Annual Financial Report 2024 2025

Virginia Tech Financial Report 2024-2025

Summary of Expenses by Natural Classification

Increase (Decrease) in Expenses by Natural Classification For the years ended June 30, 2025 and 2024 (all dollars in thousands) 2025 2024

Expenses by Natural Classification For the year ended June 30, 2025

Change

Contractual services 7.0%

Amount

Percent

(restated)

Compensation and benefits 64.1%

Compensation and benefits Contractual services Supplies and materials

$ 1,375.5 $

1,257.8 $ 117.7

9.4 % 15.6 % (4.5)% 8.8 % 34.2 % 13.6 % 10.2 % 9.5 %

Supplies and materials 5.1%

150.8 109.3 60.5 142.1 53.3 60.3 192.8

130.4 114.4 55.6 105.9 65.9 53.1 175.0

20.4 (5.1)

Travel 2.8% Other operating expenses 6.6%

Travel

4.9

Other operating expenses Scholarships and fellowships* Sponsored program subcontracts Depreciation and amortization Total operating expenses

36.2

(12.6) (19.1)%

Scholarships and fellowships 2.5% Sponsored program subcontracts 2.8%

7.2

17.8

$ 2,144.6 $

1,958.1 $ 186.5

Depreciation and amortization 9.0%

*Includes loan administrative fees and collection costs.

Total Expenses The university is committed to recruiting and retaining outstanding faculty and staff. The personnel compensation package is one way to successfully compete with peer institutions and nonacademic employers. The natural expense category, compensation and benefits, comprises $1,375.5 million or 64.1% of the university’s total operating expenses. This category increased by $117.7 million (9.4%) over the previous year. Generally, changes to expenses in this category come from three sources: increases or reductions in the number of personnel, annual salary increases, and the general trend in the costs of fringe benefits. The benefits section is also affected by the changes in the actuarially calculated expenses for the OPEB and pension programs. Almost all of the natural expense categories saw increases as the university continues to grow and expand. Operating expenses for fiscal year 2025 totaled $2,144.6 million, an increase of $186.5 million or 9.5% from fiscal year 2024. In the functional categories of expense, research experienced the largest increase ($41.9 million) reflecting

the increase in sponsored program awards and the continued investment in university research centers. Instruction had the second-largest increase ($39.7 million) reflecting the continued investment in providing the highest quality education for students of the university. Auxiliary enterprise functions grew by $30.6 million, driven by increases in athletics as well as dorm and dining. Public service rose $31.2 million, with one of the largest contributors to the increase being a USDA public service alliance grant. In summary, the university’s operating revenues increased by $100.4 million or 6.5% over the preceding year, while operating expenses grew by $186.5 million or 9.5%. This resulted in an operating loss for the current fiscal year of $506.3 million in comparison to the operating loss of $420.2 million gen erated during the previous year. State appropriations, investment earnings, and other net non-operating revenues were used to meet operating expenses not offset by operating revenues.

Summary of Expenses by Function

Expenses by Function For the year ended June 30, 2025

Increase (Decrease) in Expenses by Function For the years ended June 30, 2025 and 2024 (all dollars in millions) 2025

2024

Change

Amount

Percent

(restated)

Auxiliary enterprises 15.5%

Instruction Research Public service

$

563.0 $

523.3 $ 39.7

7.6 % 9.6 % 29.5 % 10.2 % 10.2 % 10.5 %

Depreciation and amortization 9.0%

478.2 136.9 332.0 192.8 162.2 39.2 117.3 109.6 13.4 441.7

436.3 105.7 301.4 175.0 148.4 35.2 103.3 91.7 37.8 416.4

41.9 31.2 30.6 17.8

Public service 6.4%

Auxiliary enterprises

Academic support 7.6% Student services 1.8% Institutional support 5.5% Operations and maintenance 5.1% Student financial assistance 0.6%

Depreciation and amortization

Subtotal

1,702.9

1,541.7

161.2

Support, maintenance, and other Academic support

Research 22.3%

13.8

9.3 %

Student services* Institutional support

4.0 11.4 % 14.0 13.6 % 17.9 19.5 % (24.4) (64.6)%

Operations and maintenance Student financial assistance Total support, maint., and other

25.3

6.1 % 9.5 %

Instruction 26.2%

$ 2,144.6 $ 1,958.1 $ 186.5

Total operating expenses

*Includes loan administrative fees and collection costs.

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