The flood of crypto money in the 2024 election was one of the biggest breaks for the Trump campaign. Six months into the term, the relationship might be cooling.

Mark Zuckerberg’s AI hiring spree is costing a lot of money. His investors don’t care.

Meta’s stock price shot up over 10 percent on Wednesday after the company reported better-than-expected earnings. Revenue generated in the second quarter was $47.5 billion, up 22 percent from a year ago. Daily users across Facebook, Instagram, Threads, and WhatsApp grew to almost 3.5 billion. Meta also warned Wall Street that it would spend more on data centers and hiring next year. In response to all this, the company’s valuation increased by over $175 billion, or more than 12 Scale AI deals.

”Our business continues to perform very well, which enables us to invest heavily in our AI efforts,” Zuckerberg said during today’s earnings call. Meta’s cash cannon is now fully pointed at his new moonshot of achieving superintelligence, or as he puts it, AI that “surpasses human intelligence in every way.” He bragged about providing the richly compensated members of his new superintelligence lab “access to unparalleled compute” for training new models that will “push the next frontier in a year or so.” 

Zuckerberg’s last moonshot was the metaverse, which came up only once at the very end of today’s earnings call. It’s too early to compare the two projects, but they share a key similarity: they need the kind of funding that only a company like Meta can provide.

Where AI differs from the metaverse, however, is that it appears to be already improving Meta’s ads business. A new AI model for delivering ads has driven approximately five percent more conversions on Facebook and three percent more conversions on Instagram, according to CFO Susan Li. Large language models are also starting to power how posts are ranked in feeds across the company’s apps, including Threads. 

While Meta is still spending heavily on the metaverse (it’s on track to spend a total of $100 billion on its Reality Labs division this year), there’s no mistaking the fact that AI is officially Zuckerberg’s top priority. This time, though, he’s playing catch-up in a heated race, not trying to invent a new platform from scratch. The stakes are much higher, even if he’s playing the game with house money.

President Donald Trump signed an executive order on Wednesday that will suspend the de minimis exemption — which allows packages with goods valued less than $800 to enter the US duty-free — for all countries. Earlier this year, Trump ended the de minimis exemption for goods from China and Hong Kong.

The White House says the change goes into effect on August 29th. Per the executive order, for the next six months, goods shipped through the international postal system will either be charged the flat tariff rate based on country of origin (an ad valorem duty) or a specific duty ranging from $80 to $200 per item. After six months, all duties will be calculated as ad valorem duties.

The White House’s argument for ending the exemption is that packages using it are “subject to less scrutiny than traditional imports” and could “pose health, safety, national and economic security risks.” The White House claims that 98 percent of narcotics seizures (by “number of cases”) are from de minimis shipments. It also says that low-value packages from China and Hong Kong accounted for “the majority of de minimis shipments to the United States.”

Microsoft just posted the fourth and final quarter of its 2025 fiscal financial results. The software maker made $76.4 billion in revenue and a net income of $27.2 billion during Q4. Revenue is up 18 percent, and net income has increased by 24 percent.

Like clockwork, cloud services are the strong point of Microsoft’s revenue this quarter. Azure revenue grew 39 percent year-over-year, and Microsoft CEO Satya Nadella says “Azure surpassed $75 billion in revenue” for the entire financial year, up 34 percent.

The impressive cloud earnings come just weeks after the software maker laid off as many as 9,000 employees earlier this month. Microsoft says it employed 228,000 people on a full-time basis as of June 30th, the same amount as 2024 before the most recent layoffs.

Windows and Surface revenue

The PC market is still feeling the effects of the Trump tariffs and consumer spending, while businesses look to refresh PCs ahead of Windows 10’s end of support in October. As a result, Windows OEM and devices revenue is up 3 percent year over year, driven by growth in Windows OEM revenue.

Gartner said earlier this month that PC shipments were up more than 4 percent in the recent quarter, thanks to a Windows 11 refresh cycle for desktop PCs. Microsoft primarily makes money from Windows through OEM revenue, the price that manufacturers pay to license Windows for laptops and PCs.

While this time last year Microsoft’s Surface revenue had been in decline for two years, Microsoft started combining Windows and devices revenue together during this past financial year, so it’s still not clear how Surface is performing. Microsoft CFO Amy Hood did reveal on the company’s earnings call today that devices revenue is expected to decline next quarter, alongside a Windows OEM revenue decline in the “mid to high single digits.”

Microsoft did launch two new Surface devices in the recent quarter, though: the 12-inch Surface Pro and 13-inch Surface Laptop. Both devices launched midway through the quarter, so the full impact of sales on Windows OEM and devices revenue won’t be felt until next quarter.

Xbox and gaming

Xbox content and services revenue, which includes Xbox Game Pass, is up by 13 percent this quarter. Microsoft still isn’t revealing any new Game Pass subscriber numbers, though, and the last time we got an update was in February 2024, when Microsoft revealed there were 34 million subscribers, including Xbox Game Pass Core (previously Xbox Live Gold) members.

Microsoft has been aggressively pushing ahead with its strategy to bring more previously Xbox-exclusive games to PlayStation and Nintendo Switch over the past year. Senua’s Saga: Hellblade II is arriving on PS5 next month, alongside the original Gears of War as a remastered version. Microsoft also launched Forza Horizon 5 on PS5 earlier this year, as well as Age of Empires II: Definitive Edition, Age of Mythology: Retold, and Indiana Jones and the Great Circle.

While the move to bring more Xbox games to PlayStation might have angered some fans, it has proven to be a successful choice. Preorders for Indiana Jones and the Great Circle and Forza Horizon 5 topped Sony’s own PlayStation Store earlier this year, and Circana revealed this week that Microsoft had six of the 10 top-selling games on PlayStation in the recent quarter.

“We are now the top publisher on both Xbox and PlayStation this quarter,” said Nadella on an earnings call today. Nadella also revealed “Game Pass annual revenue was nearly $5 billion for the first time,” and confirmed that Microsoft has 500 million monthly active users across gaming platforms and devices.

Xbox hardware is still struggling, though. Xbox hardware revenue is down 22 percent this quarter, despite a busy period for Game Pass. Microsoft increased the prices of its Xbox consoles and controllers worldwide in May, with the Xbox Series X bumped by $100 to $599.99.

Overall gaming revenue at Microsoft is up 10 percent year-over-year, and has increased by $2 billion for the entire fiscal year. Xbox content and services revenue has also increased by 16 percent for the fiscal year, but Xbox hardware revenue has decreased by 25 percent in the fiscal year “driven by lower volume of consoles sold.”

Microsoft’s Xbox everywhere strategy — which I’ve been covering closely in my Notepad newsletter over the past year — will also include titles for the Nintendo Switch 2. It’s possible we might even see one during Nintendo’s Switch 2 partner Direct tomorrow.

Looking ahead, Microsoft is also heading to the Gamescom show next month, where it will let attendees play with its new Xbox Ally handheld devices. A playable demo of the long-awaited Hollow Knight: Silksong will also be available on the ROG Xbox Ally handhelds, as well “a couple more surprises at the show from our partners too.”

In Q1 fiscal 2026, Hood expects Xbox content and services revenue to decline in the mid single digits, alongside an overall gaming revenue decline in the mid to high single digits.

Office and cloud

Microsoft 365 commercial cloud revenue grew by 18 percent year-over-year, driven by growth in revenue per user and in part to Microsoft 365 Copilot licenses. The January price increase to Microsoft 365 consumer plans has also contributed to 20 percent of growth in Microsoft 365 Consumer cloud revenue. There are now 89 million Microsoft 365 consumer subscribers, up 8 percent year-over-year.

It’s Microsoft’s cloud growth that’s really the story this quarter once again. Azure and other cloud services grew by 39 percent, a big jump that was driven by growth across all workloads, according to Microsoft. Server products revenue declined 2 percent, a sign that Microsoft’s customers are increasingly moving to its cloud offerings.

Nadella noted on Microsoft’s earnings call that every Azure region is now AI-first, and all regions support liquid cooling.

