IMMERSION CORP

Previous wording

On June 10, 2024, we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware corporation (“Barnes & Noble Education” or “BNED”), refer to Note 2. Business Combination for more information. The financial results of Barnes & Noble Education have been included in our condensed consolidated financial statements from the acquisition date of June 10, 2024.

Current wording

On June 10, 2024, we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware corporation (“Barnes & Noble Education” or “BNED”), please refer to Note 2. Business Combination for additional information. The financial results of Barnes & Noble Education have been included in our condensed consolidated financial statements from the acquisition date of June 10, 2024.

Previous wording

In order to more closely align with Barnes &Noble Education’s fiscal year end, on September 27, 2024, our Board of Directors (the “Board”) approved a change of our fiscal year from the period beginning on January 1 and ending on December 31 to the period beginning on May 1 and ending on April 30. As a result of the change in fiscal year end, we filed a Transition Report on Form 10-QT for the transition period from January 1, 2024, through April 30, 2024, on November 8, 2024. The change in quarterly reporting from the old to the new fiscal year resulted in theone month period ended July 31, 2024 not being covered by a separate report on Form 10-Q. As this period is not covered in the transition report, it is included in this first initial report on Form 10-Q for the newly adopted fiscal year. The financial results for the month ended July 31, 2024, did not have a significant impact on our financial position and results of operation.

Current wording

In order to more closely align with Barnes & Noble Education’s fiscal year end, on September 27, 2024, our Board of Directors (the “Board”) approved a change of our fiscal year from the period beginning on January 1 and ending on December 31 to the period beginning on May 1 and ending on April 30. As a result of the change in fiscal year end, we filed a Transition Report on Form 10-QT for the transition period from January 1, 2024, through April 30, 2024, on November 8, 2024.

Previous wording

The financial information presented in this Quarterly Report on Form 10-Q includes the financial information of Barnes & Noble Education for the 13 weeks and 26 weeks ended October 26, 2024.

Current wording

The financial information presented in this Quarterly Report on Form 10-Q includes the financial information of Barnes & Noble Education for the 13 weeks and 39 weeks ended January 25, 2025.

Previous wording

We did not recast the condensed consolidated financial statements for the three and six months ended October 31, 2023, because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical and would not have been cost-justified. As a result, the condensed consolidated financial statements for the three and six months ended June 30, 2023, are presented as the most nearly comparable quarter of the earlier year.

Current wording

We did not recast the condensed consolidated financial statements for the three and nine months ended September 30, 2023, because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical and would not have been cost-justified. As a result, the condensed consolidated financial statements for the three and nine months ended September 30, 2023, are presented as the most nearly comparable periods of the prior year.

Previous wording

We have adopted a business model under which we offer licenses to our patented technology to our customers and offer our customers enabling software, related tools and technical assistance relatedto integrate our patented technology into our customers’ products or enhance the functionality of our patented technology. Our licenses enable our customers to deploy haptically-enabled devices, content and other offerings, which they typically sell under their own brand names. We and our wholly-owned subsidiaries hold more than 800 issued or pending patents worldwide as of October 31, 2024. Our patents cover a wide range of digital technologies and ways in which touch-related technology can be incorporated into and between hardware products and components, systems software, application software, and digital content. We believe that our IP is relevant to many of the most important and cutting-edge ways in which haptic technology is and can be deployed, including in connection with mobile interfaces and user interactions, in association with pressure and other sensing technologies, as part of video and interactive content offerings, as related to virtual and augmented reality experiences, and in connection with advanced actuation technologies and techniques. Our portfolio includes numerous patents and patent applications that we believe may become essential to emerging standards in development by Standards Development Organizations (“SDOs”) including media standards in development by ISO/IEC Moving Picture Expert Group (MPEG) and software and system standards in development at IEEE-SA.

