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ZTO Reports Third Quarter 2024 Unaudited Financial Results

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Robust Profitability amidst Consumption Mix-shift
Adjusted Net Income Grew 2.0% to RMB2.4 Billion
Parcel Volume Increased 15.9% to 8.7 Billion

SHANGHAI, Nov. 19, 2024 /PRNewswire/ — ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057), a leading and fast-growing express delivery company in China (“ZTO” or the “Company”), today announced its unaudited financial results for the third quarter ended September 30, 2024[1]. The Company grew parcel volume by 15.9% year over year while maintaining high quality of service and customer satisfaction. Adjusted net income increased 2.0%[2] to reach RMB2,387.3 million. Cash generated from operating activities was RMB3,112.0 million.

Third Quarter 2024 Financial Highlights

Revenues were RMB10,675.0 million (US$1,521.2 million), an increase of 17.6% from RMB9,075.9 million in the same period of 2023.Gross profit was RMB3,334.8 million (US$475.2 million), an increase of 23.2% from RMB2,706.4 million in the same period of 2023.Net income was RMB2,379.0 million (US$339.0 million), an increase of 1.3% from RMB2,349.6 million in the same period of 2023.Adjusted EBITDA[3] was RMB3,739.5 million (US$532.9 million), an increase of 8.7% from RMB3,438.6 million in the same period of 2023.Adjusted net income was RMB2,387.3 million (US$340.2 million), an increase of 2.0% from RMB2,340.7 million in the same period of 2023.Basic and diluted net earnings per American depositary share (“ADS”[4]) were RMB2.98 (US$0.42) and RMB2.90 (US$0.41), an increase of 2.4% and 2.1% from RMB2.91 and RMB2.84 in the same period of 2023, respectively.Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders[5] were RMB2.99 (US$0.43) and RMB2.91 (US$0.41), an increase of 3.5% and 2.8% from RMB2.89 and RMB2.83 in the same period of 2023, respectively.Net cash provided by operating activities was RMB3,112.0 million (US$443.5 million), compared with RMB2,938.1 million in the same period of 2023.

Operational Highlights for Third Quarter 2024

Parcel volume was 8,723 million, an increase of 15.9% from 7,523 million in the same period of 2023.Number of pickup/delivery outlets was over 31,000 as of September 30, 2024.Number of direct network partners was over 6,000 as of September 30, 2024.Number of self-owned line-haul vehicles was over 10,000 as of September 30, 2024.Out of the over 10,000 self-owned trucks, over 9,700 were high capacity 15 to 17-meter-long models as of September 30, 2024, compared to over 9,300 as of September 30, 2023.Number of line-haul routes between sorting hubs was over 3,900 as of September 30, 2024, compared to over 3,800 as of September 30, 2023.Number of sorting hubs was 95 as of September 30, 2024, among which 91 are operated by the Company and 4 by the Company’s network partners.

(1)   An investor relations presentation accompanies this earnings release and can be found at http://zto.investorroom.com.

(2)   Adjusted net income is a non-GAAP financial measure, which is defined as net income before share-based compensation expense and non-recurring items such as impairment of investments in equity investees, gain/(loss) on disposal of equity investment and subsidiary and corresponding tax impact which management aims to better represent the underlying business operations.

(3)   Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income before depreciation, amortization, interest expenses and income tax expenses, and further adjusted to exclude the shared-based compensation expense and non-recurring items such as impairment of investments in equity investees, gain/(loss) on disposal of equity investment and subsidiary which management aims to better represent the underlying business operations.

(4)   One ADS represents one Class A ordinary share.

(5)   Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders is a non-GAAP financial measure. It is defined as adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted American depositary shares, respectively.

Mr. Meisong Lai, Founder, Chairman and Chief Executive Officer of ZTO, commented, “During the third quarter, ZTO maintained high quality of services and customer satisfaction, and achieved 8.72 billion of parcel volume and 2.39 billion of adjusted net income. Our retail volume increased by over 40% year over year for the quarter as we systematically improved cooperations with various ecommerce platforms for reverse logistics, remote area delivery and premium services. Our strategy to improve volume mix has generated very positive contributions to both revenue and operating margin.”

Mr. Lai added, “For nearly a decade since ZTO took the number one position in the industry, volume leadership has always been one of our key priorities. The recent stimulus policies by the central government sent a very strong signal for its commitment to support China’s economic recovery and long-term growth. In the meantime, the downgrade of consumer spending may still be present for a while before an economic turnaround takes place. Volume leadership is the cornerstone of our business. We are setting plans in motion to maintain high quality of services and customer satisfaction, to regain market share and widen our leadership in parcel volume while achieving a reasonable level of earnings.”

Ms. Huiping Yan, Chief Financial Officer of ZTO, commented, “ZTO’s core express ASP increased 1.8% for this quarter thanks to continued improvements in key accounts’ mix offsetting negative impact from lower per parcel weight and volume incentive increases. Combined unit sorting and transportation costs decreased 8.4%, or 6 cents benefiting from sustained productivity gain initiatives. SG&A as a percentage of revenue remained stable at approximately 5%. Cash flow from operating activities was 3.1 billion, and capital spending was 1.8 billion.”

Ms. Yan added, “The express delivery industry experienced high growth contrary to the soft macroeconomic conditions. We have guided down our annual volume targets based on the visibility we have for the year. The increasing proportion of low-value ecommerce packages presented new challenges to the execution of our overall strategy to achieve continuous and simultaneous growth or improvements in quality of services, volume market share and profit. We are making modifications to rebalance our resource allocation as well as key network pricing approaches to regain volume growth momentum and expand our existing market share lead. Our quality of earnings will remain intact, and we are confident in maintaining our leadership in profitability in the industry.”

