DAILY JOURNAL CORP

Previous wording

Comparable six-month periods ended March 31, 2025 and 2024

Current wording

Comparable nine-month periods ended June 30, 2025 and 2024

Previous wording

Consolidated revenues were $35,880,000 and $32,564,000 for the six months ended March 31, 2025 and 2024, respectively. This increase of $3,316,000 (10%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $1,615,000, and other public service fees of $2,467,000, partially offset by decreased consulting fees of $1,238,000, and (ii) the Traditional Business’ advertising revenues of $441,000 and advertising service fees and other of $98,000.

Current wording

Consolidated revenues were $59,286,000 and $50,058,000 for the nine months ended June 30, 2025 and 2024, respectively. This increase of $9,228,000 (18%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $2,418,000, consulting fees of $1,853,000, and other public service fees of $4,031,000, and (ii) the Traditional Business’ advertising revenues of $703,000 and advertising service fees and other of $310,000.

Previous wording

Approximately 76% of the Company’s revenues during the six months ended March 31, 2025 were derived from Journal Technologies. In addition, the Company’s revenues during the six months ended March 31, 2025 were primarily from the United States, with approximately $1,753,000 (5%) from foreign countries. Almost all of Journal Technologies’ revenues are from governmental agencies.

Current wording

Approximately 77% of the Company’s revenues during the nine months ended June 30, 2025 were derived from Journal Technologies. In addition, the Company’s revenues during the nine months ended June 30, 2025 were primarily from the United States, with approximately $5,586,000 (9%) from foreign countries. Almost all of Journal Technologies’ revenues were from governmental agencies.

Previous wording

Consolidated operating expenses increased by $1,275,000 (8%) to $17,213,000 from $15,938,000. Total salaries and employee benefits increased by $903,000 (8%) to $12,706,000 from $11,803,000 primarily due to annual salary adjustments and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on and supporting the Company’s installation projects. Outside services increased by $11,000 (1%) to $1,802,000 from $1,791,000 mainly because of increased third-party hosting fees which were billed to clients. Accounting and legal fees increased by $112,000 (72%) to $267,000 from $155,000 primarily resulting from increased legal fees.

Current wording

Consolidated operating expenses increased by $6,645,000 (14%) to $54,357,000 from $47,712,000. Total salaries and employee benefits increased by $4,093,000 (12%) to $39,520,000 from $35,427,000 primarily due to annual salary adjustments and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects. Outside services increased by $102,000 (2%) to $5,322,000 from $5,220,000 mainly because of increased third-party hosting fees which were billed to clients. Equipment and maintenance and software went up by $203,000 (18%) to $1,333,000 from $1,130,000 primarily because of purchases of additional equipment for the new hires. Accounting and legal fees increased by $291,000 (39%) to $1,030,000 from $739,000 primarily resulting from increased legal fees.

Previous wording

The Company’s non-operating income, net of expenses, increased by $39,356,000 (112%) to $74,460,000 from $35,104,000 in the prior fiscal year period primarily because of the recording of net unrealized gains on marketable securities of $72,799,000 as compared with realized and unrealized gains on marketable securities of $34,454,000 in the prior fiscal year period. There was also a decrease in dividends and interest income of $424,000 (15%) to $2,362,000 from $2,786,000.

Current wording

The Company’s non-operating income, net of expenses, increased by $23,618,000 (36%) to $89,467,000 from $65,849,000 in the prior fiscal year period primarily because of the recording of net unrealized gains on marketable securities of $84,320,000 as compared with realized and unrealized gains on marketable securities of $62,472,000 in the prior fiscal year period. There was also an increase in dividends and interest income of $301,000 (5%) to $6,158,000 from $5,857,000.

Previous wording

During the six months ended March 31, 2025, the Company’s consolidated pretax income was $76,165,000, as compared to $36,360,000 in the prior fiscal year period. There was consolidated net income of $55,565,000 ($40.34 per share) for the six months ended March 31, 2025, as compared with $28,030,000 ($20.36 per share) in the prior fiscal year period.

Current wording

During the nine months ended June 30, 2025, the Company’s consolidated pretax income was $94,396,000, as compared to $68,195,000 in the prior fiscal year period. There was consolidated net income of $69,986,000 ($50.81 per share) for the nine months ended June 30, 2025, as compared with $51,385,000 ($37.32 per share) in the prior fiscal year period.