LinkedIn revenue was also up 9 percent this quarter, with sessions also growing by 7 percent. Microsoft says it has also seen “record engagement” with LinkedIn this quarter. Even Microsoft’s search and news advertising revenue is up 21 percent, after it has overhauled Bing with AI-powered results and features.

Analogue’s 4K remake of the Nintendo 64 has been delayed again and again due to the US tariff situation. But at least you can get 8BitDo’s updated take on the N64 controller, which was announced alongside the Analogue 3D, while you wait. You can get one through Amazon in white or black for $39.99 and while it’s one of 8BitDo’s more budget-friendly controllers, its functionality is limited.

The Nintendo 64, which launched in 1996, had an unusual three-prong controller design, with a single analog joystick in the center of the gamepad above the middle grip. The 8BitDo 64 offers the same buttons as the N64’s controller in a more traditional layout, but while it’s easier to hold, the lack of a second joystick limits its compatibility with modern games, which generally expect two. The 8BitDo 64 is compatible with the Switch, Switch 2 (after updating the controller’s firmware), Windows, and Android devices and connects to consoles, PCs, and mobile devices using either a Bluetooth connection or a USB cable. 

It also features more durable Hall effect joysticks and shoulder buttons which should help prevent it from developing stick drift over time. But if you’re not planning to use it with the Analogue 3D (someday), the controller will potentially only be useful for playing classic N64 games through an emulator or the Nintendo Switch Online service but your GoldenEye 007 muscle memory may not perfectly transfer over to the updated button layout. Nintendo’s own wireless N64 controller is a more accurate reproduction, but you still need to be a Nintendo Switch Online subscriber to buy one.

Ziff Davis, the media conglomerate that owns outlets like CNET, ZDNet, PCMag, and Mashable is laying off 15 percent of its unionized workforce, for a total of 23 people.

The majority of layoffs are coming from CNET, where 19 people will lose their jobs — even as Ziff Davis goes on a shopping spree. The layoffs will hit CNET coverage areas like the finance, broadband, and sleep beats, as well as the outlet’s copy desk. A handful of staffers across Lifehacker, Mashable, and ZDNet will also be laid off.

“It’s very clear to us that these cuts aren’t about journalism,” Anna Iovine, unit chair of the Ziff Davis Creators Guild, says. “They’re based on money and greed.” Iovine noted particular concerns about cutting copy editors and fact checkers.

“Eliminating any coverage is really devastating. These journalists, some of them have decades of experience, and we’re losing [that],” Iovine says.

Ziff Davis has acquired five other companies this year alone, most notably daily news outlet TheSkimm and health outlet Well+Good. CNET was acquired by Ziff Davis in 2024 for $100 million. Ziff Davis did not immediately respond to a request for comment.

CNET has had a tumultuous last few years under its previous owner, Red Ventures. In 2023, the outlet was engulfed in controversy when readers discovered that it had been quietly publishing stories written by AI that were full of errors. In the ensuing weeks and months, CNET staff were laid off, editor-in-chief Connie Guglielmo stepped down to take a job overseeing AI content, and staff at the outlet unionized. After Red Ventures sold CNET, the union was rolled into the Ziff Davis Creators Guild, which is represented by the NewsGuild of New York.

“At a time when CNET is still building back its reputation after a damaging AI scandal under Red Ventures, Ziff’s decision to further undermine CNET’s human authority is disturbing,” a statement from the bargaining unit reads.

“Our members are so much more than dollars and cents, even as the capricious management at Ziff Davis tries to treat us as such,” the statement continues. “We won a strong collective bargaining agreement just over a year ago, and we will fight to enforce it so we can preserve our ability to continue producing high-quality work for our readers.”

Dropbox is discontinuing its password manager. The tool, Dropbox Passwords, will be discontinued on October 28th, and the company is recommending that you transfer your passwords to another app like 1Password ahead of that date.

The company will shut down Dropbox Passwords in phases. Starting August 28th, Dropbox Passwords will be view-only from both the mobile app and the browser extension, meaning you can’t add new information. At that time, Dropbox will also be deactivating autofill functionality. On September 11th, the mobile app will “stop working.” On October 28th, Dropbox Passwords will be fully shut down, meaning you can’t add or access information and everything that you had stored will be “permanently and securely deleted from our servers.”

Dropbox says it’s discontinuing Dropbox Passwords “as part of our efforts to focus on enhancing other features in our core product.” Dropbox launched Dropbox Passwords in 2020 after acquiring the password manager Valt in 2019.

Google will soon cast an even wider net with its AI age estimation technology. After announcing plans to find and restrict underage users on YouTube, the company now says it will start detecting whether Google users based in the US are under 18.

Age estimation is rolling out over the next few weeks and will only impact a “small set” of users to start, though Google plans on expanding it more widely. The company says it will use the information a user has searched for or the types of YouTube videos they watch to determine their age. Google first announced this initiative in February.

If Google believes that a user is under 18, it will apply the same restrictions it places on users who proactively identify as underage. In addition to enabling bedtime reminders on YouTube and limiting content recommendations, Google will also turn off Timeline in Maps, disable personalized advertising, and block users from accessing apps for adults on the Play Store.

In case Google incorrectly identifies someone as under 18, users can submit a photo of their government ID or a selfie to verify their age. The move comes amid a global push for age verification, with politicians in the US pressuring tech companies to make their platforms safer for kids, and the UK widely rolling out an age verification requirement affecting platforms like Bluesky, Reddit, Discord, and even Spotify.

If you’re a parent with kids in school or kids who are independently exploring their neighborhood for the first time, then there’s a good chance you’ve considered stashing a tracker somewhere on their person for added peace of mind. Skechers is making that a little easier with a new line of sneakers for kids that feature a hidden compartment in the sole, which is designed to securely hold an Apple AirTag so you can track your child without worrying about the tracker itself going missing.

There are currently several different styles and color options in the company’s new Find My Skechers line, with size options ranging from toddlers to eight-year-olds. Lifting the sneaker’s insole and a fabric web liner reveals a plastic compartment recessed into the cushioned midsole that holds and protects an AirTag without inhibiting its wireless communications.

You can already find a lot of AirTag accessories that let you attach an AirTag to an active child more securely than just slipping the tracker into their pockets, where it can potentially fall out while they’re playing. Skechers’ solution goes one step further with a lid on the compartment that’s screwed into place. That should help prevent kids from tampering with it and, given the AirTag’s compact size, make it safer for toddlers still experimenting with cramming things into their mouths.

As an added safety feature, the shoes don’t feature any branding that hint at there being an AirTag inside them. They look like every other sneaker that Skechers sells, making them one of the more covert ways to keep tabs on where your kids are.

• A gunman's shooting rampage at a Manhattan office tower left four people dead.
• The victims include a police officer, a real estate exec, a Cornell grad, and a security guard.
• Here are glimpses of the lives they lived before the shooting at 345 Park Avenue.

A police officer, a real estate power player, a top Cornell University grad, and a security guard.

These are victims who were fatally gunned down on Monday when a man with an assault rifle stormed into a Midtown Manhattan office tower at the workday's end and opened fire.

Public figures, employers, and educational institutions have reacted to the victims' deaths in statements and on social media. New York City Mayor Eric Adams said in an X post on Wednesday, "Our city mourns each of these innocent lives taken from their families and communities far too soon."

Here's how some who knew the men and women killed at 345 Park Avenue remember them:

Didarul Islam, 36

Islam, an NYPD officer with less than four years on the job, was off-duty at the time of the shooting, but was instead working a paid security detail at the building that's home to major financial institutions and the NFL's headquarters.

The married father of two, with a third child on the way, was one of the first people shot in the attack, city officials said.

Islam was an immigrant from Bangladesh and served in the department's 47th Precinct. He was hailed as a hero by city officials in the aftermath of the shooting.

"He put himself in harm's way. He made the ultimate sacrifice, shot in cold blood, wearing a uniform that stood for the promise that he made to this city. He died as he lived — a hero," NYPD Commissioner Jessica Tisch said.

