Petition on May 15, 2024, seeking to compel arbitration and stay the underlying State Court action[165] Accounting and Compliance - The company is in the process of evaluating the impact of recent accounting standards updates on its consolidated financial statements[64][65][66][67] - The company is currently evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and establishing an internal audit function[152] - The company has a 100% valuation allowance against deferred tax assets, indicating uncertainty regarding their realization[93]

Financial Performance - Revenues for the three months ended April 30, 2025, were $250,000, up 25% from $200,000 in the same period of 2024[20] - Net loss for the nine months ended April 30, 2025, was $3,859,571, compared to a net loss of $1,840,689 for the same period in 2024, indicating an increase in losses of approximately 109%[20] - For the nine months ended April 30, 2025, the Company reported a net loss of approximately $3.9 million, compared to a net loss of $1.8 million for the same period in 2024, indicating a 116.67% increase in losses year-over-year[32] - Net loss for the three months ended April 30, 2025, was approximately $1.6 million, an increase of $781,452, or 97%, from a net loss of $807,588 in 2024[126] - Net loss for the nine months ended April 30, 2025, was approximately $3.9 million, an increase of $2.1 million, or 110%, from a net loss of $1.8 million in 2024[135] Assets and Liabilities - Total current assets increased to $8,687,975 as of April 30, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 200%[19] - Cash and cash equivalents rose significantly to $6,681,402 as of April 30, 2025, from $1,249,376 as of July 31, 2024, marking a 435% increase[19] - Total liabilities decreased to $278,073 as of April 30, 2025, from $1,258,834 as of July 31, 2024, a reduction of approximately 78%[19] - As of April 30, 2025, the Company had cash of approximately $6.7 million and short-term investments in trading securities of approximately $1.1 million, which could cover current liabilities of approximately $0.3 million[35] Share Issuance and Capital - The company issued 5,400,000 ordinary shares during the nine months ended April 30, 2025, raising $5,456,769 in capital[22] - The Company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, generating gross proceeds of $4.8 million[33] - In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of $1 per share, along with warrants, for gross proceeds of $2.5 million[34] - The Company had 100,000,000,000 authorized ordinary shares, with 17,317,452 ordinary shares issued and outstanding as of April 30, 2025[78] Operating Expenses - The company reported total operating expenses of $1,510,918 for the nine months ended April 30, 2025, down from $2,075,577 in the same period of 2024, a decrease of approximately 27%[20] - General and administrative expenses decreased by $196,270, or 31%, from approximately $635,282 for the three months ended April 30, 2024, to $439,012 for the same period in 2025[122] - Selling expenses for the nine months ended April 30, 2025, were $120,000, a decrease of $131,000, or 52%, from $251,000 in 2024[130] - Rent expenses for the nine months ended April 30, 2025, were $12,000 compared to $291,771 for the same period in 2024[75] Investment Losses - Loss from investment in trading securities for the nine months ended April 30, 2025, was $2,538,592, compared to $338,255 for the same period in 2024, reflecting a significant increase in losses[24] - The Company recognized a loss of $1,400,028 from investments in trading securities for the three months ended April 30, 2025, compared to a loss of $309,521 for the same period in 2024[41] - Loss from investment in trading securities increased by approximately $1.1 million, or 352%, from $309,521 in 2024 to $1.4 million in 2025 for the three months ended April 30[123] - Loss from investment in trading securities for the nine months ended April 30, 2025, was approximately $2.5 million, compared to $338,255 in 2024, representing an increase of $2.2 million, or 650%[133] Revenue Concentration Risk - One customer accounted for 100% of the Company's consolidated revenue for the three months ended April 30, 2025, highlighting significant revenue concentration risk[60] - For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company's consolidated revenue, indicating a high dependency on a limited customer base[60] - For the three and nine months ended April 30, 2025, substantially all of the Company's revenues were generated from going public related consulting services[62] Future Plans and Concerns - The company plans to transition its consulting services from PRC based customers to more international customers to mitigate risks[62] - The company plans to strategically expand into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC, having purchased 0.19 BTC to date[110] - The company is currently facing uncertainties regarding its ability to continue as a going concern due to a history of net losses and cash outflows from operating activities[137] - The company plans to support future