Previous wording

At March 31, 2025, the aggregate fair market value of the Company’s marketable securities was $431,490,000. These securities had approximately $292,396,000 of net unrealized gains before taxes of $76,930,000. Most of the unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

Current wording

At June 30, 2025, the aggregate fair market value of the Company’s marketable securities was $443,011,000. These securities had approximately $303,917,000 of net unrealized gains before taxes of $79,260,000. Most of the unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

Previous wording

For the six months ended March 31, 2025, the Company recorded an income tax provision of $20,600,000 on the pretax income of $76,165,000. The income tax provision consisted of tax provisions of $19,155,000 on the unrealized gains on marketable securities, $35,000 on income from foreign operations, $910,000 on income from US operations and dividend income, and a tax provision of $640,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. These tax liabilities were partially offset by a tax benefit of $140,000 for the dividends received deduction and other permanent book and tax differences. Consequently, the overall effective tax rate for the six months ended March 31, 2025 was 27%, after including the taxes on the unrealized gains on marketable securities.

Current wording

For the nine months ended June 30, 2025, the Company recorded an income tax provision of $24,410,000 on the pretax income of $94,396,000. The income tax provision consisted of tax provisions of $21,990,000 on the unrealized gains on marketable securities, $70,000 on income from foreign operations, $2,530,000 on income from US operations and dividend income and $170,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability, partially offset by a tax benefit of $350,000 for the dividends received deduction and other permanent book and tax differences. Consequently, the overall effective tax rate for the nine months ended June 30, 2025 was 25.9%, after including the taxes on the unrealized gains on marketable securities.

Previous wording

For the six months ended March 31, 2024, the Company recorded an income tax provision of $8,330,000 on the pretax income of $36,360,000. The income tax provision consisted of tax provisions of $3,660,000 on the realized gains on marketable securities, $5,180,000 on the unrealized gains on marketable securities, $40,000 on income from foreign operations, and $480,000 on income from US operations and dividend income, partially offset by a tax benefit of $210,000 for the dividends received deduction and other permanent book and tax differences, and a tax benefit of $820,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the six months ended March 31, 2024 was 22.9%, after including the taxes on the realized and unrealized gains on marketable securities.

Current wording

For the nine months ended June 30, 2024, the Company recorded an income tax provision of $16,810,000 on the pretax income of $68,195,000. The income tax provision consisted of tax provisions of $3,690,000 on the realized gains on marketable securities, $12,480,000 on the unrealized gains on marketable securities, $50,000 on income from foreign operations, and $1,440,000 on income from US operations and dividend income, partially offset by a tax benefit of $330,000 for the dividends received deduction and other permanent book and tax differences, and a tax benefit of $520,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the nine months ended June 30, 2024 was 24.65%, after including the taxes on the realized and unrealized gains on marketable securities.

Previous wording

During the six months ended March 31, 2025, the Traditional Business had total operating revenues of $8,471,000, as compared with $7,999,000 in the prior fiscal year period. Advertising revenues increased by $441,000 (10%) to $4,844,000 from $4,403,000, primarily resulting from increased commercial advertising revenues of $225,000, legal notice advertising revenues of $64,000, trustee sale notice advertising revenues of $81,000, and government notice advertising revenues of $71,000. In addition, advertising service fees and other revenues increased by $98,000 to $1,500,000 from $1,402,000.

Current wording

During the nine months ended June 30, 2025, the Traditional Business had total operating revenues of $13,352,000, as compared with $12,426,000 in the prior fiscal year period. Advertising revenues increased by $703,000 (10%) to $7,642,000 from $6,939,000, primarily resulting from increased commercial advertising revenues of $380,000, legal notice advertising revenues of $154,000, trustee sale notice advertising revenues of $108,000, and government notice advertising revenues of $61,000. In addition, advertising service fees and other revenues increased by $310,000 (14%) to $2,514,000 from $2,204,000.

Previous wording

Trustee sale notices are very much dependent on the number of California and Arizona foreclosures for which public notice advertising is required by law. The number of foreclosure notices published by the Company increased by 13% during the six months ended March 31, 2025 as compared to the prior fiscal year period. The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for about 84% of the total public notice advertising revenues during the six-month period ended March 31, 2025. Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 13% of the Company's total operating revenues for the six months ended March 31, 2025 and 14% for the six months ended March 31, 2024.