Wesley LePatner, 43

LePatner, a mother of two, was a star executive in the real estate business for the private equity giant Blackstone, which was headquartered in the building.

She served as the $1.2 trillion firm's global head of Core+ real estate and the CEO of Blackstone Real Estate Income Trust, the company's real estate fund for individual investors.

The 11-year Blackstone veteran was known at the firm for championing women, developing mentorship opportunities at the company.

Blackstone, in a statement, said LePatner "was brilliant, passionate, warm, generous, and deeply respected within our firm and beyond. She embodied the best of Blackstone."

The LePatner family called her the "most loving wife, mother, daughter, sister, and relative, who enriched our lives in every way imaginable."

Julia Hyman, 27

Hyman, a Manhattan native, was a distinguished 2020 graduate of the Cornell Nolan School of Hotel Administration.

Late last year, Hyman began working as an associate for the property firm Rudin Management, which owns 345 Park Avenue and has its headquarters on the 33rd floor.

The dean of Cornell's hotel school, Kate Walsh, told The Cornell Daily Sun that Hyman was an "extraordinary student whose academic achievements and intellectual curiosity made a lasting impression."

"She exemplified the drive and excellence we strive to cultivate at the Nolan School," Walsh said.

Cornell President Michael Kotlikoff said in a statement that the university is "devastated for Julia's friends and family, including her parents and sister Ali," also a Cornell grad.

Rudin Management referred to Hyman as a "cherished" colleague in a statement and called the shooting a "senseless tragedy."

Aland Etienne, 46

Etienne, a father of two, was working as a security guard in the lobby of the Manhattan high-rise at the time of the shooting.

He was shot by the gunman while taking cover behind a security desk just as the shooter made his way to the elevator bank and before the attacker traveled up to the 33rd floor, the NYPD commissioner said.

Etienne's brother, Gathmand, said in a post on Facebook that his sibling was "more than just a brother."

"He was a father, a son, and a light in our lives," Gathmand said. "Our hearts are shattered."

In a statement, Manny Pastreich, the president of the 32BJ SEIU union, which Etienne belonged to, called Etienne "a dedicated security officer who took his job duties extremely seriously."

"Aland Etienne is a New York hero. We will remember him as such," Pastreich added.

Rudin Management called Etienne a "beloved" employee.

Key Points

• Adjusted earnings per share reached $1.48, surpassing analyst estimates by 6.5%.

• Revenue was $21.1 billion, up 2.8% from the prior year.

• Local U.S. Foodservice case volume remained negative, but management guided for moderate sales and earnings growth in fiscal 2026.

• These 10 stocks could mint the next wave of millionaires ›

Sysco (NYSE:SYY), a global leader in foodservice distribution, released its fourth-quarter results for fiscal 2025 on July 29, 2025. The headline results showed adjusted earnings per share (EPS) of $1.48, beating the Wall Street estimate of $1.39 (non-GAAP). Revenue totaled $21.1 billion, which was also above forecasts and up from the same quarter last year. Company leadership said overall results "exceeded expectations" thanks to improved trends in local foodservice and execution of internal initiatives. While the quarter was better than expected, certain key metrics, such as Local U.S. case volume continued to trend lower in recent quarters, signaling mixed industry conditions.

Metric	Q4 FY25(13 weeks ended Jun. 28, 2025)	Q4 Estimate	Q4 FY24(13 weeks ended Jun. 29, 2024)	Y/Y Change
EPS (Non-GAAP)	$1.48	$1.39	$1.39	6.5%
Revenue (GAAP)	$21.1 billion	$21.0 billion	$20.6 billion	2.4%
Adjusted Operating Income (Non-GAAP)	$1.1 billion	N/A	$1.1 billion	1.1%
Adjusted EBITDA (Non-GAAP)	$1.3 billion	N/A	$1.3 billion	1.8%
Net Earnings (GAAP)	$531 million	N/A	$612 million	(13.2%)

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.

Business Model Overview and Key Success Factors

Sysco is the largest foodservice distributor in North America, supplying restaurants, healthcare, educational facilities, and hospitality businesses. Its core business is the delivery and sale of fresh, frozen, and packaged food, along with equipment and supplies, to commercial customers.

Key areas for success include maintaining and growing share in a fragmented $360 billion U.S. foodservice market (calendar year 2023). With about 17% share for calendar year 2023, Sysco faces low barriers to entry and a mix of regional and national competitors. Supply chain efficiency, pricing competitiveness, regulatory compliance, and workforce management are critical. Investments in employee retention and technology, strong customer service, and international expansion strategies also play key roles in maintaining Sysco’s position in the industry.

Quarter Highlights: Revenue, Profitability, Segments, and Trends

The quarter brought solid revenue growth above GAAP estimates, with Total sales were up 2.8% compared to the prior year. U.S. Foodservice operations contributed $14.8 billion (GAAP) in sales, up 2.4%, but total case volume in this segment slipped 0.3%. The more telling local case volume fell 1.5%, a trend that continued from earlier periods as Foot traffic at restaurants remained weak in the prior quarter.

The International Foodservice segment posted stronger results, with Sales in the International Foodservice segment were up 3.6% to $3.9 billion. When adjusted for constant currency and excluding the Mexico joint venture, growth was even higher at 8.3%. Gross profit in the International Foodservice segment increased 7.6% to $847 million. International adjusted operating income increased 20.1% from the prior year quarter, reflecting both margin gains and local volume growth. SYGMA, Sysco's logistics-focused unit, saw GAAP sales rise 5.9% year over year, contributing to the overall top line but representing a smaller part of profits.

Gross profit company-wide (GAAP) improved by 3.9%, with the gross margin expanding to 18.9%. This was mainly due to better management of product cost inflation, which stood at 3.5% for the quarter, with meat and dairy most affected. Operating expenses, however, grew at a faster rate -- up 8.2% (GAAP) -- impacted by increased headcount and a $92 million goodwill impairment (GAAP) in the Guest Worldwide business segment. The company’s net earnings (GAAP) fell to $531 million, impacted by these higher costs and impairment charges, though Adjusted net income rose 3.3% to $716 million.

Sysco’s supply chain and pricing agility were central topics in the prior quarter. The company launched a price-matching and approval pilot to better respond to competitor pricing while protecting margins. In U.S. operations, Gross profit and gross margin (GAAP) ticked higher, but the expense base expanded as Sysco invested in both people and delivery capacity. Management continued on “self-help” initiatives, such as improving salesforce retention. Company leadership expects the benefits of these investments to show more strongly in the next fiscal year, stating, “Salesforce will be a tailwind, not a headwind.”

Customer churn remains elevated across the industry, largely due to price transparency and value-seeking by end customers. Sysco’s view is that high-value customer retention and improved service will be a critical focus for fiscal 2026. "Sysco To Go" is a cash-and-carry concept that targets price-sensitive customers by allowing them to pick up goods directly from centralized locations, thereby lowering delivery costs and offering greater convenience.

On the balance sheet, the company had $3.8 billion in liquidity at period end and net debt at 2.85 times adjusted EBITDA. Cash flow from operations (GAAP) was $2.5 billion, and free cash flow was $1.8 billion, both lower than the prior year. Significant funds went to expanding distribution centers both domestically and abroad. Sysco returned $2.3 billion to shareholders in buybacks and dividends, highlighting its ongoing capital allocation approach. The quarterly dividend increased 6% year over year, continuing more than five decades of consecutive annual raises.

Looking Ahead: Guidance, Risks, and Investor Considerations

Management issued guidance for FY2026 calling for GAAP sales between $84 and $85 billion, up approximately 3% to 5% from FY2025 and adjusted EPS in the range of $4.50 to $4.60 (up 1% to 3%) (non-GAAP). This guidance factors in a headwind from higher incentive compensation. Excluding that impact, the adjusted EPS growth would be about 5% to 7%. Planned share buybacks will remain steady at around $1 billion, and dividend growth is planned to match adjusted EPS growth expectations. The company expects ongoing pressure on U.S. local volume and continued investments in talent and infrastructure.

