Shares of Daily Journal Corporation (DJCO Quick QuoteDJCO - Free Report) have gained 0.2% since the company reported its earnings for the fiscal year ended Sept. 30, 2024. This compares to the S&P 500 index’s 0.7% decline over the same time frame. Over the past month, the stock has declined 4.9% compared with the S&P 500’s 3.1% decrease.

Daily Journal's fiscal 2024 net income came in at $56.73 per share compared with $15.58 per share in fiscal 2023, reflecting a remarkable 264.1% rise. This significant improvement was largely attributed to increased non-operating income, primarily from realized and unrealized gains on marketable securities.

Consolidated revenues grew 3.3% year over year to $69.9 million, up from $67.7 million in fiscal 2023. This increase was primarily driven by higher revenues from Journal Technologies’ license and maintenance fees and public service fees, partially offset by a decline in consulting fees. 

Net income surged to $78.1 million compared to $21.5 million in fiscal 2023.

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Other Key Business Metrics

Revenues from Journal Technologies rose in fiscal 2024, offsetting a $4.7 million drop in consulting fees. However, the segment’s pretax income declined to $2.5 million from $5 million due to higher operating expenses. These costs stemmed from increased personnel costs, contractor services, and third-party hosting fees billed to clients.

The company’s Traditional Business segment saw a modest increase in advertising revenues and service fees, but pretax income declined $0.1 million year over year, primarily due to higher promotional and operational expenses.

At fiscal year-end, the company’s marketable securities portfolio was valued at $358.7 million, including $219.6 million in net pretax unrealized gains. A notable financial move during the year was the sale of $40.6 million worth of securities, generating net gains of $14.3 million. Proceeds were used to reduce the margin loan balance to $27.5 million from $75 million at the previous year-end.

Management Commentary

Management attributed fiscal 2024’s robust performance to strategic financial decisions and efforts to optimize operations across segments. The reduction in margin loan debt exemplifies a disciplined approach to balance sheet management, positioning the company for future financial stability. However, the rise in operating costs underscores the challenges associated with expanding the Journal Technologies segment.

Factors Influencing the Headline Numbers

Non-operating income played a pivotal role in the company’s performance, surging by $78.8 million to $100.2 million. Gains on marketable securities were the primary driver, recording $96.1 million in realized and unrealized gains compared to $17.5 million in fiscal 2023. However, dividend and interest income fell by $1.2 million, partially offsetting these gains.