Current wording

Trustee sale notices are very much dependent on the number of California and Arizona foreclosures for which public notice advertising is required by law. The number of foreclosure notices published by the Company increased by 12% during the nine months ended June 30, 2025 as compared to the prior fiscal year period. The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for about 84% of the total public notice advertising revenues during the nine months ended June 30, 2025. Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 13% of the Company's total operating revenues for the nine months ended June 30, 2025 and 14% for the nine months ended June 30, 2024.

Previous wording

The Daily Journals accounted for about 94% of the Traditional Business’ total circulation revenues, which decreased by $67,000 (3%) to $2,127,000 from $2,194,000. The court rule and judicial profile services generated about 4% of the total circulation revenues, with the other newspapers and services accounting for the balance. Advertising service fees and other are Traditional Business segment revenues, which include primarily (i) agency commissions received from outside newspapers in which the advertising is placed, and (ii) fees generated when filing notices with government agencies.

Current wording

The Daily Journals accounted for about 94% of the Traditional Business’ total circulation revenues, which decreased by $87,000 (3%) to $3,196,000 from $3,283,000. The court rule and judicial profile services generated about 4% of the total circulation revenues, with the other newspapers and services accounting for the balance. Advertising service fees and other are Traditional Business segment revenues, which include primarily (i) agency commissions received from outside newspapers in which the advertising is placed, and (ii) fees generated when filing notices with government agencies.

Previous wording

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, decreased slightly by $3,000 to $7,935,000 from $7,938,000.

Current wording

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, increased by $980,000 (8%) to $13,185,000 from $12,205,000 primarily due to increased personnel costs and agency commission expenses.

Previous wording

During the six months ended March 31, 2025, Journal Technologies’ business segment pretax income increased by $139,000 (35%) to $534,000 from $395,000 in the prior fiscal year period primarily resulting from increased operating revenues of $2,844,000, which were partially offset by increased operating expenses of $2,705,000.

Current wording

During the nine months ended June 30, 2025, Journal Technologies’ business segment pretax income increased by $3,947,000 (530%) to $4,692,000 from $745,000 in the prior fiscal year period primarily resulting from increased operating revenues of $8,302,000, which were partially offset by increased operating expenses of $4,355,000.

Previous wording

Revenues increased by $2,844,000 (12%) to $27,409,000 from $24,565,000 in the prior fiscal year period. Licensing and maintenance fees increased by $1,615,000 (12%) to $15,026,000 from $13,411,000. Consulting fees decreased by $1,238,000 (19%) to $5,263,000 from $6,501,000 mainly due to fewer customer projects being completed during the fiscal 2025 period. Other public service fees increased by $2,467,000 (53%) to $7,120,000 from $4,653,000 primarily because of increased e-filing fee revenues.

Current wording

Revenues increased by $8,302,000 (22%) to $45,934,000 from $37,632,000 in the prior fiscal year period. Licensing and maintenance fees increased by $2,418,000 (12%) to $22,990,000 from $20,572,000. Consulting fees increased by $1,853,000 (19%) to $11,792,000 from $9,939,000 mainly due to more customer projects being completed during the fiscal 2025 period. Other public service fees increased by $4,031,000 (57%) to $11,152,000 from $7,121,000 primarily because of increased e-filing fee revenues.

Previous wording

Operating expenses increased by $2,705,000 (11%) to $26,875,000 from $24,170,000 primarily because of (i) increased personnel costs because of annual salary adjustments, (ii) additional contractor services and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects, and (iii) increased third-party hosting fees which were billed to clients.

Current wording

Operating expenses increased by $4,355,000 (12%) to $41,242,000 from $36,887,000 primarily because of (i) increased personnel costs because of annual salary adjustments, (ii) additional contractor services and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects, and (iii) increased third-party hosting fees which were billed to clients.

Previous wording

Journal Technologies continues to update and upgrade its software products, which includes work deemed necessary by management to strengthen product management and quality assurance/quality control, as well as update aspects like user experience, documentation, regionalization, and ease of ongoing customer upgrades (which the Company believes should correspondingly reduce costs for Journal Technologies over the longer term). These costs are expensed as incurred and will impact earnings at least through the foreseeable future.

