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Operator: Good day, and thank you for standing by. Welcome to the OTC Markets Group Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Daniel Zinn, General Counsel and Chief of Staff. Please go ahead. Daniel Zinn: Thank you, operator. Good morning, and welcome to the OTC Markets Group Inc. Fourth Quarter and Year-End 2025 Earnings Conference Call. With me today are Cromwell Coulson, our President and Chief Executive Officer, and Antonia Georgieva, our Chief Financial Officer. Today’s call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations and as such may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the Risk Factors section of our 2025 annual report and is also available on our website. For more information, please refer to the safe harbor statement on slide three of the earnings presentation. With that, I would like to turn the call over to Cromwell Coulson. Cromwell Coulson: Thank you, Dan. Good morning, everyone, and thank you for joining us. I will begin by reviewing our year-end 2025 results at a high level and will then turn to our priorities for 2026. For the full year 2025, gross revenues grew 13%, bringing us to over $125,000,000 for the first time in our history, while our net revenues grew by 12%. The company achieved double-digit gains across all four quarters last year, with each business line contributing to our strong results. For the year, OTC Link was up 17%, Market Data increased 15%, and Corporate Services was up 8%. OTC Link's performance primarily resulted from increased trading volume across our markets. In times of increased market activity, we focus on providing reliable service trusted by our broker-dealer subscribers. Meeting that standard across all of our ATSs is a direct result of the hard work and dedication of our business, infrastructure, and technology teams. Market Data benefited primarily from price increases that took effect at the start of 2025, supported by new sales in certain product areas. While pricing power is a critical part of long-term competitiveness, especially in inflationary environments, we prioritize consistently adding value to our subscribers, expanding our distribution networks, signing new clients, and growing unit counts. While not materially impactful to our revenue during 2025, our OTC Link and Market Data teams established the foundation of our overnight trading business. Moon ATS, which facilitates overnight trading in exchange-listed securities, gained traction in the fourth quarter as a result of our team's onboarding subscribers and educating the global trading community. The momentum in NMS securities on Moon and the lessons learned will serve us well as securities markets move to 24/5 and longer. Our Corporate Services business not only delivered solid revenue growth for the year, but also ended the year with 17% revenue growth in the fourth quarter. These increases resulted from the success of our OTCID Basic Market, launched in July, as well as price increases and strong new sales in our OTCQX and OTCQB markets. Over the long term, our Corporate Services business remains strategically focused on client success and retention, helping connected companies close the investor and broker information experience gap with exchange-listed securities. Our operating expenses also increased last year, up 7%. Compensation and benefits remain the largest components of our expense base, as we continue to invest in our people. I am grateful for the hard work and dedication of our colleagues, and thrilled that our trajectory last year reflects each person's contributions. With revenue running faster than expenses last year, our operating margin also rose back above 31% for the year. We remain committed to achieving sustainable growth over the long term. Overnight trading and the OTCID Basic Market were our primary strategic initiatives during 2025. Although our work on each is far from over, I am pleased with our progress thus far. On overnight trading, Moon ATS saw a substantial increase in volume traded during the fourth quarter as our broker-dealer subscribers used the system to trade thousands of exchange-listed securities between 8:00 p.m. and 4:00 a.m. We face significant competition in this space, with one established player already controlling a majority of the market share, and the listing exchanges planning to enter the space as early as this year. In this increasingly competitive landscape, we believe that Moon ATS offers an elegant, reliable, and cost-effective solution for our current subscribers and an opportunity to expand and scale our network. Our overnight trading initiative is also focused on educating and onboarding subscribers to our OTC Overnight Market. Although we have not yet had trading take place in this market, the OTC space is where we can offer a unique value proposition. Over 12,000 OTC securities trade on our daytime markets, and more than 9,000 of those are non-U.S. Providing global investors access to these securities during hours more convenient for non-U.S. time zones remains a key part of our vision for overnight trading. Our second priority initiative last year was the OTCID Basic Market. Following its launch, OTCID experienced a rapid uptake as qualifying companies chose our services to publish a baseline of ongoing information. It is well aligned with our strategy of connecting more companies to their U.S. trading market to improve market quality one security at a time. OTCID enhances our offerings for corporate clients, filling a gap below the premium OTCQX and OTCQB markets. With a disclosure- and management certification-driven service, OTCID allows more companies to connect without the price, float, or financial requirements of our higher-level markets. It is a simple entry point for companies to start to stream information, gain a foothold of liquidity, or test the waters. We have designed our premium markets to provide the functionality for connected companies to supply data that will improve the quality of the market for their securities. In comparison with Pink Limited securities, our objective is to clearly flag risks. Investor-focused companies need to be actively connected to the market, consistently updating investors, with management teams willing to certify compliance with regulations. Otherwise, gaps in communication can lead to information asymmetries, disruptive corporate actions, and discounted valuations that diminish their market quality. The connected companies on our OTCQX, OTCQB, and OTCID markets represented approximately 25% of all securities traded on our platforms at the end of 2025 and contributed roughly 31% of the dollar volume traded on our markets during the fourth quarter. Our primary focus is to increase the percentage of connected companies and related dollar volume on our markets. When we empower public companies to connect to our Corporate Services, actively publish ongoing information, and demonstrate global governance standards, our markets become better informed and more efficient. These are the core activities that improve the quality of each company's individual trading market, open up more investor accounts, and expand overall investor interest. As we move these metrics higher, we will improve overall market quality and further separate companies on our premium markets from the imperfections and inefficiencies of securities orphaned on our Pink Limited Market. Preparing for the introduction of tokenized and digital asset securities into our markets is another strategic priority for 2026. As the SEC and Congress continue their work to provide regulatory clarity in these areas, it is vital that we prepare to support our FINRA member broker-dealer, market data customers, and other market participants as they innovate around these new technologies. We also continue to advocate for modernizing digital asset regulation without undermining market integrity. We believe a technology-neutral approach rooted in existing regulatory principles will foster responsible growth, prevent regulatory arbitrage, and reinforce confidence in U.S. market structure. Our regulatory priorities extend further, with a particular focus on capital formation, state Blue Sky laws, and disclosure-based initiatives that will improve the often-overlooked market functionality that provides the backbone of our capital markets. Being public should not be painful, and we need to both lower the burdens on public companies and increase the benefits. We have achieved 50-state Blue Sky compliance for our own shares, so we will use that knowledge to efficiently map the path to national compliance for our corporate clients. International companies on our markets, and the dollar volume traded in these companies, has trended higher in recent years. This is due to a number of factors, including our premium markets for issuers, improved broker-dealer trading functionality across our ATSs, increased access to our market data, and targeted outreach by our Corporate Services team. Continuing to grow our international presence remains a key objective for 2026. We are focused on educating non-U.S. companies about how best to use our market structure, data, and disclosure tools to connect with more investors and build their brands in the U.S. I look forward to updating you on our progress with each of our 2026 core initiatives throughout the year. We have a long history of paying regular quarterly dividends and a special dividend at the end of the year. It is a conservative strategy that gives us operational flexibility and financial resilience. In reviewing companies with similar strategies, we have decided to increase our quarterly dividend to better balance the ratio between quarterly and special dividends. We will also look to opportunistically resume buying back shares in the public market. As such, I am pleased to announce that on March 2, our Board of Directors declared a quarterly dividend of $0.30 per share payable later this month. This dividend reflects our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia. Thank you, Cromwell, and thank you everyone for joining us today. Antonia Georgieva: I would like to start by thanking our entire OTC Markets team for driving our business to record revenue, and for the successful execution of our key projects for 2025. I will now review our results for the fourth quarter and year ended 12/31/2025. Any references made to prior period comparatives refer to the fourth quarter or the year ended 12/31/2024. A review of our fourth quarter results is included on page seven. We generated $32,700,000 in gross revenues, up 15% as compared to the prior-year period. Revenues less transaction-based expenses were also up 15%. OTC Link's gross revenues increased 7%, driven by a 12% increase in transaction-based revenues from OTC Link ECM and OTC Link NQB with Moon ATS contributing as we benefited from a higher number of shares traded on those platforms. As an offset, transaction-based expenses also increased 12%. Additionally, OTC Link saw a 6% increase in usage-based revenues, including OTC Link ATS messages due to a higher number of messages and the Quote Access Payment service due to the increased volume of trading activity. Trading volumes remain highly unpredictable and could decline in the future. OTC Link finished the fourth quarter with 117 subscribers on OTC Link ECM, and 77 subscribers on OTC Link ATS, compared to 114 and 82, respectively, at the end of the prior year. OTC Link had 145 unique subscribers to our ATSs at the end of 2025, up four from 2024. Revenues from Market Data licensing increased 17% quarter over quarter, reflecting a 25% increase in the registrar-based revenues, a 14% increase in revenues from direct-sold licenses, and a 3% increase in revenues from data and compliance solutions. Within the 32%, primarily due to price increases from 2025 combined with a 3% increase in professional user count. Nonprofessional user revenues declined 4% as a result of an 18% reduction in reported nonprofessional users, which more than offset the impact of the price increases. Historically, in the normal course of business, we have seen significant changes in the number of nonprofessional users as market volumes and retail participation on our markets fluctuate, and we may experience further decline in the future. Broker-dealer enterprise licenses and internal licenses drove the growth in direct-sold licenses. Broker-dealer enterprise license revenues increased due to the combined effect of price increases and subscriber growth, while internal system license revenues increased due to subscriber growth. Increased revenues from data services and the Blue Sky data product contributed to overall growth in data and compliance solutions revenue, partially offset by lower revenue from EDGAR Online. Corporate Services revenues increased 17% in the fourth quarter. The impact of annual incremental pricing adjustments effective 01/01/2025 and improved sales, combined with a steady average number of OTCQX companies, resulted in an 8% increase in OTCQX revenues. OTCQB revenues increased 11% due to the same factors combined with a higher number of companies on the OTCQB market. In the fourth quarter, we added 41 OTCQX companies compared to 22 in the prior-year quarter, and finished the period with 574 OTCQX companies, up 1%. On OTCQB, we added 71 new companies in the fourth quarter compared to 61 in the prior-year period and finished the quarter with 1,106 OTCQB companies, up 5%. The launch of OTCID on 07/01/2025 resulted in a substantial number of Pink companies upgrading to OTCID and receiving access to DNS as a result. In addition, select Pink Limited companies also chose to subscribe to DNS. The resulting increase in DNS subscribers combined with price increases from the beginning of the year drove a 55% increase in related revenues compared to the prior-year period. As of 12/31/2025, 1,052 companies traded on the OTCID Basic Market, up from 1,035 companies at launch on 07/01/2025. Overall, we had a combined 1,508 OTCID companies and Pink Limited subscribers to DNS and other products at the end of the fourth quarter, representing a 13% increase from 1,338 companies at the end of the prior-year period. Month-to-month variability in our Corporate Services subscribers is driven by new sales, offset by non-renewals, corporate events, and compliance downgrades. Turning to page eight for our full-year results. In 2025, we generated gross revenues of $125,300,000, up 13%. OTC Link revenues increased 17%, driven by the same factors as previously mentioned. Transaction-based expenses increased 39%. Market Data licensing revenues increased 15%, also driven by the same factors as previously discussed, with nonprofessional user revenue increasing 1% for the full year due to price increases offsetting the decline in nonprofessional user count. Corporate Services revenues increased 8%, with a 46% increase in revenues from our OTCQX and OTCQB markets as well as a 29% increase in revenue from the OTCID market and the DNS product, driving the overall increase. During 2025, we added 137 new companies to OTCQX compared to 83 in the prior year, and 293 new companies to OTCQB compared to 190 in the prior year. The retention rate for the annual OTCQX subscription period that began on 01/01/2025 was 96% compared to 93% for the prior year. The net increase of seven in OTCQX companies reflects the 137 new sales, partially offset by 130 OTCQX removals. For the annual OTCQX subscription period beginning 01/01/2026, we achieved a 95% retention rate. Turning now to expenses on page nine. On a quarter-over-quarter basis, operating expenses increased by 6%. The primary drivers were a 6% increase in compensation and benefits, and a 9% increase in each of IT infrastructure and information services costs, and professional and consulting fees. Compensation and benefits comprised 61% of our total operating expenses during the fourth quarter, unchanged from the prior-year period. In the fourth quarter, income from operations increased 32%, while net income and diluted earnings per share each increased 28%. Operating profit margin expanded to 36.3% compared to 31.6% in the prior-year quarter. On a year-over-year basis, on page 10, operating expenses were up 7%, driven by similar factors. Compensation and benefits comprised 63% of our total expense base in 2025 compared to 64% in the prior year. Turning to page 11. For the full year, income from operations increased 19%, and net income increased 14%. Operating margin expanded to 31.5% compared to 29.9% in the prior year. Our diluted earnings per share increased commensurately to $2.58 per share compared to $2.26 per share. In addition to certain GAAP and other measures, management utilizes adjusted EBITDA, a non-GAAP measure which excludes non-cash stock-based compensation expenses. Our adjusted EBITDA was $47,600,000 for the full year 2025, and our adjusted diluted earnings were $3.94 per share, each up 15% compared to the prior year. Cash flow from operating activities for 2025 amounted to $48,600,000 and free cash flows were $48,400,000 compared to $32,900,000 and $31,600,000 in the prior year, respectively. Turning to page 12. During 2025, we returned a total of $32,600,000 to investors in the form of dividends and through our stock buyback program, a 10% increase from the prior year primarily related to an increase in the special dividend. We remain focused on growing our business and delivering long-term value to our stockholders. With that, I would like to thank everyone for your time and pass it back to the operator to open the line for questions. Operator: We will now open for questions. Please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Our first question comes from Steven Silver with Argus Research Corp. Steven Silver: Thank you, operator, and good morning, everybody. Thanks for taking the questions. Cromwell, you had mentioned that you are looking to build on the momentum in Corporate Services in 2026. And there were a lot of new companies added to OTCQX and QB, but a lot of that was offset by companies leaving as well. Just curious as to your high-level thoughts on momentum in Corporate Services given the flow of companies coming on and off those markets over time? Or markets, rather. Cromwell Coulson: Yes, Steve. I think that is a very good question. You know, every subscription business deals with churn, and there are different reasons for churn. Clients get taken over. Clients go to competitors. Clients have financial distress. And so targeting how we are selling our service into securities that have a foothold of trading liquidity in the U.S., and educating and engaging those companies to use the Corporate Services tools we have built to create better information on investor screens, and better data in brokers’ machines to really close the gap in functionality from the user perspective with exchange-listed securities. And then there are all the activities that once a company takes ownership of a symbol, that they can do around their brand, around their current investor base, and around their potential investor base. You know, successful companies over the long term connect share ownership with other communities of consumers and business partners. And that part of it, I think is for us going to be an important strategy going forward. One bright light is you have seen large issuers joining OTCQX and seeing the value there. And that is, you know, part of it when you use the OTCID to change the conversation. We are addressing churn at the low end by having a product for anybody who is willing to publish and certify information, and it brings in other companies wanting to use our full suite. Steven Silver: Great. And one more if I may. You talk a little bit about increasing visibility into OTCID and ATS Moon contributing to revenues in 2026. But then you mentioned that OTC Overnight is still kind of building that connective tissue and has not yet commenced trading. Is there a timeline for that? Is that anticipated to launch in 2026, or is that still maybe a little further out? Cromwell Coulson: Well, it is live. The industry is figuring out NMS overnight. And the real activity is, while it is broad, most of the activity is trading in a narrow list of names by the bulk of the activity, and it is a big lift for the industry. So the industry is moving thoughtfully forward on that. My belief is that we will see some activity this year. It is a chicken-and-egg game, but the same brokers trade these during the daytime. So it is moving through the development queues for firms, and it will move along. And I have always said, we wanted to do NMS because our clients want that now. And what we learned from NMS is going to be incredibly helpful in bringing the complexity of OTC securities into overnight trading. Steven Silver: Great. Thank you so much for the color, and best of luck throughout the year. Operator: Our next question comes from Brendan Michael McCarthy with Sidoti. Brendan Michael McCarthy: Great. Good morning. Congratulations on a strong quarter and strong year. I just wanted to circle back to the Corporate Services segment and a follow-up question there. On OTCQB, which looks like you had really strong growth in total dollar volume, also very strong growth in dollar volume per security. Is there any, you know, noticeable trend going on there? Cromwell Coulson: Fannie Mae and Freddie Mac. Bill Ackman’s tweets. Brendan Michael McCarthy: Got it. That makes sense. And what is the pivot to? Okay. Simply— Antonia Georgieva: Just to add to that. As we launched our OTCID campaign, that gave us an opportunity to reengage with our entire addressable market for our tiered markets. And many of our potential subscribers considered the full lineup of offerings, and many ended up opting for higher tiers such as QB, as they were being approached to evaluate or consider OTCID. So we saw some of that upselling contribute to the number of companies and the volume as well. Brendan Michael McCarthy: That makes sense. I appreciate the additional color there. And on that topic, Antonia, I think I saw OTCID had just a small drop in subscribers from Q3. Is that primarily due to uplisting, or is there anything to read through there? Antonia Georgieva: In terms of OTCID, you will see fairly regular ups and downs. We have a highly automated process to tag companies as qualifying for OTCID, and around reporting cycles, you may see certain companies being somewhat late, perhaps in filing or failing to meet any of the criteria that the automated process looks for to tag them as OTCID. What we do see is that movement month to month, so I would not necessarily read too much into it. We will continue to monitor the trends in ID subscribers over time, but it is too early to say what that trend really looks like, and the month-to-month variability has to do with just regular filing cycles and other events that occur at our company. Brendan Michael McCarthy: Understood. Brendan Michael McCarthy: And wanted to ask a question on OTC Link. Can you talk about your pricing strategy there? I think I read in the annual report that you are considering potentially competing on price going forward. Maybe talk about your pricing strategy and how that plays into your competitive position. Cromwell Coulson: We—our pricing strategy is a Costco-type strategy, which is subscription-based with quality products on the shelf. And when you buy volume, you get great value. I mean, we like to make money. We do not like to make as much money as the exchanges. Brendan Michael McCarthy: Got it. Thanks, Cromwell. Last question for me. Just wanted to ask about tokenization. It just seems to be a growing topic of discussion across many different industries. We saw ICE announce plans for the