Third Quarter 2024 Unaudited Financial Results 

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2024

2023

2024

RMB

%

RMB

US$

%

RMB

%

RMB

US$

%

(in thousands, except percentages)

Express delivery services

8,341,620

91.9

9,812,807

1,398,314

91.9

25,728,807

92.6

28,928,902

4,122,336

92.2

Freight forwarding services

238,565

2.6

240,491

34,270

2.3

670,162

2.4

676,480

96,398

2.2

Sale of accessories

460,870

5.1

588,233

83,823

5.5

1,297,486

4.7

1,653,717

235,653

5.3

Others

34,863

0.4

33,517

4,775

0.3

103,026

0.3

101,919

14,522

0.3

Total revenues

9,075,918

100.0

10,675,048

1,521,182

100.0

27,799,481

100.0

31,361,018

4,468,909

100.0

 

Total Revenues were RMB10,675.0 million (US$1,521.2 million), an increase of 17.6% from RMB9,075.9 million in the same period of 2023. Revenue from the core express delivery business increased by 18.1% compared to the same period of 2023 driven by a 15.9% growth in parcel volume and a 1.8% increase in unit price. KA revenue including delivery fees from direct sales organizations, established to serve core express KA customers, increased by 122.1% as the proportion of higher-valued parcels such as returned parcels from e-commerce platforms continued to increase. Revenue from freight forwarding services increased by 0.8% compared to the same period of 2023. Revenue from sales of accessories, largely consisted of sales of thermal paper used for digital waybills’ printing, increased by 27.6%. Other revenues were derived mainly from financing services.

 

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2024

2023

2024

RMB

% of

RMB

US$

% of

RMB

% of

RMB

US$

% of

revenues

revenues

revenues

revenues

(in thousands, except percentages)

Line-haul transportation cost

3,245,767

35.8

3,398,007

484,212

31.8

9,627,419

34.6

10,052,623

1,432,487

32.1

Sorting hub operating cost

2,048,438

22.6

2,224,206

316,947

20.8

5,996,475

21.6

6,620,077

943,353

21.1

Freight forwarding cost

221,742

2.4

226,111

32,221

2.1

626,986

2.3

631,217

89,948

2.0

Cost of accessories sold

117,036

1.3

161,648

23,035

1.5

351,164

1.3

454,788

64,807

1.5

Other costs

736,491

8.1

1,330,265

189,560

12.6

2,663,160

9.5

3,644,940

519,400

11.5

Total cost of revenues

6,369,474

70.2

7,340,237

1,045,975

68.8

19,265,204

69.3

21,403,645

3,049,995

68.2

 

Total cost of revenues was RMB7,340.2 million (US$1,046.0 million), an increase of 15.2% from RMB6,369.5 million in the same period last year.

Line-haul transportation cost was RMB3,398.0 million (US$484.2 million), an increase of 4.7% from RMB3,245.8 million in the same period last year. The unit transportation cost decreased 9.7% or 4 cents mainly attributable to better economies of scale and improved load rate through more effective route planning.

Sorting hub operating cost was RMB2,224.2 million (US$316.9 million), an increase of 8.6% from RMB2,048.4 million in the same period last year. The increase primarily consisted of (i) RMB108.0 million (US$15.4 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvements and (ii) RMB74.9 million (US$10.7 million) increase in depreciation and amortization costs associated with expansion of automation equipment and facility upgrades to further improve the transit efficiency. With standardization in operating procedures, effective performance evaluation system, sorting hub operating cost per unit decreased 6.4% or 2 cents. As of September 30, 2024, there were 535 sets of automated sorting equipment in service, compared to 482 sets as of September 30, 2023.

Cost of accessories sold was RMB161.6 million (US$23.0 million), increased 38.1% compared with RMB117.0 million in the same period last year.

Other costs were RMB1,330.3 million (US$189.6 million), increased 80.6% from RMB736.5 million in the same period last year, included costs for serving higher-valued enterprise customers which increased by RMB546.8 million (US$77.9 million).

Gross Profit was RMB3,334.8 million (US$475.2 million), increased by 23.2% from RMB2,706.4 million in the same period last year. Gross margin rate improved to 31.2% from 29.8% in the same period last year.

Total Operating Expenses were RMB493.0 million (US$70.3 million), compared to RMB282.8 million in the same period last year.

Selling, general and administrative expenses were RMB544.6 million (US$77.6 million), increased by 25.6% from RMB433.7 million in the same period last year, mainly due to (i) RMB74.1 million (US$10.6 million) change in credit loss provision for financing services, and (ii) disposal losses of RMB41.1 million (US$5.9 million) on fixed assets.

Other operating income, net was RMB51.6 million (US$7.3 million), compared to RMB150.9 million in the same period last year. Other operating income mainly consisted of (i) RMB43.4 million (US$6.2 million) of rental income, and (ii) RMB8.2 million (US$1.2 million) of government subsidies and tax rebates.

Income from operations was RMB2,841.8 million (US$405.0 million), an increase of 17.3% from RMB2,423.6 million for the same period last year. Operating margin rate decreased to 26.6% from 26.7% in the same period last year.

Interest income was RMB238.5 million (US$34.0 million), compared with RMB246.4 million in the same period last year.

Interest expenses was RMB66.4 million (US$9.5 million), compared with RMB83.8 million in the same period last year.

Loss from fair value changes of financial instruments was RMB62.7 million (US$8.9 million), compared with a gain of RMB8.6 million in the same period last year. The large swing in USD and RMB exchange rate near quarter end caused a RMB94.9 million (US$13.5 million) unrealized foreign exchange loss related to cash management products.

Income tax expenses were RMB555.0 million (US$79.1 million) compared to RMB271.4 million in the same period last year. In the third quarter of 2023, Shanghai Zhongtongji Network Technology Co., Ltd.(上海中通吉網絡技術有限公司), a wholly-owned subsidiary of the Company, received an income tax refund of RMB207.1 million for being a “Key Software Enterprise” for the tax year 2022.

Net income was RMB2,379.0 million (US$339.0 million), which increased by 1.3% from RMB2,349.6 million in the same period last year.

Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB2.98 (US$0.42) and RMB2.90 (US$0.41), compared to basic and diluted earnings per ADS of RMB2.91 and RMB2.84 in the same period last year, respectively.

Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB2.99 (US$0.43) and RMB2.91 (US$0.41), compared with RMB2.89 and RMB2.83 in the same period last year, respectively.

Adjusted net income was RMB2,387.3 million (US$340.2 million), compared with RMB2,340.7 million during the same period last year.

EBITDA[1] was RMB3,731.3 million (US$531.7 million), compared with RMB3,449.5 million in the same period last year.

Adjusted EBITDA was RMB3,729.5 million (US$532.8million), compared to RMB3,438.6 million in the same period last year.

Net cash provided by operating activities was RMB3,112.0 million (US$443.5 million), compared with RMB2,938.1 million in the same period last year.

(1)   EBITDA is a non-GAAP financial measure, which is defined as net income before depreciation, amortization, interest expenses and income tax expenses which management aims to better represent the underlying business operations.

Business Outlook

Based on current market and operating conditions, the Company revises its previously stated annual guidance. Parcel volume for 2024 is expected to be in the range of 33.7 billion to 33.9 billion, representing a 11.6% to 12.3% increase year over year. Such estimates represent management’s current and preliminary view, which are subject to change.

Exchange Rate

This announcement contains translation of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars were made at the exchange rate of RMB7.0176 to US$1.00, the noon buying rate on September 30, 2024 as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve Systems.

Use of Non-GAAP Financial Measures

The Company uses EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders, and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders, each a non-GAAP financial measure, in evaluating ZTO’s operating results and for financial and operational decision-making purposes.

Reconciliations of the Company’s non-GAAP financial measures to its U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

The Company believes that such Non-GAAP measures help identify underlying trends in ZTO’s business that could otherwise be distorted by the effect of the related expenses and gains that the Company includes in income from operations and net income. The Company believes that EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by ZTO’s management in its financial and operational decision-making.

EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders should not be considered in isolation or construed as an alternative to net income or any other measure of performance or as an indicator of the Company’s operating performance. Investors are encouraged to compare the historical non-GAAP financial measures to the most directly comparable GAAP measures. EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to ZTO’s data. ZTO encourages investors and others to review the Company’s financial information in its entirety and not rely on a single financial measure.

Conference Call Information

ZTO’s management team will host an earnings conference call at 7:30 PM U.S. Eastern Time on Tuesday, November 19, 2024 (8:30 AM Beijing Time on November 20, 2024).

Dial-in details for the earnings conference call are as follows:

United States:

1-888-317-6003

Hong Kong:

800-963-976

Mainland China:

4001-206-115

Singapore:

800-120-5863

International:

1-412-317-6061

Passcode:

0501133

Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call.

A replay of the conference call may be accessed by phone at the following numbers until November 26, 2024:

United States:

1-877-344-7529

International:

1-412-317-0088

Passcode:

1609584

Additionally, a live and archived webcast of the conference call will be available at http://zto.investorroom.com

About ZTO Express (Cayman) Inc.

ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK:2057) (“ZTO” or the “Company”) is a leading and fast-growing express delivery company in China. ZTO provides express delivery service as well as other value-added logistics services through its extensive and reliable nationwide network coverage in China.

ZTO operates a highly scalable network partner model, which the Company believes is best suited to support the significant growth of e-commerce in China. The Company leverages its network partners to provide pickup and last-mile delivery services, while controlling the mission-critical line-haul transportation and sorting network within the express delivery service value chain.

For more information, please visit http://zto.investorroom.com

Safe Harbor Statement

This announcement contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and other similar expressions. Among other things, the business outlook and quotations from management in this announcement contain forward-looking statements. ZTO may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “HKEX”), in its interim and annual reports to shareholders, in announcements, circulars or other publications made on the website of the HKEX, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including but not limited to statements about ZTO’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: risks relating to the development of the e-commerce and express delivery industries in China; its significant reliance on certain third-party e-commerce platforms; risks associated with its network partners and their employees and personnel; intense competition which could adversely affect the Company’s results of operations and market share; any service disruption of the Company’s sorting hubs or the outlets operated by its network partners or its technology system; ZTO’s ability to build its brand and withstand negative publicity, or other favorable government policies. Further information regarding these and other risks is included in ZTO’s filings with the SEC and the HKEX. All information provided in this announcement is as of the date of this announcement, and ZTO does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

UNAUDITED CONSOLIDATED FINANCIAL DATA

Summary of Unaudited Consolidated Comprehensive Income Data:

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2024

2023

2024

RMB

RMB

US$

RMB

RMB

US$

(in thousands, except for share and per share data)

Revenues

9,075,918

10,675,048

1,521,182

27,799,481

31,361,018

4,468,909

Cost of revenues

(6,369,474)

(7,340,237)

(1,045,975)

(19,265,204)

(21,403,645)

(3,049,995)

Gross profit

2,706,444

3,334,811

475,207

8,534,277

9,957,373

1,418,914

Operating (expenses)/income:

Selling, general and administrative

(433,682)

(544,573)

(77,601)

(1,724,896)

(2,034,192)

(289,870)

Other operating income, net

150,850

51,552

7,346

443,448

400,507

57,072

Total operating expenses

(282,832)

(493,021)

(70,255)

(1,281,448)

(1,633,685)

(232,798)

Income from operations

2,423,612

2,841,790

404,952

7,252,829

8,323,688

1,186,116

Other income/(expenses):

Interest income

246,362

238,510

33,987

505,382

771,608

109,953

Interest expense

(83,801)

(66,364)

(9,457)

(227,729)

(266,135)

(37,924)

Gain/(loss) from fair value changes of

financial instruments

8,551

(62,699)

(8,935)

215,764

34,883

4,971

Gain/(loss) on disposal of equity investees,

subsidiary and others

10,838

(1,440)

(205)

10,074

10,694

1,524

Impairment of investments in equity investees

(672,816)

(95,876)

Foreign currency exchange gain before tax

4,650

(38,174)

(5,440)

75,571

(17,612)

(2,510)

Income before income tax, and share of

loss in equity method investments

2,610,212

2,911,623

414,902

7,831,891

8,184,310

1,166,254

Income tax expense

(271,387)

(554,959)

(79,081)

(1,301,979)

(1,786,275)

(254,542)

Share of gain in equity method investments

10,785

22,378

3,189

14,732

42,751

6,092

Net income

2,349,610

2,379,042

339,010

6,544,644

6,440,786

917,804

Net (income)/loss attributable to non-

controlling interests

(4,452)

17,255

2,459

12,054

(6,641)

(946)

Net income attributable to ZTO Express

(Cayman) Inc.