Current wording

Journal Technologies continues to update and upgrade its software products, which includes work deemed necessary by management to strengthen product management and quality assurance/quality control, as well as update aspects like user experience, documentation, regionalization, and ease of ongoing customer upgrades (which the Company believes should correspondingly reduce costs for Journal Technologies over the longer term). These costs are expensed as incurred and will impact earnings at least through the foreseeable future. The Company will capitalize software development costs if those costs are required to be capitalized under GAAP, which generally means development costs incurred during the typically short period of time, if any, between a product’s technological feasibility and general release. There are also new investments getting underway flowing from research and development related to new possibilities afforded by emerging technologies to offer new types of capabilities to customers and to streamline the process of building and upgrading applications.

Previous wording

Consolidated revenues were $18,176,000 and $16,571,000 for the three months ended March 31, 2025 and 2024, respectively. This increase of $1,605,000 (10%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $647,000, and other public service fees of $1,225,000, partially offset by decreased consulting fees of $535,000, and (ii) the Traditional Business’ advertising revenues of $249,000, advertising service fees and other of $71,000, and circulation revenues of $52,000.

Current wording

Consolidated revenues were $23,406,000 and $17,494,000 for the three months ended June 30, 2025 and 2024, respectively. This increase of $5,912,000 (34%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $803,000, consulting fees of $3,091,000 and other public service fees of $1,564,000, and (ii) the Traditional Business’ advertising revenues of $262,000, and advertising service fees and other of $212,000.

Previous wording

Approximately 76% of the Company’s revenues during the three months ended March 31, 2025 were derived from Journal Technologies. In addition, the Company’s revenues during the three months ended March 31, 2025, were primarily from the United States, with approximately $148,000 (1%) from foreign countries. Almost all of Journal Technologies’ revenues are from governmental agencies.

Current wording

Approximately 79% of the Company’s revenues during the three months ended June 30, 2025 were derived from Journal Technologies. In addition, the Company’s revenues during the three months ended June 30, 2025 were primarily from the United States, with approximately $3,833,000 (16%) from foreign countries. Almost all of Journal Technologies’ revenues were from governmental agencies.

Previous wording

The Company’s non-operating income, net of expenses, increased by $40,320,000 (202%) to $60,039,000 from $19,987,000 in the prior fiscal year period primarily because of the recording of net unrealized gains on marketable securities of $59,386,000 as compared with $19,764,000 in the prior fiscal year period. There was a decrease in dividends and interest income of $39,000 (3%) to $1,178,000 from $1,217,000.

Current wording

The Company’s non-operating income, net of expenses, decreased by $15,738,000 (51%) to $15,007,000 from $30,745,000 in the prior fiscal year period primarily because of the recording of net unrealized gains on marketable securities of $11,521,000 as compared with $28,018,000 in the prior fiscal year period. There was an increase in dividends and interest income of $797,000 (27%) to $3,796,000 from $2,999,000.

Previous wording

During the three months ended March 31, 2025, the Company’s consolidated pretax income was $61,270,000, as compared to $20,620,000 in the prior fiscal year period. There was consolidated net income of $44,670,000 ($32.43 per share) for the three months ended March 31, 2025, as compared with $15,415,000 ($11.19 per share) in the prior fiscal year period.

Current wording

During the three months ended June 30, 2025, the Company’s consolidated pretax income was $18,231,000, as compared to $31,835,000 in the prior fiscal year period. There was consolidated net income of $14,421,000 ($10.47 per share) for the three months ended June 30, 2025, as compared with $23,355,000 ($16.96 per share) in the prior fiscal year period.

Previous wording

During the three months ended March 31, 2025, the Traditional Business had total operating revenues of $4,380,000, as compared with $4,112,000 in the prior fiscal year period. Advertising revenues increased by $249,000 (11%) to $2,565,000 from $2,316,000, primarily resulting from increased commercial advertising revenues of $162,000, legal notice advertising revenues of $4,000, trustee sale notice advertising revenues of $5,000, and government notice advertising revenues of $78,000.

Current wording

During the three months ended June 30, 2025, the Traditional Business had total operating revenues of $4,881,000, as compared with $4,427,000 in the prior fiscal year period. Advertising revenues increased by $262,000 (10%) to $2,798,000 from $2,536,000, primarily resulting from increased commercial advertising revenues of $155,000, legal notice advertising revenues of $90,000 and trustee sale notice advertising revenues of $27,000, partially offset by decreased government notice advertising revenues of $10,000.

Previous wording

During the three months ended March 31, 2025, Journal Technologies’ business segment pretax income increased by $19,000 (32%) to $78,000 from $59,000 in the prior fiscal year period primarily resulting from increased operating revenues of $1,337,000, which were partially offset by increased operating expenses of $1,318,000.