operations primarily from cash generated from operations and cash on hand, but may need to raise additional funds[136] Legal Matters - A settlement agreement with Boustead Securities, LLC requires the company to pay a total of $1,000,000, with $750,000 already paid in two installments[102] - The company is involved in a pending legal proceeding with J.P. Morgan Securities LLC, claiming damages of $5,064,160 related to a stock transaction[103] - The parties involved in a dispute have agreed to attempt mediation, but no resolution was reached as of May 6, 2024[165] - Defendants filed a Petition on May 15, 2024, seeking to compel arbitration and stay the underlying State Court action[165] Tax Matters - The company is subject to a federal tax rate of 21% and a state tax rate of 8.84% in the US, but did not incur any income tax expenses for the three and nine months ended April 30, 2025[91][92] - The company has a 100% valuation allowance against deferred tax assets, indicating uncertainty regarding their realization[93] - The company has no uncertain tax positions as of April 30, 2025, and does not expect changes in unrecognized tax benefits over the next twelve months[94] Cash Flow - Operating cash outflows for the nine months ended April 30, 2025, were approximately $2.1 million, significantly higher than approximately $0.08 million for the same period in 2024[32] - The company recorded net cash used in operating activities of approximately $2.1 million for the nine months ended April 30, 2025, primarily due to a net loss of approximately $3.9 million[143] - Net cash provided by financing activities was approximately $6.9 million for the nine months ended April 30, 2025, compared to $2.3 million for the same period in 2024, showing a significant increase in financing[147] Miscellaneous - The Company operates in one reporting segment, which is the consulting service business, as of April 30, 2025[57] - The Company recorded accrued litigation fees of $250,000 as current liabilities as of April 30, 2025[76] - The company is in the process of evaluating the impact of recent FASB updates on its consolidated financial statements[64][65][66][67] - The company is in the process of evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and implementing training programs[152] - The company extended a loan of $93,013 to Mr. Jun Liu during the nine months ended April 30, 2025, which was subsequently collected[86] - The company has a total of $600,000 due from Mr. Jun Liu as of April 30, 2025[88] - The Company recognized a decrease in fair value of investments of $1,400,028 for the three months and $2,538,592 for the nine months ended April 30, 2025[73] - The Company recorded a loss on disposal of property and equipment amounting to $53,765 due to the premature termination of a lease agreement[71] - As of April 30, 2025, the company had 3,355,106 outstanding and exercisable warrants, with a weighted average exercise price of $0.89[82]

Financial Performance - Net sales decreased from $1.53 billion to $1.49 billion, representing a period-over-period decrease of 2.3%[82] - Operating income improved to $16.4 million, compared to an operating loss of $16.8 million in the prior year period[82] - Net loss attributable to Class A and B-1 common stockholders decreased from $46.5 million to $11.7 million[82] - Adjusted EBITDA increased from $75.6 million to $89.4 million[82] - Comparable sales change was a decline of 1.3% for the thirteen weeks ended May 3, 2025[84] - Adjusted EBITDA for the thirteen weeks ended May 3, 2025, was $89.4 million, compared to $75.6 million for the same period in 2024, representing a 18.2% increase[96] - Net sales for the thirteen weeks ended May 3, 2025, were $1.49 billion, a decrease from $1.53 billion in the same period in 2024, reflecting a 2.5% decline[96] - Adjusted EBITDA Margin improved to 6.0% for the thirteen weeks ended May 3, 2025, compared to 4.9% in the same period in 2024[96] Cost and Expenses - Gross profit margin improved to 38.2% from 37.8% year-over-year[87] - SG&A expenses as a percentage of net sales decreased from 38.9% to 37.1%[88] - Interest expense decreased by $3.3 million, or 9.0%, to $33.5 million[89] Cash Flow and Liquidity - Free Cash Flow for the thirteen weeks ended May 3, 2025, was $(43.9) million, compared to $(41.1) million for the same period in 2024, indicating a slight increase in cash outflow[100] - As of May 3, 2025, the company's liquidity was $647.9 million, including $133.3 million in cash and cash equivalents and $514.6 million available on the ABL Revolving Credit Facility[102] - Net cash used in operating activities was $(15.5) million for the thirteen weeks ended May 3, 2025, compared to $(8.4) million for the same period in 2024, primarily due to lower sales and higher incentive bonuses[106] - Cash used in investing activities decreased to $27.1 million for the thirteen weeks ended May 3, 2025, from $31.7 million in the same period in 2024, driven by fewer new pet care centers and hospitals[107] - Net cash used in financing activities was $(0.3) million for the thirteen weeks