For investors and observers, upcoming quarters will hinge on Sysco’s ability to convert its investments in the salesforce into higher case volumes and recapture customer churn. Market share in the U.S. stands at about 17% for 2023, but the flat or declining local volume shows that competitive risks remain. With product cost inflation, regulatory compliance, and labor market challenges still present, results will depend on execution rather than industry growth alone. Continued margin management and cost discipline remain essential.

The quarterly dividend was raised 6% to $0.54 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Sysco. The Motley Fool has a disclosure policy.

Key Points

• Revenue (GAAP) slightly topped expectations at $420.8 million for Q2 2025, but adjusted EPS missed the estimate at $0.08.

• The Pintail Completions acquisition boosted reported revenue in Q2 2025, yet margins and profits declined year over year (GAAP, Q2 2025 vs Q2 2024).

• The quarterly dividend remained at $0.04 per share, while free cash flow (non-GAAP) fell from $56.7 million to $17.6 million for the first six months of 2025.

• These 10 stocks could mint the next wave of millionaires ›

RPC (NYSE:RES), a provider of oilfield services to energy producers in North America, reported results for Q2 2025 on July 24, 2025. The company’s headline news was the major acquisition of Pintail Completions, a wireline service provider, which contributed to a 15.6% year-over-year revenue rise. Reported revenue (GAAP) reached $420.8 million, just edging past consensus GAAP estimates of $420.5 million. However, diluted adjusted earnings per share (EPS) were $0.08, missing the $0.09 expectation and dropped from $0.15 in Q2 2024. As industry pressure and integration costs weighed on earnings. The quarter highlighted ongoing headwinds in core service lines such as pressure pumping, as well as operational shifts due to the new acquisition. Overall, the quarter reflected mixed performance, with some growth via acquisition but continued softness in underlying business segments.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS – Diluted (Non-GAAP)	$0.08	$0.09	$0.15	(46.7%)
Revenue	$420.8 million	$420.5 million	$364.2 million	15.6%
Adjusted Net Income	$17.5 million		$32.4 million	(46.0%)
Adjusted EBITDA	$65.6 million		$68.5 million	(4.2%)
Adjusted EBITDA Margin	15.6%		18.8%	(3.2 pp)

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Strategic Focus

RPC provides oilfield services such as pressure pumping, wireline, coiled tubing, downhole tools, cementing, and rental tool support. Its clients include exploration and production companies mainly in the United States. The company is known for its diversified service lineup, and after the Pintail acquisition, it increased its presence in the wireline segment, especially in the Permian Basin.

Key factors for success include the ability to respond to oil and gas price cycles, careful cost control, and investment in service technology and efficiency. In recent years, RPC has targeted growth in higher-margin and less cyclical service lines, reinforcing its client base among large, established energy producers. Strategic moves, such as the Pintail purchase, support this shift and aim to reduce overall volatility in results.

Quarterly Highlights: Performance, Segments, and Financials

Reported GAAP revenue of $420.8 million was up 15.6% from Q2 2024 and slightly above projections, mostly due to the addition of Pintail's $98.9 million contribution. Excluding this, adjusted revenues fell 3 % from the previous quarter, revealing an underlying decline in the legacy business. Adjusted diluted EPS, at $0.08, fell short of analyst expectations by approximately 8.8%.

Margins compressed as the cost of revenues outpaced sales growth, a trend tied to the integration of Pintail and ongoing weakness in the company's mainstay pressure pumping services. Adjusted EBITDA margin dropped to 15.6%, down from 18.8% in Q2 2024. Net income, excluding certain acquisition-related costs, was $17.5 million, marking a 46% year-over-year decrease compared to Q2 2024.

Segment results show a mixed picture. Technical Services revenue climbed 27% quarter over quarter, primarily from the Pintail wireline acquisition, and operating income for this segment increased 51% sequentially. However, pressure pumping revenue, RPC’s largest product line (which provides high-pressure pumping for hydraulic fracturing), was down 18% sequentially. Support Services, which includes rental tool and similar offerings, posted a 14% revenue rise, with operating income up 74%, driven by cost leverage and increased demand for rental equipment.

Industry forces were evident. The U.S. rig count, a common indicator of drilling and completion activity, dropped to 571 from 603 in Q2 2024. Oil prices averaged $64.74 per barrel, down 20.8% year over year. Management called the market “challenged” with lower commodity prices and strong competition. “Results were negatively impacted by our pressure pumping service line as we experienced weaker activity and pricing pressure ... The diversified service lines, customer base, and geographies across our company provided resiliency during the quarter. ... Competition continues to be intense, but we will remain disciplined focusing on full cycle returns."

The Pintail acquisition significantly increased RPC's blue-chip customer base and wireline revenue share. The deal was done without using the company’s credit facility, yet free cash flow (non-GAAP) year-to-date fell sharply to $17.6 million from $56.7 million in the prior year period. Goodwill and intangibles swelled on the balance sheet, reflecting Pintail’s integration. Year to date, the company allocated $17.5 million to dividends and only $2.9 million to share repurchases, primarily to settle share vesting taxes, year-to-date.

RPC's dividend policy continued, with a declared $0.04 per share for the period. An unusually high effective tax rate, a result of acquisition costs not deductible for tax purposes, affected net income calculation. The balance sheet remained strong with $162 million in cash and no outstanding borrowings under its revolving credit facility.

Looking Ahead: Guidance and Investor Considerations

RPC did not provide a specific financial outlook or quantitative guidance for the upcoming quarter or full-year period. Management comments remain cautious, reflecting continued industry softness and uncertainty in commodity prices. The company signaled a focus on efficiency, selective capital spending, and exploring new opportunities, but refrained from presenting a forecast.

Investors should monitor RPC's execution of the Pintail integration, trends in pressure pumping margins, and the company’s ability to manage through potential sustained periods of lower commodity prices. Significant one-time integration costs from the acquisition remain in future quarters. Oilfield services competition and customer activity shifts, particularly in the Permian region, will determine near-term results. The quarterly dividend was unchanged at $0.04 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Revenue reached $518.8 million, topping expectations by $17.97 million and matching analyst EPS estimates.

• Non-GAAP gross and operating margins declined year over year in Q2 FY2025.

• A $151.1 million goodwill impairment led to a significant GAAP net loss in Q2 FY2025.

• These 10 stocks could mint the next wave of millionaires ›

Ultra Clean (NASDAQ:UCTT), a supplier of engineering and manufacturing solutions for the semiconductor industry, released its second quarter 2025 earnings on July 28, 2025. The company’s GAAP revenue surpassed analyst expectations in Q2 FY2025, coming in at $518.8 million (GAAP) versus the $500.8 million estimate, while non-GAAP earnings per share (EPS) landed squarely in line with forecasts at $0.27. The overall quarter was marked by weak profitability, as the company recorded a large non-cash goodwill impairment that swung its GAAP net results deeply negative. Despite matching non-GAAP EPS expectations and slightly beating GAAP revenue forecasts, the results reflected ongoing challenges in demand and operational efficiency.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS (Non-GAAP)	$0.27	$0.27	$0.32	(15.6%)
Revenue (GAAP)	$518.8 million	$500.8 million	$516.1 million	0.5%
Gross Margin (Non-GAAP)	16.3%	N/A	17.7%	(1.4) pp
Operating Margin (Non-GAAP)	5.5%	N/A	6.9%	(1.4) pp
Net Income (Non-GAAP)	$12.1 million	N/A	$14.4 million	(16.0%)

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

Ultra Clean is a manufacturing and engineering partner for original equipment manufacturers (OEMs) in the semiconductor industry. The company is best known for building and servicing essential components and sub-systems used in semiconductor manufacturing, providing both products and services to many of the industry's biggest names.

The company’s main focuses currently include managing its customer concentration, deepening its strategic position in the semiconductor supply chain, and maintaining flexibility by operating manufacturing and service sites in multiple regions worldwide. Ultra Clean also continues to invest in innovation and technology development, aiming to stay aligned with evolving customer requirements while pursuing cost efficiency through vertical integration and strategic acquisitions. Key success factors for the company include maintaining strong relationships with several major customers, executing on supply chain localization initiatives, and controlling costs as the demand environment fluctuates.