Current wording

During the three months ended June 30, 2025, Journal Technologies’ business segment pretax income increased by $3,808,000 (1088%) to $4,158,000 from $350,000 in the prior fiscal year period primarily resulting from increased operating revenues of $5,458,000, which were partially offset by increased operating expenses of $1,650,000.

Previous wording

Revenues increased by $1,337,000 (11%) to $13,796,000 from $12,459,000 in the prior fiscal year period. Licensing and maintenance fees increased by $647,000 (9%) to $7,501,000 from $6,854,000. Consulting fees decreased by $535,000 (17%) to $2,664,000 from $3,199,000 mainly due to fewer customer projects being completed. Other public service fees increased by $1,225,000 (51%) to $3,631,000 from $2,406,000 primarily because of increased e-filing fee revenues.

Current wording

Revenues increased by $5,458,000 (44%) to $18,525,000 from $13,067,000 in the prior fiscal year period. Licensing and maintenance fees increased by $803,000 (11%) to $7,964,000 from $7,161,000. Consulting fees increased by $3,091,000 (90%) to $6,529,000 from $3,438,000 mainly due to more customer project being completed. Other public service fees increased by $1,564,000 (63%) to $4,032,000 from $2,468,000 primarily because of increased e-filing fee revenues.

Previous wording

During the three months ended March 31, 2025, the Company’s cash and cash equivalents, restricted cash, and marketable security positions increased by $71,853,000 after the recording of net pretax unrealized gains on marketable securities of $72,799,000, and a payment of $2.5 million to reduce the margin loan balance to $25 million at March 31, 2025.

Current wording

During the nine months ended June 30, 2025, the Company’s cash and cash equivalents, restricted cash, and marketable security positions increased by $90,097,000 after the recording of net pretax unrealized gains on marketable securities of $84,320,000, and a payment of $2.5 million to reduce the margin loan balance to $25 million.

Previous wording

The investments in marketable securities, which had an adjusted cost basis of approximately $139,094,000 and a market value of about $431,490,000 at March 31, 2025, generated approximately $2,362,000 in dividends and interest income during the six months ended March 31, 2025. These securities had approximately $292,396,000 of net unrealized gains before estimated taxes of $76,930,000 that will become due only when we sell securities in which there is unrealized appreciation. The balance on the Company’s margin loan secured by the securities portfolio was $25,000,000 at March 31, 2025, as compared to $27,500,000 at September 30, 2024.

Current wording

The investments in marketable securities, which had an adjusted cost basis of approximately $139,094,000 and a market value of about $443,011,000 at June 30, 2025, generated approximately $6,158,000 in dividends and interest income during the nine months ended June 30, 2025. These securities had approximately $303,917,000 of net unrealized gains before estimated taxes of $79,260,000 that will become due only when we sell securities in which there is unrealized appreciation. The balance on the Company’s margin loan secured by the securities portfolio was $25,000,000 at June 30, 2025, as compared to $27,500,000 at September 30, 2024.

Previous wording

Cash flows from operating activities increased by $6,449,000 during the six months ended March 31, 2025, as compared to the prior fiscal year period, primarily due to (i) decreases in the Company’s accounts receivable of $4,368,000, (ii) increases in accounts payable of $335,000, accrued liabilities (which included non-qualified deferred compensation) of $739,000 and deferred income tax payable of $15,238,000. This was partially offset by decreases in income tax payable of $1,250,000, deferred revenues of $2,362,000 and net income of $10,898,000, after excluding the increases in realized and unrealized gains on marketable securities of $38,345,000.

Current wording

Cash flows from operating activities increased by $12,022,000 during the nine months ended June 30, 2025 as compared to the prior fiscal year period, primarily due to (i) decreases in accounts receivable of $3,056,000, and (ii) increases the Company’s deferred income tax liabilities of $9,943,000, income tax payable of $768,000, accounts payable of $2,122,000 and accrued liabilities (which included non-qualified deferred compensation) of $2,911,000. This was partially offset by decreases in deferred revenues of $3,496,000, and net income of $3,247,000, after excluding the increases in realized and unrealized gains on marketable securities of $21,848,000.

Previous wording

As of March 31, 2025, the Company had working capital of $428,646,000, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $17,698,000.

Current wording

As of June 30, 2025, the Company had working capital of $446,595,000, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $20,164,000.