Daily Journal (DJCO) investor relations material

Executive summary

• Consolidated revenues rose 17.8% year-over-year to $42.3 million for the six months ended March 31, 2026, driven by Journal Technologies and modest gains in the Traditional Business.

• Second quarter fiscal 2026 revenue rose 25% year-over-year to $22.7 million, led by Journal Technologies.

• Net loss was $42.6 million for the first half, primarily due to $62.9 million in unrealized losses on marketable securities compared to $72.8 million in unrealized gains last year.

• Income from operations improved to $3.0 million in Q2 and $3.5 million for the first half, reflecting operating leverage.

• Journal Technologies accounted for approximately 79% of total revenues, with strong growth in licensing, maintenance, consulting, and public service fees.

Financial highlights

• Operating expenses increased 13.5% to $38.8 million for the first half, mainly from higher salaries, outside services, and legal/accounting fees.

• Q2 net loss was $34.6 million, or ($25.14) per share, compared to net income of $44.7 million, or $32.43 per share, in the prior-year quarter.

• Net unrealized losses on marketable securities were $51.2 million in Q2 and $62.9 million for the first half.

• As of March 31, 2026, marketable securities were valued at $430.1 million, with $291.0 million in cumulative unrealized gains.

• Net cash used in operating activities was $2.2 million in Q2.

Outlook and guidance

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

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