Current wording

We have adopted a business model under which we offer licenses to our patented technology to our customers and offer our customers enabling software, related tools and technical assistance relatedto integrate our patented technology into our customers’ products or enhance the functionality of our patented technology. Our licenses enable our customers to deploy haptic-enabled devices, content and other offerings, which they typically sell under their own brand names. We and our wholly-owned subsidiaries hold more than 800 issued or pending patents worldwide as of January 31, 2025. Our patents cover a wide range of digital technologies and ways in which touch-related technology can be incorporated into and between hardware products and components, systems software, application software, and digital content. We believe that our IP is relevant to many of the most important and cutting-edge ways in which haptic technology is and can be deployed, including in connection with mobile interfaces and user interactions, in association with pressure and other sensing technologies, as part of video and interactive content offerings, as related to virtual and augmented reality experiences, and in connection with advanced actuation technologies and techniques. Our portfolio includes numerous patents and patent applications that we believe may become essential to emerging standards in development by Standards Development Organizations (“SDOs”) including media standards in development by ISO/IEC Moving Picture Expert Group (MPEG) and software and system standards in development at IEEE-SA.

Previous wording

A summary of our results of operation for the month ended July 31, 2024, and the three and six months ended October 31, 2024, and June 30, 2023 is as follows (in thousands, except for percentages):

Current wording

A summary of our results of operation for the three and nine months ended January 31, 2025, and September 30, 2023 is as follows (in thousands, except for percentages):

Previous wording

Fixed fee license revenue increased by $9.4 million in the three months ended October 31, 2024, compared to the three months ended June 30,2023, primarily due to $9.7 million increase in mobility license revenue following the new license agreements we entered into in the first half of fiscal 2025.

Current wording

Fixed fee license revenue increased by $4.6 million in the three months ended January 31, 2025, compared to the three months ended September 30, 2023, primarily due to $3.0 million increase in automotive license revenue following the new license agreements entered into during the three months ended January 31, 2025.

Previous wording

Per-unit royalty revenue decreased by $2.3 million, or 40%, in the three months ended October 31, 2024 compared to the three months ended June 30,2023, primarily due to a$2.4 million decrease in royalties from mobility licensees.

Current wording

Per-unit royalty revenue decreased by $5.6 million, or 68%, in the three months ended January 31, 2025 compared to the three months ended September 30, 2023, primarily due to a$3.8 million decrease in royalties from mobility licensees.

Previous wording

Geographically, revenues generated in Asia, North America and Europe for the three months ended October 31, 2024 represented 90%,5%, and 5%, respectively, of our total revenue as compared to 14%,83%, and 3%, respectively, for the three months ended June 30, 2023.

Current wording

Geographically, revenues generated in Asia, North America, and Europe for the three months ended January 31, 2025 represented 31%,9%, and 60%, respectively, of our total revenue as compared to 68%,8%, and 24%, respectively, for the three months ended September 30, 2023. Revenue is significantly different from period to period due to the timing and geographic location of the company that executes the agreements.

Previous wording

Fixed fee license revenue increased by $53.6 million in the firstsix months of fiscal 2025 compared to the six months ended June 30,2023, primarily due to a $53.8 million increase in mobility license revenue following the new license agreements we entered into in the first half of fiscal 2025.

Current wording

Fixed fee license revenue increased by $58.0 million in the first nine months of fiscal 2025 compared to thenine months ended September 30, 2023, primarily due to a $56.8 million increase in mobility and gaming license revenue following the new license agreements entered into during the nine months ended January 31, 2025.

Previous wording

Per-unit royalty revenue decreased by $5.1 million, or 44%, in the six months ended October 31, 2024 compared to the six months ended June 30,2023, primarily due toa $2.9 million decrease in royalties from mobility licensees, a $1.4 million decrease in royalties from gaming licensees and a $0.9 million decrease in royalties from other licensees.

Current wording

Per-unit royalty revenue decreased by $10.6 million, or 53%, in the nine months ended January 31, 2025 compared to the nine months ended September 30, 2023, primarily due toa $7.9 million decrease in royalties from mobility licenses.