New York Stock Exchange to develop a platform for on-chain tokenized securities. Are you taking a similar approach here, or are you awaiting regulatory clarity? How can investors think about your stance on the topic? Cromwell Coulson: We are very involved in the discussion. So there are a lot of tokenized assets that are not securities. There are not many lawful tokenized securities yet. So there are a lot of different discussions and experiments about how these securities will trade, how efficient such trading will be, what is the cost of such trading. We are deeply involved in discussions with regulators, with how do we bring tokenization into the complexity of securities markets, which we have an experience and history of helping brokers trade, publishing data out on them, and assisting issuers in demonstrating their compliance with securities law, and helping brokers understand the risks and lawfulness of different securities. All of that complexity is showing up. We will be there with tokenized securities when they are free trading and lawful. Brendan Michael McCarthy: Understood. Understood. That is all for me. Thank you. Operator: Our next question comes from Walter Hopkins with Eighteenth Square. Walter Hopkins: Hi. Thanks, and congrats on the big quarter and the year. First question is just a sort of high-level question about the company’s overall strategy with organizing the markets. Do you think the current state of the market, with the addition of OTCID, likely reflects the end state of how OTC Markets Group Inc. sort of views the organization of the market into OTCQX, QB, ID, and Pink Limited? Cromwell Coulson: Thank you, Walter, for that question. I would say it is our current state. Bringing out OTCID lets us improve the standards for the higher markets. I would view that standards are always going to be a work in progress. But if you think about the four—if you add the Expert Market, five—buckets that we place securities in, they are pretty well formed from our perspective. They will be tuned over time. We will both add and remove standards as we learn, with the ultimate goal of incentivizing issuers to maximize the amount of information, governance, compliance that actually improves market quality and their investor experience and the broker experience. Now, OTCID was launched in the middle of last year. It is very new. It seems old to us. However, our user bases are just learning to understand it. So this is a long-tail build-out, and we have work to do around building the positive momentum of our premium markets, but we also have work to do educating investors about the reasons for risks and discounts in the Pink Limited Market and the responsibility lying with the managements of those companies, that they have chosen proactively not to do the base-level things that are fiduciary for shareholders and a company that wants to be compliant with rules and regulations in all jurisdictions where they operate or they have investors. That is really important. And as we build that out, you know, that understanding across all the different constituencies, the tiered market structure will become more powerful. And, you know, the future is on screens and in machines. That is where our markets are built for. But the information does not come directly from us. We need others to buy in, and when they buy in, it becomes more powerful. Walter Hopkins: Thank you. And next question is about Moon. Congrats on creating Moon’s success and traction out of thin air. It seems to kind of follow a tradition at OTC Markets Group Inc. creating new products that customers value without, you know, necessarily investing a lot of CapEx. I just have a couple questions on it. To the extent you are willing to share, it looks like daily volume is up significantly so far in Q1. Can you share the sort of run rate that you are seeing so far in the quarter? Antonia Georgieva: We will start putting out more information about Moon volumes in the near term. At that point, you will be able to see more specific statistics. Walter Hopkins: Okay. Thank you. Cromwell Coulson: Walter, the view of platforms is it really takes five years to turn it into a profitable franchise when you are doing the electronic platform business. And so you are doing these steps to gain traction, and then you are building out on it. And it is—you know, we have got a great team, but it is a grinding and elbow grease and one-on-one conversations to really build it out and understand how we can provide unique value to our broker-dealer clients on a competitive basis. Walter Hopkins: Understood. I saw that a competitor suggested that once you get to breakeven, that they thought they would see 90% incremental margins above breakeven. And I guess that is just two questions on that. You know? Is it—given the existing broker-dealer network and the sort of upfront investments that came through IT expense—are—is OTC Markets Group Inc. already at breakeven on the overnight trading side? Cromwell Coulson: They have a different understanding of transactional businesses than I do. So I wish I had that magic, but we are not so special. We have to work harder. Walter Hopkins: Okay. And I saw that they also said that they expected, you know, about half of the revenue to come from transaction volume and the other half to come from market data licensing. Does that seem like a realistic split for OTC Markets Group Inc.? Cromwell Coulson: They have a different view of competitive dynamics in the market data business than I do. Walter Hopkins: Okay. Okay. Understood. And then the last question is just kind of a technical one. I noticed that the OBV drove the GAAP taxes up a good bit, but drove down the near-term cash tax payments. So maybe this one is for Antonia. Do you mind just describing what is going on there and what you might expect the medium- and long-term effect on cash taxes to be? In other words, you know, what is the normalized effective cash tax rate look like for the company? And is it lower? Antonia Georgieva: I will ask our Chief Corporate Controller, Jeff Jim, to weigh in on those questions. Walter Hopkins: Thanks, Antonia. Jeff Jim: Walter, as you have seen on cash flow, where we disclose our tax payments over the past three years, the trend is going down because the OBB were allowed a more beneficial deduction on R&D credits as well as its deductions. So for the next couple years, you will see very similar trends, and with the adjustments, there is a lingering tax benefit that we will take in 2026, and then you will see a slight upward trend in cash taxes. Therefore, for your benefit, the accounting standards were expanded, particularly focusing on additional disclosure in the tax notes. So we provide significantly more enhanced disclosure about our GAAP provision for income taxes as well as cash tax information in the back. If you would like to review that in our annual filing, it is a newly adopted standard, so newly provided enhanced disclosure. We will be happy to follow up with you with a more thorough discussion, but please review our new tax disclosure in Note 14 to the annual report. Walter Hopkins: Okay. Thank you. That is all for me. Thank you all. Operator: Our next question comes from Jonathan Isaac with Quilt Investment Management. Jonathan Isaac: Hi. Thanks for taking my question. Congrats on the quarter. Can you hear me okay? Antonia Georgieva: Yes. Jonathan Isaac: Great. Great. Wondering, can you discuss changes to your capital allocation philosophy? You mentioned in the preamble paying a higher quarterly dividend and better balancing the quarterly and the special dividend, but you also mentioned—and this is music to my ears, by the way—opportunistic buybacks. In the past, buybacks have mostly been used to limit the impact of stock-based compensation, if my memory serves. What specific metrics do you think about when considering opportunistic buybacks? And what influenced you to evolve your capital allocation philosophy? Thanks. Cromwell Coulson: Well, Jonathan, we should question everything, and then we should look around and see what other successful companies have done, especially ones that tend towards enduring. So, you know, looking at our dividend strategy, looking at our buyback strategy, and looking at the ratio, from—you know, I took a look at Hermès as a company that, you know, builds sustainable value over time. You know, they are a luxury brand product, but they put real value into their products. They are not incredibly greedy about margin, and they have had a special dividend for a long time. Then if you switch over to the financial services industry, the CME is an example too. And as you and others have pointed out about in-the-market buybacks, for us, the desire is to be buying back some shares in the market as well. The challenge with buying back in the market is around—you know, let us say 10% for argument’s sake—of our stock turns over in a year. Now I think it is fantastic that we have happy shareholders who do not want to sell. We have a lot of community banks in our market that have the same problem. And I do not think it is actually a problem. I think it is a great thing if you have shareholders who are with you for the long term, so you do not have to run your business quarter to quarter, and the CEO does not have to spend a third of their time convincing new people to buy their stock because others are flipping out of it. However, starting to buy back in the market, and doing it in a manner that we are not putting our finger on the scale, is important. We are a profitable, cash-flow-positive company, so we will look opportunistically. We do not want to be doing it in a manner which could feel overwhelming to other buyers wanting to come in. But we will be opportunistic. And, you know, we are in a position with our financial strength and cash flow, where a mixture of quarterly dividends, special dividends, and buying back stock both as we have to give employees consistency around their stock compensation and, as you said, reduce dilution, but also in the market as well. So I think that is kind of how we look at the lens today, and, you know, we will, as we move forward and find areas in which we can deploy capital for shareholders, we may adjust it. But if we are creating more capital than we need, we are a big believer in being the kind of company that sends its excess capital back to shareholders because we have a group of very intelligent shareholders who know how to deploy that capital in other areas. Jonathan Isaac: Great. Thanks. Considering the firm’s large cash position, which is rather idiosyncratic for your industry, should we expect the new capital allocation philosophy to potentially result in a lower cash balance or even in a net debt position over time? Antonia Georgieva: Jonathan, one clarification on the cash position. There is a clear and well-defined seasonality in our cash position if you look over the years, with the fourth quarter and year-end cash position tending to be the largest, considering that we have an annual renewal cycle for our OTCQX subscription that starts in the fourth quarter of the year prior to the new cycle of QX subscriptions. So we tend to have significantly more collections and cash inflow in the fourth quarter, followed usually by a meaningful reduction in the same cash balance by the end of the first quarter in connection with year-end expenses related to incentive compensation and taxes. So it is more appropriate in our view to look at the cash balance as an average over the year or to trace its general evolution quarter to quarter, rather than focus exclusively on one particular quarter that happens to be our high point. Cromwell Coulson: And, Jonathan, you know, there is a course they teach using spreadsheets at Harvard Business School called “Everything looks better with leverage,” and then every market cycle, there is the school-of-hard-knocks course called “Until it does not.” We run our books conservatively. Now, if we were to acquire something, we would look at debt, but just leveraging up our balance sheet because it makes the numbers look better is not really what I have any interest in for the company where I have the majority of my personal wealth and many of my friends, family, and colleagues here have significant amounts of. It could look better in the short term. Now, if there was a durable cash flow asset that we could buy, that can change. And the companies that you are comparing us to are larger; they have a history in the capital markets. For the most part, they are in the S&P 500. So they have an incredibly low cost of equity capital, and they have a low cost of debt. So, you know, I think that is not something that is in our strategic outlook anytime in the near future. Jonathan Isaac: Thanks for taking my questions. Operator: That concludes today’s question-and-answer session. I would like to turn the call back to Cromwell Coulson for closing remarks. Cromwell Coulson: Thank you, operator. I want to thank each of you for joining us today. I would encourage you to read our full 2025 annual report, the risk statements, and the earnings press release for more information. Links to both are available on our Investor Relations page of our website. On behalf of the entire team, we look forward to updating you on our key initiatives that will continue to shape the integrity and competitiveness of the public markets. Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the fourth quarter and full year 2025 NCS Multistage Holdings, Inc. earnings conference call. At this time, participants are in a listen-only mode. After the speakers’ presentation, we will open up for questions. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s call is being recorded. I would now like to hand it over to your speaker today, Corbin Woodhall, Hayden Investor Relations. Please go ahead. Corbin Woodhall: Thank you, Victor. I would like to welcome everyone to the conference call and thank NCS Multistage Holdings, Inc. management for hosting today’s call. Us on the call today are Mr. Ryan Hummer, CEO of NCS Multistage Holdings, Inc., and Mr. Mike Morrison, the CFO. I want to remind listeners that some of today’s comments include forward-looking statements, such as our financial guidance and comments regarding our future expectations for financial results and business operations. These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any other expectations expressed herein. Please refer to our most recent Annual Report on Form 10-K and our latest SEC filings for risk factors and cautions regarding forward-looking statements. Our comments today, as well as the results of operations included in our earnings release, contain the following non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA less share-based compensation, adjusted gross profit, adjusted gross margin, free cash flow, free cash flow less distributions to noncontrolling interest, net working capital, return on invested capital, net operating profit after tax, and average invested capital. These non-GAAP measures and reconciliations to the most comparable GAAP financial measures are provided in our quarterly earnings release, which can be found on our website at ncsmultistage.com. I will now turn the call over to Ryan Hummer. Ryan Hummer: Thank you, Corbin, and welcome to our investors, analysts, and employees who are joining our fourth quarter and full year 2025 earnings conference call. I will begin my discussion with the financial highlights for 2025, and I will review certain commercial and operational accomplishments from 2025 and early 2026 that are aligned with NCS Multistage Holdings, Inc.’s vision and core business strategies. I will also discuss the integration of ResMetrics, and outline our strategic objectives for the year. Mike will follow, covering the financial results for the quarter and our near-term guidance. 2025 was a very important and successful year for NCS Multistage Holdings, Inc. Strong performance in the fourth quarter capped a year in which we exceeded the high end of our guidance range for the quarter and full year, for revenue, adjusted EBITDA, and free cash flow. Year over year, we grew revenue by 13% compared to 2024, and 10% excluding the contribution from ResMetrics, which we acquired in July 2025. We achieved revenue growth in each of the U.S., Canada, and international markets despite the challenging industry environment. Adjusted EBITDA increased by 20% year over year, outpacing our revenue growth and reaching $26.7 million with an adjusted EBITDA margin of 15%. Free cash flow, after distributions to noncontrolling interest, totaled $18.9 million and represents over 70% adjusted EBITDA-to-free cash flow conversion, which highlights the impact of our asset-light model. We strengthened our balance sheet while completing the strategic acquisition of ResMetrics, enhancing our global position in the tracer diagnostics space. ResMetrics is a highly complementary addition to our business that I will discuss further. So starting with our strategy, our vision at NCS Multistage Holdings, Inc. is to advance more efficient, intelligent, and sustainable energy development by enabling unmatched well performance. In practice, we deploy this vision in pursuit of the approximately $10 billion global completions market through a cohesive product and service offering that is designed to enable our customers to reliably maximize the value of their unconventional assets. This applies across diverse markets, in the more mature markets in North America, in emerging, high-growth unconventional developments in Argentina and the Middle East, and in more conventional geographies like the North Sea and Alaska, where we are successfully deploying unconventional technologies and techniques, collaborating with our customers to open new markets for our products and services in technically demanding environments, including innovative solutions for heavy oil utilizing steam-assisted gravity drainage, or SAGD, for deepwater offshore markets, and for enhanced geothermal systems. We also continue to partner with our customers to pursue further applications of our products and services during the production phase of the well. As we have discussed before, we have three core strategies that are supported by two guiding principles. I will review each, including recent progress, to demonstrate how we are creating long-term value for our stakeholders. The first core strategy is to build upon our leading market positions. This includes our market share and relationships in Canada, our extensive global track record in fracturing systems, and our expertise in tracer diagnostics, which has been strengthened through our combination with ResMetrics. This strategy is evident when we partner with our customers to introduce our solutions in new markets, often based on our extensive track record and the partnership that we have built with our customers over time. An example includes the first use of our fracturing systems technology for stimulation in a SAGD project in Canada in 2025, which also utilized our tracer diagnostic services to corroborate production results. Another example is the first expected installation of our Raytec Propex sliding sleeve system with integrated screen technology that we expect to deliver to our customer later this year for use in the deepwater Gulf of America. A second core strategy is to capitalize on high-margin growth opportunities worldwide. Over the years, I have highlighted the growth of our customer base in the North Sea, which continues to expand. We have received orders from two new customers already this year, each operating in the Dutch sector of the North Sea. We completed our first well in the Middle East utilizing our fracturing systems technology in 2025 and expect further applications in that market in 2026. And we have made the first sales of Repeat Precision frac plugs in the Middle East in 2025 with continued sales to two customers in the region so far and continuing during 2026. Our final core strategy is to commercialize innovative solutions to complex customer challenges. This proved to be an effective and exciting year for us with several significant achievements. In Canada, we recently installed our first Terrus AICV system, which has an integrated autonomous inflow control valve to improve the production profile of more mature wells, reducing produced water volumes while allowing for potential increases in oil rates. We look forward to additional installations of this system during 2026. Customer adoption of our StageSaver solution at Repeat Precision has been a meaningful contributor to growth, with new customers added during 2025 and early 2026 reflecting the value that our customers place on the contingency mitigation offered by the product, paired with the proven performance of our Purple Seal frac plugs. We are capitalizing on our investments in new tracer diagnostic solutions, including our RapidTrace on-site tracer detection solution, our Luminate multi-day composite samplers, and expanded use of ResMetrics SmartProp particulate tracer into Canada and other geographies. I will now speak to the two guiding principles that underpin our long-term strategy. First, seek to maximize financial flexibility. Our business model reflects this strength, with a net cash position at year end of approximately $29 million and an undrawn revolver. During 2025, we generated $22 million in free cash flow, $19 million of which is free cash flow after distributions to our noncontrolling interest. This free cash flow after distributions constitutes over 70% of our adjusted EBITDA for the year, reflecting meaningful conversion, especially considering our 13% year-over-year revenue growth. Our second guiding principle is to uphold the promise. Our company values are embedded in the promise, which represents the commitments that we make as a company to our employees, customers, vendors, and other stakeholders related to how we conduct business. It also speaks to our focus in the areas of technology, quality, health, safety, and the environment. Now I will provide a brief update on the integration of ResMetrics. This combination immediately strengthened our tracer diagnostics platform, increased our exposure to new markets in the Middle East, and aligned well with NCS Multistage Holdings, Inc.’s culture and our capital-light business model. I am pleased to say that we are operating under the ResMetrics commercial brand in the U.S., having integrated our sales and business development team. We have also upgraded our laboratory information management systems to incorporate certain ResMetrics processes, allowing us to uniformly plan and execute jobs for our customers. Operational and manufacturing integration will soon follow, with manufacturing and U.S. lab operations to be centralized in Tulsa by midyear. We have a clear line of sight to achieve the cost savings that we identified with this transaction, and we are progressing to deliver on revenue synergy opportunities we originally characterized as upside potential from the combination. I will close this section by reviewing our goals for the year, which are straightforward and are aligned with our long-term strategy. In 2026, we aim to grow revenue in excess of underlying market activity in the U.S. and internationally, with an objective to grow total revenue relative to 2025 inclusive of a full-year contribution from ResMetrics. We are targeting the conversion of more than 50% of our adjusted EBITDA to free cash flow. We expect to advance commercial adoption of our recent and new technology introductions, drive further commercial success for our product and service offerings, and also continue to penetrate the newest markets that we have entered. We are working to continuously