Shares of Daily Journal Corporation DJCO have gained 0.8% since the company reported its earnings for the quarter ended June 30, 2025. This compares with the S&P 500 index’s -0.2% change over the same period. Over the past month, the stock has rallied 14%, markedly outpacing the S&P 500’s 2.5% increase.
Daily Journal reported net income of $10.47 per share compared to $16.96 a year earlier — a decrease of 38% year over year.
Quarterly revenues of $23.4 million denoted a 34% rise from $17.5 million in the prior-year quarter. This growth was driven by strong performances in licensing and maintenance fees, consulting services, and public service fees.
Net income, however, declined to $14.4 million compared to $23.4 million a year earlier. The decline in earnings despite revenue expansion reflected lower gains on DJCO’s securities portfolio compared to last year’s quarter.
Daily Journal Corporation Price, Consensus and EPS Surprise
Daily Journal Corporation price-consensus-eps-surprise-chart | Daily Journal Corporation Quote
DJCO’s Other Key Business Metrics
Daily Journal’s Journal Technologies segment remained the core growth driver, contributing roughly 79% of revenues. Segment revenues climbed 44% to $18.5 million, up from $13.1 million a year ago. Licensing and maintenance fees advanced 11% to $8 million, consulting fees nearly doubled to $6.5 million, and public service fees surged 63% to $4 million. This was partly attributable to increased e-filing activity.
Conversely, the Traditional Business segment generated $4.9 million in revenues, up modestly from $4.4 million in the prior-year period. Advertising revenues rose 10% to $2.8 million. Pretax income for the Traditional Business turned negative, recording a $0.9 million loss versus a $0.7 million profit last year, due to higher personnel and compensation accrual costs.
Management Commentary
Management emphasized that much of the growth stemmed from the successful execution of customer projects at Journal Technologies. The subsidiary continues to prioritize product upgrades, enhanced user experiences and operational efficiencies. However, Daily Journal noted that costs tied to additional staffing, contractor services and third-party hosting fees weighed on operating margins.
On the Traditional Business side, revenues were supported by increased legal and trustee sale advertising, but profitability eroded as higher employee benefit and supplemental compensation expenses outpaced revenue gains.
Factors Influencing Headline Numbers
The quarter’s top line benefited from robust demand for Journal Technologies’ software and services, particularly consulting and public service fees. However, the key swing factor for net income was the company’s investment portfolio. Daily Journal reported $11.5 million in unrealized securities gains for the quarter, sharply down from $28 million a year earlier. This reduced the contribution from non-operating income, dampening earnings despite higher operating revenues.
Operating expenses also rose 23% year over year to $20.2 million, driven largely by salary adjustments, new hires and increased legal costs. This exerted further pressure on operating income, which nevertheless grew to $3.2 million compared with $1.1 million in the year-ago quarter.
Other Developments
Daily Journal continued to reduce its reliance on margin borrowings secured by its securities portfolio. At June 30, 2025, the balance on the investment margin loan stood at $25 million, down from $27.5 million at fiscal year-end 2024.
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This article originally published on Zacks Investment Research (zacks.com).