Value Line Inc (VALU) Q2 2025 Earnings Report

Revenue: $8.841 million; YoY change: -8.00%; QoQ change: -0.48%

Gross Profit: $5.266 million; Gross Margin: 59.56%; YoY Gross Profit change: -10.94%; QoQ change: -1.40%

Operating Income: $1.744 million; Operating Margin: 19.73%; YoY change: -34.78%; QoQ change: -5.58%

Net Income: $5.685 million; Net Margin: 64.30%; YoY change: +62.99%; QoQ change: -3.43%

EPS: $0.60; Diluted EPS: $0.60; YoY EPS change: +62.16%; QoQ change: -3.23%

EBITDA: $1.744 million; EBITDA Margin: 19.73%

Income Before Tax: $7.560 million; Pre-Tax Margin: 85.51%

Income Tax Expense: $1.875 million; Effective Tax Rate (reported): ~24.8%

Cash Flow and Liquidity: Net cash provided by operating activities $3.073 million; Free Cash Flow $3.078 million; Net change in cash -$4.335 million; Cash at end of period $11.598 million; Cash & Short-Term Investments $72.045 million; Total liquidity (cash + short-term investments) remains ample at ~$72.0 million and current ratio 3.42.

Balance Sheet Health: Total assets $139.992 million; Total liabilities $43.277 million; Total stockholders’ equity $96.715 million; Debt levels are minimal (Total debt ~$4.196 million; Net debt negative ~$7.098 million), indicating a conservative capital structure.

Valuation Context: Price-to-earnings around 20.0x; Price-to-book around 4.71x; Price-to-sales around 51.5x. Dividend yield ~0.62%. A smaller but highly liquid balance sheet with limited leverage; valuation appears modestly attractive versus broader financial data peers given the solid cash generation and moat in proprietary research publications.

Note: No earnings-call transcript was provided in the dataset. Analysis below relies on the Q2 2025 10-Q/press-release data and the quarterly four-quarter balance sheet and income metrics. Key themes that would typically appear in a management call, based on the results and structure of Value Line’s business, would include:

- Revenue quality and mix: Recurring subscription-based revenue from Value Line publications and digital platforms remains the core, with modest QoQ and YoY top-line pressure observed in QQ2 2025. Investors would typically seek commentary on subscriber retention, pricing, and product expansion.

- Non-operating income contribution: A significant positive swing in total other income supported pretax profitability (Income Before Tax of $7.56M vs. operating income of $1.744M). Management commentary would likely address the nature, sustainability, and potential normalization of this non-operating income.

- Operating efficiency and product mix: Gross margin near 60% and operating margin near 20% suggest a high-margin subscription model. Discussion in a call would typically cover cost discipline, amortization of intangibles, and potential investments in data services or technology platforms.

- Balance sheet and liquidity: A very strong liquidity position with $72.0M of cash and equivalents plus short-term investments and a debt-light balance sheet would be highlighted as a strength, with focus on working capital efficiency and ability to fund ongoing product development from internal cash flow.

- Outlook and risk factors: Management would typically address subscription growth opportunities, competitive dynamics in financial data products, potential macro headwinds affecting investor budgets, and the risk of relying on non-operating components for earnings visibility.

QQ2 2025 portrays a financially healthy Value Line with a robust balance sheet and strong cash generation. The operating metrics reflect a high-margin, subscription-based model, but the notable contribution from total other income raises questions about earnings quality and the sustainability of profitability absent non-operating items. The stock’s valuation—P/E around 20x and P/B around 4.7x—appears plausible given the company’s liquidity and defensible niche, though it trades at a premium to many traditional data-services peers on certain metrics (e.g., P/S).