Daily Journal Corporation Announces Financial Results for the six Months ended March 31, 2025

Rhea-AI Summary

Daily Journal Corporation (NASDAQ:DJCO) reported strong financial results for the six months ended March 31, 2025. Consolidated revenues increased to $35.88M from $32.56M year-over-year, driven by growth in Journal Technologies' license fees and Traditional Business advertising. The company's consolidated net income surged to $55.57M ($40.34 per share) from $28.03M ($20.36 per share). Notable highlights include marketable securities valued at $431.49M with net pretax unrealized gains of $292.40M. Non-operating income significantly increased to $74.46M from $35.10M, primarily due to net unrealized gains on marketable securities of $72.80M. The company maintained an effective tax rate of 27% and recorded an income tax provision of $20.60M on pretax income of $76.17M.

Positive

• Consolidated revenues increased by $3.32M to $35.88M (+10.2% YoY)
• Net income doubled to $55.57M from $28.03M, with EPS growing to $40.34 from $20.36
• Significant marketable securities portfolio valued at $431.49M with $292.40M in unrealized gains
• Traditional Business pretax income grew by $310,000 to $1.17M
• Journal Technologies' pretax income increased by $139,000 to $534,000

Negative

• Journal Technologies consulting fees decreased by $1.24M
• Operating expenses increased by $2.71M due to higher personnel costs and contractor services
• Dividends and interest income decreased by $424,000 to $2.36M

Insights

Financial Analyst

DJCO reports strong half-year results with 10.2% revenue growth and 98.2% net income increase, driven by software segment and investment portfolio gains.

Daily Journal Corporation's six-month financials reveal solid operational improvements paired with substantial investment portfolio gains. The company achieved $35.88 million in consolidated revenues, representing a 10.2% year-over-year increase. This growth primarily stemmed from their Journal Technologies segment, which saw license and maintenance fees increase by $1.62 million and public service fees jump by $2.47 million.

Profitability metrics show encouraging trends across both business segments. The Traditional Business increased its pretax income by 36% to $1.17 million, while Journal Technologies grew pretax income by 35.2% to $534,000. These operational improvements came despite increased expenses in the technology segment for personnel, contractors, and infrastructure needed for growth initiatives.

What truly stands out, however, is the company's investment portfolio. DJCO holds marketable securities valued at $431.49 million with unrealized gains of $292.4 million. This investment strategy generated $72.8 million in unrealized gains for the period, driving non-operating income to $74.46 million - a 112% increase year-over-year.

The combined effect of operational improvements and investment gains resulted in consolidated net income of $55.57 million ($40.34 per share), a remarkable 98.2% increase from the prior year's $28.03 million ($20.36 per share). The effective tax rate was 27%, including taxes on unrealized investment gains.

While the company is clearly benefiting from its dual strategy of operational business growth and investment portfolio management, investors should note that most of the earnings growth came from investment gains rather than core business improvements. The significant unrealized investment gains create both opportunity and risk, as these paper profits could fluctuate substantially with market conditions.

Contact: Tu To                                                 (213) 229-5436

LOS ANGELES, May 20, 2025 (GLOBE NEWSWIRE) -- During the six months ended March 31, 2025, Daily Journal Corporation (NASDAQ:DJCO) had consolidated revenues of $35,880,000 as compared to $32,564,000 in the prior year period. This increase of $3,316,000 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.

The Traditional Business’ pretax income increased by $310,000 to $1,171,000 from $861,000. This increase primarily resulted from increased revenues of $472,000. Journal Technologies’ business segment pretax income increased by $139,000 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 mainly from (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.

At March 31, 2025, the Company held marketable securities valued at $431,490,000, including net pretax unrealized gains of $292,396,000, and accrued a deferred tax liability of $76,930,000 for estimated income taxes due only upon the sales of the net appreciated securities

The Company’s non-operating income, net of expenses, increased by $39,356,000 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 to $2,362,000 from $2,786,000.

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.

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.

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this press release are “forward-looking” statements that involve risks and uncertainties that may cause actual future events or results to differ materially from those described in the forward-looking statements. Words such as “expects,” “intends,” “anticipates,” “should,” “believes,” “will,” “plans,” “estimates,” “may,” variations of such words and similar expressions are intended to identify such forward-looking statements. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in documents we file with the Securities and Exchange Commission.

# # #

FAQ

What was Daily Journal Corporation's (DJCO) net income for the six months ended March 31, 2025?

DJCO reported a consolidated net income of $55.57 million ($40.34 per share) for the six months ended March 31, 2025, compared to $28.03 million ($20.36 per share) in the prior year period.

How much are Daily Journal's (DJCO) marketable securities worth as of March 2025?

As of March 31, 2025, DJCO held marketable securities valued at $431.49 million, including net pretax unrealized gains of $292.40 million.

What drove Daily Journal's (DJCO) revenue growth in the first half of 2025?

The $3.32M revenue increase was primarily driven by growth in Journal Technologies' license and maintenance fees ($1.62M), public service fees ($2.47M), and Traditional Business advertising revenues ($441,000), partially offset by decreased consulting fees.

What was Daily Journal Corporation's (DJCO) effective tax rate for H1 2025?

DJCO's 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.

How did Daily Journal's (DJCO) non-operating income perform in H1 2025?

DJCO's non-operating income increased by $39.36M to $74.46M, primarily due to net unrealized gains on marketable securities of $72.80M, though dividends and interest income decreased by $424,000.