What changed in this filing

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Item 1. Business

2025-12-29 compared with 2024-12-31 · 45 added, 84 removed, 156 unchanged (45% of the section changed)

7 unchanged sentences

Essentially all of the Company’s U.S.

operations are based in California, Arizona and Utah.

The Company also has a presence in Australia where Journal Technologies is working on three software installation projects and in British Columbia, Canada, where the Company has operated a wholly-owned subsidiary, Journal Technologies (Canada) Inc.

operations are based in California and Utah.

The Company also has a presence in Australia where Journal Technologies is working on four software installation projects and in British Columbia, Canada, where the Company has operated a wholly-owned subsidiary, Journal Technologies (Canada), Inc.

since August 2022.

1 unchanged sentence

Products and Services

The Traditional Business

Traditional Business

Newspapers and related online publications.

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Generally, The Daily Journals seek to be of special use to lawyers and judges.

The Daily Journals share much content.

The Los Angeles Daily Journal is the largest newspaper published by the Company, both in terms of revenues and circulation.

At September 30, 2024, the Los Angeles Daily Journal had approximately 3,805 paid subscribers and the San Francisco Daily Journal had approximately 2,177 paid subscribers as compared with total paid subscriptions for both of The Daily Journals of 5,653 at September 30, 2023.

As of September 30, 2025, the Los Angeles Daily Journal had approximately 3,636 paid subscribers and the San Francisco Daily Journal had approximately 2,045 paid subscribers as compared to total paid subscriptions for both of The Daily Journals of 5,687 as of September 30, 2024.

The Daily Journals carry commercial advertising (display and classified) and public notice advertising required or permitted by law to be published in a newspaper of general circulation.

The main source of commercial advertising revenue has been law firms and businesses wishing to reach the legal professional community.

The gross revenues generated directly by The Daily Journals are attributable approximately 54% to subscriptions and 46% to the sale of advertising and other revenues.

Revenues from The Daily Journals constituted approximately 11% of the Company's total operating revenues in both fiscal 2024 and 2023.

The Daily Journals include the Daily Appellate Report, providing full text and case summaries of all opinions certified for publication by the California Supreme Court, the California Courts of Appeal, the U.S.

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Orange County Reporter.

The Orange County Reporter (“Reporter”) has been an adjudicated newspaper of general circulation since 1922.

The Orange County Reporter (“Reporter”) has been an adjudicated newspaper of general circulation since 1922 in Orange County, California.

In addition to general news of local interest, the Reporter publishes local and state legal, business and real estate news, and carries public notice advertising.

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The Company has several court rules services, including multi-volume, loose-leaf sets for state and federal courts in California.

The Northern California set consists of nine volumes.

The Southern California set has eight volumes.

The Company updates these court rules on a monthly basis.

In addition, the Company publishes single-volume rules for Los Angeles and San Diego counties.

The single volumes are replaced when there are rule changes.

The Judicial Profiles service contains information concerning nearly all active judges in California.

The Judicial Profiles include an interview-based article previously published in The Daily Journals, biographical data and information supplied by participating judges on courtroom procedures and policies.

The Judicial Profiles include an interview-based article previously published in The Daily Journals and biographical data.

Subscribers may purchase the ten-volume set for Southern California, the eight-volume set for Northern California or individual profiles online.

Advertising and Newspaper Representative.

The Company's publications carry commercial advertising and public notice advertising.

Commercial advertising consists of display and classified advertising and constituted about 4% of the Company’s total operating revenues in both fiscal 2024 and 2023.

Public notice advertising consists of many different types of legal notices required by law to be published in an adjudicated newspaper of general circulation, including notices of death, fictitious business names, trustee sale notices and notices of governmental hearings.

The major types of public notice advertisers are real estate-related businesses and trustees, governmental agencies, attorneys, and businesses or individuals filing fictitious business name statements.

Many government agencies use the Company’s Internet-based advertising system to produce and send their notices to the Company for publication.