2,345,158

2,396,297

341,469

6,556,698

6,434,145

916,858

Net income attributable to ordinary

shareholders

2,345,158

2,396,297

341,469

6,556,698

6,434,145

916,858

Net earnings per share attributed to

ordinary shareholders

Basic

2.91

2.98

0.42

8.11

7.99

1.14

Diluted

2.84

2.90

0.41

7.94

7.80

1.11

Weighted average shares used in

calculating net earnings per ordinary

share/ADS

Basic

807,081,026

804,565,579

804,565,579

808,298,164

805,388,468

805,388,468

Diluted

838,290,093

838,131,679

838,131,679

839,507,232

838,954,568

838,954,568

Net income

2,349,610

2,379,042

339,010

6,544,644

6,440,786

917,804

Other comprehensive income/(loss),

net of tax of nil:

Foreign currency translation adjustment

(32,832)

137,698

19,622

(174,729)

20,138

2,870

Comprehensive income

2,316,778

2,516,740

358,632

6,369,915

6,460,924

920,674

Comprehensive (income)/loss attributable to

non-controlling interests

(4,452)

17,255

2,459

12,054

(6,641)

(946)

Comprehensive income attributable to ZTO

Express (Cayman) Inc.

2,312,326

2,533,995

361,091

6,381,969

6,454,283

919,728

 

Unaudited Consolidated Balance Sheets Data:

As of

December 31,

September 30,

2023

2024

RMB

RMB

US$

(in thousands, except for share data)

ASSETS

Current assets:

Cash and cash equivalents

12,333,884

11,703,151

1,667,686

Restricted cash

686,568

32,350

4,610

Accounts receivable, net

572,558

782,772

111,544

Financing receivables

1,135,445

1,272,992

181,400

Short-term investment

7,454,633

11,213,470

1,597,907

Inventories

28,074

27,651

3,940

Advances to suppliers

821,942

862,789

122,946

Prepayments and other current assets

3,772,377

4,162,249

593,116

Amounts due from related parties

148,067

99,206

14,137

Total current assets

26,953,548

30,156,630

4,297,286

Investments in equity investees

3,455,119

2,092,880

298,233

Property and equipment, net

32,181,025

33,591,675

4,786,775

Land use rights, net

5,637,101

6,097,476

868,883

Intangible assets, net

23,240

18,592

2,649

Operating lease right-of-use assets

672,193

573,209

81,682

Goodwill

4,241,541

4,241,541

604,415

Deferred tax assets

879,772

711,368

101,369

Long-term investment

12,170,881

13,511,938

1,925,436

Long-term financing receivables

964,780

850,440

121,187

Other non-current assets

701,758

953,451

135,866

Amounts due from related parties-non current

584,263

520,833

74,218

TOTAL ASSETS

88,465,221

93,320,033

13,297,999

LIABILITIES AND EQUITY

Current liabilities

Short-term bank borrowing

7,765,990

10,770,422

1,534,773

Accounts payable

2,557,010

2,112,632

301,048

Advances from customers

1,745,727

1,662,922

236,964

Income tax payable

333,257

316,260

45,067

Amounts due to related parties

234,683

154,447

22,009

Operating lease liabilities

186,253

166,392

23,711

Dividends payable

1,548

1,993,865

284,123

Convertible bond

6,979,057

994,508

Other current liabilities

7,236,716

7,126,793

1,015,558

Total current liabilities

20,061,184

31,282,790

4,457,761

Non-current operating lease liabilities

455,879

374,057

53,303

Deferred tax liabilities

638,200

541,115

77,108

Convertible bond

7,029,550

TOTAL LIABILITIES

28,184,813

32,197,962

4,588,172

Shareholders’ equity

Ordinary shares (US$0.0001 par value; 10,000,000,000 shares authorized;
    812,866,663 shares issued and 804,719,252 shares outstanding as of

December 31, 2023; 810,339,182 shares issued and 804,140,620 shares

outstanding as of September 30, 2024)

525

523

75

Additional paid-in capital

24,201,745

24,383,137

3,474,569

Treasury shares, at cost

(510,986)

(337,541)

(48,099)

Retained earnings

36,301,185

36,715,863

5,231,969

Accumulated other comprehensive loss

(190,724)

(170,586)

(24,308)

ZTO Express (Cayman) Inc. shareholders’ equity

59,801,745

60,591,396

8,634,206

Noncontrolling interests

478,663

530,675

75,621

Total Equity

60,280,408

61,122,071

8,709,827

TOTAL LIABILITIES AND EQUITY

88,465,221

93,320,033

13,297,999

 

Summary of Unaudited Consolidated Cash Flow Data:

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2024

2023

2024

RMB

RMB

US$

RMB

RMB

US$

(in thousands)

Net cash provided by operating activities

2,938,104

3,111,972

443,452

9,437,682

8,623,087

1,228,780

Net cash used in investing activities

(4,025,760)

(1,910,131)

(272,191)

(13,433,920)

(8,955,072)

(1,276,088)

Net cash provided by/(used in) financing activities

2,529,988

10,183

1,451

1,396,265

(963,309)

(137,270)

Effect of exchange rate changes on cash, cash

equivalents and restricted cash

9,459

(43,349)

(6,176)

105,393

(8,272)

(1,178)

Net increase/(decrease) in cash, cash equivalents

and restricted cash

1,451,791

1,168,675

166,536

(2,494,580)

(1,303,566)

(185,756)

Cash, cash equivalents and restricted cash at

beginning of period

8,656,716

10,579,069

1,507,505

12,603,087

13,051,310

1,859,797

Cash, cash equivalents and restricted cash at end of   

period

10,108,507

11,747,744

1,674,041

10,108,507

11,747,744

1,674,041

 