Quarter Review: Revenue, Margins, and One-Time Items

During the quarter, Ultra Clean generated GAAP revenue of $518.8 million, nearly flat sequentially. Products, which include gas and liquid delivery subsystems essential for semiconductor manufacturing, contributed $454.9 million (GAAP), while the services business, focused on specialized cleaning and analytics for chipmaking tools, brought in $63.9 million (GAAP). Services revenue (GAAP) showed a modest sequential uptick but was also largely unchanged year over year.

Non-GAAP gross margin fell to 16.3%. The products segment recorded a gross margin of 14.4% (non-GAAP), while the services segment’s gross margin was 29.9% (non-GAAP), underscoring the higher-value nature of cleaning and analytics compared to core product manufacturing. The operating margin on a non-GAAP basis dropped to 5.5%.

The quarter was heavily affected by a $151.1 million goodwill impairment (GAAP), a non-cash charge (GAAP) reflecting a downward revision in the anticipated future value of prior acquisitions. This pushed the company’s GAAP operating margin to negative 27.3%, leading to a GAAP net loss of $162.0 million, or $3.58 per share. Without adjusting for this impairment, the company’s bottom line (GAAP net loss) would have shown much smaller losses.

Segment performance showed little change in either direction. While gross margins in the segment slipped, services provided stability, aided in part by expanded engineering support in areas such as lithography and sub-fab systems. Overall, the lack of revenue growth alongside shrinking margins highlighted the ongoing challenges the company faces in lifting its earnings profile absent a broader recovery in industry demand.

Balance sheet management was a priority. Cash and cash equivalents (GAAP) increased to $327.4 million, and spent $7.8 million on research and development (R&D) (GAAP), but did not announce any major new capital initiatives.

Key Business Drivers and Ongoing Risks

Ultra Clean’s most notable business risk, customer concentration, continues to loom large. No segment revenue was broken out by customer this quarter, but prior disclosures show that two customers, Applied Materials (NASDAQ:AMAT) and Lam Research (NASDAQ:LRCX), historically contribute more than half of total sales. Revenue with its largest customer was described as flat quarter-on-quarter, with its second largest customer’s revenue was slightly down. The company remains focused on solidifying these relationships while seeking incremental diversification where possible. Customer concentration risk means that any slowdown, loss, or renegotiation with a key account can have an outsize impact on the company’s results.

Strategic initiatives to localize supply chains and adapt to changing global trade policies continued this quarter. Ultra Clean’s multi-region manufacturing approach remains a hedge against policy shifts and tariffs, though no new factories or major reductions in footprint were announced this quarter.

On the technology front, the company increased its R&D spend to $7.8 million (GAAP). Investment continues in new products for critical subsystems and cleaning technologies. The company emphasized ongoing engineering collaborations, notably in lithography portfolio expansion and services aimed at supporting advanced chipmaking, but did not attribute revenue growth to these activities so far.

Cost-cutting and efficiency improvements remain a high priority, with actions under way to realign operating expenses with current demand levels. Headcount reductions, ongoing review of manufacturing footprint, and broader expense discipline were reiterated. The benefit of these steps is expected to be realized later in the year rather than providing an immediate improvement to margins or profits in the quarter. UCTT does not currently pay a dividend.

Outlook and What to Watch

Looking ahead, management guided to revenue in the range of $480 million to $530 million for Q3 2025 and a non-GAAP EPS between $0.14 and $0.34 per share. The midpoint of this outlook suggests continued revenue stagnation with profitability under pressure. The company expects to start seeing the benefits of its cost reduction program later in the year, but did not project a near-term uptick in demand or clear margin recovery.

Management commentary remained cautious, noting that the industry remains “highly dynamic.” The ongoing dependence on a handful of major customers, sector-wide slowdowns in semiconductor capital spending, and policy-related uncertainties such as tariffs all continue to shape the landscape. Should the broader semiconductor sector rebound, management believes Ultra Clean is positioned to capture renewed growth, but for now, underlying trends remain steady and unremarkable.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Earnings per limited partner unit (GAAP) and revenue (GAAP) for Q2 2025 missed analyst expectations, with EPS at $0.46 and revenue at $547.5 million.

• Coal sales volumes rose 6.8% to 8.4 million tons in Q2 2025, but the average coal sales price per ton declined 11.3% in Q2 2025.

• The quarterly distribution was reduced 14.3% to $0.60 per unit for Q2 2025, citing after-tax cash flow and increased financial flexibility.

• These 10 stocks could mint the next wave of millionaires ›

Alliance Resource Partners (NASDAQ:ARLP), a leading coal producer with growing oil and gas royalty assets, reported its second quarter results on July 28, 2025, covering the period that ended in June. The most significant news from the release was a decline in both earnings and revenue (GAAP) for Q2 2025 compared to market expectations and the same period last year. Earnings per limited partner unit (basic and diluted, GAAP) were $0.46, missing analyst expectations of $0.61 (GAAP) by 24.6%. Revenue (GAAP) finished at $547.5 million, short of the expected $578.7 million (GAAP) and down 7.7% from the prior year. Management attributed this underperformance to lower realized coal prices and a one-time $25.0 million impairment on a non-core investment. Still, the company highlighted strong contracting activity and improvement in shipment volumes as bright spots during an otherwise mixed quarter.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS (GAAP)	$0.46	$0.61	$0.77	(40.3%)
Revenue (GAAP)	$547.5 million	$578.7 million	$593.4 million	(7.7%)
Adjusted EBITDA	$161.9 million	N/A	$181.4 million	(10.7%)
Free Cash Flow	$79.0 million	N/A	$114.9 million	(31.2%)
Segment Adjusted EBITDA – Coal Operations	$141.9 million	N/A	$160.2 million	(11.4%)

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Recent Focus

Alliance Resource Partners is the second-largest coal producer in the eastern United States, operating multiple mines in both the Illinois Basin and Appalachia. The company also owns oil and gas mineral and royalty interests across top U.S. energy regions, including the Permian, Anadarko, and Williston Basins. Its core revenue comes from supplying coal to domestic electric utilities, especially through stable, long-term contracts.

Over the past year, Alliance has sharpened its focus on high-value, long-term sales commitments and has invested in technology and infrastructure to boost efficiency and broaden its future market reach. Key success factors include securing multi-year contracts, maintaining cost discipline, navigating regulatory shifts, and managing its customer concentration risk. These activities have been paired with careful expansion into oil and gas royalties and selected technology investments targeting infrastructure and grid support.

Quarter in Review: Financial and Operational Insights

The period saw a clear divergence between operational momentum and financial performance. While total coal sales volumes climbed 6.8% to 8.4 million tons, the average realized coal price fell 11.3% year over year. Management explained, “reduced coal sales prices, which declined 11.3% compared to Q2 2024, and lower transportation revenues, partially offset by increased coal sales volumes,” were the main drivers of revenue and earnings declines. Revenue (GAAP) fell short of analyst expectations, while net income was further impacted by a $25.0 million impairment on a preferred equity investment in a battery materials company.

Certain regions stood out. The Illinois Basin mines reported strong gains, with tons sold rising 15.2% year over year. This was helped by “Hamilton and River View mines achieving monthly shipping records in June.” Illinois Basin also saw operating cost improvements, as the Segment Adjusted EBITDA Expense per ton dropped 7.1% to $34.69. In contrast, Appalachia faced persistent cost and volume obstacles. Tons sold in Appalachia dropped 16.8% and the segment’s adjusted earnings shrank 35.1%, even as operations completed a key longwall move—a major underground mining process—at Tunnel Ridge, expected to improve output efficiency in future quarters.

Contracting activity was a highlight. The company added 17.4 million new committed and priced sales tons for delivery through 2029, bringing the year-to-date total to 35.1 million tons. This deep sales backlog increases forward visibility and supports steady production. Coal inventories dropped by 1.4 million tons to 1.2 million tons year over year.