A fictitious business name website enables individuals to send their statements to the Company for filing and publication, and another website enables attorneys and individuals to send probate, civil, corporate, public sale and other types of public notices to the Company.

California Newspaper Service Bureau (“CNSB”), a division of the Company, is a statewide newspaper representative (commission-earning selling agent) specializing since 1934 in public notice advertising.

CNSB places public notices and other forms of advertising with adjudicated newspapers of general circulation, most of which are not owned by the Company, and produces a legal advertising page for some other newspapers.

Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 14% of the Company's total operating revenues in both fiscal 2024 and 2023.

Most of these revenues were generated by (i) notices published in the Company’s newspapers, (ii) commissions and similar fees received from other publications in which the advertising was placed, and (iii) service fees to file notices with government agencies.

The California legislature passed a bill (AB542) which became effective January 1, 2024 that reduced the number of required publication days in a newspaper for self-service storage facility lien sales.

The existing requirement was to publish the notice once per week for two consecutive weeks.

Now, the notice can be published either once per week for two consecutive weeks in a newspaper or once in a newspaper and once on an Internet website that customarily conducts or advertises online auctions or sales.

We were able to successfully adjust our advertising rates upward in anticipation of the change in law, meaning that we suffered only a small decline in revenue of approximately $14,000 in 2024 due to the new law.

The effort to reduce the number of required publication notices, however, is likely to continue.

Indeed, another bill (AB721) relative to school budget hearing notices, which will take effect January 1, 2027, provides that these notices may be posted on the school district’s website in lieu of being published in a newspaper.

For several years following the Global Financial Crisis that began in 2007, trustee sales legal advertising revenues were driven by the large number of foreclosures in California and Arizona, for which public notice advertising is required by law.

Those revenues declined significantly in more recent years due to an improved economy and then to the COVID-related foreclosure moratoriums.

Trustee sales legal advertising revenues represented about 2% of the Company’s total operating revenues in both fiscal 2024 and 2023 in which those moratoriums were generally lifted.

Other revenues are attributable to fees from attorneys taking continuing legal education tests published in The Daily Journals and online, and other miscellaneous fees including reprint services of articles published in The Daily Journals.

1 unchanged sentence

Journal Technologies provides case management software and related services to courts and other justice agencies.

Its operations constituted about 76% of the Company’s total operating revenues in both fiscal 2024 and 2023.

Its operations constituted approximately 80% and 76% of the Company’s total revenues in fiscal years 2025 and 2024, respectively.

Journal Technologies earns revenues from license, maintenance and support fees paid by customers to use its software products;

hosting services;

consulting fees paid by customers for installation, implementation and training services;

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In addition, budget constraints, especially during stressful economic times, could force governmental agencies to defer or forgo consulting services or even to stop paying their annual software maintenance fees.

As a technology-based company, Journal Technologies’ success depends on the continued improvement of its products, which is why the costs to update and upgrade them consistently constitute such a significant portion of the Company’s expenses.

The Company’s revenues from Journal Technologies’ foreign customers were approximately $6,153,000 in fiscal 2024 and $3,293,000 in fiscal 2023.

The remainder of the Company’s other revenues in those years was attributable to the United States.

Journal Technologies (Canada)

Journal Technologies (Canada) Inc.

was founded in August 2022 as a service company to provide management and advisory services related to corporate leadership, financial management, strategic planning, operational guidance, human resources, project management, software development, professional services, and various other services required by Daily Journal Corporation and Journal Technologies.

It is primarily based in Victoria, Canada.

Materials and Postage

After personnel costs (included in “Salaries and employee benefits” and in “Outside services” in the accompanying consolidated statements of comprehensive income), postage and paper costs are typically the next two largest expenses for the Traditional Business.

Paper and postage accounted for approximately 5% of the Traditional Business’ operating costs in both fiscal 2024 and 2023.