Previous wording

Geographically, revenues generated in Asia, North America and Europe for the six months ended October 31, 2024 represented 96%,3%, and 1%, respectively, of our total revenue as compared to 96%,1%, and 3%, respectively, for the six months ended June 30, 2023.

Current wording

Geographically, revenues generated in Asia, North America, and Europe for the nine months ended January 31, 2025 represented 88%,4%, and 8%, respectively, of our total revenue as compared to 77%,12%, and 11%, respectively, for the nine months ended September 30, 2023. Revenue is significantly different from period to period due to the timing and geographic location of the company that executes the agreements.

Previous wording

A summary of operating expenses for the month ended July 31, 2024, and thethree and six months ended October 31, 2024, and June 30, 2023, is as follows (in thousands, except for percentages):

Current wording

A summary of operating expenses for thethree and nine months ended January 31, 2025, and September 30, 2023, is as follows (in thousands, except for percentages):

Previous wording

Selling and administrative expenses increased $0.3 millionin thethree months ended October 31, 2024 as compared to the three months ended June 30,2023 primarily due toa $0.8 million increase in compensation, benefits and other personnel related costs partially offset by a $0.5 million decrease in legal costs. The increase in compensation, benefits and other personnel related costs is largely attributable to higher stock-based compensation expense resulting from new equity grants partially offset by a decrease in variable compensation.

Current wording

Selling and administrative expenses increased $2.0 millionin thethree months ended January 31, 2025 as compared to the three months ended September 30, 2023 primarily due toa $2.3 million increase in compensation, benefits and other personnel related costs; partially offset by a $0.2 million decrease in legal costs. The increase in compensation, benefits and other personnel related costs is largely attributable to higher stock-based compensation expense resulting from new equity grants partially offset by a decrease in variable compensation.

Previous wording

Selling and administrative expenses increased $9.9 millionin the six months ended October 31, 2024 as compared to the six months ended June 30,2023 primarily due to a $5.1 million increase in legal costs and a $4.9 million increase in compensation, benefits and other personnel related costs. The increase in legal costswas due to an increase from legal costs related to the new license agreements and Barnes & Noble Education Transactions. The increase in compensation, benefits and other personnel related costs were largely driven by increases in variable compensation and higher stock-based compensation.

Current wording

Selling and administrative expenses increased $11.9 millionin thenine months ended January 31, 2025 as compared to thenine months ended September 30, 2023 primarily due to a $4.9 million increase in legal costs and a $4.7 million increase in compensation, benefits and other personnel related costs. The increase in legal costswas due to costs related to the new license agreements and the Barnes & Noble Education Transaction. The increase in compensation, benefits and other personnel related costs were primarily driven by increases in variable compensation and stock-based compensation.

Previous wording

Barnes & Noble Education isone of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. Barnes & Noble Education is also a textbook wholesaler, and inventory bookstore management hardware and software provider. Barnes & Noble Education operates 1,162 physical and virtual bookstores and serves more than 5.7 million students, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment.

Current wording

Barnes & Noble Education isone of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. Barnes & Noble Education is also a textbook wholesaler, and bookstore management hardware and software provider. Barnes & Noble Education operates 1,164 physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment.

Previous wording

The strengths of Barnes & Noble Education's business include its ability to compete by developing new products and solutions to meet market needs, its large operating footprint with direct access to students and faculty, its well-established, deep relationships with academic partners and stable, long-term contracts and its well-recognized brands. Barnes & Noble Education provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its BNC First Day® affordable textbook programs, consisting of First Day Complete and First Day, which provide faculty required course materials to students on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition. Barnes & Noble Education is moving quickly to accelerate its First Day Complete strategy. Many institutions adopted First Day Complete in Fiscal 2024, and Barnes & Noble Education plans to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond. See BNC First Day® Affordable Textbook Access Programs below.