Oil and gas royalty operations continued to help offset coal price weakness, though not completely. Volumes sold increased 7.7% year over year to 880,000 barrels of oil equivalent (BOE), but lower oil and gas prices resulted in a 4.4% year over year decline in adjusted segment earnings, emphasizing “the high-quality of our acreage position and organic growth potential embedded in our existing portfolio.” Digital asset investments, mainly bitcoin holdings, increased in value by $16.6 million, providing a modest offset against other non-core investment losses.

Strategic and Product Developments in the Quarter

During the period, Alliance expanded long-term sales commitments despite falling average prices. Management stated, “This brings our total of new commitments secured this year to 35.1 million tons to be delivered over the next four and a half years, underscoring the value our customers place on quality, reliability, and counterparty strength.” This backlog offers future revenue stability but does not immediately offset the quarter’s revenue miss.

On the product side, the Illinois Basin’s thermal coal -- coal primarily used for electricity generation -- led operational success in Q2 2025, with cost improvements resulting from “lower maintenance and materials and supplies costs at several mines in the region as well as reduced longwall move days.” Meanwhile, Appalachia’s performance continued to lag in Q1 2025, hindered by operational challenges that led to higher cost per ton, even after scheduled longwall moves. The company expects costs to decrease in the second half of 2025 as these mining panels transition to better geology.

Diversification efforts in oil and gas mineral and royalty interests showed mixed results. While volumes improved, realized prices fell, undercutting the benefit of volume gains. The segment kept Segment Adjusted EBITDA Expense (non-GAAP) flat year over year and reduced it sequentially, helping to buffer earnings. Capital spending for oil and gas remained limited by management’s strict investment standards and the challenging pricing environment for new mineral rights purchases.

Non-core strategic investments, such as those in battery materials and bitcoin mining, were a double-edged sword. The $25.0 million impairment on the battery materials investment was related to the conversion of preferred equity to common equity as part of a recapitalization during the quarter. Conversely, an increase in the fair value of digital assets, mainly bitcoin, partially offset other negatives, with most major projects at the company’s main mining operations now completed or nearing completion.

Looking Ahead: Guidance and Investor Considerations

The company updated its 2025 operational guidance with little change in overall coal sales targets but a notable shift in regional mix. Illinois Basin sales volumes were increased by 625,000 tons at the midpoint, while Appalachia’s outlook for FY2025 was reduced by 1.0 million tons due to ongoing operational challenges. Coal prices are expected to remain under pressure, with management forecasting stable margins largely thanks to cost control initiatives and the benefits of recent capital investments.

Oil and gas royalty volume guidance was increased about 5% at the midpoint for FY2025, but the company acknowledged ongoing risks from weaker commodity prices. Distribution coverage ratio (non-GAAP) declined to 1.00x in Q2 2025, down from 1.13x in Q2 2024, reflecting a thinner buffer between cash generation and dividends. The most immediate change for investors was the reduction in the quarterly distribution to $0.60 per unit (annualized $2.40) for Q2 2025, down from $0.70 previously. Management framed the dividend cut as a proactive move for financial flexibility, citing changes in bonus depreciation that increased the after-tax cash available to most unitholders, but the reduction is a departure from previous years’ payouts.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• GAAP earnings per share of $0.58 in Q2 2025 exceeded analyst expectations by $0.09.

• Revenue (GAAP) rose to $217.5 million, beating estimates.

• Non-performing assets rose to $28.6 million, while the company maintained strong capital ratios and continued share buybacks and stable dividends.

• These 10 stocks could mint the next wave of millionaires ›

First Hawaiian (NASDAQ:FHB), the largest full-service bank headquartered in Hawaii, released its Q2 2025 results on July 25, 2025. The company reported GAAP earnings per share of $0.58, outpacing analyst estimates of $0.49 (GAAP). Revenue (GAAP) reached $217.5 million, also topping expectations, with both GAAP EPS and revenue exceeding analyst estimates. The quarter was marked by notable improvements across key profitability measures, tight expense control, and a continued strong capital position. However, there are signs of rising non-performing assets, a trend the bank and analysts are watching closely. Overall, the results were better than expected and reflect continued operational execution from the bank.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
Diluted EPS	$0.58	$0.49	$0.48	20.8%
Net Interest Income	$163.6 million	N/A	$152.9 million	7.0%
Revenue	$217.5 million	$213.96 million	$204.6 million	6.3%
Efficiency Ratio	57.2%	N/A	59.2%	(2.0) pp
Return on Average Tangible Assets (Non-GAAP)	1.28%	N/A	1.08%	0.20 pp

Source: Analyst estimates for the quarter provided by FactSet.

Understanding First Hawaiian’s Core Business and Strategy

First Hawaiian operates as the leading full-service regional bank in Hawaii. Its offerings span traditional retail and commercial banking, wealth management, and payment services. With $23.8 billion in total assets, the bank serves both consumers and businesses mainly across Hawaii, Guam, and Saipan.

The bank’s success relies on its deep local presence and relationship-based approach, combined with a focus on maintaining financial strength and meeting regulatory capital requirements. Recent efforts have concentrated on defending its market position, growing deposits and loans, and managing costs while investing in staff and technology. As well as adaptation to local economic conditions, these remain vital to its ongoing performance.

Key Events and Performance Drivers in the Quarter

The quarter saw First Hawaiian earn more on its assets relative to the interest paid on deposits and borrowings. Revenue also benefited from a $3.5 million sequential increase in noninterest income, reflecting contributions from services such as wealth management and card fees.

Expense control was a standout, as the efficiency ratio improved to 57.23%, down from 59.22% a year ago. Return on average tangible stockholders’ equity (non-GAAP), a key profitability metric, climbed to 17.61%. A notable one-time event was a $5.1 million benefit to income taxes from a change in the California tax code, lowering the effective tax rate to 16.9%. Capital ratios stayed well above regulatory minimums, with common equity Tier 1 at 13.03 % and total capital at 14.28 %.

Across business segments, loan growth was modest but positive, with total loans and leases at $14.4 billion as of June 30, 2025, up 0.4% from the prior quarter. Deposit balances remained stable at $20.2 billion. While residential lending and construction loans saw slight declines, the bank maintained a diversified loan book, including real estate, construction, consumer, and lease financing.

Credit quality remains sound, but with early caution signals. Non-performing assets -- or loans displaying signs of credit distress -- rose to $28.6 million, up from $18.0 million a year ago. Allowance for credit losses, measures set aside for potential loan defaults, stood firm at 1.17% of loans as of June 30, 2025, higher than 1.11% at year-end 2024. Net charge-offs, or loans that the bank does not expect to collect, totaled $3.3 million. On the shareholder front, First Hawaiian repurchased 1.04 million shares for $25.0 million and First Hawaiian continued to pay a $0.26 per-share quarterly dividend, with a payout ratio of 44.83%.

Looking Ahead: Guidance and Factors to Watch

Management did not provide explicit forward guidance for the coming quarters or full fiscal year. The company did, however, express a cautiously positive view, noting stable loan demand, steady deposits, and manageable risks.

Investors should continue to monitor asset quality trends, especially as non-performing assets have increased, and pay attention to the bank’s performance in its core Hawaii, Guam, and Saipan markets. Capital and liquidity remain strong, but management noted ongoing uncertainty in the macroeconomic and regulatory environment. The quarterly dividend was held flat at $0.26 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Earnings per share (GAAP) rose 32.9% to $1.13 compared to Q2 2024, driven by higher net income and improved margins.

• Tax-equivalent net interest margin (non-GAAP) expanded by 0.44 percentage points to 3.59%.

• The quarterly dividend increased 7.4% to $0.29 per share compared to Q2 2024.

• These 10 stocks could mint the next wave of millionaires ›

First Capital (NASDAQ:FCAP), a community bank with a sizable presence in southern Indiana and Kentucky, reported its second quarter 2025 earnings on July 25, 2025. The release detailed robust growth in profitability, including a 32.9% year-over-year jump in GAAP earnings per share to $1.13 and a 16.2% increase in revenue to $12.4 million (GAAP) compared to Q2 2024. While there were no consensus analyst estimates available for direct comparison, the quarter showed advances in both asset yields and deposit management, despite noninterest expense growth and flat noninterest income. Overall, the quarter points to solid profitability, increased efficiency, and a reinforced capital base.