An adequate supply of newsprint and other paper is important to the Company's operations.

The Company currently does not have a contract with any paper supplier.

The Company has always been able to obtain sufficient newsprint for its operations, although past shortages of newsprint have sometimes resulted in higher prices.

During fiscal 2024, the price of newsprint decreased about 14% and usage decreased about 2%.

We use the U.S.

Postal Service for distribution of roughly 48% of our print newspaper subscriptions.

During the past several years, the Company has instituted changes in an attempt to mitigate higher postage costs.

These changes have included contracting for hand delivery in urban areas of San Francisco, Santa Clara, Alameda, San Diego, Riverside, Orange and Los Angeles counties, delivering pre-sorted newspapers to post offices, and bundling newspapers to reduce per-piece charges.

In addition, the Company has an ink jet labeler which eliminates paper labels and enables the Company to receive bar code discounts from the postal service on some of its newspapers.

Postal rates are dependent on the operating efficiency of the U.S.

Postal Service and on legislative mandates imposed upon the U.S.

Postal Service.

During the past several years, the U.S.

Postal Service has increased postal rates.

During fiscal 2024, postage increased by $72,000 (15%) to $541,000 from $472,000.

The Company’s revenues from Journal Technologies’ foreign customers were approximately $11.9 million in fiscal year 2025 and $6.2 million in fiscal year 2024.

The Company actively promotes its individual newspapers and its multiple newspaper network as well as its other publications.

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Such agencies ordinarily receive a commission of 15% to 25% on their sales of advertising in Company and other publications.

Commercial advertising agencies also place advertising (including nearly 100% of display advertising) in Company publications and receive commissions for advertising sales.

Commercial advertising agencies also place advertising in Company publications and receive commissions for advertising sales.

Journal Technologies’ staff includes employees who are focused on marketing with the intention of growing market share over time, via additional consulting projects and licensing of products.

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understanding what is possible can inform requirements and build confidence over the buying process.

Competition for readers and advertisers is very intense, both by established publications and by new entries into the market.

Competition for readers and advertisers is very competitive, both from established publications and new entries into the market.

The Daily Journals face aggressive competition in Los Angeles and San Francisco.

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The in-depth news coverage which the Company's newspapers provide, along with general news coverage, attracts readers who, for personal or professional reasons, desire to keep abreast of topics to which a major newspaper cannot devote significant news space.

Other newspapers do provide some of the same subject coverage, but the Company believes its coverage, particularly that of The Daily Journals, is more complete.

Other newspapers do provide some of the same subject coverage, but the Company believes its coverage, particularly that of The Daily Journals, is more comprehensive.

The Company believes that The Daily Journals are the most important newspapers serving California lawyers on a daily basis.

The Company's court rules publications face competition from case management systems and the courts themselves.

Subscriptions to the single and multi-volume court rules continued to decline during fiscal 2024.

Subscriptions to the single and multi-volume court rules continued to decline during fiscal year 2024 and 2025.

The Company's Judicial Profile services have indirect competition because some of the same information is available through other sources, including the courts.

The newspaper industry continues to experience significant secular decline.

The Company believes the long-term trend will be in the direction of fewer subscriptions to the Company’s publications, and that trend will certainly negatively impact the Company’s future revenues.

The Company believes the subscriptions to the Company’s publications and the amount of advertising will decline over the long term, and those trends will adversely impact the Company’s future revenues.

In attracting commercial advertisers, the Company competes with other newspapers and magazines, television, radio and other media, including electronic and online systems for employment-related classified advertising.

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To reduce costs, the Company has contracted with an outside advertising agency to conduct sales of its display advertising.

The Company competes with at least one serious competitor for public notice advertising revenue in each of its markets.

Large metropolitan general interest newspapers normally do not carry a significant amount of legal advertising, although recently they too have solicited certain types of public notice advertising.

CNSB, the Company’s commission-earning selling agent, faces competition from a number of companies based in California, some of which specialize in placing certain types of notices.