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:

 

As of

September 30,

September 30,

2023

2024

RMB

RMB

US$

(in thousands)

Cash and cash equivalents

9,284,625

11,703,151

1,667,686

Restricted cash, current

793,037

32,350

4,610

Restricted cash, non-current

30,845

12,243

1,745

Total cash, cash equivalents and restricted cash

10,108,507

11,747,744

1,674,041

 

Reconciliations of GAAP and Non-GAAP Results

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2024

2023

2024

RMB

RMB

US$

RMB

RMB

US$

(in thousands, except for share and per share data)

Net income

2,349,610

2,379,042

339,010

6,544,644

6,440,786

917,804

Add:

Share-based compensation expense (1)

6,769

965

254,976

311,924

44,449

Impairment of investments in equity investees (1)

672,816

95,876

(Gain)/loss on disposal of equity investees

and subsidiary, net of income taxes

(8,866)

1,440

205

(8,102)

(8,507)

(1,212)

Adjusted net income

2,340,744

2,387,251

340,180

6,791,518

7,417,019

1,056,917

Net income

2,349,610

2,379,042

339,010

6,544,644

6,440,786

917,804

Add:

Depreciation

712,734

695,241

99,071

2,035,702

2,168,290

308,979

Amortization

31,951

35,709

5,088

100,535

104,034

14,825

Interest expenses

83,801

66,364

9,457

227,729

266,135

37,924

Income tax expenses

271,387

554,959

79,081

1,301,979

1,786,275

254,542

EBITDA

3,449,483

3,731,315

531,707

10,210,589

10,765,520

1,534,074

Add:

Share-based compensation expense

6,769

965

254,976

311,924

44,449

Impairment of investments in equity investees

672,816

95,876

(Gain)/loss on disposal of equity investees

and subsidiary

(10,838)

1,440

205

(10,074)

(10,694)

(1,524)

Adjusted EBITDA

3,438,645

3,739,524

532,877

10,455,491

11,739,566

1,672,875

(1) Net of income taxes of nil

 

Reconciliations of GAAP and Non-GAAP Results

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2024

2023

2024

RMB

RMB

US$

RMB

RMB

US$

(in thousands, except for share and per share data)

Net income attributable to ordinary

shareholders

2,345,158

2,396,297

341,469

6,556,698

6,434,145

916,858

Add:

Share-based compensation expense (1)

6,769

965

254,976

311,924

44,449

Impairment of investments in equity

investees (1)

672,816

95,876

(Gain)/loss on disposal of equity investees

and subsidiary, net of income taxes

(8,866)

1,440

205

(8,102)

(8,507)

(1,212)

Adjusted Net income attributable to

ordinary shareholders

2,336,292

2,404,506

342,639

6,803,572

7,410,378

1,055,971

Weighted average shares used in

calculating net earnings per ordinary

share/ADS

Basic

807,081,026

804,565,579

804,565,579

808,298,164

805,388,468

805,388,468

Diluted

838,290,093

838,131,679

838,131,679

839,507,232

838,954,568

838,954,568

Net earnings per share/ADS attributable to

ordinary shareholders

Basic

2.91

2.98

0.42

8.11

7.99

1.14

Diluted

2.84

2.90

0.41

7.94

7.80

1.11

Adjusted net earnings per share/ADS

attributable to ordinary shareholders

Basic

2.89

2.99

0.43

8.42

9.20

1.31

Diluted

2.83

2.91

0.41

8.24

8.96

1.28

 (1) Net of income taxes of nil

 

For investor and media inquiries, please contact:

ZTO Express (Cayman) Inc.

Investor Relations

E-mail: ir@zto.com 

Phone: +86 21 5980 4508

View original content:https://www.prnewswire.com/news-releases/zto-reports-third-quarter-2024-unaudited-financial-results-302310241.html

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/U P D A T E — TrendAI/

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This release has been updated to include new information provided by TrendAI. The complete, corrected release follows, with additional details at the end:

TrendAI™ Adopts Claude Opus 5 to Advance Vulnerability Prioritization and Virtual Patching

As a participant in Anthropic’s Cyber Verification Program, TrendAI applies frontier reasoning to convert vulnerability intelligence into faster protection across hybrid environments

DALLAS, July 24, 2026 /PRNewswire/ — TrendAI™, the enterprise AI security leader from Trend Micro Incorporated (TYO: 4704; TSE: 4704), today announced it is adopting Claude Opus 5, Anthropic’s latest and most capable Opus model, to help security teams convert vulnerability intelligence into immediate protection, from prioritization to virtual patching. The move builds on TrendAI’s collaboration with Anthropic on Claude Opus 4.8, extending the same defensive focus to a model that delivers step-change gains in advanced reasoning, agentic workflows, and long-horizon analysis. As AI makes finding vulnerabilities easier than ever, the harder problem becomes protecting organizations faster than software can be permanently patched, and that is where TrendAI is putting Opus 5 to work.

As a participant in Anthropic’s Cyber Verification Program, which credentials organizations for the defensive use of frontier AI models, TrendAI is positioned to apply Claude Opus 5 to defensive security as access becomes available. The model is Zero Data Retention compatible, supporting TrendAI’s governance and data-protection requirements as it scales AI across security operations.

The work extends to TrendAI Threat Research, where frontier AI models are combined with our proprietary frontier intelligence engine and human expertise to generate pre-disclosure intelligence. Those insights power TrendAI Vision One™, delivering stronger detection, deeper forensic insights, and proactive protection through virtual patching.

Rachel Jin, Chief Platform and Business Officer, Head of TrendAI™:
“With Claude Opus 5, TrendAI can move from vulnerability intelligence to action faster than ever, prioritizing what matters most by exploitability and business impact. Finding the vulnerability was always the hard part. Now the challenge is protecting organizations faster than software can be permanently patched, and frontier reasoning is what changes that equation, extending all the way to virtual patching that protects customers before a vendor fix ships. This is what it means to secure the AI age, fearlessly.”