improve our employee engagement and to ensure workplace safety, and we expect to advance initiatives currently underway to participate in higher temperature and production markets, to drive better data-enabled decision-making, and to expand our gross margin by implementing strategic actions to drive our efficiencies and optimize the cost and performance of our products and services. Mike will now provide more detail for our results for 2025 and our guidance for 2026. Mike Morrison: Thank you, Ryan. As reported in yesterday’s earnings release, our fourth quarter revenues were $50.6 million, a 13% increase compared to the fourth quarter of last year, and comfortably above the high end of our guidance range. Growth for the quarter was driven by healthy double-digit percentage improvements in both product and services revenue. From a geographic standpoint, the U.S. led with a 69% year-over-year increase, with international up 5% and Canada down 7%. The increase in the U.S. was due to the improved NCS Multistage Holdings, Inc. fracturing system sales, higher plug revenue from Repeat Precision, and a $2.9 million contribution from ResMetrics, a business we acquired on July 31, 2025. The decline in Canada for the quarter reflected moderately lower activity levels due to a general market headwind. Our fourth quarter revenues were the highest of the year and sequentially increased by 9%, with increases in Canada and the U.S. partially offset by a decline for international. Our adjusted gross profit, defined as total revenues less total cost of sales, excluding depreciation and amortization expense, was $21.2 million in the fourth quarter, representing an adjusted gross margin of 42% compared to an adjusted gross margin of 43% for the same period in 2024. Despite the favorable contribution from ResMetrics, the slight decline in adjusted gross margin was attributable to the mix of international tracer diagnostic jobs and fracturing system service activity, positively offset by an expansion in gross margin for our product sales. Selling, general and administrative costs were $14.2 million for the fourth quarter, down 5% compared to the same period last year, reflecting the timing of incentive bonus accruals recorded in the fourth quarter last year, as well as lower professional fees and share-based compensation expense associated with our cash-settled awards, which we recognize as expense as our stock price changes. During the quarter, ResMetrics contributed $600,000 to our SG&A. The provision for litigation, net of recoveries, was a benefit of $900,000 and resulted from a 2025 ruling by the Federal Court of Appeal of Canada, which remanded a prior judgment against NCS Multistage Holdings, Inc. in a patent dispute to the trial court and reduced the cost award. Accordingly, $900,000 of the cost award was returned to NCS Multistage Holdings, Inc. in November 2025. Other income of $1.1 million declined from $2.4 million for 2024, driven primarily by timing of royalty income licenses associated with our intellectual property, with 2025 activity aligning with our expected normalized rate of approximately $1.0 million per quarter. Net income for the fourth quarter was $15.0 million, or diluted earnings per share of $5.34, which included a positive impact of $9.8 million related to the release of our deferred tax valuation allowance. This reversal demonstrates confidence in our continued profitability and our ability to fully utilize our deferred tax assets in the future. Adjusted EBITDA was $9.2 million, or an adjusted EBITDA margin of over 18%, which exceeds the high end of our quarterly guidance range and is above the $8.2 million for the fourth quarter last year. Now turning to our full year 2025 results. Our revenues were $183.6 million, an improvement of over $21 million, or 13%, compared to 2024, exceeding the 5% midpoint of our initial guidance range for the full year. Excluding the revenue contribution of ResMetrics, which totaled $5.2 million for the five months following the acquisition and was slightly above our expectations, revenue for the year increased by 10%. All regions delivered an increase in total revenue for the year. Our adjusted gross margin for fiscal 2025 was stable at 41%, a slight decline of approximately 40 basis points compared to last year. For 2025, our SG&A expense was $58.8 million, an increase of $1.0 million compared to last year. ResMetrics contributed $1.1 million of SG&A in 2025, while increased share-based compensation expense also drove higher SG&A expenses. However, these increases in SG&A were partially offset by lower professional service fees, R&D expenses, and other SG&A reductions. Other income declined to $4.8 million from $7.3 million in 2024, primarily driven by the timing of royalty income recognition we previously discussed. Also, the prior year benefited from a technical service agreement with our local partner in Oman that ended in November 2024. Net income for 2025 improved to $23.7 million, or diluted earnings per share of $8.65, which includes a net positive impact of $11.5 million related to the release of our U.S. and Canadian deferred tax valuation allowances, as previously discussed. In the prior year, net income was $6.6 million, or diluted earnings per share of $2.55. Adjusted EBITDA was $26.7 million, up 20% compared to $22.3 million in 2024, with an adjusted EBITDA margin expanding to 14.5%, up from 13.7%. Turning to the balance sheet. On December 31, we had $36.7 million in cash and total debt of $7.6 million, which consisted entirely of finance leases, resulting in a net positive cash position of $29.1 million. The borrowing base availability under our undrawn ABL facility was $24.4 million, resulting in total liquidity of approximately $61 million. Turning now to a few points of guidance for the 2026 first quarter. We currently expect first quarter total revenue in the range of $49 million to $53 million, implying an increase of 2% at the midpoint compared to 2025. We expect U.S. revenue to range from $19.5 million to $20.5 million, international revenue from $3 million to $4 million, and Canadian revenue from $26.5 million to $28.5 million. Adjusted gross margin is expected to be between 39% and 41%, a modest decline compared to 2025. Adjusted EBITDA is expected to be between $6.5 million and $8.5 million. Our first quarter depreciation and amortization expense is expected to be approximately $1.6 million. With that, I will hand it back over to Ryan, who will provide our full year 2026 guidance and closing remarks. Ryan Hummer: Thank you, Mike. We expect the market environment to be challenging again in 2026. Based on our current outlook, we expect flat to lower overall customer activity in North America for 2026 compared to 2025, and for customer activity to increase in the primary international markets that we serve, though the improvements are likely to be weighted towards the back half of the year, especially in the Middle East. Accordingly, our full year guidance for 2026 is as follows: We currently expect full year revenue to range from $184 million to $194 million and for full year adjusted EBITDA to be between $26 million and $29 million. We expect our revenue growth to come primarily from the U.S. and international markets, where we are well positioned to outperform underlying market trends through continued market share gains, particularly at Repeat Precision, and also through new product adoption and continued international expansion. We currently expect Canadian revenue to be lower year over year as we face some headwinds from a lower total rig count, especially in Q1, and from specific customer consolidation that is likely to result in reduced pro forma activity levels. Our financial guidance does not incorporate any meaningful additional impacts from the currently volatile trade environment, including the potential imposition of new or retaliatory tariffs involving the U.S., Canada, and Mexico. The guidance also does not reflect the potential impact of the current conflict in the Middle East, either on operations in the region or potentially resulting from a sustained increase in commodity prices. We expect our gross capital expenditures for 2026 to be between $1.5 million and $2.0 million. In addition, we paid $1.5 million of contingent consideration associated with the ResMetrics acquisition in January 2026, which will be reflected in cash flow from investing activities. We expect our free cash flow after distributions to our JV partner of $12 million to $16 million, further strengthening our robust balance sheet and positioning us to pursue strategic investment opportunities. Due to the seasonality of our business, and consistent with prior years, we would anticipate that the achievement of our annual adjusted EBITDA guidance range will be weighted towards the second half of the year, with free cash flow weighted towards the end of the year. Before Q&A, I will close with a few comments. I am very proud of what the team at NCS Multistage Holdings, Inc. accomplished in 2025. We grew revenue, adjusted EBITDA, and free cash flow in a challenging market environment, delivering the benefits that we expect as we executed our strategic plan. We have the infrastructure in place to support revenue growth. Over time, we would expect our incremental adjusted EBITDA margins to be 25% to 35%. We are benefiting from the successful introduction of new solutions that meet the needs of our customers, adding to our portfolio and expanding our addressable market. We are operating as a unified tracer diagnostics business with ResMetrics. We have completed the work required to realize most of the anticipated synergies of this combination, with more benefit to come as we consolidate our U.S. lab and manufacturing footprint and increasingly focus on revenue synergy opportunities. We maintain a strong balance sheet and liquidity position, with total liquidity, including availability under our revolver, of over $61 million. We are efficiently converting our adjusted EBITDA to free cash flow, with free cash flow after distributions to noncontrolling interest totaling $19 million in 2025, which constituted over 70% of adjusted EBITDA. We expect our free cash flow after distributions to noncontrolling interest to exceed 50% of adjusted EBITDA again for 2026. As of yesterday, the midpoint of our free cash flow guidance for 2026 would represent a free cash flow yield of approximately 132% to our market capitalization. Finally, we uploaded our new investor presentation yesterday, which touches on a few of the items I discussed earlier in the call: our efforts to open new addressable markets, the progress we are making on the areas of emphasis from our corporate strategy, and the actions that we are taking across our product lines to improve profitability. We also added a new slide highlighting our return on invested capital, which illustrates the significant improvement in our business over the past few years. While we continue to be focused on core metrics, including revenue and EBITDA growth, margin improvement, and free cash flow, I think it is important to keep in mind that we are competing for investment capital not only with our industry peers, but the broader market as well, and return on invested capital is an important indicator of a company’s ability to create value for its shareholders over time. I am proud of the progress we have made, achieving after-tax returns of over 11% in 2025, reflecting our disciplined capital allocation and the operating leverage inherent in our business as we grow. Over time, our objective is to continue to improve our returns, with a medium-term objective of 15%, which we believe to be highly competitive across industries. With that, we welcome any questions from the audience. Operator: Press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please limit yourself to one question and one follow-up in the interest of time. We will now open for questions. Please stand by while we gather the candidate roster. One moment for our first question. Our first question will come from the line of Dave Storms from Stonegate. Your line is open. Dave Storms: Morning, and thank you for taking my questions. Ryan Hummer: Morning, Dave. Dave Storms: Just wanted to get started with the puts and takes on guidance. I know there is now a couple of quarters in a row you guys have telegraphed that a lot of your revenues this year are going to be weighted towards the back half. Is there potential for some of that to get moved up, or is a lot of maybe some of the Middle East stuff still in qualification phases that is pretty locked into Q3, Q4? Ryan Hummer: Yeah, Dave. I think you will see that profile continue. Right? Part of it has to do just with the seasonality of our business and our weighting to the Canadian market where, while Q1 is generally relatively strong, we see spring breakup in the second quarter and then more normalized activity in the second half of the year. Certainly, acquisition of ResMetrics, which is more U.S. and international focused, will help to mitigate that bit, as well as some of the market share gains that we have made with frac plugs in Canada, which tend to go to work that is more year-round. But I think we will continue to see that seasonality. I think as we look to certain specific opportunities, you know, for NCS Multistage Holdings, Inc., they are not just kind of market-driven. We do see a lot of the projects for 2026 developing such that we will see that pattern again with the majority of the earnings and the cash flow coming in the back half of the year. Dave Storms: Understood. That is very helpful. Thank you. And then I know you mentioned in your prepared remarks, you spent a little bit of time talking about some of the cross selling that you have been able to do specifically in Canada. Is it too early to talk about some cross selling potential in the Middle East with the ResMetrics, excuse me, with the ResMetrics transaction, or should we still wait on that until later in the year? Ryan Hummer: Yeah. So with ResMetrics internationally, we started to see some benefits. It is really more within North America, however. For example, I mentioned a product, a type of particulate tracer that ResMetrics has called SmartProp that was developed and utilized initially with their customers in the U.S., and we have now deployed that and have utilized it with some customers in Canada who really appreciate that technology. We are seeing, and what I would say is, kind of as you look to international markets, we are really looking at the combination of some of the new technologies that we have across that tracer diagnostic platform. One of those that is really applicable internationally is something called RapidTrace, and that is an on-site tracer detection capability for us. And that really brings value in remote markets where it might be hard to collect a sample and ship it to a lab and wait for that time to see results, but also where decisions that you make as you see that tracer result can enable a customer to take an asset off location and save significant dollars. So that is one of the things I think will help us in multiple international markets. The international work that ResMetrics has is really under long-term contracts. We mentioned they have work in the Emirates and in Kuwait. So those contracts, because they are multiyear, can certainly work to expand scope. We can also work to bring some of the best practices we identify across the organization. But as far as kind of revenue cross selling, that will take a little bit more to develop outside of North America. Dave Storms: That is great color. Thank you. I will get back in line. Operator: Thank you. Once again, that is 11 for questions. 11. One moment for any questions to queue up. Alright. One moment for our next question. We have a follow-up from Dave Storms from Stonegate. Your line is open. Dave Storms: Appreciate that. I did also want to ask maybe about what you are seeing in the North Sea. I know it tends to be pretty project by project. Maybe just any updates on the pipeline there as you continue to expand deepwater and some other unique capabilities. Ryan Hummer: Yeah. Thanks, Dave. Obviously, North Sea has been a great success story for us over the last several years, especially with our fracturing systems technology. I believe last year in 2025, we worked with, I believe it was seven customers across the North Sea, either having sold sleeves or, you know, complete completions work out on the platforms. And I mentioned earlier in the comments that, you know, we have orders in place to add two customers to that roster that are operating in, you know, the Dutch sector of the North Sea. So we are now, you know, working with customers in Norway, in the U.K., in the Netherlands. So, yeah, I think just the breadth of the customer base that we have developed speaks to kind of the product market fit that we have in that region and the results that customers are seeing utilizing that technology. And I think in a prior call, we might have mentioned, you know, a workshop that we held in Norway where we had great, you know, customer engagement and feedback for operators that were operating not just in Norway but across the entire region. So we feel, you know, really, really good about the work that we have in the North Sea. So as far as kind of how that might develop and play forward and, you know, that technology into other markets? You know, one of our North Sea customers is a project partner in the deepwater Gulf of America well that we expect to participate in later this year. So you have some connectivity there. There is also a customer that we have in the North Sea that we are talking to about other project opportunities in shallow water markets outside of the North Sea. So, you know, I would expect that to continue to develop over the course of the next year or two, but we certainly are looking to build on that success in shallow water offshore markets, taking that outside of the North Sea and then leveraging and moving into mid and deeper waters over time as well with our technology. Dave Storms: If I could just ask one follow-up on that. You mentioned the drill that you are expecting later this year in the Gulf of America. It is kind of a new market opportunity for you. How would you characterize maybe in the medium to long term some of your other new market opportunities that you might go after? Ryan Hummer: Yeah. No. Thanks for the question, Dave. And I think one of the things that came through in the prepared comments is the work that we have been doing to open up new addressable markets for our technology. So certainly, the deepwater is one, and that is a long, you know, a long sales cycle and product development cycle to get to it. So we feel really encouraged to be able to deploy that technology for the first time, hopefully, this year, and we believe that will open up additional opportunities with that customer, but then, you know, also opportunities for other customers that are targeting the same type of reserves going forward. The other areas where, you know, we have, you know, development initiatives in place, one is higher temperature more broadly. That does play into some deepwater markets. It is offshore in traditional oil and gas. It also plays into the thermal oil developments in Canada. I had mentioned SAGD. It also plays into enhanced geothermal systems, where customers are looking to leverage technology developed by the oil and gas industry, horizontal drilling, hydraulic fracturing, to access, you know, the heat in situ, you know, deep underground to provide baseload power that can be used to power data centers and other things. So I think, you know, the SAGD or the heavy oil market in Canada is one that we feel, you know, will open up some opportunities for us over the medium term. I think geothermal is one as well. Those are all relatively early days, will take time to scale, but good examples of what we are looking to do to participate in those markets. The other one is that, you know, historically, we focused primarily on supporting our customers during their completions. And within our fracturing systems portfolio, we do have an enhanced recovery suite of technology. You know, historically, that has been around what we would call injection control, so helping customers be more precise in the way they inject fluid, typically water, but in a waterflood or secondary recovery regime, when they are doing that with a horizontal injector, to being able to compartmentalize the well to create efficient sweeps and optimize the value of those waterfloods. We do have a development underway which is called TERIS AICV. I mentioned that earlier, which is more of a production control solution, which should help our customers to reduce the water cut that they are seeing in their wells, and, you know, handling produced water is an expense for our customers. So the deployment of the solution, we can help them reduce their production operating costs, but then also, through kind of preferentially producing through this specialized valve, preferentially producing the oil relative to the water, you may be able to see an oil production uplift as well. So if we can help our customers both improve their revenue profile and reduce their cost profile on existing assets, that is something that we think will have good application for our customers in the industry over time. And then, again, sort of speaking to one of your earlier questions on the ResMetrics integration and how that plays into some of this enhanced recovery and production space. Historically, we have been a little bit limited in our ability to pursue deploying tracers in waterflood projects. But with some of the new lab and chemical deployment techniques that, you know, we have been able to utilize from that ResMetrics brought to the table, that has opened up new opportunities for us in the production space on the waterflood, and our Canadian team in particular has been very successful this year going out and participating in projects that we probably were not as competitive in before without those capabilities. Dave Storms: That is great color. I really appreciate it. Thank you for taking my questions, and good luck in the quarter. Ryan Hummer: Alright. Appreciate it. Thanks, Dave. Operator: Thank you. Once again, that is 11 for questions. 11. And I am not showing any further questions in the queue. I would now like to turn it back over to Ryan Hummer, CEO, for closing remarks. Ryan Hummer: Thank you, Victor. On behalf of our management team and board, we would like to thank everyone on the call today, including our shareholders and analysts, and especially our employees. I truly appreciate the depth and breadth of the expertise of our people at NCS Multistage Holdings, Inc., at Repeat Precision, and the folks that have joined us from ResMetrics, and the passion and the effort that our people bring to their work. Our team continues to provide excellent service to our customers, commercializing new products and services that will enable our customers to be more successful. We are taking on demanding and technically challenging work and delivering results. We appreciate everyone’s interest in NCS Multistage Holdings, Inc. We look forward to speaking again on our next quarterly earnings call.