There is significant competition among a limited number of companies to provide services and software to the courts and other justice agencies, and some of these companies are much larger and have greater access to capital and other resources than Journal Technologies.

Others provide services for a limited number of customers, or in specialized niches.

As part of the competitive bidding process, many customers will express a preference for, or even require, larger vendors or specific domain specialization.

As artificial intelligence (AI) becomes increasingly integrated into both our personal and professional lives, many of our competitors are rapidly incorporating AI capabilities into their offerings to maintain a technological advantage.

We have already introduced AI features in some of our products, and to continue delivering value to our customers and outpacing the competition, we must further invest in these cutting-edge technologies.

The Company competes with at least one significant competitor for public notice advertising revenue in each of its markets.

Large metropolitan general interest newspapers typically do not carry a significant amount of legal advertising, although recently they too have solicited certain types of public notice advertising.

Remaining competitive requires periodic investment in technology to ensure modern patterns are followed;

Journal Technologies has begun developing next-generation development patterns and practices to address technical debts that exist within current generation offerings.

The Company had approximately 400 full-time employees and contractors and about 11 part-time employees as of September 30, 2024, including about 280 employees and contractors at Journal Technologies and 22 employees at Journal Technologies (Canada).

As artificial intelligence (AI) is gaining widespread adoption, many of our competitors are rapidly incorporating AI capabilities into their offerings to maintain a technological advantage.

Journal Technologies faces significant competition in the markets for case management software and related services for courts, prosecutors, and other justice agencies.

These markets are characterized by a limited number of vendors competing for a finite number of large procurements.

Customers frequently select vendors through formal competitive bidding processes and may impose mandatory requirements or strong preferences for certain capabilities, architectures, implementation approaches, prior experience, or vendor qualifications.

If we are unable to compete successfully for new business, renewals, or expansions, our revenues, operating results, and growth prospects could be materially adversely affected.

In the court market, certain competitors have substantially greater scale, longer operating histories, and deeper penetration in particular jurisdictions and customer segments.

Some competitors have long-standing experience with statewide implementations, while statewide deployments are a more recent strategic focus for us.

Even where our technology and implementation approach are well-suited to complex deployments, prospective customers may perceive established vendors as a lower-risk choice based on historical presence or perceived execution “safety.” If we are unable to win and then deliver larger statewide projects on competitive terms and timelines, our future revenues, operating results, and long-term growth could be materially adversely affected.

In the prosecutor market, we compete with small and mid-sized vendors that focus on higher volumes of smaller, more price-sensitive agencies.

While our platform is well-established for larger prosecuting agencies and more complex operational environments, smaller offices may prefer lower-cost offerings even when those offerings provide fewer features or less configurability.

If we are not successful in developing, pricing, and marketing simpler hosted solutions that can be deployed more quickly while meeting the needs of smaller agencies, we may be less able to win new customers and retain or expand within that segment, which could materially adversely affect our revenues and results of operations.

We also compete with specialized vendors in adjacent or niche justice verticals that may offer highly focused, turnkey solutions or adopt new technologies (including artificial intelligence-enabled capabilities) more quickly than we do.

In addition, because we have finite development capacity and must prioritize among competing product and customer demands, we may be slower than competitors—particularly startups focused on a single problem area—to develop, integrate, and commercialize certain add-on capabilities, modules, or integrations that could otherwise represent incremental revenue opportunities.

If competitors deliver such capabilities earlier, more effectively, or at lower cost, we may experience reduced win rates, lower expansion revenue, increased pricing pressure, or higher customer attrition, any of which could materially adversely affect our operating results.

Geopolitical developments, changes in trade policy, or related uncertainty may also affect procurement behavior in international markets.

In certain jurisdictions, prospective customers may prefer local vendors or exhibit reluctance to contract with United States-based companies.