Current wording

The strengths of Barnes & Noble Education's business include its ability to compete by developing new products and solutions to meet market needs, its large operating footprint with direct access to students and faculty, its well-established, deep relationships with academic partners and stable, long-term contracts and its well-recognized brands. Barnes & Noble Education provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its BNC First Day® affordable access course material programs, consisting of First Day Complete and First Day, which provide faculty required course materials to students on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition. Barnes & Noble Education is moving quickly to accelerate its First Day Complete strategy. Many institutions adopted First Day Complete in Fiscal 2024, and Barnes & Noble Education plans to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond. See BNC First Day® Affordable Access Course Material Programs below.

Previous wording

Barnes & Noble Education expects to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand its e-commerce capabilities and accelerate such capabilities with its service providers, Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics Lids College, Inc. D/B/A “Lids” (“Lids”) (collectively referred to herein as the “F/L Relationship”), win new accounts, and expand its revenue opportunities through strategic relationships. Barnes & Noble Education expect gross comparable store general merchandise sales to increase over the long term, as its product assortments continue to emphasize and reflect changing consumer trends, and Barnes & Noble Education evolves its presentation concepts and merchandising of products in stores and online, which Barnes & Noble Education expects to be further enhanced and accelerated through the F/L Relationship. Fanatics and Lids, acting on Barnes & Noble Education's behalf as its service providers, provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of its logo general merchandise business.

Current wording

Barnes & Noble Education expects to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand its e-commerce capabilities and accelerate such capabilities with its service providers, Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics Lids College, Inc. D/B/A “Lids” (“Lids”) (collectively referred to herein as the “F/L Relationship”), win new accounts, and expand its revenue opportunities through strategic relationships. Barnes & Noble Education expects gross comparable store general merchandise sales to increase over the long term, as its product assortments continue to emphasize and reflect changing consumer trends, and Barnes & Noble Education evolves its presentation concepts and merchandising of products in stores and online, which Barnes & Noble Education expects to be further enhanced and accelerated through the F/L Relationship. Fanatics and Lids, acting on Barnes & Noble Education's behalf as its service providers, provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of its logo general merchandise business.

Previous wording

******Barnes & Noble Education provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its BNC First Day® affordable textbook access programs, consisting of First Day Complete and First Day, which provide faculty required course materials to students on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

Current wording

******Barnes & Noble Education provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its BNC First Day® affordable access course material programs, consisting of First Day Complete and First Day, which provide faculty required course materials to students on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

Previous wording

Offering course materials through the BNC First Day® affordable textbook access programs, First Day Complete and First Day, is an important strategic initiative to meet the market demands of reduced pricing for students, as well as the opportunity to improve student outcomes, while, at the same time, increasing Barnes & Noble Education's market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These affordable textbook access programs have allowed Barnes & Noble Education to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted. Barnes & Noble Education is moving quickly to accelerate its First Day Complete strategy. Many institutions have already adopted First Day Complete, and Barnes & Noble Education plans to continue to scale the number of schools adopting First Day Complete in fiscal 2025 and beyond.

Current wording

Offering course materials through the BNC First Day® affordable access course material programs, First Day Complete and First Day, is an important strategic initiative to meet the market demands of reduced pricing for students, as well as the opportunity to improve student outcomes, while, at the same time, increasing Barnes & Noble Education's market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These affordable access course material programs have allowed Barnes & Noble Education to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted. Barnes & Noble Education is moving quickly to accelerate its First Day Complete strategy. Many institutions have already adopted First Day Complete, and Barnes & Noble Education plans to continue to scale the number of schools adopting First Day Complete in fiscal 2025 and beyond.

Previous wording

Barnes & Noble Education's business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education's quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

Current wording

Barnes & Noble Education’s business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education’s quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in Barnes & Noble Education's fiscal calendar dates. These shifts in timing may affect the comparability of Barnes & Noble Education's results across periods.