ended May 3, 2025, a decrease from $(5.6) million in the same period in 2024, due to lower tax withholding payments[108] Debt and Credit Facilities - The First Lien Term Loan outstanding as of May 3, 2025, was $1.60 billion, with variable interest rates that could increase annual cash interest by approximately $16.2 million if rates rise by 100 basis points[118] - The company has a secured asset-based revolving credit facility with availability of up to $581.0 million, maturing in 2029, to support its liquidity needs[109] Business Operations - Total pet care centers in the U.S. and Puerto Rico decreased from 1,423 to 1,393[84] - The company continues to experience momentum in services, driven by strategic investments in customer acquisition and retention[85]

Revenue Performance - Total revenue for the first quarter of fiscal 2026 was $8.8 billion, a decrease of 0.9% compared to $8.8 billion in the same period last year[77]. - Comparable sales declined by 0.7% in the first quarter of fiscal 2026, with declines in home theater, appliances, and drones, while growth was seen in computing, mobile phone, and tablet categories[78]. - Domestic segment revenue was $8.13 billion, a decline of 0.9% year-over-year, with comparable sales also down by 0.7%[85]. - International segment revenue decreased by 0.6% to $640 million, with a comparable sales decline of 0.7%[91]. - Foreign currency exchange rate fluctuations negatively impacted revenue by approximately $29 million in the first quarter of fiscal 2026, primarily due to the strength of the U.S. dollar against the Canadian dollar[127]. Profitability Metrics - Gross profit for the first quarter of fiscal 2026 was $2.05 billion, representing 23.4% of revenue, compared to 23.3% in the prior year[77]. - Operating income decreased to $219 million, with an operating income margin of 2.5%, down from 3.5% in the same quarter last year[77]. - Diluted EPS for the first quarter of fiscal 2026 was $0.95, a decrease from $1.13 in the prior year[77]. - International segment gross profit decreased to 22.0% of revenue, down from 22.8% in the previous year[91]. - Adjusted operating income for the consolidated entity was $333 million, unchanged from the previous year, representing 3.8% of revenue[97]. Expenses and Charges - Restructuring charges in the first quarter of fiscal 2026 amounted to $109 million, primarily related to optimizing the Best Buy Health business[79]. - Domestic segment adjusted SG&A decreased, primarily due to a favorable indirect tax settlement[90]. - Cash flows from operating activities decreased to $34 million from $156 million in the previous year[106]. Tax and Financial Position - The effective tax rate decreased to 8.6% in the first quarter of fiscal 2026, down from 24.7% in the same period last year[83]. - The effective tax rate for the consolidated entity decreased to 8.6% from 24.7% in the previous year[97]. - As of May 3, 2025, the company has $1.4 billion in cash, cash equivalents, and restricted cash, with $0.5 billion of debt swapped to floating rate, resulting in a net asset balance exposed to interest rate changes of $0.9 billion[125]. Debt and Credit Facilities - The company entered into a $1.25 billion five-year senior unsecured revolving credit facility agreement, replacing the previous facility[111]. - The company has $1.25 billion in undrawn capacity on its Five-Year Facility Agreement as of May 3, 2025, which could be included in short-term or long-term debt if drawn[117]. Market and Interest Rate Exposure - A 50-basis point increase in short-term interest rates would lead to an estimated $5 million increase in interest income, while a decrease of the same magnitude would result in a $5 million decrease[125]. - The company is exposed to changes in short-term market interest rates, which will impact net interest expense and interest income[124]. Strategic Initiatives - The company plans to reduce its Domestic Best Buy store count by approximately 5 to 10 stores in fiscal 2026[82]. - The company emphasizes the importance of managing strategic ventures, alliances, or acquisitions as part of its growth initiatives[121]. Currency Management - The company utilizes foreign currency forward contracts to manage foreign currency exposure related to certain forecasted inventory purchases and recognized receivable and payable balances[126]. - The estimated impact of foreign exchange rate fluctuations on net earnings in the first quarter of fiscal 2026 was not significant[127]. Other Financial Information - Cash and cash equivalents decreased to $1,147 million from $1,578 million as of February 1, 2025, primarily due to inventory purchases and dividend payments[104]. - Total cost of shares repurchased increased to $100 million in the first quarter of fiscal 2026, with an average price per share of $64.39[115]. - There have been no significant changes in the company's significant accounting policies or critical accounting estimates since the end of fiscal 2025[119]. - The company has not experienced any material changes in contractual obligations since the end of fiscal 2025[118].