If such preferences materially limit our ability to compete for international opportunities, our international growth strategy and future operating results could be adversely affected.

The Company had approximately 415 full-time employees and contractors and approximately 9 part-time employees as of September 30, 2025.

The Company is not a party to any collective bargaining agreements.

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Working Capital

The Company owns marketable securities that provides the Company with working capital in addition to its cash flow from operations, subject, of course, to the normal risks associated with owning securities.

The Company owns marketable securities that provide the Company with working capital in addition to its cash flow from operations, subject to the normal risks associated with owning securities.

To a considerable extent, the Company also benefits from the fact that subscriptions and some licenses, maintenance and customer support are paid in advance.

In fiscal 2013, the Company borrowed $14 million from its investment margin account to purchase all of the outstanding stock of New Dawn Technologies, Inc., and another $15.5 million to acquire substantially all of the operating assets and liabilities of ISD Technologies, Inc., in each case pledging its marketable securities to obtain favorable financing.

In addition, there were subsequent borrowings of $45.5 million to purchase additional marketable securities bringing the margin loan balance up to $75 million as of September 30, 2023.

In March 2024, the Company sold a portion of its marketable securities for approximately $40.6 million and used these proceeds and excess cash from operations to pay down the margin loan balance to $27.5 million at September 30, 2024.

The Company believes it has sufficient cash and marketable securities for the foreseeable future.

In fiscal year 2024, the Company sold a portion of its marketable securities for approximately $40.6 million and used these proceeds and excess cash from operations to pay down the margin loan balance to $27.5 million as of September 30, 2024.

In fiscal year 2025, no marketable securities were sold, but the margin loan principal balance was paid down by $5.5 million to $22.0 million as of September 30, 2025, using excess cash from operations.

The Company believes it has sufficient cash and marketable securities to support its operations for the foreseeable future.

If the Company’s overall cash needs exceed cash flow and its current working capital, the Company may still have the ability to borrow against its marketable securities on favorable terms, or it may attempt to secure additional financing, which may or may not be available on acceptable terms.

1 unchanged sentence

The Company maintains a reserve account for estimated losses resulting from the inability of these customers to make required payments, but if the financial conditions of these customers were to deteriorate or the Company’s judgments about their abilities to pay are incorrect, additional allowances might be required, and the Company’s cash flows and results of operations could be materially affected.

The effects of inflation are not significantly any more or less adverse on the Company's businesses than they are on other publishing and software companies.

The Company has experienced the effects of inflation primarily through increases in costs of personnel.

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The Company’s investment margin account has an interest rate that fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly.

The interest rate as of September 30, 2024 was 5.5% after the first cut of 50 basis points to the central bank's key interest rate by Federal Reserve since 2020.

The Federal Reserve may continue to reduce the rate in the near future.

The Company’s interest expense on the margin account has decreased primarily due to the reduction to the investment margin account borrowings during fiscal 2024 and may continue to decrease more in the future because of the decreased interest rate.

The interest rate as of September 30, 2025 was 4.75%.

The Company’s interest expense on the margin account has decreased primarily due to the reduction to the investment margin account borrowings during fiscal year 2025.

Access to Our Information

The Company files annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission (“SEC”).

These filings are not available on our website, www.dailyjournal.com , which is generally dedicated to the content of our publications and services.

We will, however, provide these filings in electronic or paper format free of charge upon request addressed to our Secretary at our principal executive offices.

Our SEC filings are also available to the public over the Internet at the SEC’s website at www.sec.gov.

These filings are available on the SEC’s website at www.sec.gov .

In addition, our SEC filings, as well as our Code of Ethics and other investor materials, are available free of charge through the Investor Relations section of our website at https://ir.dailyjournal.com/ .

We will also provide copies of these filings, without charge, in electronic or paper form upon request to our Secretary at our principal executive offices.

Information contained on, or accessible through, our websites is not incorporated by reference into this Annual Report unless expressly stated otherwise.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business