Previous wording

Given the growth of BNC First Day® affordable textbook access programs, the timing of cash collection from the school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts Barnes & Noble Education's BNC First Day® affordable textbook access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in the third quarter given the timing of the Spring Term and Barnes & Noble Education's quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of Barnes & Noble Education's sales shift to BNC First Day® affordable textbook access offerings, Barnes & Noble Education is focused on efforts to better align the timing of its cash outflows to course material vendors and cash inflows from collections from schools. As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to: (i) the rental of physical textbooks where revenue is recognized over the rental period, and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by Barnes & Noble Education customers for products ordered through its websites and virtual bookstores.

Current wording

Given the growth of BNC First Day® affordable access course material programs, the timing of cash collection from the school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts Barnes & Noble Education’s BNC First Day® affordable access course material offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in the third quarter given the timing of the Spring Term and Barnes & Noble Education’s quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of Barnes & Noble Education’s sales shift to BNC First Day® affordable access course material offerings, Barnes & Noble Education is focused on efforts to better align the timing of its cash outflows to course material vendors and cash inflows from collections from schools. As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to: (i) the rental of physical textbooks where revenue is recognized over the rental period, and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by Barnes & Noble Education customers for products ordered through its websites and virtual bookstores.

Previous wording

A summaryof Barnes & Noble 's Education’s s results of operationfor the reporting period for the month ended July 31, 2024, the three months ended October 31, 2024 and for the period from June 10, 2024, to October 31, 2024, is as follows (in thousands):

Current wording

A summaryof Barnes & Noble Education’s results of operationfor the reporting period for thethree months ended January 31, 2025 and for the period from June 10, 2024 to January 31, 2025, is as follows (in thousands):

Previous wording

Total revenue was $602.1 million during the three months ended October 31, 2024, primarily consisting of$559.7 million product and other sales and $42.4 million of rental sales. Total revenue was $737.2 million during the period from June 10, 2024, to October 31, 2024, primarily consisting of $689.8 million product and other sales and $47.4 million of rental sales.

Current wording

Total revenue was $466.3 million during thethree months ended January 31, 2025, primarily consisting of$423.2 million product and other sales and $43.2 million of rental sales. Total revenue was $1,203.5 million during the period from June 10, 2024, to January 31, 2025, primarily consisting of $1,113.0 million product and other sales and $90.6 million of rental sales.

Previous wording

During the period from June 10, 2024, to October 31, 2024, Barnes & Noble Education recognized restructuring and other charges (credits) totaling $5.1 million, comprised primarily of $2.1 million related to severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction initiatives, $2.0 million of severance costs related to the departure of Barnes & Noble Education's Chief Executive Officer on June 11, 2024, a $1.9 million loss related to fixed assets disposal and $0.8 million costs associated with legal and advisory professional services restructuring and process improvements and other charges. These costs and expenses were partially offset by a $1.4 million expense reversal related to the termination of liabilities related to a frozen retirement benefit plan.

Current wording

During the period from June 10, 2024, to January 31, 2025, Barnes & Noble Education recognized restructuring and other charges (credits) totaling $(2.4) million, comprised primarily of $(9.0) million expense reversal related to the termination of liabilities related to a frozen retirement benefit plan, partially offset by cost and expense of $2.1 million related to severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction initiatives, $2.0 million of severance costs related to the departure of Barnes & Noble Education's Chief Executive Officer on June 11, 2024, a $1.9 million loss related to fixed assets disposal, and $0.8 million costs associated with legal and advisory professional services restructuring and process improvements and other charges.

Previous wording

A summaryof consolidated interest and other Income (loss), interest expense and income taxes for the month ended July 31, 2024 and thethree and six months ended October 31, 2024 and June 30, 2023 are as follows (in thousands, except for percentages):

Current wording

A summaryof consolidated interest and other income (expense), net, interest expense, and income taxes for thethree and nine months ended January 31, 2025 and September 30, 2023 are as follows (in thousands, except for percentages):

Previous wording

Interest and Other Income (loss) -Interest and other income consists primarily of interest and dividend income from cash and cash equivalents and marketable debt and equity securities, realized and unrealized gains (losses) on our marketable equity securities and derivative instruments and realized gains (losses) on our marketable debt securities.