Operator: Good afternoon. Welcome to the Amprius Technologies, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining us for today's presentation are the company's CEO, Thomas Stepien, and CFO, Ricardo Rodriguez. At this time, all participants are in listen-only. Following management's remarks, we will open the call for questions. Please note that this presentation contains forward-looking statements, including, but not limited to, statements regarding our financial and business performance, our business strategy, future product development or commercialization, new customer adoption and new applications, our growth and the growth of the markets in which we operate, and the timing and ability of Amprius Technologies, Inc. to expand its manufacturing capacity, scale its business, and achieve a sustainable cost structure. These statements involve known and unknown risks, uncertainties, and other important factors that may cause Amprius Technologies, Inc.'s results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. For a more complete discussion of these risks and uncertainties, please refer to Amprius Technologies, Inc.'s filings with the Securities and Exchange Commission. This presentation includes a non-GAAP financial measure, which is adjusted EBITDA. This non-GAAP financial measure does not replace the presentation of Amprius Technologies, Inc.'s GAAP financial results and should only be used as a supplement to, not a substitute for, Amprius Technologies, Inc.'s financial results presented in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies. A reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is included in our press release, a copy of which is filed with the SEC and posted on our website. Finally, I would like to remind everyone that this conference call is being webcast and a recording will be made available for replay on the company's Investor Relations website at ir.amprius.com. In addition to the webcast, the company has posted a press release that accompanies these results, which can also be found on the Investor Relations website. I will now turn the call over to Amprius Technologies, Inc.'s CEO, Thomas Stepien, for his comments. Sir, please proceed. Thomas Stepien: Welcome, everyone, and thank you for joining us this morning. Let's start with Slide two. 2025 was a landmark year for Amprius Technologies, Inc. Our second generation SiCore silicon anode batteries gained broad adoption with many unmanned aerial vehicle customers. One recent win I would like to highlight is Nokia Drone Networks, whose commercial drone-in-a-box system is one of the most capable platforms on the market. Amprius Technologies, Inc.'s balanced cells provide Nokia drones with the burst power needed for takeoff and the sustained energy required for extended flight, ensuring obstacle avoidance, return to home, and other safety-critical subsystems remain powered throughout the mission. Our technology enables drones to fly longer, carry more, and operate in conditions once considered impractical, helping customers improve safety, reduce downtime, and increase mission value. In early January, we were honored to receive a Best of Innovation Award at CES. Our silicon anode lithium-ion battery was selected from the thousands of entrants for delivering an industry-leading 520 watt-hours per kilogram. For perspective, that is nearly twice the energy density of conventional graphite-based lithium-ion cells. Our cells are lighter, longer, and stronger. In December 2025, the U.S. updated the National Defense Authorization Act. Under the revised NDAA, batteries used in Department of War UAVs must meet two sourcing requirements. First, final battery assembly must be conducted by a non-foreign entity of concern, typically located in the United States or in an allied nation. Second, functional cell components must not be sourced from or produced by FEOC. For new DOW acquisition programs, both of these requirements must be met by 01/01/2028, approximately 22 months from now. NDAA is important in the context of our contract with the Department of War's Defense Innovation Unit. Awarded in July 2025 through a competitive solicitation from the 2024, the contract was recently increased and now totals $14,800,000. The DIU contract provides prototyping funds for Amprius Technologies, Inc. to accelerate production of NDAA-compliant SiCore pouch cells used in military unmanned autonomous systems. The contract includes milestones for supply chain diversification, pilot line expansion in Fremont, California, and the selection of NDAA-compliant contract manufacturing partners. Amprius Technologies, Inc. is ahead of schedule on NDAA compliance. One of our South Korean contract manufacturing partners has been delivering cells to customers since September 2025. We have expanded the Amprius Technologies, Inc. Korea Battery Alliance to three contract manufacturing partners, and in early January, we announced our first U.S.-based partner, Nanotech Energy, located in Northern California. I am happy to report that our scorecard for the battery component sourcing is 11 out of 11. All internal SiCore components—anode, cathode, electrolyte, separator, and seven additional elements—are now sourced from primary and secondary suppliers in NDAA-compliant countries. We are prepared to supply domestic cells to customers such as L3Harris Technologies, which delivers integrated solutions across space, air, land, sea, and cyber in support of national security. On the financial front, we completed our aftermarket financing facility during the fourth quarter. We also fully exited our Colorado facility and settled the remaining lease and expense obligations. Fourth quarter revenue reached a record $25,200,000, representing an 18% quarter-over-quarter improvement and a 137% year-over-year increase. Gross margin improved to 24%, a nine percentage point increase quarter over quarter and a 45 percentage point increase year over year. Full year 2025 revenue reached $73,000,000, 3x our 2024 level. Gross margin for the year was 11%, up significantly from the minus 76% in 2024. Later in this call, Ricardo will share additional financial details and color. Now turning to Slide three. Amprius Technologies, Inc.'s customers choose our batteries because they materially improve the performance of their products. By replacing standard graphite-based cells with our silicon-based cells, customer drones achieve significantly longer flight times. One way to think about our batteries is through the analogy of espresso. Espresso delivers the same amount of caffeine energy as a standard cup of drip coffee but in a much smaller volume. And if you match the volume and weight of the two, espresso gives you roughly twice the energy. Drone customers tell us this consistently. Amprius Technologies, Inc. batteries extend their flight time. In many cases, flight times double. Amprius Technologies, Inc. Xpresso batteries give customers the extra energy they need to elevate system performance. We elevate without compromise. The Amprius Technologies, Inc. silicon anode platform spans 22 cell designs across multiple chemistries, pouch and cylindrical formats, and a range of sizes. We have tuned and optimized cells for specific customer duty cycles, giving us the precision to deliver ideal solutions for energy-focused missions, the takeoff power required by air taxis, and applications demanding high cycle life. This tunability is a significant differentiator for Amprius Technologies, Inc. Slide four looks at our market segments. We serve five principal end markets. The first is UAVs, including drones used for defense, public safety, security, and logistics. Defense platforms that require high energy density typically support long loiter missions and are primarily ISR—intelligence, surveillance, and reconnaissance. Public safety drones are typically DFR—drone as first responder—systems integrated directly into 911 emergency workflows. In the U.S., more than 1,500 emergency departments now operate DFR programs as a part of real-time response operations. Drones are pre-positioned in fixed launch stations across the city and are dispatched automatically or semi-automatically the moment a 911 call is received. The objective is to get a camera over the scene in under two minutes, well before police, fire, and EMS units can arrive. Market segment number two is satellites and space. Satellite launch providers charge customers by the gram, making our ability to deliver the same energy at roughly half the weight—our espresso advantage—extremely valuable. Alto, a division of Airbus, is a long-standing customer in this segment. Its Zephyr high-altitude pseudo satellite are solar-powered aircraft that operate at 70,000 feet for months at a time. The persistent ISR capability that Zephyr provides is strategically important for both defense and commercial applications. Amprius Technologies, Inc. cells are also gaining strong traction in light electric vehicles—e-motorcycles, scooters, and e-bikes. Wins in this segment typically align with the launch of new models, so revenue tends to be lumpier than in other markets. This category also includes a healthy replacement and range extender sub-segment, an area we are beginning to explore. Robotics is our fourth market segment, and while still early, it is developing quickly. Robot performance is closely tied to battery capability, and Amprius Technologies, Inc.'s tunable cells can deliver both the high power needed for tasks like lifting and the energy required to maximize time between charges. With strong growth rates and expanding use cases, this segment is highly promising. The final segment that depends heavily on our industry-leading energy density is the electric vertical takeoff and landing aircraft, eVTOL, and other advanced air mobility. Customers are developing autonomous, point-to-point regional transport for both passengers and cargo. Several companies are currently testing our cells, and we have a customer-funded joint development program underway with one leading company. In this program, we are tuning our chemistry to meet the specific power and energy requirements of their aircraft. Turning to Slide five. Amprius Technologies, Inc. captures customer interest through our flexibility. We work closely with customers to understand their energy, power, and cycle life requirements, then select internal components that meet those needs while aligning with country of origin constraints. Because SiCore cells are produced on standard lithium-ion equipment, we can secure early design wins from our California pilot line and seamlessly transfer cell recipes and process steps to our contract manufacturing partners as volumes scale. During Q4 2025, we introduced three new cells to our silicon anode platform and retired one. The portfolio now stands at 22 designs spanning energy, power, and balanced cells in both pouch and cylindrical formats. We continue to offer the tunability, speed, and flexibility our customers rely on. Now turning to Slide six. Increasingly, customers care about the country of origin for both battery cells and internal components. Much of this is driven by the NDAA requirements discussed earlier, and the impact now extends to non-defense customers as well. Avoiding foreign entities of concern has become a compliance mandate, not just a marketing detail. Procurement teams are asking detailed questions about where cells are manufactured, where anodes and cathodes are processed, and where critical minerals originate. Fortunately, we anticipated this shift and began executing more than a year ago. In 2025, we announced our first NDAA-compliant contract manufacturer in South Korea, which delivered cells to customers just one quarter later. Last week, I was in South Korea with several of my Amprius Technologies, Inc. colleagues visiting component suppliers, checking in with current contract manufacturing partners, supporting new partners coming online, and meeting customers at our booth at DroneShow Korea. We still have work ahead on the NDAA supply front. With multiple contract manufacturers, 22 cell models, and 11 internal components, aligning every variable is operationally intensive. But we got an early start, we invested wisely, and we consistently share our progress with customers. They understand our roadmap, for both cell manufacturing and for cell content sourcing, and they respect our ability to deliver the right cell from the right location at the right time. On Slide seven, we present our high-level cell roadmap. The Amprius Technologies, Inc. roadmap highlights our industry-leading energy density on the vertical axis over the next 18 months. It organizes our portfolio into three cell types: high energy cells, where long uptime drives range and usability—key segments here include drones, robotics, and LEDs; high power cells, which deliver short, intense power bursts—applications include power tools, data center backup systems, and aviation platforms such as eVTOLs and drones that require power pulses for takeoff and landing; and long-life balanced cells designed for applications that demand both power and energy along with extended cycle life—these include eVTOL, satellite, and bendable device applications. We routinely share this high-level roadmap and the detailed information behind it with customers. We listen closely to their needs, incorporate their feedback, and adjust the roadmap as required. I will now turn the call over to Ricardo Rodriguez, for the financial results. Thank you, Tom, and good morning, everyone. Ricardo Rodriguez: I am very happy to be reporting another record-breaking quarter on behalf of our team, starting on Slide eight. In the 2025, we delivered $25,200,000 of revenue. This translates into 18% growth over the third quarter and is over 2.3x higher than the same quarter last year. I am particularly excited about crossing the $100,000,000 annual revenue run-rate mark, which positions us to deliver over $1,000,000 of revenue per employee, joining a very selective and unique group of companies. Echoing Tom's remarks, clearly the monster role technical edge has continued driving demand for our products as we broadened the portfolio and expanded our capacity in close collaboration with our manufacturing partners. For the year, our revenues were $73,000,000, in line with our expectations and just over three times higher than 2024. Our Q4 cost of goods sold, at $19,300,000, did not increase at the same rate as the revenue, thanks to a favorable product mix and higher volumes. This enabled gross profit margins of 24%, a significant improvement over our Q3 gross margin of 15%. Our lower SiMax line mix was now below percent of revenues, providing a powerful driver of our gross margin improvements. For the year, gross margins were 11%, reflecting a step-change improvement over negative 76% gross margins in 2024 as our revenue from SiCore increased around the world. Our resourceful culture enabled the team to only spend $8,900,000 of OpEx, which excludes a one-time charge of $22,500,000 linked with our decision to not develop a facility in Colorado and the decommissioning of some equipment in Fremont. The quarter-over-quarter increase in OpEx of $900,000 was driven by a targeted investment in our sales and go-to-market efforts along with the reallocation of some R&D expenses from cost of goods sold to OpEx as development services agreements are completed. These expenses, including the one-time charge of $22,500,000 that I mentioned earlier, bring our Q4 operating loss to $25,400,000 compared to an operating loss of $4,700,000 in the prior quarter. Without the one-time charge, our operating loss would have been $2,900,000, which would have reduced our operating loss by 37% quarter over quarter. A similar dynamic applies to our annual operating loss of $46,600,000, which would have been $24,100,000 without the same one-time charge and the 48% reduction of the operating loss of $46,200,000 from 2024. Our GAAP net loss for the third quarter was $24,300,000, or negative $0.18 per share, based on 132,100,000 weighted average shares outstanding. Without the one-time charge, our loss would have been only $1,900,000, or $0.01 per share. In Q4, we recorded adjusted EBITDA of negative $1,800,000 compared to negative $1,400,000 in the prior quarter. With $1,600,000 in operating costs from Colorado, we would have actually had positive adjusted EBITDA of $177,000 in 2025. As a reminder, we define adjusted EBITDA as net income or loss before interest, taxes, depreciation, amortization, stock-based compensation, and other items that we do not believe are indicative of our core operating performance. In Q4, these adjustments included $1,200,000 of depreciation, $1,900,000 of stock-based compensation, $1,100,000 of interest and other income, along with $1,600,000 of quarterly operating cost linked to the Colorado facility. If we adjust our EBITDA for the costs that we will now not be incurring in Colorado, our adjusted EBITDA in 2025 would have been negative $5,300,000, reducing our EBITDA loss by 77% year over year and putting us on a path to have positive adjusted EBITDA above our current revenue run-rate. As of the 2025, we had 134,500,000 shares outstanding, which was up by 4,100,000 from the prior quarter. The change includes approximately 2,300,000 shares issued from option exercises and RSU vesting along with 1,800,000 shares issued under our at-the-market offering program. Now turning over to cash flow and the balance sheet. We ended the third quarter with $90,500,000 in cash and no debt. The main drivers of cash flow in the quarter were the following: $13,500,000 used in operating cash flow was mainly driven by a near-term $1,800,000 increase in accounts receivable and a $2,100,000 increase of inventory. $2,240,000 of Q4 investments that are being funded by the Defense Innovation Unit, or DIU, as part of our project to stand up NDAA-compliant pilot and manufacturing lines. This brought our total CapEx in 2025 to $4,400,000. And lastly, $23,100,000 from financing activities consisting of $19,600,000 from the issuance of common stock under our at-the-market sales agreement and $3,500,000 of proceeds from warrants and option exercises. As we announced on January 12, we have now terminated our at-the-market offering program. Before I turn the call back to Tom, I would like to take a moment to frame out our outlook for 2026 and the North Star beyond that using Slide nine as the backdrop. With what we know today, we believe that by leveraging our platform and existing relationships, we can deliver at least $125,000,000 of revenue in 2026, which would enable us to have our first full year of adjusted positive EBITDA of at least $4,000,000. This baseline level of profitability would translate into a net loss of $8,000,000 for the year, or $0.06 per share, assuming 134,500,000 shares. When we say at least, we mean that we believe that while we are positioned to deliver additional upside, we would rather size this incremental opportunity as it happens than commit to delivering it as we work our way through what can be a great year for Amprius Technologies, Inc. Our CapEx for the year will be less than $10,000,000 as we have made a decision to strategically invest in diversifying our supply chain and expanding manufacturing capacity within our Fremont facility to include electrode manufacturing. As noted earlier, we are doing this in collaboration with the U.S. Government Defense Innovation Unit and have secured a contract for $14,800,000. With what we know today, we expect this funding to cover most of our capital over the next several quarters as we work to develop a growing and resilient source of supply in a dynamic trade environment. Last month, alongside the announcement of our agreement to produce cells with Nanotech Energy in the U.S., we also reported that we eliminated a lease and related expense obligation of over $110,000,000 in Colorado by settling it for $20,000,000. As a result, you can expect our cash position in Q1 to decrease by that amount, along with the reduction of $13,400,000 in right-of-use assets and the $33,200,000 reduction in near-term liabilities in our balance sheet. In forecasting our cash burn, we believe that our current revenue level and even slight improvements from these can put us on a path to mainly consuming cash for working capital versus funding operating expenses in the near term. Looking further ahead, we believe that as we work through 2026, it will become increasingly clear that our plans to build an efficiently scaled, multi-market leader that sets the technical pace in high energy and density power cells are realistic. As we close out the decade, we are targeting making the most of over $600,000,000 of contracted capacity by enabling our customers’ most mission-critical duty cycles and positioning us to deliver over 30% gross margins. By maintaining our resourceful culture and low-cost structure, we can then translate that into at least 20% EBITDA margins. Most importantly, the capabilities in go-to-market, product development, quality assurance, and enabling scale that we would have by then would position us for additional growth beyond 2030. That opportunity has our team energized and motivated to work together to meet and hopefully even surpass these goals by improving ourselves and how we work. With that, I am happy to turn the call back to Tom for his closing remarks. Thank you very much for your attention and continued support. Thomas Stepien: 2025 was a very strong year. We delivered consistent quarter-over-quarter revenue growth, expanded our customer base to more than 550, demonstrated state-of-the-art technical performance, and achieved three consecutive quarters of positive and growing gross margin. The lithium-ion battery market is intensely competitive, and we embrace those challenges. In 2026, we remain focused on delivering next-generation silicon anode performance that raises the bar for energy density and sustained power without compromising safety or reliability. We are equally committed to meeting the cell manufacturing and content country of origin requirements our customers expect. We will broaden our product portfolio to unlock new market opportunities and convert a growing number of customer engagements into formal qualifications and deployments, particularly across mobility-centric platforms. We are starting 2026 in a financially clean position, having completed our ATM program, fully exited the Colorado facility, and transitioned all legacy SiMax Generation One customers to our Generation II SiCore platform. We are incredibly bullish about the opportunities in front of us. We look forward to meeting and reconnecting with many of you as we participate in a number of upcoming investor conferences. Thank you for your continued interest and support of Amprius Technologies, Inc. With that, I will turn it back to the operator for questions. Operator: Thank you. We will now open for questions. Ricardo Rodriguez: I ask you please limit yourself to one question and one follow-up. Operator: The first question is coming from the line of Eric Stine with Craig Hallum. Please proceed with your question. Eric Stine: Hi, Tom. Hi, Ricardo. So curious—maybe if we could start just with the selection of the 11 components. I mean, a quite significant step. But just curious, you talked about it a little bit, Tom, but just maybe a little bit more in-depth about what you need to do now, what some of the steps might be in 2026. Obviously, you have got a head start, but those steps as you work towards gaining that full compliance, and I would assume you are trying to do that well in advance of the 01/01/2028 date. Thomas Stepien: Yes, good question. So we have technically selected anode, cathode, electrolyte, separator, and [other elements] that make up the internals of our battery and give us the internal performance that we talked about. We have primary vendors and secondary vendors. It went through a pretty rigorous testing process. This all started with the DIU project back when it started in July '25. So we have had six, eight months to turn the knobs here. So we are happy with the performance of the cells with the different internals. In fact, in some cases, we see