Revenue and Income - Advent's revenue primarily comes from the sale and servicing of fuel cell systems and Membrane Electrode Assemblies (MEAs), with expectations for significant future income from these markets[208]. - Total revenue from continuing operations increased by approximately $1.7 million or 113.3% from approximately $1.5 million in 2023 to approximately $3.3 million in 2024, driven by an increase in Joint Development Agreements[267]. - Revenues are expected to increase materially, with a focus on Joint Development Agreements (JDAs) and Technology Assessment Agreements (TAAs)[254]. - Advent anticipates substantial increased demand for its fuel cell systems and MEAs, with existing customers expected to increase order volume[251]. Grants and Collaborations - The company secured a €34.5 million grant from the EU Innovation Fund for the RHyno Project, aimed at developing innovative fuel cells and electrolysers[215]. - Advent entered a joint development agreement with Hyundai to enhance the HMC-Advent Ion Pair™ MEA, focusing on heavy-duty and stationary applications[228]. - The company has engaged in a multi-million-dollar collaboration with Airbus to optimize the Ion Pair™ MEA for aviation fuel cells, expected to last two years[218]. - Advent's collaboration with the Department of Energy National Laboratories aims to advance HT-PEM fuel cells for heavy-duty transportation and stationary power systems[226]. - The company is collaborating with BASF to develop a closed-loop supply chain for fuel cells, focusing on improved performance and cost competitiveness[230]. Product Development - Advent launched the Honey Badger 50™ Fuel Cell System, capable of generating up to 50W of continuous power with 65% weight savings compared to traditional batteries[236]. - In September 2023, Advent secured a $2.2 million contract with the US DoD to optimize the HB50 system, focusing on integrating Ion Pair MEA technology[239]. - A new $2.8 million contract was secured in December 2023 to develop advanced manufacturing processes for the HB50 system, aiming to increase production capacity[240]. - As of December 31, 2024, Advent continues to collaborate with the US DoD to advance HB50 technology[241]. - The company is developing its next generation MEA technology, which is expected to deliver up to three times the power output of current products[252]. Financial Performance - Cost of revenues decreased by approximately $5.5 million from approximately $7.0 million in 2023 to approximately $1.5 million in 2024, primarily due to a shift from product sales to Joint Development Agreements[268]. - Research and development expenses decreased from approximately $7.6 million in 2023 to approximately $3.2 million in 2024, reflecting cost reductions[270]. - Administrative and selling expenses decreased from approximately $28.8 million in 2023 to approximately $14.3 million in 2024, primarily due to cost and staff reductions[271]. - Net cash provided by operating activities from continuing operations was approximately $1.2 million in 2024, a significant improvement from $(21.0) million in 2023[286][287]. - Cash flows from investing activities provided approximately $1.2 million in 2024, primarily related to the sale of equipment, compared to $(5.3) million in 2023[288][289]. Stock and Equity - A reverse stock split of 1-for-30 was executed on May 13, 2024, adjusting all historical share amounts accordingly[213]. - Advent's stockholders' equity was reported at ($2,879,000) as of June 30, 2024, leading to non-compliance with Nasdaq's listing requirements[245]. - The company is authorized to issue 501,000,000 shares of Common Stock, which did not change as a result of the Reverse Stock Split[294]. Impairments and Contingencies - The company received an arbitration award in favor of F.E.R. for approximately €4.5 million, which it is appealing[249]. - Impairment losses of $9.8 million were recognized in 2023, primarily related to goodwill and other intangible assets[274]. - The company recorded a goodwill impairment charge of $0.6 million for the UltraCell Reporting Unit during the year ended December 31, 2023[316]. - A goodwill impairment charge of $5.1 million was recorded for the SerEnergy and FES Reporting Unit during the year ended December 31, 2023[317]. - The company recognized an impairment charge of $3.3 million related to the Patented Technology during the second quarter of 2023[316]. - The company recognized a loss contingency of $4.7 million related to litigation during the year ended December 31, 2024[278]. Tax and Interest - Advent follows the asset and liability method of accounting for income taxes under ASC 740, recognizing deferred tax assets and liabilities for estimated future tax consequences[319]. - For the years ended December 31, 2024 and 2023, net income tax benefits of $0.1 million were recorded in the consolidated statements of operations for both years[323]. - The Company recognized $26 thousand of interest income related to the Bond Loan for the year ended December 31, 2023[327]. - The estimated fair value of the Bond Loan was fully reserved as an expected credit loss as of December 31, 2023, and continues to be reserved as of December 31, 2024[328]. Cash Flow and Debt - The company had a working capital deficit of $(26.1) million as of December 31, 2024, with current assets of $2.7 million and current liabilities of $28.8 million[282]. - Advent's cash flows from financing activities from continuing operations were approximately $0.9 million for the year ended December 31, 2024, compared to $9.1 million for the year ended December 31, 2023[290][291]. - The Company had an unrestricted cash balance of approximately $0.4 million as of December 31, 2024[339]. - Advent's short-term debt was $0.5 million, with limited exposure to interest rate risk in the future[339]. - The Company has not entered into any hedging transactions for foreign exchange risk due to relatively low exposure[341]. Losses and Adjusted Metrics - For the three months ended December 31, 2024, the net loss from continuing operations was $0.77 million, a decrease of $23.60 million compared to the same period in 2023[335]. - Adjusted EBITDA for the three months ended December 31, 2024 was $1.95 million, an increase of $26.44 million compared to the same period in 2023[335]. - Adjusted net loss from continuing operations for the year ended December 31, 2024 was $0.77 million, a decrease of $23.63 million compared to 2023[337]. Corporate Tax Changes - The U.S. corporate income tax rate was reduced from 35% to 21% as part of the Tax Cuts and Jobs Act of 2017[324].