Current wording

Interest and other income (expense), net -Interest and other income (expense), net consists primarily of interest and dividend income from cash and cash equivalents and marketable debt and equity securities, realized and unrealized gains (losses) on our marketable equity securities, and derivative instruments and realized gains (losses) on our marketable debt securities.

Previous wording

Interest and other income, net decreased $3.2 million during the three months ended October 31, 2024 compared to the three months ended June 30, 2023, primarily due to a $4.2 million decrease in net gains from investments in marketable equity securities and derivative instruments and a $0.5 million increase in interest income.

Current wording

Interest and other income (expense), net increased $17.4 million during the three months ended January 31, 2025 compared to the three months ended September 30, 2023, primarily due to a $17.1 million increase in net gains from investments in marketable equity securities and derivative instruments and a $0.3 million increase in interest income.

Previous wording

Interest and other income, net increased $0.4 million during the six months ended October 31, 2024, compared to the six months ended June 30, 2023, primarily driven bya $0.9 million increase in interest income partially offset bya $0.6 million decrease in net gains from investments in marketable equity securities and derivative instruments.

Current wording

Interest and other income (expense), net increased $18.3 million during thenine months ended January 31, 2025, compared to thenine months ended September 30, 2023, primarily driven bya$16.5 million increase in net gains from investments in marketable equity securities and derivative instruments and a$1.9 million increase in interest income.

Previous wording

Interest expense -Interest expenses primarily consisted of the interest charges related to Barnes & Noble Education's credit facility.

Current wording

Interest expense -Interest expenses primarily consisted of interest charges related to Barnes & Noble Education’s credit facility. Interest expense decreased primarily due to the June 10, 2024 debt financing transaction, lower borrowings, and lower interest rates.

Previous wording

Provision for income taxes for the three and six months ended October 31, 2024 resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate. We maintain no valuation allowance against our U.S. federal deferred tax assets and maintain a valuation allowance against certain our U.S. state and Canadian federal deferred tax assets. The change in the estimated effective tax rate was mainly driven by higher U.S. taxable income which was a result of higher U.S. passive income.

Current wording

Provision for income taxes for thethree and nine months ended January 31, 2025 resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate. We maintain no valuation allowance against our U.S. federal deferred tax assets and maintain a valuation allowance against certain our U.S. state and Canadian federal deferred tax assets. The change in the estimated effective tax rate was mainly driven by higher U.S. taxable income which was a result of higher U.S. passive income.

Previous wording

Barnes & Noble Education recorded an income tax provision of $1.3 million on pre-tax loss of $48.5 million during the period of May 1 st,2024 to October 31, 2024, which represented an effective income tax rate of (2.6)%.

Current wording

Barnes & Noble Education recorded an income tax provision of $11.9 million on pre-tax loss of $30.7 million during the period of May 1,2024 to January 31, 2025, which represented an effective income tax rate of (38.8)%.

Previous wording

Cash, cash equivalents and investments-current -As of October 31, 2024, our cash, cash equivalents, and investments- current totaled $159.3 million, a $19.0 million decrease from $178.4 million on April 30, 2024. In addition, as of October 31, 2024, we had restricted cash of $17.3 million.

Current wording

Cash, cash equivalents, and investments-current -As of January 31, 2025, our cash, cash equivalents, and investments-current totaled $153.9 million, a $24.5 million decrease from $178.4 million on April 30, 2024. In addition, as of January 31, 2025, we had restricted cash of $7.5 million.