These capabilities support TrendAI Vision One™ in helping security analysts, AppSec teams, and SOC teams prioritize exposure, map attack paths, and accelerate mitigation, including virtual patching, across hybrid environments, moving vulnerability management from a static scanning process into a faster, context-aware risk mitigation workflow.

About TrendAI™
TrendAI™, the global AI security leader and enterprise business unit of Trend Micro, empowers organizations with full AI visibility and consolidated security that inspires confidence, drives innovation, and eliminates risk. Trusted by the largest enterprises and governments across 185 countries, TrendAI™ secures the entire organization, from identities, to infrastructure, to data. Global Fortune 500 companies rely on TrendAI™ to cut risk and stop threats up to three months earlier, powered by world-leading threat and attack intelligence. Through deep ecosystem partnerships with market leaders like NVIDIA, Anthropic, AWS, Google, and Microsoft, TrendAI™ empowers your organization to securely drive forward at the speed of AI. AI Fearlessly. Learn more: trendaisecurity.com

About Anthropic
Anthropic is an AI safety and research company dedicated to building reliable, interpretable, and steerable AI systems. Its Claude family of models, including Claude Opus 5, enables advanced capabilities across a wide range of applications, including code understanding and security analysis.

Update: The latest version of this release includes additional statements from TrendAI related to the original announcement.

View original content to download multimedia:https://www.prnewswire.com/news-releases/trendai-adopts-claude-opus-5-to-advance-vulnerability-prioritization-assessment-and-virtual-patching-302834362.html

SOURCE TrendAI

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Ralph Ye on 10 Years of Entrepreneurship at CASEKOO: Less Identity Shift, More Habits That Endure

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NEW YORK, July 24, 2026 /PRNewswire/ — As CASEKOO approaches its 10th anniversary, founder Ralph Ye says the company’s biggest achievement isn’t measured by units sold, but by how its philosophy has evolved.

Ten years ago, Ye found himself frustrated by a simple problem: his phone wouldn’t stand upright on a fast-food table. Instead of accepting the inconvenience, he saw an opportunity to rethink what a phone case could do.

Today, CASEKOO has sold more than 20 million phone cases across 32 countries. Over the past decade, the company has evolved from creating protective accessories into designing products that fit naturally into everyday life.

“Innovation isn’t about changing identities,” Ye said. “It’s about making meaningful habits easier to keep.”

From Q Line to LinKOO

The evolution of CASEKOO’s product portfolio reflects a broader shift in the company’s design philosophy.

The journey began with the Q Line (Quality Line), a collection of crystal-clear phone cases engineered to deliver premium protection without compromising aesthetics. In 2021, CASEKOO introduced the E Line (Innovation Line), the world’s first phone case with an integrated ring stand. The product earned an iF Design Award and became an Amazon bestseller, demonstrating the market’s appetite for accessories that combined protection with everyday functionality. The X Line (Expression Line) followed, expanding the brand’s focus on personalization and expressive design.

Each product generation introduced new capabilities, but each also reinforced an important insight.

“We moved from Q Line to E Line to X Line, and every generation taught us something about what people actually need,” said Ye. “By the time we introduced The KOO series, we weren’t designing features anymore. We were designing around everyday behaviors.”

Today, the portfolio gives each rhythm a clear name: LinKOO — Link Your Way for hands-free carry, StandKOO — Elevate Your Day for hands-free viewing and grip, and X-LINE — Fit Your Vibe for expressive personalization.

It represents CASEKOO’s transition from designing accessories with added functions to creating products that support everyday habits. For the company, the future of consumer technology lies not in how many features a product offers, but in how seamlessly it integrates into the way people live.

A Philosophy Born from Everyday Life

The inspiration behind LinKOO came from one of Ye’s longest-standing habits.

For nearly two decades, he has left home every day holding his wife’s hand. One evening, while carrying his phone, keys, and wallet in his other hand, he realized how often everyday essentials compete with life’s simplest moments.

That observation inspired ClipSafe™, a foldable clasp integrated into the LinKOO series. Hidden when not in use and deployable with a single press, it allows users to carry everyday essentials without sacrificing comfort or aesthetics.

For CASEKOO, LinKOO is more than a product launch. It represents the company’s belief that technology should adapt to people—not the other way around.

“Ten years ago, we asked how to better protect a phone,” Ye said. “Today, we’re asking how to protect a moment.”

That is what designed to fit you means. That is Less Effort, More Living. And after a decade of iteration, failure, and quiet persistence, CASEKOO has finally arrived—not at an answer, but at a better question.

About CASEKOO

CASEKOO is a design-led lifestyle accessories brand built around a simple idea: freeing your hands in everyday life. Through thoughtful hands-free solutions, we help people move seamlessly between different moments of the day—from active, on-the-go moments to times of focus and connection.

What makes CASEKOO different from a regular phone case? We believe technology should support life, not interrupt it. By designing products that adapt naturally to how people live, work, and move, CASEKOO reduces everyday friction and creates a more effortless experience—making room for freedom, connection, and the moments that truly matter.

For more information, visit: casekoo.com.

Contact:
Charlotte Yu
brandteam@casekoo.com 

View original content to download multimedia:https://www.prnewswire.com/news-releases/ralph-ye-on-10-years-of-entrepreneurship-at-casekoo-less-identity-shift-more-habits-that-endure-302831896.html

SOURCE CASEKOO

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Paramount Skydance Corporation Announces Extension of Expiration Dates of Previously Announced Exchange Offers and Tender Offers

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LOS ANGELES and NEW YORK, July 24, 2026 /PRNewswire/ — Paramount Skydance Corporation (NASDAQ: PSKY) (“Paramount”) today announced the extension of the Expiration Dates in connection with the previously announced (i) offers to purchase (the “Tender Offers” and each, a “Tender Offer”) for cash, upon the terms and subject to the conditions set forth in the related offer to purchase (the “Offer to Purchase”), any and all of the identified notes in each series of the Existing Tender Offer Notes (defined by reference to the table set forth below) issued by Discovery Global Holdings, Inc. (formerly WarnerMedia Holdings, Inc.) (the “DGH Issuer”) and Discovery Communications, LLC (the “DCL Issuer” and together with the DGH Issuer, each a “WBD Issuer” and collectively the “WBD Issuers”), as applicable, and (ii) offers to exchange (the “Exchange Offers” and each, an “Exchange Offer” and, together with the Tender Offers, the “Offers” and each, an “Offer”), upon the terms and subject to the conditions set forth in the related exchange offer memorandum (the “Offering Memorandum”), any and all of the identified notes in each series of the Existing Exchange Offer Notes (defined by reference to the table set forth below) (together with the Existing Tender Offer Notes, the “Offer Notes”) issued by the applicable WBD Issuer for notes to be newly issued by Paramount.