slightly improved performance compared to the legacy components. So that is where we are. The work that remains includes productizing and getting all of those new suppliers under multiyear agreements. Part of what I was doing in South Korea last week is talking to some of those suppliers because Korea is, outside of China, probably the second largest country in terms of suppliers. There are ones in Japan. There are suppliers here in the U.S., etc. So we need to put those agreements in place, make sure that we can operationalize it, get them to deliver their components to our contract manufacturer. So there is some operational work. There is some supply chain work that is still on our plate to complete to finally deliver full cells at quantities that our customers are demanding. Eric Stine: Got it. So it sounds like you are really through all the technical or the engineering side of it. It is now more about just making sure that—yes, you have qualified those sources—but can you lock those down and be able to incorporate those in your products for, obviously, larger volumes? Thomas Stepien: That is a good way to summarize it. The heavy lifting on the technical side is done, and now it turns over to our operational teams who need to do exactly that and get the supplies. Eric Stine: Appreciate that. And then just maybe for my follow-up, saw the first Gauntlet Awards under the Drone Dominance Plan, and I know there were 25 awardees. I do not know if you are able to give specifics or any color around this, but of those 25 awardees, just kind of curious how many of those are your customers? How do you view that as an opportunity? And then obviously, just your outlook for the next steps under the executive order? Thomas Stepien: Yes. The gauntlet one of the Drone Dominus program had 25 invitees. We should see here in the next couple of days the results of the actual fly-off that has completed. Our understanding is that it was done last week and there is a down-select going. We are all over that in terms of understanding where is Amprius Technologies, Inc. inside in each of the 25. We are looking forward to understanding the official down-select list that, again as I mentioned, should be [out shortly]. So that is where we are. Stay tuned on specifics. I think as that list is published, we may be able to talk about [more]. Understand there is a second, third, and fourth gauntlet, so this will happen over the next 18 months or so. This is early, but we feel good about where we are today. Operator: Thank you. Our next question is from the line of Austin Volle with Needham and Company. Please proceed with your question. Austin Volle: Hey, guys, thanks for taking my question and congrats on the great results. I just wanted to dive into the new customer wins. Historically, this was a metric you guys were giving. In the deck, it says that you are working with 550 customers. So, my question is, is it fair to assume you guys added over 100 new customers in the quarter? And then just trying to get a sense of where they are in volume production. Are we still kind of in the early design phase for the majority of these? When do we get to those high-volume production levels? Thomas Stepien: It is fair, Austin, to assume that it is more than 100. It was 444 in the last call in November. You said 550. So yes, we continue to add to that. We have both repeat customers, of course, which is an interesting signal that we have earned the trust and can grow that, and we continue to expand the funnel with over 100 new logos. In general, the 100 new ones are new evaluations, right? Some of these are a couple of hundred cells for testing. They come from our Fremont pilot line, which is set up exactly to win these [programs]. So we keep track of those because we are planting seeds first. The average PO—we looked at that just the other day—during Q4 increased relative to Q3. Customers are purchasing larger volumes. But it is still early days here. You can obviously do the math on our revenue; we are at single-digit market share in these markets, and growing. So, it is early. We have a lot of work to do to capture what we believe is our fair share given our tech. Austin Volle: Okay. Thank you for that. And just one quick follow-up. Looking at your guidance and kind of what is baked in from a geographic perspective—historically, Europe or international has been the main driver. Could you talk about what is baked into that and what we should be expecting from a regional perspective? Ricardo Rodriguez: Yes, sure, Austin. We see a continuation of the same trends that we saw especially in Q3 and Q4, and are really waiting to see where the U.S. comes out in terms of enabling us to deliver additional upside. So, frankly, within the guide, we expect our mix to look pretty similar to where we were in Q2, Q3 of last year. Austin Volle: All right. Well, thank you, guys, and best of luck for the rest of the year. Ricardo Rodriguez: Thanks, Austin. Thank you. Operator: Our next question comes from the line of Mark Schubert with William Blair. Please proceed with your question. Mark Schubert: Tom and Ricardo, congrats on the great progress in 2025. Question about some recent geopolitics. The war in Iran—we are starting to see the U.S. drone warfare capabilities. But at the same time, we are starting to see some strain in the munition stockpiles. So I am wondering, in the past six days, have you had any increased urgency from any U.S. military defense contractors? Are they looking for you to ship more batteries yesterday? Thomas Stepien: Yes. Over the weekend, we actually had one customer who themselves have a reconnaissance drone—tends to fly for hours and days at a time—that was a little bit on hold that is getting a pull themselves, which creates a pull for us. And that is where this pilot line we have here where, for Ricardo and I, are in Fremont and quickly do a student body right. Okay, let's make those in this one and eight cells. Deliver them quickly, i.e., in a couple of weeks, to that. So we are seeing some of that. It is hard to talk about more than that, just a single customer, but that is one data point to share. Mark Schubert: The Nanotech partnership we thought was a creative solution to find some capacity. How much demand are you seeing from these super NDAA-compliant customers where they need U.S. manufacturing? And are you looking to find more creative solutions like another Nanotech, or do you think that the pilot line that you are increasing capacity in Fremont with the DIU investment will provide enough capacity later this year? Thomas Stepien: Yes. The pilot line is well named because it is primarily to win initial designs. And once there is volume that is a couple of thousand cells, that is when we transfer to one of our partners. Nanotech helps us on cylindrical cells, and we are getting a really strong pull. I was at [customer meetings in] December. As the NDAA changes [rolled out], they are okay with some of the cells they are getting today from the countries and content today, but they really want to understand the when. We mentioned that earlier. So we share with them the roadmap—here is when we are really going to have volume from either Nanotech or others. And there will be more coming. That is clear. The pull is there. This will balance out in a couple of years. Some of our customers are insensitive to this, and Korea is serving that, as I mentioned. As we know, we have sales from Korea today, and some must have U.S. So it will balance out maybe one-third, one-third, one-third, in a couple of years, grading that transition. Operator: Thanks, Tom. Your next question comes from the line of Colin Rusch with Oppenheimer. Please proceed with your question. Colin Rusch: Thanks so much, guys. Tom, I would love to get a better understanding of what is happening here within the technology roadmap. Are these fundamental changes in some of the electrolyte and binder technologies or any of those separator technologies as you move towards these higher performance cells? And how mature is the testing process to give you comfort that you will be able to execute on these over the next 18 to 24 months? Thomas Stepien: Yes. We think that—let's go inside the battery a bit. So the anode with our silicon design, which took us a little while to get right, we think is pretty strong. So the big question is, okay, why cannot we go above 450, 500—depending on the cell type—watt-hours per kilogram? Is that some of the other components, as you alluded to? Primarily on the cathode. So there are knobs being turned by our R&D folks. The thinking is that cathode may be slowing down the overall package. So there is some work being done. We had a Board meeting yesterday and shared our goals to the Board on specifics related [to that], and it is very focused on improving that. We are big believers you get what you measure. We are measuring our energy density inside. We are R&D focused on that. On the testing part, we feel pretty good. We have got a pretty robust system here at the small scale, the manual scale P&L, and then as these 30 different tools arrive, funded by the defense unit, that is getting stronger. Colin Rusch: The performance that you are talking about here from a technology perspective is just fundamentally advantaged and looks defensible in a pretty material way. And the target market that you guys are looking at are so much larger than what it looks like the target is for 2030. So can you talk a little bit about the considerations around the pacing of growth, pricing and margin, kind of internal targets as you think about growing this platform and doing it sustainably? How should we think about the key gating items and how we should think about potential acceleration relative to those targets? Ricardo Rodriguez: Yes, Colin. So again, I think this all really just starts with the technical performance that we are able to deliver. So in our view, if we deliver everything that is there on Slide seven, and the markets grow—maybe not even to the full extent, but half of what we have on Slide four—we look at some of the main drivers. And as we were looking at the markets, one element that people forget about: there is a bit of a replacement dynamic within some of these end applications. And then it really comes down to us leveraging the capacity that we have contracted, having that capacity in the right place, so that we can deliver the right cell at the right time from the right place. And, yes, when we look at it, I agree with you. I think that is why we have $600,000,000 plus. We will find out over time what capacity is needed in 2030. But with the way we are looking at the world today, I think this is, as you mentioned, pretty achievable. Colin Rusch: Thanks so much, guys. Thomas Stepien: Thank you, Colin. Operator: The next question comes from the line of Ryan Pfingst with B. Riley Securities. Please proceed with your question. Ryan Pfingst: Hey, good morning, guys. Thanks for taking the questions. Hey, Ricardo. Tom, you mentioned market share earlier. Could you frame how you are thinking about your aviation market share today, maybe for drones globally? Or if you could get more specific within military drones or advanced drones? Thomas Stepien: Yes. Thanks, Ryan. It is, as we have said, single digits. These markets are large and growing. We have updated—and you see that on Slide four—our understanding that also goes into our 10-Ks. We are trying to really double-click on that for some of the specifics. Drone taxonomy is groups one through five. Okay, we know that batteries are used in one, two, and half of three. Not in four and five. How much of that is industrial versus defense? What is going on by region? DFR—drone as [first responder]. We have not yet found a good source for that double-click. We got the first click to understand as we present it, but our goal is to have more definition that we can have both internally and share externally. We have started—we have a good third party who is helping pull that together. But it is so early and it is changing so fast, right? This dominance program, the U.S. has admitted that, hey, we got to catch up. So what we have today is what we can share. We are not holding anything back, but we are certainly trying to get smarter and understand that better. Ricardo Rodriguez: And Ryan, the point that we are trying to drive here is that our share depends on how you subsegment the market. In some cases, our batteries basically enable the duty cycle. By the time you power the drone, a camera, a gimbal, a radar, multiple sensors, you wonder how there is energy left in the battery to still make the drone fly a couple of miles away. And so we are seeing our share be pretty high on those drones that have a lot of other power-draining devices, while those more inexpensive drones—some of them are frankly using remote control car batteries—and therefore that is not a market for us to play in, even though the volumes are pretty high. So we do believe, just through process of elimination of the folks who are not yet customers, that we are positioned to do very, very well in that high power, high energy draw drones—tend to be the larger ones that are used for surveillance or more complex missions. Ryan Pfingst: Got it. Appreciate that detail. And then just a follow-up on guidance. Could you give more detail around what is baked into the baseline revenue estimate, maybe what needs to happen to exceed it? And what your revenue capacity is roughly today? Thomas Stepien: Yes. I will answer it sort of in reverse order. In our assumptions is what we see from current customers and some prospects that we are looking to convert here into customers in Q3 and Q4. Sort of going back to Austin's question, we still see the UAV market accelerating from being pretty well established in Europe. And what is not baked in fully just yet is any [incremental upside] that could come from additional drone production and sourcing here in the U.S. So in our guide, we are still assuming that the mix is meaningfully outside of the U.S. for 2026. And as I said, we will size the upside here as we deliver it because there are some pretty quick decisions being made on the U.S. side around what this demand could be. Alongside some of the calls that we got here this weekend and have been getting this week, we do see this evolving favorably from a demand perspective, but we want to size it with POs, not with some loose idea of what the pipeline is. Ryan Pfingst: Appreciate it, guys. I will turn it back. Thomas Stepien: Thank you. Operator: The next question is from the line of Ted Jackson with Northland Securities. Please proceed with your question. Ted Jackson: Thanks very much. I hope you can hear me—a xylophone band literally set up behind me in the airport while I was on this call. So it is really loud. I have got a lot of really nice ambient music for you. I had a couple of questions. So, a real simple one. You made a comment, if I recall, that your SiMax revenue has fallen about 60% of total—I guess, we are ongoing—and then you have transitioned your Gen One SiMax customers to Gen Two SiCore. So I guess my question is, what was the mix of revenue SiMax or SiCore coming into the year? What was it coming out? Where do you see it at the '26? Ricardo Rodriguez: At the '26, we see it zero. And coming in it was about 25%. Ted Jackson: Okay. Then my next question—with the NDAA compliance success that you have had, in terms of getting all your suppliers in place and your contract manufacturing in place—where do you think you stand in that process vis-à-vis the market as a whole? Do you think that you are on a path with everyone else or perhaps a few lengths ahead? And do you see the ability to get there first as a competitive advantage? Thomas Stepien: Yes. So we think that we are near the front. It is hard to know whether we are at the front. Every battery manufacturer got the memo and is looking to serve. We tend to take “only the paranoid survive,” so we never really want to think of ourselves as being at the front. We are happy with our industry-leading advantage, etc. We are working hard. We have got work to do for sure. As I mentioned, there is more announcing here—work is underway. You can imagine that there is a lot of effort long before things get announced. So we are happy with where we are. We are very focused on making sure that we keep up with [demand] because it is [evolving quickly]. So happy, but work to do. Ted Jackson: Okay. And then my last question—just looking over at Slide four over to the right where you have your OEMs and key market players. You have a lot of corporate logos up here. Have all of these logos in some form or fashion sampled or looked at the Amprius Technologies, Inc. product? Are they customers? How much do you give to someone with this—like, some of them you have clearly announced as customers, some we have not. Are these all people that you actually have kept making your battery in the past for some form or fashion? Thomas Stepien: Yes. You are right. Some are customers. The title of that column on Slide four is appropriate, key market players. So some are customers that we can talk about publicly, some are potential customers where we are in testing, and other ones we have to earn their trust. So that is the mix that we have on that right-hand column. Ricardo Rodriguez: But in general, these are all folks for whom it would be logical to buy cells from us. And they may have bought cells at low volumes for testing as well. Ted Jackson: Okay. I will step out of line. Thanks very much and congrats on the quarter. Operator: Thanks, Ted. Thank you. Our next question is from the line of Derek Soderberg with Cantor Fitzgerald. Please proceed with your question. Derek Soderberg: Yes. Hey, guys. Thanks for taking the questions and my congrats as well on the results. First one on the Nokia—hey, the first question is on the Nokia Drone Networks. Is this sort of a single product win? Is it more of a platform win? Can you talk a bit about the unit volumes and ramp timing for that? And then as we sort of look into exiting the decade, can you sort of talk about how large the opportunity would be with the Nokia piece? Thomas Stepien: We like Nokia, Derek, because it is a communications platform generally, right? Our understanding of this platform is that it is able to beam 5G signals to difficult-to-reach places where you cannot easily install cellular. It is a platform. If you talk to the Nokia guys, there is a lot of work that they have planned in the future, and they have their roadmap, of course. We do not tend to break out specific customer volumes and share those. We do like this because it emphasizes what we say—this espresso advantage. Nokia drones with our batteries can fly 40%, 50% longer, and other customers twice the flight time compared to standard batteries. That is what led them to us. Derek Soderberg: Got it. That is helpful. And Tom, you have got a validated technology, hundreds of customers. You have been commercial for seven, eight years now with Fortune 500s. You really have had a head start, at least in the drone opportunity. How do you think you can best leverage that position to really accelerate the growth of the business? Thomas Stepien: Yes. It is about execution on the operational side for sure—to get the customers what they want, when they want it, and from the right place. We are also investing into the customer-facing side of the house. We have added to our sales team. We have a pack partner program that is embryonic but growing. Some of our cells go directly to the folks who make crafts—products that fly or roll or walk around like robots do. Others go through pack houses, and those packs then go into those end-use products. So we are investing there for sure. We are investing in some of our internal processes. We want to be able to meet and exceed this demand that we see. Derek Soderberg: Super helpful. Thanks, guys. Operator: Thank you. Our next question is from the line of Chip Moore with ROTH Capital. Please proceed with your question. Chip Moore: Hey, good morning. Thanks for taking the question. I want to follow up—actually, you brought up a good point on the replacement dynamic for batteries. Have you done any sort of analysis on what replacement can become as some of these markets mature, understanding that some of them are still pretty nascent? Where do you think that can go over time? Ricardo Rodriguez: I think it can be pretty meaningful depending on the market. In eVTOLs, it could very well be even more than the initial install volume if these things are—almost the same way, if you look at jet engine manufacturers in planes today, the maintenance and the replacement of those parts within those jet engines make the Rolls Royces of the world more money than selling the jet engine the first time. And that is a dynamic that you obviously do not see in EVs because you hopefully do not have to replace the battery—you just replace the whole car. But in UAVs, in robotics, in eVTOLs, we are seeing a little bit of a razor–razor blade dynamic, where the replacement market could be even larger than the initial sale market. And so, of course, depending on what assumptions you have for that, you end up with completely different market sizing. There is also a lot of work that can be done here to develop a standardized battery pack, and so this is something that we think about pretty frequently. We are looking for the right way to frame this out for the industry so that we do not have customers pulling in different directions when the duty cycle and the requirements are pretty clear and where we can drive meaningful convergence. Chip Moore: Yeah. No. That is helpful, Ricardo. And maybe just for my follow-up—appreciate all the new detail in the slides, great job. On the market slide, on Slide four—huge opportunities. What about opportunities outside of those core markets—fast charge and discharge capabilities, data center at the rack level, higher-volume electronics? Just maybe quickly address some of the adjacencies. Thomas Stepien: Yes. We alluded to this in Slide seven. There is a little picture of a data center there for the high power cells. That is an opportunity. Another one that we are looking at are battery packs for military applications. So the average soldier carries over 100 pounds of gear, and the standard battery packs currently use standard lithium-ion cells. If we bring higher energy density, we believe that we can cut the weight of those packs in half, potentially even make them more powerful. And if you combine them with something like a supercap, you can even trim the upper bounds of power peaks that tend to degrade batteries further. So, theoretically, we could cut the weight of those things in half or double their capacity. Then at the same time, almost double the life of those battery packs, therefore reducing the need to replace them as frequently. So, outside of what we have in Slide four, high power cells for data centers are obviously a market. And then anywhere else where you are using a battery pack, particularly in military applications—looking to leverage some of the customers that we already have—those would be other ancillary opportunities. Thomas Stepien: And maybe just to pile on, some of the characteristics that we show on Slide three are inherent with the silicon platform. Fast charge is up—and by the way, we also can charge a lot faster—and we have a wider temperature range. So we lead with our strengths—our only-ness is energy density, or metric density. But some of these other ones really help secure the win and secure the long-term relationships that we are building with customers. Chip Moore: Excellent. Thank you very much. Ricardo Rodriguez: Thanks, Chip. Operator: Thank you. Our last question comes from the line of Amit Dayal with H.C. Wainwright. Proceed with your question. Amit Dayal: Thank you, guys. Good morning. With respect to trying to bring manufacturing costs down or the price of the batteries down, do you have any room as you iterate on your side and how much of that may come from the engineering side from your end versus what the contract manufacturers can support you with? Thomas Stepien: Yes. Certainly design is a big lever for sure. Volume plays a part also. As we get volumes up, there is some pricing that we see with the 11 suppliers we have. And then we are getting into that, as we mentioned, as we go full NDAA with the contracts and the negotiations with suppliers on the 11. So we are in the midst of some of that. But the good news is that volumes are increasing. That is a big lever. And then we will see that. When we do talk to customers and they are insisting on U.S., that is where this interesting dynamic comes in—where they want U.S., but they want pricing. So we tend to have a little bit of an arm-wrestle. But in general, we are happy with the margins we see. And you, of course, understand the guidance. I think we can get [there]. Amit Dayal: Understood. Thank you, Tom. And then just last one for me. In terms of your balance sheet, it looks really solid with over $90,000,000 in cash. It looks like at this point, you really do not need to tap the ATM anymore. Especially going into sort of a capital-light strategy with Colorado out of the picture now, what are the uses of that cash that we can think of that could maybe accelerate sales or product development? Any color on that would be helpful. Ricardo Rodriguez: Yes. I mentioned in my remarks, Amit, with the current balance sheet, we are really only looking to fund working capital. As I mentioned, our CapEx will be funded by the DIU here in Fremont. Any little bit of incremental CapEx that could be needed at the contract manufacturers to accelerate production if demand ramps up even beyond our expectations will also be funded by the balance sheet. We are also looking at putting in place a working capital line with some of our banking partners to further scale the balance sheet. And then, yes, as you mentioned, earlier this year we put out an announcement saying that we are basically done with the ATM. I think the ATM did its job over the last two years. And right now, as you mentioned, the balance sheet is solid. We think our current strategies are more than fully funded. Amit Dayal: Understood. Thank you, guys. That is all I have. Thomas Stepien: Thanks so much. Take care, Amit. Ricardo Rodriguez: Thank you. Operator: This concludes our question and answer session. I will now turn the floor back to management for closing comments. Thomas Stepien: Thank you so much for joining us on the call. Stay tuned. We look forward to meeting some of you on the road here as we attend a couple of Investor Relations events. Be well, and thanks for your support. Ricardo Rodriguez: Absolutely. As we talked about, 2025 was a great year. We think 2026 can be even stronger as we play to our strengths—our energy density—and continue to push new products, expand our portfolio, respond to the country of origin requests. We are in a fortunate position. We are certainly in it to win it, and we appreciate your support. Operator: Ladies and gentlemen, this will conclude today's conference. You may disconnect your lines at this time and have a wonderful day.