Previous wording

A summary of select cash flow information for the six months ended October 31, 2024 and June 30,2023 are as follows (in thousands):

Current wording

A summary of select cash flow information for the nine months ended January 31, 2025 and September 30, 2023 are as follows (in thousands):

Previous wording

Cash provided by (used in) operating activities - Our operating activities primarily consists of net income adjusted for certain non-cash items including depreciation and amortization; stock-based compensation expense, deferred income taxes and the effect of changes in operating assets and liabilities.

Current wording

Cash provided by (used in) operating activities - Our operating activities primarily consists of net income adjusted for certain non-cash items including depreciation and amortization, stock-based compensation expense, deferred income taxes, net (gains) losses on investments in marketable securities, and the effect of changes in operating assets and liabilities.

Previous wording

Net cash used in operating activities was $64.0 million in the six months ended October 31, 2024, a $72.7 million decrease compared to the six months ended June 30,2023. This cash decrease was primarily attributable to a $145.1 million decrease from changes in operating assets and liabilities partially offset by $52.8 million increase from changes in net income and a $19.6 million increase from non-cash items.

Current wording

Net cash used in operating activities was $107.7 million for thenine months ended January 31, 2025, a $120.5 million decrease compared to thenine months ended September 30, 2023. This cash decrease was primarily attributable to a $207.2 million decrease from changes in operating assets and liabilities, partially offset by $69.6 million increase from changes in net income and a $17.2 million increase from non-cash items.

Previous wording

Net cash provided by operating activities was $8.8 million in the six months ended June 30, 2023, a $9.9 million decrease compared to the same period in 2022. This cash decrease was primarily attributable to a $15.7 million decrease from changes in non-cash items and $6.3 million decrease from changes in net operating assets partially offset by a $12.0 million increase in net income.

Current wording

Net cash provided by operating activities was $12.8 million in thenine months ended September 30, 2023, a $19.5 million decrease compared to the same period in 2022. This cash decrease was primarily attributable to a $14.7 million decrease from changes in non-cash items and $11.8 million decrease from changes in net operating assets, partially offset by a $7.0 million increase in net income.

Previous wording

Cash used in investing activities - Our investing activities primarily consist of purchases of marketable securities and other investments and proceeds from disposal of marketable securities and other investments; proceeds from issuance of derivative instruments; payments made to settle derivative instruments, payment for business acquisitions, net of cash acquired and purchases of property and equipment.

Current wording

Cash provided by (used in) investing activities - Our investing activities primarily consist of purchases of marketable securities and other investments and proceeds from disposal of marketable securities and other investments; proceeds from issuance of derivative instruments; payments made to settle derivative instruments; payment for business acquisitions, net of cash acquired; and purchases of property and equipment.

Previous wording

Net cash used in investing activities during thesix months ended October 31, 2024 was $4.3 million primarily consisting of $49.4 million in cash used to purchase marketable securities and in the settlement of derivative instruments, $29.6 million cash used in business acquisition, net of cash acquired and $5.6 million in purchase of property and equipment partially offset by $79.6 million in proceeds from selling marketable securities.

Current wording

Net cash provided by investing activities during thenine months ended January 31, 2025 was $4.4 million primarily consisting of$127.2 million in cash provided by proceeds from selling marketable securities and derivatives, partially offset by$85.8 million in cash used to purchase marketable securities and the settlement of derivative instruments, $29.6 million cash used in business acquisition, net of cash acquired, and $8.1 million in purchase of property and equipment.

Previous wording

Net cash used in investing activities during thesix months ended June 30, 2023 was $22.7 million primarily consisting of $104.6 million in cash used to purchase marketable securities and in the settlement of derivative instrument partially offset by $81.9 million in proceeds from selling marketable securities and derivatives.

Current wording

Net cash used in investing activities during thenine months ended September 30, 2023 was $19.4 million primarily consisting of $167.9 million in cash used to purchase marketable securities and in the settlement of derivative instrument, partially offset by $148.5 million in proceeds from selling marketable securities and derivatives.