Metric	Q2 2025	Q2 2024	Y/Y Change
EPS (GAAP)	$1.13	$0.85	32.9%
Net Interest Margin (Non-GAAP)	3.59%	3.15%	0.44 pp
Return on Average Assets (annualized)	1.24%	0.99%	0.25 pp
Total Noninterest Expense	$7.5 million	$7.0 million	7.1%

Company Overview and Business Focus

First Capital is a regional community bank that operates 17 locations across Indiana and Kentucky. Its operations focus on offering personal, residential, and commercial banking services in the areas it serves. With a leading deposit market share in Harrison and Bullitt counties, the bank supports both consumer and business customers, emphasizing local relationships and steady growth.

In recent years, the company's strategy has shifted from traditional thrift banking to a broader commercial focus. This means larger exposure to business and commercial real estate lending, where yields can be higher but risk management becomes more important. The main success drivers for the bank are strong deposit funding, disciplined lending standards, and compliance with regulatory requirements to protect against sector and credit risks.

Quarter Highlights and Financial Review

The quarter saw notable profitability gains. Net income (GAAP) grew 35.7% to $3.8 million. The company's return on average assets (a measure of how efficiently company assets generate profits) rose to 1.24% for the three months ended June 30, 2025, and return on average equity (profitability relative to shareholder investment) increased to 12.6%. These improved returns reflect the company’s ability to both grow and manage its loan and deposit books.

This came from higher interest earned on loans and securities, as well as taming the costs of deposits and other funding. The company's net interest margin (non-GAAP, tax-equivalent basis) -- the difference between income earned from loans and investments versus interest paid on deposits and borrowings, as a percentage of average earning assets -- expanded to 3.59%, up from 3.15% for Q2 2024. This expansion signals the bank's success in both increasing asset yields and holding down liability costs. The average yield on earning assets rose to 4.82% for the three months ended June 30, 2025, while average funding costs actually declined slightly to 1.64%.

Noninterest income, which covers fees and other revenue streams outside of lending, stayed nearly flat, moving down by just $5,000 (GAAP). While headline results held steady, there were offsetting swings inside the line: securities-related losses were higher, and income from gains on loan sales and bank-owned life insurance both softened. The standout item, a $46,000 gain from a one-time policy redemption, highlights fluctuations that may not recur in future quarters.

Total noninterest expense (GAAP), which includes salaries, facilities, technology, and marketing, rose to $7.5 million. Key areas driving this increase in noninterest expenses included staff compensation and benefits (up $308,000), upgrades to call center and ATM infrastructure, advertising, and technology licensing. While these costs suggest a commitment to improving operations and digital access for customers, they also contributed to higher overall expenses for the quarter.

Credit quality remains a focus, as shown by a decrease in provisions for credit losses and a modest uptick in net charge-offs for the quarter ended June 30, 2025 compared to the same period in 2024. Nonperforming assets (consisting of nonaccrual loans, accruing loans 90 days or more past due, and foreclosed real estate) fell to $4.0 million as of June 30, 2025, down from $4.5 million at December 31, 2024. The allowance for credit losses rose to 1.48% of gross loans as of June 30, 2025, showing continued caution, especially given commercial real estate loans make up 28.9% of the portfolio as of December 31, 2024. The bank’s regulatory leverage ratio stands at 10.8% as of June 30, 2025, signaling strong capital adequacy and positioning the company well above minimum required thresholds.

From a funding perspective, total deposits climbed to $1.11 billion as of June 30, 2025, supporting the bank’s ability to fund loans and invest in operations. Cash and equivalents jumped to $134.6 million at June 30, 2025, up sharply from $105.9 million at December 31, 2024, further bolstering liquidity.

For dividend investors, the quarterly dividend was raised 7.4% to $0.29 per share compared to Q2 2024, continuing a trend of annual increases.

Outlook and What to Watch Ahead

Management did not provide quantitative forward guidance for the next quarter or for fiscal 2025. There was no specific forecast for revenue, earnings, or credit metrics, with leadership pointing instead to ongoing macroeconomic uncertainty shaping their approach to credit risk and provisioning levels.

Looking ahead, investors may want to monitor trends in loan growth, especially within commercial real estate lending. Further developments in noninterest income, which remains susceptible to market volatility and nonrecurring items, are also important. The company's strong capital position and deposit base provide reassurance, but sector risks from commercial lending and credit costs will continue to be critical topics in future quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Net interest income (GAAP) rose 14.4% to $12.8 million for Q2 2025, supporting stable earnings and an improved net interest margin (non-GAAP).

• Noninterest income for the three months ended June 30, 2025 fell 22.5% compared to the same period in 2024, mainly due to lower wealth management and account fee revenue.

• Nonperforming assets increased to 0.48% of total assets.

• These 10 stocks could mint the next wave of millionaires ›

Virginia National Bankshares (NASDAQ:VABK), a regional community bank serving Virginia, reported its earnings for the second quarter of fiscal 2025 on July 24, 2025. The most important news from the release was that net interest income (GAAP) increased significantly, while asset quality metrics and fee-based revenues were mixed. Net income (GAAP) was $4.2 million ($0.78 per diluted share), essentially flat compared to the same period last year. There were no analyst estimates for direct comparison. Overall, the quarter showed improvement in core banking activities, with continued strength in loan growth and margin, but trends in fee income and credit quality require monitoring.

Metric	Q2 2025	Q2 2024	Y/Y Change
EPS, Diluted (GAAP)	$0.78	$0.77	1.3%
Net Income (GAAP)	$4.2 million	$4.2 million	0.0%
Net Interest Income (GAAP)	$12.8 million	$11.2 million	14.4%
Return on Average Assets	1.05%	1.05%	0.0 pp
Efficiency Ratio (Non-GAAP)	61.2%	62.7%	(1.5) pp
Net Interest Margin (Non-GAAP)	3.40%	3.04%	0.36 pp

Business Overview and Key Focus Areas

Virginia National Bankshares operates as a community banking provider focused on deposit, lending, and wealth management services for individuals and businesses in core markets such as Charlottesville, Winchester, Manassas, and Richmond. Its main business lines include traditional banking as well as trust and estate management services, with an emphasis on local decision-making and a personalized approach to client service.

Recent strategic priorities have addressed compliance with regulatory requirements, operational efficiency, and expanding loan growth in local markets. Key success factors for Virginia National Bankshares include maintaining strong capital ratios, delivering competitive deposit and lending products, and investing in staff development. Its approach aims to foster client retention and build on strong community relationships, while also monitoring trends in credit quality and adapting to the competitive Virginia financial landscape.

Quarterly Review: Financial and Operating Performance

Net interest income (GAAP) rose 14.4%, driven by 7.2% loan book growth and improved cost management on deposits and borrowings. The net interest margin, which measures how much the bank earns from lending versus its funding costs, improved to 3.40% for the three months ended June 30, 2025. This margin expansion reflected lower costs on interest-bearing deposits, which offset a slight decline in loan yields.

Despite the growth in lending, noninterest income (GAAP) declined by 22.5% compared to Q2 2024. Fee revenue from wealth management, deposit accounts, and debit cards all showed decreases; for example, wealth management fee income dropped from $240,000 in Q2 2024 to $206,000 in Q2 2025.

Operating expenses, classified as noninterest expense, rose 6.9% compared to Q2 2024, largely due to higher franchise taxes and costs tied to special projects like data processing and legal fees. However, revenue grew more quickly than expenses, reflected in the efficiency ratio improving from 62.7% for the three months ended June 30, 2024 to 61.2% for the three months ended June 30, 2025.

Asset quality metrics showed that nonperforming assets reached $7.8 million or 0.48% of total assets, up from 0.25 % a year earlier. The bulk of the increase was in loans 90 days past due but still accruing, a category dominated by government-guaranteed balances with no immediate loss risk. Net charge-offs, which represent loan losses not expected to be recovered, remained low at $71,000, keeping the charge-off ratio stable at 0.02%.