Operator: Good morning, and welcome to the CorMedix Inc. Fourth Quarter and Full Year 2025 Earnings and Corporate Update Conference Call. Today's conference call is being recorded. There will be a question and answer session at the end of today's presentation, and instructions on how to ask a question will be given at that time. At this time, I would like to turn the conference call over to Daniel Ferry from LifeSci Advisors. Please go ahead. Daniel Ferry: Good morning, and welcome to the CorMedix Inc. fourth quarter and full year 2025 Earnings and Corporate Update Conference Call. Leading the call today is Joseph Todisco, Chairman and Chief Executive Officer of CorMedix Inc., and he is joined by Elizabeth Masson-Hurlburt, EVP and Chief Operating Officer, and Susan Blum, EVP and Chief Financial Officer. In addition, Beth Zelnickauffen, EVP and Chief Legal and Compliance Officer, Mike Seckler, EVP and Chief Commercial Officer, and Dr. Matthew T. David, EVP and Chief Business Officer, are also on the line and will be available during the Q&A session. Before we begin, I would like to remind everyone that during the call, management may make what are known as forward-looking statements within the meaning set forth in the Private Securities Litigation Reform Act of 1995. These statements are statements other than statements of historical facts regarding management's expectations, beliefs, goals, and plans about the company's prospects and future financial position. Actual results may differ materially from the estimates and projections on which these statements are based due to a variety of important factors, including the risks and uncertainties described in greater detail in CorMedix Inc.'s filings with the SEC, which are available free of charge at the SEC's website or upon request from CorMedix Inc. CorMedix Inc. may not actually achieve the goals or plans described in these forward-looking statements. Investors should not place undue reliance on these statements. CorMedix Inc. does not intend to update these forward-looking statements except as required by law. During this call, the company will discuss certain non-GAAP measures of its performance. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in CorMedix Inc.'s earnings release and the current report on Form 8-Ks filed with the SEC. This information is also available on the Investor Relations section of CorMedix Inc.'s site. At this time, it is now my pleasure to turn the call over to Joseph Todisco, Chairman and Chief Executive Officer of CorMedix Inc. Joseph, please go ahead. Joseph Todisco: Thank you, Dan. Good morning, everyone, and thank you for joining us on this call. 2025 was truly a transformational year for CorMedix Inc. While DEFENCATH achieved peak sales of just under $260,000,000, we are excited to have both announced and closed the acquisition of Melinta Therapeutics in the third quarter of the year. In addition, the team worked expeditiously to facilitate integration and achieve our target synergy of $35,000,000 during 2025. This was a monumental achievement and truly a testament to the operational execution capabilities of the CorMedix Inc. leadership team. As we turn our attention to the year ahead, there is much focus on our post TDAPA add-on period strategy for maintaining patient utilization rates for DEFENCATH in outpatient hemodialysis. As a reminder, on July 1, the TDAPA reimbursement for DEFENCATH will transition from a buy-and-bill format to a bundled add-on mechanism. We have had multiple conversations with our top customers and are in the process of finalizing supply pricing for Q3 2026 as well as for 2027. At this time, we are affirming our 2026 DEFENCATH guidance of $150,000,000 to $170,000,000 and 2027 DEFENCATH guidance of $100,000,000 to $125,000,000. With respect to 2026, we expect much of the revenue concentration to be front-loaded in the first half of the year as price erosion related to the post TDAPA add-on occurs in the fourth quarter. Assuming CMS utilizes the same methodology to calculate the 2027 bundle addition, we do expect a meaningful increase in traditional Medicare provider reimbursement in 2027, which we expect to translate into a higher net selling price in 2027 compared to Q3 2026. To that extent, we took the extra step of issuing 2027 DEFENCATH guidance based on existing patient utilization rates as well as our current estimates for the range of net selling prices and it does not include potential upside from new customers or managed care contracting. In addition to DEFENCATH guidance, the company is also affirming full year 2026 financial guidance of revenue of $300,000,000 to $320,000,000 and adjusted EBITDA of $100,000,000 to $125,000,000. That said, we are actively in discussions with multiple Medicare Advantage providers as well as new potential customers for DEFENCATH in both the inpatient and outpatient settings of care, focused on execution of sales and marketing efforts for RIZEAO, Minocin, and Vabomere, and we will evaluate appropriate updates to financial guidance as we progress throughout 2026. This past month, we completed our first analyst R&D Day, which we focused on educating our analysts and investor community on the market opportunity for our antifungal product, RIZEAO, its current approved indication in the treatment of invasive fungal infections, as well as our key pipeline assets of RIZEAO in development for prophylaxis of invasive fungal infections and DEFENCATH in development for prevention of CLABSI in adult patients receiving total parenteral nutrition. Elizabeth will provide an update on the status of these development programs shortly. During the Analyst Day event, stakeholders were given the opportunity to engage with multiple panels of physician thought leaders around key aspects for each of these three growth opportunities for CorMedix Inc. The webcast of the event and associated materials remains available on our website and I encourage all investors to review those materials. The feedback from thought leaders was excellent and underscores our view for the large potential market opportunity for RIZEAO, which we estimate at approximately $2,500,000,000 across both potential indications, and for DEFENCATH in TPN, which we estimate between $500,000,000 and $750,000,000. 2026 is expected to be a transitional year for CorMedix Inc., with a heightened investor focus on new catalysts and value drivers, most notably our Phase III RESPECT data for RIZEAO in prophylaxis which is on track for the second quarter of this year. With the acquisition of Melinta, not only did we acquire what we believe will be an exceptional growth asset in RIZEAO, but also added highly durable institutionally administered products like Minocin and Vabomere, which we expect to provide a stable base of revenue while the company builds toward future growth. I believe CorMedix Inc. has done an exceptional job of maximizing the value of the initial TDAPA period afforded to DEFENCATH in outpatient hemodialysis and parlayed that success into building a pipeline that positions the company for long-term sustainable growth. I would now like to turn the call over to our Chief Operating Officer, Elizabeth Masson-Hurlburt, to provide an update on clinical activities. Elizabeth? Please go ahead. Elizabeth Masson-Hurlburt: Thank you, Joseph, and good morning. The combined clinical development and operations teams, along with field medical affairs, have been working diligently on numerous clinical activities. As we shared last fall, enrollment for the global Phase III RESPECT study evaluating RIZEAO for the prophylaxis of fungal infection in adult allogeneic bone marrow transplant patients completed in September. This pivotal trial is being conducted by our global partner, Mundipharma, who has confirmed that all sites have completed study participation and they are on track for an anticipated database lock later this month. We expect to announce top-line data from the RESPECT study in 2026. Top-line results will include the primary efficacy outcome of fungal-free survival at day 90, discontinuation of study drug due to toxicity or intolerance, all-cause mortality and attributable mortality with invasive fungal disease as determined by the Data Review Committee, and the cumulative incidence of invasive fungal disease at day 90 by the Data Review Committee and by azole choice. Additionally, safety data, overall adverse events, treatment-emergent adverse events, and serious adverse events are expected to be included in top-line results. The team continues to work closely with investigators and clinical experts in the field to deepen our understanding of the evolving clinical practices and the needs of these patients as we prepare to support a potential commercialization in 2027. As Joseph mentioned earlier, our panel of thought leaders provided excellent insights into the market opportunity for a long-acting echinocandin in the prophylaxis of invasive fungal infections and we are looking forward to our Phase III data readout. Turning to DEFENCATH, I am pleased to share that the Phase III NEUTROGUARD clinical study, which is evaluating the impact on central line-associated bloodstream infections, or CLABSI, in adult patients receiving total parenteral nutrition via a central venous catheter, is approximately 30% enrolled toward our minimum patient target of 90 patients. We are working to increase enrollment rates as we progress throughout 2026 with new sites in Turkey. At this time, we are still anticipating study completion in early 2027. The adaptive design is 90 minimum and a maximum of 200 participants based on the incidence rate of CLABSI. An interim assessment will be made by the independent data monitoring committee after 15 participants have experienced a CLABSI event. I would now like to turn the call over to Susan to discuss the company's fourth quarter and full year financial results and financial position. Susan? Susan Blum: Thanks, Elizabeth, and good morning, everyone. We are pleased to share our fourth quarter and full year 2025 financial results, which reflect our ongoing commercial and operational execution. A few things to note on the financial results before I jump in. Following the close of the Melinta acquisition on 08/29/2025, 2025 represents the first full reporting period incorporating Melinta's operations into our consolidated results. Also, the company has filed its annual report on Form 10-K for the year ended 12/31/2025, and I encourage you to review this filing for a more comprehensive discussion of our financial performance and operating results. As Joseph mentioned, we had a strong quarter on the revenue front. For the fourth quarter, revenue of $128.6 million reflected continued growth across our commercial portfolio, driven primarily by DEFENCATH, which contributed $91.2 million, and supplemented by a full-quarter contribution from the Melinta portfolio, which totaled $37.4 million, compared to net revenue of $31.312 million in 2024 which included only results from DEFENCATH. This represents a meaningful year-over-year increase and highlights the company's ability to execute on product launches and business development initiatives. Total revenue on a pro forma basis for 2025, which is full year revenue for both the CorMedix Inc. and Melinta businesses, was $401.3 million, which is in line with our previously established guidance. Of the total, DEFENCATH generated $258.8 million in net sales for the year. Turning to OpEx, fourth quarter operating expenses of $48.2 million increased from $17.1 million in the comparable prior-year period, reflecting the expected expanded cost structure of the combined organization, merger-related costs associated with the Melinta acquisition including severance expenses, and additional investment in expanded indications for DEFENCATH, most notably our Phase III clinical program focused on the prevention of CLABSI in TPN patients. Our operating expenses for the fourth quarter were consistent with our expectations and aligned with our strategic focus on building a platform for long-term sustainable growth, which was supported by the execution and integration of the Melinta acquisition. Our employee base has grown significantly in connection with the merger and scaling of the business. Last year at this time, we had a workforce of approximately 100 people and today have just under 200 employees. The expanded infrastructure serves to support growth and is expected to provide significant operating leverage in the periods to come. Now that we have successfully streamlined the two organizations, we can focus on executing our business growth strategy in preparation for the anticipated new launch opportunities of DEFENCATH in TPN and RIZEAO for prophylaxis. On the bottom line, CorMedix Inc. recognized net income of $14.0 million in 2025. Net income was impacted by tax expense of $42.4 million, the majority of which was non-cash, resulting from the utilization of deferred tax assets that were established in 2025. On a pre-tax basis for the fourth quarter, income was $56.4 million, an increase of $43.0 million from 2024. Turning to non-GAAP results, adjusted EBITDA for the fourth quarter was $77.2 million, which was within our previously established guidance and reflects modest growth quarter over quarter. This metric excludes one-time acquisition-related and reorganization costs, stock-based compensation, and the tax benefit and expenses recognized during the year, and it provides additional insight into the strength of our core operating performance. A reconciliation to GAAP results is included in the press release issued with our earnings announcement. From a liquidity perspective, we ended the quarter with cash and cash equivalents and short-term investments of $148.5 million, driven by strong operating cash flow of almost $100 million during the quarter and ongoing working capital optimization. Where we stand today, given our financial flexibility and commercial momentum, we believe we are well positioned for both organic growth from existing pipeline and promoted assets and potential inorganic growth from new business development opportunities. I am excited to be a part of the journey as we move forward. And now I will turn the call back to Joseph for closing remarks. Joseph Todisco: As I mentioned, 2025 was a transformational year. 2026 will be a transitional year that we believe sets up CorMedix Inc. for long-term sustainable growth in 2027 and beyond. We recently announced the share repurchase program and have been repurchasing shares throughout the first quarter. We intend to continue to be active throughout the year, subject to normal blackout periods, applicable volume restrictions, and other business needs, as we believe our balance sheet has sufficient flexibility to pursue this repurchase while leaving sufficient dry powder for new business development opportunities. The company sits here today with a diversified product portfolio, multiple late-stage pipeline opportunities, financial flexibility, and a capital structure to support future growth. We remain confident in the outlook for this year, our path to future growth, and sustained profitability. I would like to now open up the call for Q&A. Operator: We will now begin the question and answer session. The first question today comes from Roanna Clarissa Ruiz with Leerink. Please go ahead. Roanna Clarissa Ruiz: Hey, good morning everyone. A couple of questions from me. I was thinking in terms of your conversations with dialysis customers and talking about supply and contract pricing for DEFENCATH, could you give a little bit more color on how those are going? You trying to build in certain features to drive DEFENCATH volume in 2026 and beyond? Or how are you thinking about these different levers? Sounds good. And then I had a different question about RIZEAO. It sounds like you are going to share a lot of interesting information with the top line for the Phase III. Could you help frame what in that information you think is most clinically meaningful for physicians? How do you plan to leverage some of this data in potential future discussions with payers, etc., if all goes well and the top line is positive? Joseph Todisco: Hey, thanks, Roanna. So I would say conversations that I believe are going fairly well. The near-term focus is on preserving patient utilization through the back part of 2026 and creating a structure for an increase in selling price in 2027. And that is what we have been working toward negotiating with customers, and that is what we are hopeful we will be finalizing shortly. We are also setting these up with flexibility to allow for changes in the event we are successful with Medicare Advantage contracting as we progress through this year and into next year. So overall, I am happy with the progress that we have made and hopeful in the near term we will have some things finalized for the back part of the year. Thanks. Before I let Elizabeth comment, I will just give you a little bit of my thoughts. And the way I look at the RIZEAO top-line data, I think there are obviously various degrees of success, right? There is meeting the top-line endpoint and then there are going to be different aspects of pathogen data within the top-line data as well as the secondary endpoint around the discontinuation of the standard of care. And I think, obviously, what we are able to show will guide toward the commercial utility and how we are going to think about marketing and promoting the product. But Elizabeth, do you want to add any further? Elizabeth Masson-Hurlburt: Sure. Roanna, I think when it comes to how we are going to use the data, a lot of this is going to be dependent on the data that we see in top line. Obviously, the more, the better. I think if we are successful in the way that RESPECT reads out, there is a lot of opportunity for us to be able to talk to the payers about an option that does not have the drug–drug interactions that the azoles and some of the other therapeutics are presenting right now, and we are hopeful that that will lead to understanding around less hospitalizations, getting patients out quickly, and to, you know, more safely be on their cancer regimen. It will be certainly data dependent, but I am confident that once it comes out, we will be able to take a look at that data and strategically place it with payers and the clinical community. Roanna Clarissa Ruiz: Understood. Thanks. Operator: And the next question comes from Leszek Sulewski with Truist Securities. Please go ahead. Jeevan Larson: This is Jeevan on for Les. Thanks for taking our questions. First, any developments on the bipartisan proposed TDAPA extension bills and if the timing here has changed based on recent global events? And then also any updates on a potential partnership with the other LDO and how post TDAPA dynamics change the odds here? Thank you. Joseph Todisco: Thanks. Look, legislation is always speculative. What I can say is that we have spent a lot of time, we are working closely with the other company that is actively in TDAPA, Akebia. We have been pounding the pavement on the Hill as well as with career staff at CMS and political appointees at CMS. We have a large number of co-sponsors of the bill now. Timing is tricky, right, because this likely needs to be attached to another piece of legislation. There is a war in the Middle East. So we really cannot speculate on whether this can happen before June 30 or December 31. I think if it happens after June 30, I think there is a pathway for potential retroactivity of some aspects of the bill to impact positively on DEFENCATH. That is something we would actively be working on as well behind the scenes. But it is really hard to pinpoint a timing with everything that is going on in Washington right now. With respect to the other LDO, I cannot comment on ongoing discussions with customers. Operator: And your next question comes from Serge D. Belanger with Needham & Company. Please go ahead. John Todaro: Hey, good morning. This is John on for Serge today. One on DEFENCATH and then another one on the Melinta product portfolio. So first, just curious if you have any updates on the inpatient opportunity with DEFENCATH. You know, have the sizes of the current contributions been growing and just curious what growth profile you see from this segment in 2026 and 2027? And then on the Melinta