DJCO · Daily Journal Corporation

Daily Journal Corporation's second quarter fiscal 2026 results highlight robust operational performance in its technology segment, Journal Technologies, Inc. (JTI), which drove total consolidated revenue to $22.7 million, a 25% increase year-over-year. JTI revenue surged 32% to $18.2 million, fueled by expansion in e-filing and public service fees, higher recurring license and maintenance revenues, and increased consulting activity, as noted by CEO Steven Myhill-Jones. This growth underscores the scalability of the technology business, with operating income rising to $3.0 million from $1.0 million in the prior-year quarter, demonstrating significant operating leverage. The Traditional Business saw modest 2.3% revenue growth to $4.5 million from advertising and circulation. For the first half, total revenue reached $42.3 million, up 18%, with JTI up 22% to $33.4 million and operating income at $3.5 million versus $1.7 million prior year. However, consolidated net results were heavily impacted by mark-to-market volatility in the investment portfolio, posting a $34.6 million net loss in Q2 (versus $44.7 million income last year) due to $51.2 million in unrealized losses, equating to a ($25.14) per share impact. First half net loss was $42.6 million. As of March 31, 2026, marketable securities stood at $430.1 million fair value with $291.0 million accumulated pretax unrealized gains, reflecting the portfolio's sensitivity to broad market movements rather than operating performance. Operating cash flow turned to a $2.2 million use in Q2 from a $1.6 million source prior year. Balance sheet remains strong with total assets at $479.9 million and equity at $348.5 million, down from September 30, 2025 levels primarily due to investment valuation changes. Investors should note management emphasis on technology segment momentum amid investment volatility.