Dividend, Capital, and Liquidity

Virginia National Bankshares declared a quarterly dividend of $0.36 per share. The dividend yield annualizes to roughly 3.78 %. About 54% of earnings were retained.

Capital ratios continued to exceed regulatory minimums, with the Tier 1 leverage ratio at 12.12% and total risk-based capital at 19.46%. Deposit balances were up a modest 1.1 % from the second quarter last year, but loan growth outpaced deposit gains. The company’s borrowings increased to $61.0 million from $30.0 million as of June 30, 2025, raising the loan-to-deposit ratio to 89.4%.

Product Lines and Operations

The bank’s main product groups are traditional banking services (deposits and loans), as well as trust services. Deposit products include personal and business checking, money market accounts, and certificates of deposit. Lending focuses on real estate, commercial, and consumer loans.

Within wealth management -- which encompasses investment management and financial advice for clients -- wealth management fee income fell to $206,000. Deposit account fees and debit card fees, driven by customer usage of bank accounts and payment services, also declined.

On the funding side, the bank emphasized its lack of brokered deposits (which are large, non-retail deposits) and maintained $172.0 million in unused borrowing capacity for liquidity purposes as of June 30, 2025.

The company also invested in maintaining and developing operational efficiency, emphasizing “exceptional service to depositors and borrowers” Chief executive Glenn W. Rust stated, “Our continuing focus on operating efficiencies and asset quality enables our lending and retail teams to provide exceptional service to depositors and borrowers alike.”

Looking Forward

Management did not offer explicit earnings or revenue guidance for the upcoming quarter or full year. The company did note that net income (GAAP) for the first half of 2025 was 12% ahead of the same period in 2024.

For the quarters ahead, investors and observers should watch trends in noninterest income, asset quality, and funding costs. The rise in nonperforming assets -- even with government guarantees -- and the increasing use of wholesale funding sources are risk factors to monitor.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• GAAP earnings per share of $0.37 beat expectations by $0.03 in Q2 2025, Earnings per share rose 76.2% from Q2 2024 in Q2 2025.

• Revenue (GAAP) missed estimates in Q2 2025, coming in at $32.4 million versus $37.5 million expected.

• Nonperforming loan exposure remains high but key asset quality metrics improved quarter over quarter.

• These 10 stocks could mint the next wave of millionaires ›

Carter Bankshares (NASDAQ:CARE), a regional bank focused on commercial and consumer lending across Virginia and the Carolinas, released its earnings for Q2 2025 on July 24, 2025. The most notable news was a strong beat on reported earnings per share (GAAP), which landed at $0.37 in Q2 2025 -- outpacing the consensus forecast of $0.34 (GAAP). The quarter showed improved net interest margin and credit metrics, though revenue headwinds and efficiency challenges remain.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS (GAAP)	$0.37	$0.34	$0.21	76.2%
Net Interest Margin (Non-GAAP)	2.82%	N/A	2.56%	0.26 pp
Pre-tax Pre-Provision Income (Non-GAAP)	$8.0 million	N/A	$6.2 million	29.0%
Efficiency Ratio (GAAP)	78.63%	N/A	81.62%	(2.99) pp

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Overview of Carter Bankshares’s Business

The company operates as a regional bank serving communities in Virginia and North Carolina. Its core business centers on providing commercial real estate loans, residential mortgages, and deposit products through a branch network. The bank has focused on differentiating itself through brand enhancement and personalized relationships, hoping to stand out from larger rivals and non-bank lenders.

In recent years, the company has sharpened its strategy around expanding market presence, attracting new commercial loan clients, and returning capital to shareholders via stock buybacks. Critical success factors include maintaining strong credit quality, adhering to regulatory standards, building effective teams, and ensuring its capital position can fund both organic growth and branch acquisitions. Competitiveness, human capital, and regulatory compliance remain central to its operating model.

Quarter Highlights and Financial Developments

The quarter was mixed but showed improvement versus last year. EPS (GAAP) of $0.37 surpassed analyst expectations, largely due to a lower provision for credit losses and stronger net interest margins in Q2 2025. However, an outcome shaped by the lingering effects of nonperforming loans -- especially the ongoing exposure to the Justice Entities relationship. This loan relationship, which sits in the "Other" category of Carter’s portfolio, represented $235.5 million in principal as of Q2 2025. and accounted for about 94.0% of nonperforming loans (NPLs) at June 30, 2025.

Carter’s asset quality improved during the period. Nonperforming loans dropped to $250.6 million, down from $300.2 million in Q2 2024. The largest problematic loan, tied to the Justice Entities, received $66.4 million in curtailment payments from June 30, 2023 to June 30, 2025, shrinking the exposure and pushing NPLs down as a percentage of total loans from 8.46% in Q2 2024 to 6.69% in Q2 2025. The allowance for credit losses stood at $71.0 million, equal to 1.90% of total loans as of Q2 2025. The provision for credit losses (GAAP) actually flipped to a net recovery in Q2 2025, supporting profits.

Commercial real estate loans -- Carter’s largest business -- rose to $2.00 billion, up from $1.80 billion in Q2 2024, reflecting ongoing momentum in that segment. Residential mortgages increased by $30.3 million from June 30, 2024 to June 30, 2025. Deposit growth appeared robust on the surface, rising to $4.22 billion from $3.88 billion (GAAP) in Q2 2025. However, this growth resulted from a completed branch acquisition in North Carolina, adding $55.9 million in new deposits in Q2 2025. Excluding this acquisition, core deposits actually declined as several large commercial clients repositioned funds in Q2 2025. This contributed to an increased reliance on wholesale funding, with Federal Home Loan Bank borrowings rising to $113.5 million at Q2 2025.

Net interest margin -- a key profitability measure that compares interest income earned to interest paid on deposits -- expanded to 2.82% (non-GAAP, FTE basis) in Q2 2025. This boost came in part from declines in funding costs following rate cuts by the Federal Reserve in late 2024. Despite higher net interest income, Carter continued to see substantial negative impact from the nonaccrual status of the Justice Entities loans, which reduced interest income by $6.7 million in Q2 2025.

Noninterest income (GAAP) fell 11.3% from last year to $4.9 million in Q2 2025, with a sharp drop quarter over quarter due to the absence of a one-time $1.9 million death benefit gain recorded in Q1 2025. Other declines stemmed from lower insurance commissions and softer other fee revenue in Q2 2025. Operating costs rose to $29.3 million in Q2 2025, with specific expense drivers including higher salary costs from the new branches and increased legal fees. Although the efficiency ratio (GAAP) improved to 78.63% in Q2 2025 from 81.62% in Q2 2024.

On the strategic front, Carter completed the purchase of two branch offices from First Reliance Bank, bolstering its North Carolina presence and adding 10 new associates. It also aggressively returned capital through stock repurchases: 547,332 shares bought as of June 30, 2025 at an average price of $16.70, at a total cost of $9.1 million out of a $20 million approved program. Capital ratios slipped slightly due to buybacks but remain "well-capitalized" by regulatory standards as of Q2 2025.

Looking Ahead

Management signaled confidence for the rest of FY2025, pointing to a healthy loan pipeline—especially in construction lending, which is expected to begin contributing more meaningfully over the next 12 to 18 months. The company remains sensitive to Federal Reserve rate moves, stressing that its short-term certificate of deposit portfolio should benefit from additional rate cuts, as noted by management in Q2 2025. No precise quantitative guidance was offered for revenue, EPS, or loan growth. The focus remains on deposit retention, further credit resolution, and capturing the benefits of brand investments and new branches.

Key issues for investors in coming quarters include the eventual outcome of the Justice Entities loan, trends in organic deposit growth excluding acquisitions, and Carter's ability to control expenses and improve efficiency closer to industry peer levels. Monitoring capital deployment -- especially the pace of share repurchases against ongoing credit and funding risks -- will also remain central to understanding the bank's risk profile and growth prospects.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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