portfolio, you mentioned Minocin and Vabomere being, you know, potential significant contributors along with RIZEAO. Curious if there is anything promotionally sensitive that you could kind of reinforce into these products to see some growth in the future? Joseph Todisco: All right. Thanks, John. And I am not sure I fully understood your DEFENCATH question, but what I will kind of touch on is our guidance and how we constructed our guidance for 2026–2027. So the way we looked at 2026, obviously, the way CMS did the calculation for the bundle adjustment, the $2.37 that goes into the bundle for the third and fourth quarter, it does not fully reimburse providers based on current utilization rates. They used an older period of time to do that calculation that was based on our first year of launch. But we had provisions in our agreements with customers that allow for that type of situation, where there is certain floor pricing under these contracts. What we are working on now is hopefully getting a little bit better than that floor pricing. But our guidance was somewhat based on the floor, and we are working through that process now. Now for 2027, what we wanted to do was give investors comfort that there is at least a base business level of DEFENCATH, which we expect to see price appreciation and hopefully stable volumes based on what we are doing now in the outpatient hemodialysis sector to kind of steady the market with customers. Now we elected not to include in that 2027 guidance potential upside from what we are trying to do with Medicare Advantage contracting with potential new customers both in outpatient hemodialysis and on the inpatient side, because when it comes to guidance, it is very difficult to guide towards something that is still underway in terms of execution. So as we progress throughout the year and should we get a Medicare Advantage contract across the goal line and we have the ability to look and make a forecast around volumes, we would up our guidance accordingly as we progress through the year. John Todaro: On the Melinta portfolio question, Joseph Todisco: look, I think Minocin and Vabomere are two really good durable products that have entrenched utilizations in the hospital inpatient segment for treatments of niche infections, right? I think Minocin is closing in at around $50,000,000 in sales. Vabomere is just under $30,000,000. So we do have a little bit of promotional efforts on there. We do not think that they are usually promotionally sensitive the way a launch product would be. But we think there is a couple of percentage points of growth there that we expect to get this year. John Todaro: That is helpful. Thanks. Operator: And your next question comes from Brandon Richard Folkes with H.C. Wainwright. Please go ahead. Brandon Richard Folkes: Hi, thanks for taking my questions and congrats on the quarter. Maybe just two from me. Firstly, DEFENCATH, can you just talk about the customer mix currently and whether you anticipate any change of that in your 2026 and 2027 guidance? How should we think about the opportunity in the other mid-sized operators for DEFENCATH? And if I just ask one more. I know you mentioned you filed the 10-Ks, sorry, have not been through it. But can you just talk about the operating cash flow in the quarter? It looked very strong. So just anything to consider there? And then also how we should think about it in 2026? Thank you. Joseph Todisco: So right now, I would say we are fairly heavily concentrated volume-wise with one of the LDOs and then two of the three mid-sized players are driving probably 90-something percent of our volume amongst the three of them. There is a third mid-sized provider that is utilizing but not at the scale of others. And then we have a number of small accounts that, even if they are utilizing it fairly broadly, do not represent as large of a market impact, as they may only have 20 clinics or 15 clinics. So that is certainly kind of the mix today. Now, terms of changes we would anticipate in 2026 and 2027 would depend in large extent on our ability to onboard either the other LDO or to get the third mid-sized player to meaningfully increase volume. So those are the only things that would really, I think, change the mix in any meaningful fashion. What we are doing on the inpatient side in terms of promoting DEFENCATH, while that is a good dollar market opportunity, we believe the volumes there would be much lower from a volume distribution standpoint. So I hope that answers the question. Yes. Look, I think roughly, we would like to say that EBITDA could be a proxy for cash flow for the year. I think there are some items that could impact in terms of our need to maybe stockpile some inventory this year as we are working through a few tech transfers. We also have some rebates, large accrued rebates that you will see on the balance sheet, that will get paid out in the early part of this year. So those are kind of really the big items that impact cash flow. Susan, anything you want to add to that? Susan Blum: No, you covered it, Joseph. Brandon Richard Folkes: Great. Thanks very much. Operator: This concludes our question and answer session. This concludes today's conference call. Thank you for attending today's presentation. You may now disconnect.
Operator: Good morning. My name is Becky, and I will be the conference operator today. At this time, I would like to welcome everyone to the Bowman Consulting Group Ltd. Fourth Quarter and Fiscal Year 2025 Conference Call. All lines will be placed on mute for the presentation portion of the call, with the opportunity for questions and answers at the end. Please note that many of the comments made today are considered forward-looking statements under federal securities laws as described in the company's filings with the SEC. These statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and the company is not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, the company will discuss certain non-GAAP financial information such as adjusted EBITDA, adjusted net income, and net service billing. You can find this information together with the reconciliations to the most directly comparable GAAP information in the company's earnings press release, filed with the SEC and on the company's Investor Relations website at investors.bowman.com. Management will deliver prepared remarks, after which they will take questions from research analysts. A replay of this call will be available on the company's Investor Relations website. Mr. Bowman, you may now begin your prepared remarks. Gary P. Bowman: Okay. Thanks, Becky. Good morning, everyone, and thanks for joining our year-end earnings call. Bruce Labovich, our CFO, is with me this morning, along with Dan Swayze, our Chief Operating Officer. First, I would like to welcome all new Bowman Consulting Group Ltd. employees who joined us this quarter, including those from RPT Alliance who joined in December. After my introductory remarks, I will turn the call over to Bruce, who will cover our financial performance and technology initiatives, and then Dan will discuss operational successes, including where we are winning and why. I will end the call with some closing statements before opening it to Q&A. Going forward, we plan to periodically introduce members of our leadership team to provide deeper insight into specific aspects of our business. Let us start with fourth quarter and full-year results. You know, it is hard to believe that 2025 was our fourth full year as a public company and the final year of our emerging growth company status. I am pleased to report that we delivered another record year as we advanced our efforts to become an ENR Top 50 firm. We achieved our goals of generating double digit in gross revenue, double digit growth in gross revenue, organic net revenue, and adjusted EBITDA. In addition, we increased our capture rate for public contracts with growth of approximately 28%. We entered 2026 with a record backlog of over $479,000,000, a 20% improvement over the prior year. We strengthened our position in our existing markets through acquisitions, acqui-hires, and organic workforce expansion. Our increasing breadth of services, growing scale, and redoubled commitment to relationship building produced new order growth for the year that was particularly strong in power utilities, transportation, and natural resources, all of which are markets where we are seeing increased, durable, long-term demand. Our book-to-burn ratio continues to be over 1x, a level which I am proud to say we have achieved consistently since our public debut in 2021. The 2026 is so far no exception, sales this quarter outpacing the fourth quarter. With the successful acquisition and integration of several consequential acquisitions during the year, and these results as a springboard, I am confident we are positioned for another breakout year in 2026. With that, I will turn the call over to Bruce to review our financial performance in greater detail. Bruce? Great. Thanks, Gary. Bruce J. Labovitz: I am going to start with a little off-script nod to Gary in light of recent announcements. When I came to Bowman Consulting Group Ltd. in 2013, we were a $50,000,000 company with around 450 employees. Gary's vision of achievement at the time was a diversified $100,000,000 revenue company where people could thrive and grow. For the past thirteen years, he has been deliberate in his leadership with a conviction about growth and a steadfast commitment to our culture. So, with $490,000,000 in revenue to end the company's thirtieth anniversary year, and 2,500 committed professionals living our values every day, I think it is fair to say Gary is qualified for membership in the Overachievers Club. On behalf of everyone at Bowman Consulting Group Ltd., I want to publicly thank you for all you have done. Okay. Turning to the fourth quarter and full year 2025, I am pleased to be here today discussing another breakout year for Bowman Consulting Group Ltd. With quarterly gross revenue of $129,000,000, we have now had two consecutive quarters at a revenue run rate of greater than $500,000,000. Net service billing, which we use interchangeably with net revenue, was $14,600,000 in the quarter, up 16.2% compared to last year. At an 89% net-to-gross ratio, up 200 basis points over last year, gross was disproportionately achieved through net revenue. For the full year, gross and net revenue were up 14.914.5% to $490,000,000 and $434,800,000 while maintaining a net-to-gross ratio of 89%. We again generated double digit growth of organic net revenue at 12.4%. Gross margin for the quarter was 55%, up 190 basis points from last year, and 53.4% for the full year, up 120 basis points over last year. SG&A for the full year was down 250 basis points compared to the prior year. Combined overhead for the year, in other words, the combination of all labor, both direct and indirect with SG&A, was down 400 basis points compared to the prior year. We believe this reflects an evolving mix of business in the scaling strategy we have been working towards for several years. Pretax net income for the year was $11,200,000 as compared to a loss of $8,900,000 in the prior year. Net income was $12,800,000 for the full year as compared to $3,000,000 for the prior year. With issues related to research and experimentation capitalization resolved, tax benefits had a lesser impact on our fourth quarter and the full-year results. Moving forward, tax is projected to have a more normalized impact on our statements, including simplifying the calculation of changes in working capital on our operating cash flows, no longer splitting the effect above and within the working capital. With Section 174 capitalization no longer an issue, it is key to note that we do still benefit from other permanent research and development credits that reduce our effective tax rate and never expire. We believe the turnaround in pretax GAAP profitability this year is the result of the improved labor utilization, scale, and full integration strategy we have been executing to achieve efficiency in operations. We are pleased to see meaningful increase in EPS, both GAAP-based and adjusted. On a GAAP basis, our basic and diluted EPS of $0.74 and $0.73 were up 300% year-over-year. On an adjusted basis, our basic and diluted EPS of $1.72 and $1.68 were up nearly 40% from the prior year. Holding our share count through buybacks also helped. With absolute growth in all market verticals this year, we continue to advance our objective of increased revenue diversification. Revenue distribution continued to shift positively in 2025, with transportation at 21.2%, power and utility at 22.4%, natural resources at 11.5%, and building infrastructure down to 44.9%. We expect this trend and trajectory to continue in 2026. Our geospatial operations continue to be increasingly consequential and represented approximately 26% of 2025's gross revenue as a service that was spread across all markets. In the aggregate, around 30% of total gross revenue was derived from government or public funded work assignments, an area where we expect to continue to grow over the short and long term. Organic net revenue growth was 11% in the fourth quarter and 12.4% for the full year, excluding UP E3I, SOLAs, and RPT. Broken down by vertical for the quarter and for the full year, Natural Resources led the way with 2927% growth, and utilities delivered 1113% growth. Transportation grew 622%. And building infrastructure was up 96%. Organic growth rate in transportation in the fourth quarter was a function of delayed contracting and notices to proceed in 2024. While we caught up in 2024, the delay created a skewed growth curve for the year. All is well within our transportation business, and we continue to win consequential new awards. I think it is also worth pointing out the steady increase in organic net revenue growth in building infrastructure throughout the year. I am optimistic that this represents a developing trend for that market. Backlog increased 20% to $479,000,000 on 12/31/2025, up from $399,000,000 at the 2024. While every vertical is up, the biggest gainer was power and utilities, where we were particularly active with business development and acquisitions. Excluding purchase backlog in place at year end, the increase was 18.5% at $473,000,000. Sales of new work after closing an acquisition would not be considered acquired backlog. In the case of RPT, while we have very strong visibility into projects and schedules, work is released in more frequent phases that keep their forecasts high but their backlog low relative to the overall companies. Cash from operating activities for the full year increased by nearly 50% to $35,800,000 from $24,300,000 in the prior year. Net working capital increases adjusted for the UTP changes represented the equivalent of a roughly four-month investment in gross revenue. Reducing that investment by 25% through process automation and operational efficiencies could add seven to eight percentage points to cash flow conversion. This is high on our to-do list in 2026. Net debt at the end of the year was $179,000,000, including the all-cash acquisition of RPT on December 5. Leverage was 2.45x trailing twelve months, and 2.06x the midpoint of our 2026 guidance. We expect increased cash flow from operations during the year to continue to reduce this debt throughout 2026. On March 3, we executed a third amendment to our credit facility with BofA, TD Bank, and PNC to increase the maximum borrowing to $250,000,000. We increased the facility to ensure we have sufficient access to affordable capital to continue funding investments in organic growth, innovation and efficiency, accretive acquisitions, and stock repurchases. As of today, we have available liquidity of approximately $150,000,000. During 2025, we periodically repurchased $18,800,000 worth of our common stock at an average price of $27.51 per share. We continue to view stock repurchases as a means of addressing liquidity and valuation dislocations, as opposed to a commitment to the return of capital. Assuming market stability and a rational valuation of our equity, our top priorities remain investment in organic and inorganic growth. We remain steadfast in our commitment to investment and innovation. The BIG Fund, our internal technology incubator, is funding ideas presented by our employees to make impactful investments that advance our capabilities, improve the efficiency of our workforce, and decouple revenue growth from headcount growth, increase the value of our services, and extend customer engagement. It is admittedly a tricky time in our industry with respect to innovation in AI. We need to be sure we are prioritizing investment in processes and services relating to deliverables sold at stable values, as opposed to efficiencies that merely cannibalize the work of work sold by the unit. We are making significant investments this year in our fleet of geospatial imaging assets, including high-resolution, high-altitude scanners, along with improved capture vehicles, including planes, UAVs, drones, boats, all of which increase collection rates and data processing efficiencies by as much as 30% to 40%. We continue to integrate the technologies we have developed in-house with tools we purchased in the recent Orcus acquisition, and we are launching PAC, our Port Asset Conditions Kit, which provides GIS-enabled, digital twin-based life-cycle asset management to port and marine operators. As opposed to the traditional software-as-a-service subscription model, we have put forward a services-powered-by-software model that engages our integrated digital platforms with customers through a professional services arrangement that combines process automation and professional intervention. As we develop our suite of AI- and GIS-enabled tool sets, we believe we are well positioned to monetize the library of assets in our growing digital services and advisory practice into a unique value proposition for our customers and shareholders. In connection with yesterday's release, we increased our full-year 2026 guidance to a range of $495,000,000 to $510,000,000 and an adjusted EBITDA margin of 17% to 17.5%. At an 88% net-to-gross ratio, this would represent $563,000,000 to $580,000,000 of gross revenue. Increased net revenue guide includes the recent RPT acquisition without contemplating any future acquisitions. At the midpoint of our net revenue guidance, this represents approximately 16% absolute growth over last year. Pro forma, to exclude RPT's 2025 revenue from the basis and from next year, from this year, we are projecting just over 12% organic net revenue growth. We expect revenue during the year to again be nonlinear, with the first and fourth quarters representing around 47% of net revenue and the second and third to be around 53% of net revenue. This should not be construed as quarterly revenue guidance, but rather as a guideline for relative weighting of the quarters throughout the year. I am now going to turn the call over to Dan Swayze, our Chief Operating Officer, who is joining us today to provide insight into the question of where we are winning and why. Dan has been with Bowman Consulting Group Ltd. for over three and a half years, and spent two decades in senior leadership roles in civil and engine and energy-related engineering. At Bowman Consulting Group Ltd., Dan's focus as the Chief Operating Officer is on the management and execution of our portfolio of services across markets. Dan, welcome. Gary P. Bowman: That is nice, Bruce. Thank you. Dan Swayze: Thank you, Bruce, and good morning, everyone. I know a lot of our team is listening to the call today, and I sincerely thank them for all they do and their commitment to Bowman Consulting Group Ltd. I am very proud of our team. Today, I am going to focus on where we are winning in the market and why those wins are becoming increasingly repeatable. In other words, our right to win. Over the past several years, we have been deliberate about building differentiated capabilities in markets where technical depth, geographical reach, capacity, execution consistency, and integrated end-to-end ability creates a competitive advantage. Our acquisition strategy across the country created integrated service delivery teams in our various markets. In our data center and mission critical practice, we are increasing our win rate by meeting our clients where they are. Data center programs are rarely single-service projects. They are multiphase, multiservice opportunities. For example, combining the electrical and mechanical engineering forces from our E3 acquisition, the fire and life safety design services from our Fisher acquisition, with our established capabilities in civil planning and engineering, we have a strong service offering our clients can rely on. Our ability to deliver consistent technical standards across jurisdictions while maintaining strong relationships positions us as a long-term partner rather than a one-time design provider. As major operators continue to deploy capacity into new regions, we are following them into those markets, pairing local engineering knowledge with the strength of our national platform. As a result, we are expanding wallet share and deepening our engagements in a durable growth market. This approach increases client stickiness. The power utility sector remains a robust market for our organization, spanning electric, oil and gas, as well as renewables. Bowman Consulting Group Ltd. is actively involved in supporting the development and expansion of new power supplies for utilities, addressing the evolving and urgent need for bridging power for data centers, and the rapid deployment of compressor stations for the midstream movement of natural gas. The services we provide for our natural gas clients are provided through a combination of several acquisitions, including MPX, Survein, RPT Alliance, Excellence Engineering, and Burke Engineering. Our approach leverages a comprehensive suite of services, seamlessly integrating a unique collection of geospatial expertise and equipment with proven engineering solutions to address the evolving needs of our clients. This multiservice, end-to-end strategy ensures we can consistently deliver innovative, reliable, one-stop-shop outcomes across a diverse landscape of our clients' needs. Being an early establishes incumbency, and incumbency is an important element to our right to win. Our geospatial engagements often create pull-through opportunities for related engineering and advisory services. Recent investments in new aircraft and advanced LiDAR sensors directly strengthen our competitive position. These advanced capabilities allow us to support complex infrastructure initiatives, including utility expansion both in electricity and natural gas, damage assessments, land acquisition, land development, and other large-scale public works projects. As an example, we were recently renewed for a five-year agreement with the U.S. Army Corps of Engineers to provide photogrammetric mapping and related survey services. Being awarded this renewed agreement reflects both past performance and technical differentiation. We are also continuing to build strength in transportation across the U.S., where our extensive history of time of delivery and our expansive portfolio of creative bridge and highway design create a meaningful competitive opportunity. Our comprehensive transportation services offerings are an amalgamation of our acquisitions of McMahon, Speece Lewis, and Exeltek, and our legacy teams in the Chicago area, providing end-to-end solutions. Transportation agencies prioritize demonstrated experience and capacity to deliver on comparable assets. The depth of our expertise and project experience in these regions drives repeated