The Expiration Dates for the Tender Offers and Exchange Offers (as defined in each of the Offer to Purchase and Offering Memorandum, respectively) have been extended to 5:00 p.m., New York City time, on August 7, 2026, unless further extended. The Settlement Dates for the Tender Offers and Exchange Offers (as defined in each of the Offer to Purchase and Offering Memorandum, respectively) will occur promptly after the Expiration Date and are currently anticipated to occur in the third quarter of 2026. Paramount anticipates extending the Expiration Date for such Tender Offers and Exchange Offers until such time that would result in the Settlement Dates occurring on or promptly following the closing date of the proposed acquisition (the “Acquisition”) by Paramount of Warner Bros. Discovery, Inc. (“WBD”). Tenders of the Offer Notes in the Offers may be withdrawn at any time prior to the Expiration Date. The aforementioned extensions further extend the Expiration Dates previously extended by Paramount on June 12, 2026, June 26, 2026, July 13, 2026, and July 17, 2026.

As of 5:00 p.m., New York City time, on July 23, 2026, approximately 66.17% and 76.38% of the aggregate principal amount of the Existing Tender Offer Notes and Existing Exchange Offer Notes, respectively, have been validly tendered in the applicable Offers. As Paramount previously announced that it anticipates extending the Offers to align with the closing date of the Acquisition, Paramount does not view these figures to be representative of the final results of the applicable Offers.

Information about each series of Offer Notes eligible to participate in the Offers is summarized below.

Type of Offer

Offer Notes to be Tendered
or Exchanged, as
Applicable

Issuer of Offer Notes

CUSIP No. / Common Code 
/ ISIN Eligible to
Participate in the Offers (1)

Aggregate Principal
Amount of Offer Notes
Eligible to Participate in the
Offers (2)

Tender Offer

3.950% Senior Notes due 2028

DCL Issuer

25470D CP2

US25470DCP24

$1,234,458,000

Exchange Offer

4.125% Senior Notes due 2029

DCL Issuer

25470D CQ0

US25470DCQ07

$655,825,000

Exchange Offer

3.625% Senior Notes due 2030

DCL Issuer

25470D CR8

US25470DCR89

$914,183,000

Exchange Offer

5.000% Senior Notes due 2037

DCL Issuer

25470D CS6

US25470DCS62

$453,281,000

Exchange Offer

6.350% Senior Notes due 2040

DCL Issuer

25470D CT4

US25470DCT46

$438,102,000

Exchange Offer

4.950% Senior Notes due 2042

DCL Issuer

25470D CU1

US25470DCU19

$130,366,000

Exchange Offer

4.875% Senior Notes due 2043

DCL Issuer

25470D V91 CV9US25470DC

$141,584,000

Exchange Offer

5.200% Senior Notes due 2047

DCL Issuer

25470D W74 CW7US25470DC

$3,161,000

Exchange Offer

5.300% Senior Notes due 2049

DCL Issuer

25470D X57 CX5US25470DC

$247,860,000

Tender Offer

3.755% Senior Notes due 2027

DGH Issuer

254948 AH5

US254948AH58

254948 AN2

US254948AN27

U25483 AA3

USU25483AA38

$1,189,336,000

Exchange Offer

4.054% Senior Notes due 2029

DGH Issuer

254948 AJ1

US254948AJ15

254948 AP7

US254948AP74

U25483 AB1

USU25483AB11

$1,353,828,000

Exchange Offer

4.279% Senior Notes due 2032

DGH Issuer

254948 AK8

US254948AK87

254948 AQ5

US254948AQ57

$2,691,764,000

Exchange Offer

5.050% Senior Notes due 2042

DGH Issuer

254948 AL6

US254948AL60

254948 AR3

US254948AR31

U25483 AD7

USU25483AD76

$4,104,687,000

Exchange Offer

5.141% Senior Notes due 2052

DGH Issuer

254948 AM4

US254948AM44

254948 AS1

US254948AS14

$949,883,000

Exchange Offer

4.302% Senior Notes due 2030

DGH Issuer

XS3393993285

339399328

€234,382,000

Exchange Offer

4.693% Senior Notes due 2033

DGH Issuer

XS3393994507

339399450

€316,641,000

1

No representation is made as to the correctness or accuracy of the identifiers listed in this press release or printed on the Offer Notes. Such identifiers are provided solely for the convenience of the holders.

2

Represents the aggregate principal amount of Offer Notes outstanding that are eligible to participate in the Offers.

The Exchange Offers are being made pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations of the Securities and Exchange Commission (the “SEC”) promulgated thereunder, and are also not being registered under any state or foreign securities laws. Any securities offered pursuant to the Exchange Offers may not be offered or sold in the United States or to any U.S. persons (as defined below) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers will only be made, and the securities offered pursuant to the Exchange Offers are only being offered and issued, to holders of applicable Existing Exchange Offer Notes who are (a) reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act or (b) not “U.S. persons,” as defined in Rule 902 of Regulation S under the Securities Act (such holders, “Eligible Holders”), and only Eligible Holders who have completed and returned the eligibility certification are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offers. The eligibility certification is available electronically at: https://gbsc-usa.com/eligibility/paramount.

