Daily Journal (DJCO) investor relations material

Executive summary

• Consolidated revenues rose 16.8% year-over-year to $69.2 million for the nine months ended June 30, 2026, driven by strong growth in Journal Technologies' software and services.

• Total revenue for Q3 2026 reached $27.0 million, up 15.3% year-over-year, with Journal Technologies leading growth.

• Net loss was $53.5 million for the nine months, primarily due to $87.0 million in unrealized losses on marketable securities, compared to net income of $70.0 million in the prior-year period.

• Income from operations improved to $5.3 million in Q3 and $8.7 million for the nine months, reflecting operating leverage.

• Journal Technologies accounted for approximately 80% of total revenues, with significant increases in licensing, maintenance, consulting, and public service fees.

Financial highlights

• Operating expenses increased 11.3% to $60.5 million, mainly from higher salaries, legal, and consulting fees.

• Net cash provided by operating activities was $12.9 million for the nine months, up from $8.8 million year-over-year.

• Dividends and interest income totaled $5.5 million for the nine months.

• Cash and cash equivalents plus marketable securities totaled $437.1 million at quarter-end.

• Marketable securities had a fair market value of $406.0 million as of June 30, 2026, with $266.9 million in accumulated pretax unrealized gains.

Outlook and guidance

• Management expects elevated accounting and legal costs to persist in the near term as internal control remediation and modernization initiatives continue.

• Management highlighted continued expansion in technology services and expects ongoing operating leverage as the business scales.

• The company believes it can fund operations through cash flows and current working capital, with flexibility to borrow against marketable securities if needed.