General

Each Offer is a separate offer, and each may be individually consummated, amended, extended, terminated, or withdrawn, subject to certain conditions and applicable law, at any time in Paramount’s sole discretion, and without also consummating, amending, extending, terminating, or withdrawing any other Offer with respect to any other series of Offer Notes. Paramount may terminate an Offer if any of the conditions of such Offer described in the Offer to Purchase or Offering Memorandum, as applicable, are not satisfied or waived by the applicable Expiration Date, subject to applicable law. In addition, Paramount may waive the conditions to an Offer without extending such Offer in accordance with applicable law.

The Offers are being made solely by Paramount and are not being made by WBD or the WBD Issuers. None of Paramount, WBD, the WBD Issuers, the Dealer Managers, the Exchange Agent (as defined below), the Information Agent (as defined below), the trustees under each of the indentures governing the Offer Notes, the trustee or collateral agent under the indenture that will govern the notes to be issued in the Exchange Offers, or any affiliate of any of them makes any recommendation as to whether any holder of Offer Notes should tender or refrain from tendering all or any portion of the principal amount of such holder’s Offer Notes for cash or notes to be issued in the Exchange Offers. No one has been authorized by any of them to make such a recommendation. Holders must make their own decision whether to tender Offer Notes in any Offer and, if so, the amount of Offer Notes to tender.

Only Eligible Holders may receive a copy of the Offering Memorandum and participate in the Exchange Offers. Paramount has engaged Global Bondholder Services Corporation to act as the exchange agent (in such capacity, the “Exchange Agent”) and information agent (in such capacity, the “Information Agent”) for the Offers. Questions concerning the Offers, or requests for additional copies of the Offer to Purchase or Offering Memorandum or other related documents, may be directed to Corporate Actions by telephone at (855) 654-2014 (U.S. toll-free) or (212) 430-3774 (banks and brokers) or by email at contact@gbsc-usa.com. Holders should also consult their broker, dealer, commercial bank, trust company or other institution for assistance concerning the Offers. The Exchange Offer documents and the Tender Offer documents can be accessed at the following link: https://gbsc-usa.com/paramount.

Paramount has engaged BofA Securities and Citigroup as dealer managers (in such capacity, the “Dealer Managers”) for the Offers. Holders with questions regarding the Offers should contact BofA Securities, Inc. at +1 (888) 292-0070 (toll-free) or +1 (980) 388-3646 (collect) or debt_advisory@bofa.com or Citigroup Global Markets Inc. at +1 (800) 558-3745 (toll-free) or +1 (212) 723-6106 or ny.liabilitymanagement@citi.com. Latham & Watkins LLP is serving as legal counsel to Paramount and Cahill Gordon & Reindel LLP is serving as legal counsel to the Dealer Managers.

This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security, and does not constitute an offer, solicitation, or sale of any security in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

About Paramount, a Skydance Corporation

Paramount, a Skydance Corporation is a next-generation global media and entertainment company, comprised of three business segments: Studios, Direct-to-Consumer, and TV Media. PSKY’s portfolio unites legendary brands, including Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance Animation, Film, Television, Interactive/Games, and Paramount Sports Entertainment.

PSKY-IR

Cautionary Note Concerning Forward-Looking Statements

This communication contains “forward-looking statements” regarding the Acquisition and the other transactions referred to herein. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Paramount. Risks and uncertainties include, but are not limited to: the risk that the closing conditions for the Acquisition will not be satisfied, including the risk that clearances under applicable antitrust or regulatory laws will not be obtained or will be obtained subject to conditions that are not anticipated; the possibility that the transactions described herein will not be completed in the expected timeframe or at all; the occurrence of any event, change or other circumstances that could give rise to the termination of the Acquisition; potential adverse effects to the businesses of Paramount or WBD during the pendency of the Acquisition, such as employee departures or distraction of management from business operations; negative effects of the announcement or the consummation of the Acquisition on the market price of WBD or Paramount stock; the risk of stockholder litigation relating to the Acquisition, including resulting expense or delay; the potential that the expected benefits and opportunities of the Acquisition, if completed, may not be realized or may take longer to realize than expected; risks related to the streaming business of the post-Acquisition combined business (the “Combined Company”); the adverse impact on the Combined Company’s advertising revenues as a result of changes in consumer behavior, advertising market conditions, and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to the Combined Company’s decision to invest in new businesses, products, services, and technologies, and the evolution of the Combined Company’s business strategy; the potential for loss of carriage or other reduction in, or the impact of negotiations for, the distribution of the Combined Company’s content; damage to the Combined Company’s reputation or brands; losses due to asset impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining the Combined Company’s intellectual property rights; domestic and global political, economic and regulatory factors affecting the Combined Company’s business generally or the Acquisition; the inability to hire or retain key employees or secure creative talent; disruptions to the Combined Company’s operations as a result of labor disputes; risks and costs associated with the integration of, and Paramount’s ability to integrate, the businesses of Paramount Global, Skydance Media, LLC, and WBD successfully and to achieve anticipated synergies, including in the amounts or on the timelines anticipated to realize such synergies; litigation related to the Acquisition and other matters or transactions; risks associated with the Combined Company’s holding company structure, including its dependence on distributions from its subsidiaries to meet tax obligations and other cash requirements; risks related to our indebtedness, including our substantial outstanding debt obligations, our ability to incur substantially more debt and our ability to meet the financial and other covenants contained in the agreements governing the indebtedness of Paramount, WBD, or the Combined Company. A further list and description of these risks, uncertainties and other factors and the general risks associated with the respective businesses of Paramount and WBD can be found in Paramount’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026, including in the sections captioned “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” Paramount’s most recently filed Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 4, 2026, including in the sections captioned “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” and Paramount’s subsequent filings with the SEC, and in WBD’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, including in the section captioned “Item 1A. Risk Factors,” WBD’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 6, 2026, and WBD’s subsequent filings with the SEC. Neither Paramount nor WBD undertakes to update any forward-looking statement as a result of new information or future events or developments, except as required by law.

 

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SOURCE Paramount Skydance Corporation

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