wins. Across these markets and others we participate in, the pattern is consistent. We win where specialized technical expertise matters. Past performance and incumbency create barriers to entries to our competitors. Our national presence enhances client value, and our integrated geospatial and engineering delivery improves client outcomes. Our operational investments, including workflow modernization, data integration, and selective automation using AI and machine learning, support these markets by improving throughput and timely delivery of superior outcomes. These investments are in service of a larger objective to strengthen our competitive standing in the market where we see durable demand and long-term growth potential. We are not pursuing growth indiscriminately. We are concentrating on efficient use of capital, leveraging our talent, and embracing technology in markets where we have established credibility and where our integrated platform creates measurable differentiation and competitive advantage. The result, we continue to successfully deepen client relationships, enhance our right to win multiservice assignments, and strengthen our foundation for sustained revenue growth. Our competitive position in the industry has never been stronger, and our right to win continues to broaden throughout our markets. With that, I will turn it over to Gary. Gary P. Bowman: Great. Thanks, Dan. As Bruce mentioned, our focus on execution, organic growth, and strategic acquisition was evident in our results. We exited 2025 with strong momentum, some of the best margins in the E&C group, and a backlog which foreshadows another year of double-digit revenue growth. We enter 2026 with a renewed focus on disciplined growth and continued operational improvement along our service platform. While change in the occupant of the CEO chair is ahead of us, the core of this company, its senior leadership and professional workforce, is as intact, cohesive, and aligned in its mission. With the exceptional talent we have at every level of this organization, I am really excited for the future of the company I founded some thirty years ago. With that, I will now turn the call back to Becky for questions. Operator: Thank you. Please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Aaron Spychalla from Craig-Hallum. Your line is now open. Please go ahead. Aaron Michael Spychalla: Yes, good morning. Thanks for taking the questions. First, maybe on the RPT acquisition. Good morning. Thanks. On RPT, you know, can you just maybe talk a little bit about, you know, what that brings to your offering, you know, and early on on just how integration is going there and kind of potential synergies within the platform? And then maybe second on EBITDA margins. You know, good performance in the quarter, 17.3%. Just thinking about the guidance for 2026, were there anything, you know, noteworthy from a driver perspective in the fourth quarter? And what are some of the factors you are incorporating for 2026, and how are you thinking about potential for upside there? Gary P. Bowman: Morning, Aaron. Yes. I will start off with the second part of the question. Actually, integration there is well ahead of any other acquisition that we have done. It is pretty much, you know, integrated from an operating and financial perspective. It is on its way from a platform perspective. And so we jumped right on that one because the, you know, the opportunity is right ahead of us to grow that business in connection with the rest of the components of Bowman Consulting Group Ltd. And so it is integrated. It really extends our product offering in LNG. I will let Dan talk for a second about the extension of the LNG and data center product offering. Dan Swayze: Yes. If you go back to what we talked about a minute ago and you think about our right to win, RPT's skill set and client reach puts us right into the whole midstream movement of natural gas. Feeding liquefied natural gas centers also gives us that opportunity to provide more consulting engineering services for those building pipelines. I will also say we have already been successful in several cross-selling efforts where, you know, the combination of services has gotten us into projects that we otherwise probably would not have been necessarily a lead contender for. Bruce J. Labovitz: Yes. Again, I think, Aaron, we have demonstrated that, you know, that margin is not necessarily always consistent, you know, throughout the quarters, but then we look at the year as being able to deliver from what was the sixteen, you know, high sixteens this year to what we think will be mid sixteens, you know, next year. So it is continuous improvement in margin. It always has to do with the timing of the acquisition of labor relative to the starts of projects. That is our biggest driver of margin in any particular period, is the, you know, how well we time the collection of labor with the realization of revenue. So I think that we continue to, as we scale, grow margin over overhead, and as we implement, you know, better and better workflow process automated processes, we optimize labor. So I think we can increase by another, you know, we are projecting another, you know, 50 to 50 plus basis points of margin expansion this year, 50–80 points, and I think those are the key drivers. Aaron Michael Spychalla: Alright. Thanks for taking the questions, Gary. You know, congrats on the retirement, and best of luck to everyone moving forward. Gary P. Bowman: Thank you, Aaron. Thanks. Operator: Thank you. Our next question comes from Mincho from Texas Capital Bank. Your line is now open. Please go ahead. Mincho: Good morning. Great. Thank you very much, and congrats on a really strong year. You mentioned that the building segment saw some organic growth this quarter and that there were some developing trends. Can you talk a little bit about the opportunities that you are seeing there? Also, on Slide eight, you provided some gross margin by vertical, and I was just wondering if you can talk about how that has trended over the last few years. I am assuming that it is kind of expanded just with the scale that you have. But can you talk a little bit about expectations for 2026, just directionally? And then just finally, your natural resources segment obviously had strong organic growth this quarter and just in the year. And I do not think Dan spoke too much about that segment, but can you just provide a little more detail about where that demand is coming from? Seeing any green shoots there? Gary P. Bowman: So is that put at work optimistic that this is a developing trend. I am not sure we are ready to call it yet. I think one thing that we are expecting to see at some point is a focus on affordability of housing. And we are already seeing it at the state level. You are seeing the requirements for permitting being loosened and stimulus for more affordable housing. That is where we really thrive, is in creating supply for builders and for the home building and multifamily market. So we saw some good positive movement there. It is geographical in nature. Some pockets of the country, you know, are better at times than others. But we are optimistic that that is an early indicator of, you know, some opportunity for bigger growth in that market again. Bruce J. Labovitz: Across the—you mean, you broke up a little bit there, so I think the question was about the gross margins by vertical and expectations on those for the year, I am going to assume that was the question. Yes. And so it is consistent with where we were in the third quarter when we started reporting on gross margin by vertical, with transportation being more of a cost-plus kind of market, but with longer-term commitments and longer engagements that reduce turnover costs there and create stability in workforce. And we think that the other three markets continue to have favorable gross margins, and I do not see anything that is going to erode those throughout the course of this year. If anything, processes, you know, process automations can help to improve those slightly. Gary P. Bowman: Yes. So in some respect, that is a little bit of the catchall for what does not fit into categories, but it includes environmental, it includes mining, it includes water resources, it includes agricultural imaging and orthoimaging, and it includes land services associated with assisting landowners in acquisition of easements and other rights of way when it is not land acquisition for a power utility or for a road, bridge, or highway. So it is a large category for us in terms of the number of things that fit in there. A lot of exciting projects that, you know, are developing in that area, particularly with water resources, particularly with high-altitude aerial imaging, and in the land services business. Operator: Thank you. Our next question comes from Andrew John Wittmann from Baird. Your line is now open. Please go ahead. Andrew John Wittmann: Hey, great. Good morning, and thanks for taking my questions. I have a few here. So where do I want to start? I guess I do not know. Maybe I am reading into it too closely, but in your press release, it talked about 2026 being—I forgot the exact terminology—more of an organic year. That sounds like a little bit of change. You said in your script here that your priorities are still organic growth and inorganic growth. And so just feels like maybe there is a change there. Is there more kind of organic focus in '26 than in the past? And if that is correct, why the change? And then, Bruce, in your comments, you talked about some things that are going to be kind of a priority on collecting working capital this year. Could you just elaborate on that a little bit more? It does feel like there is some working capital opportunity, maybe at lots of places, including your receivables. What is a realistic goal here for DSOs and progress through '26? And then a couple of model-focused ones: you talked about a more normalized tax rate—what is the effective tax rate that you think is applicable here in '26? And on seasonality, last year the second quarter adjusted EBITDA margin was higher than the third quarter, which is atypical. Should we expect the higher margin in the third quarter than the second quarter in '26, or is there a reason that last year’s pattern would repeat? Gary P. Bowman: Andy, this is Gary. There is really—there is not a fundamental change. We are still committed to inorganic growth. We are a little narrower in our focus with strategic and moving toward bigger opportunities. So you are seeing maybe a less frequent—certainly less frequent—announcements. But we are just as committed as ever to a strong growth of a strong combination of inorganic, inorganic growth. Bruce J. Labovitz: I think there is an evolving nature of the market that there is opportunity to invest in the expansion of our services, right, through investment in technologies and innovation, and that is all organic. So, you know, we continue to be investing in expansion of our capabilities, expansion of the capability of our workforce to generate revenue. But as Gary said, I think we will do less frequent small—yeah, but still be focused on acquisition. And in the meantime, be focused on internal investment in organic growth. But thanks for bringing it up, because I think it is an important—absolutely—point of distinction there. We want to clarify that. Bruce J. Labovitz: Yes. One thing I will point out that, you know, we are already so far past in the year, it is hard to remember that at the end of the year, there was a government shutdown, and that did slow collection on a portion of our receivables. Not because they were not collectible, but just because, you know, getting them processed was slower in a portion of our business. So it gives a little bit of extension of receivables from that artificial impact. Getting work through working capital is an important focus for us. Certainly, getting work to be billable—not necessarily that we are not earning it—but getting it to the point of billing and collecting it, you know, is something that, you know, we are working towards narrowing down. And so I think reducing, let us say, work in process, which is a component of working capital, will be a focus this year. And, you know, we are always working on collections, Andy. It is one of the great challenges that, you know, never seems to completely get solved. But between that, between—you know, we implemented a new—not a new—we upgraded our ERP system throughout in 2025. We think that will help facilitate the process of processing work to—follow on Bruce's point, always work on the collections. The thirty, thirty-one some years, we—it is in our DNA. We have to keep the cash flowing. Bruce J. Labovitz: Yes. I would say that it is, you know, on our statutory, less our R&D credits, it is somewhere in that high teen 20 kind of range. Bruce J. Labovitz: No. I do not think it is necessarily a repeatable pattern from last year. I think we had a—we talked about it in the second quarter of last year—there were a few exceptional items that, you know, sort of hit on all cylinders. I am indicative of—I think that, you know—yeah. I would not necessarily say that that is a pattern permanently. Gary P. Bowman: Thanks, Andy. Operator: Thank you. Our next question comes from Tomo Tomasano from JPMorgan. Your line is now open. Please go ahead. Tomasano: Good morning. Thank you. And, Gary, although we have only recently met, I would like to express our respect and appreciation for your leadership and culture as you prepare for your retirement. I would like to kick off: you raised your 2026 net revenue guidance to $495 to $510,000,000. Which segments or projects are driving this upward revision and/or your current $479,000,000 backlog? What proportion do you expect to convert to revenue in 2026? And as a follow-up on the upcoming CEO transition, could you talk about how you are ensuring management stability and continuity? Are there any qualitative KPIs or targets related to succession and strategic continuity? Gary P. Bowman: Thank you, Tomo. Bruce J. Labovitz: Generally speaking, Tomo, we turn somewhere between 70–80% of backlog in a year. In a twelve-month period. So I think it is a little longer. Sometimes it gets a little shorter. But generally speaking, we think of 70% to 80% of backlog in any moment as having a twelve-month tail to it. In terms of where we think we are going to continue to see growth, obviously, power is an area that we expect to, you know, to contribute to the growth year-over-year. A big chunk of that guidance increase was from the acquisition of RPT that happened after last quarter's conference call. So that is all power-related in that bit of the increase. The rest of it is between natural resources and transportation. Transportation. Gary P. Bowman: We are—we—effective communication. We are doing retention, economic retention packages for some key people. And, really, the communication, the assurance of the continuation of our culture. So, you know, a qualitative view of success in the succession is certainly retention of our key staff, retention of our leadership, and continued forward execution of our strategic plan. Bruce J. Labovitz: Yes. We have got 2,500 people who depend on the continued success of this company every day, and we take that responsibility very seriously. And, you know, the Board takes that responsibility very seriously. And so we are all wholly committed to the long-term successes. We are all invested in the long-term success of this company and in seeing this through without any disruption in service to our customers, in service to our employees, and, you know, in value generation to our shareholders. You know, I will also follow-up there, Tomo, as a member of the Board, I am not on the search and selection committee, but certainly I have input. But I would not have made this move if I did not have great confidence in the Board getting this right both for the legacy—my legacy, candidly, personal legacy, and my personal economics. I am still the largest single shareholder in the company, and I intend to continue to own a tremendous amount of the stock in the long run. So I have a real vested interest in the success. Tomasano: Thank you very much. That is all from me. Operator: Thank you. Our next question comes from Liam Burke from B. Riley Securities. Your line is now open. Please go ahead. Liam Burke: Good morning, Gary, Bruce, Dan. Gary, congratulations on your retirement. When you reach critical mass here on the front end of the infrastructure project, has there been any competitive pushback from some of the larger specialty contractors that are looking to move into your space, since it is probably the most profitable piece of the project? And across the board, you had good growth across all your business segments. Do you see any pockets of weakness, or is your diversification allowing you to move right past it? Bruce J. Labovitz: Are you talking about in the power space or—sorry, infrastructure writ large, Liam? Liam Burke: Power space? Let us go infrastructure at large. Bruce J. Labovitz: Yes. There is a real line of distinction in the industry between, I would say, the construction companies—I think that is what you are asking about—and the engineering firms. And while there is a collegial relationship between, we have not felt threatened. Dan, you can tell if you have, you know, felt it from the ground up, from, let us say, specialty construction contractors trying to make their way into the engineering world. Dan Swayze: No. In some cases, we are working for those contractors. So it is not really a threat that we see. Bruce J. Labovitz: Yes. If anything, I would say it is drawn the other way, in that there is such a resource constraint in this space that, you know, it is an all-hands-on-deck kind of mindset. And there are functions of the construction process that the specialty contractors need help with. The equipment providers, the GCs, you know, need help. There is no effort to share risk on that part of the process, but there is an effort to bring in help. Liam Burke: Mhmm. Right? Bruce J. Labovitz: Yes. Right now, I would say that there are no pockets of weakness. There is no negative, you know, connotation to any of the markets or segments. Obviously, we are keeping an eye on the growth rate of the building infrastructure space. Still our biggest and continuing to grow, and we have hopes for it to accelerate. So I would not characterize it as weakness. It is getting attention from us to make sure that, you know, we keep our staffing right and our—and all of our overhead right for that group. But on the others, as I use the same phrase, it is an all-hands-on-deck effort to try to keep up with power and transportation and natural resources. The good news, Liam, as we have talked about, is that in our workforce, it is very fungible across the four markets. So we do not have silos of workforce that are only able to do one thing. You know, the base of our labor pyramid really is very cross-disciplined and cross-market capable. And so, you know, we focus on that kind of business model deliberately. Gary P. Bowman: Thank you, Liam. Operator: Thank you. Our next question comes from Jeffrey Michael Martin from ROTH Capital Partners. Your line is now open. Please go ahead. Jeffrey Michael Martin: Good morning, Gary, Bruce and Dan. Bruce and Gary, I wonder if you could touch on RPT. I know that they were constrained for growth, and you have owned it roughly three months now. Just curious how much you have been able to staff up for RPT during the initial three months, and maybe give us a glimpse at what your hiring plans are for that business in particular, as well as touch on just general availability of labor and ability to staff up in front of larger contracts in general. And then I wanted to touch on geospatial. You mentioned that is roughly—I think 26%, 24% of your net revenue. Sounds like you are making further investments in geospatial. Can you elaborate on general demand trends you are seeing there, and also touch on the competitive dynamic? And could you tie that into your CapEx and equipment acquired and capital lease projections for this year? Gary P. Bowman: Yes. It is Gary. I will jump in. As we were doing our due diligence on RPT, and certainly part of the attraction is all the opportunities in the space that they are in and their being down as a single office operation in Houston. But being in Houston, there are pockets of the oil and gas industry that are—especially the oil industry—maybe up until this past week, that have been soft, and there has been a good availability of labor down there. So we have found the ability for the RPT group to staff up as flexible as any of our pieces of business. It has been also, you know, with them becoming part of a much larger organization has given them access to staffing that has availability of utilization as well. So we have tamped down the shortage by adding capacity from our system. The other thing that we have been doing a lot of now is insourcing things that they used to outsource. Yes. And so we are finding, you know, they are using survey. They are using our fire protection. They are using our mechanical, and we are grabbing—essentially, we are grabbing more work from their clients, which is, again, putting a little more stress on the need for people. But it is what we do for a living, is making sure that we can meet demand with supply. Bruce J. Labovitz: Yes, Jeff. Geospatial is pretty much at the core of everything that we do. A lot of the work we do originates with imaging, processes through imaging, and utilizes survey and scanning and three-dimensional iteration throughout the life cycle of the asset. So we do not think of it as a vertical because it is a service that really supports every bit of business that we do. It is kind of at the epicenter of our services portfolio. So, you know, we are making investments in that space because it is evolving so quickly. And those that are ahead have distinct advantages, and geospatial is one of those service lines that creates, as Dan mentioned, incumbency. Incumbency is such a valuable asset in the life cycle of asset work. So we are buying high-resolution scanners. We are buying imaging technology that does underwater LiDAR. You know, we are buying vehicles that collect data, whether that is from the air, from the water—you know, we are improving the operational efficiency of our altitude fleet, which spends a lot of time, let us say, chasing weather. And if we can shorten the chase, we get more productivity out of it. And there is plenty of work to be done there. So geospatial is—we think it is really a critical part of the overall product we deliver. And so we want to be a leader in our fleet. Bruce J. Labovitz: It is generally included—I mean, it is included in that bucket. We may—and, again, we sort of talk about an average of 3–4% spending on CapEx. Episodically, it may be, you know, a little bit higher and a little bit lower in years. This may be one of the little bit higher years as we continue to improve that fleet. But as revenue is growing, you know, you absorb that CapEx from a percentage perspective as well. So I do not think it is going to, you know, in any way put it off the charts, but it, you know, it could pop at a point or so this year. But then these are long-lived assets. So, you know, you buy them in one year, they last for several years. Jeffrey Michael Martin: Thank you. And, Gary, congratulations on your retirement. Gary P. Bowman: Thank you, Jeff. Bruce J. Labovitz: Look forward to seeing you guys in a couple of weeks. Operator: Our next question comes from Sharif Al Sabahi from Bank of America. Your line is now open. Please go ahead. Nabi (for Sharif Al Sabahi, Bank of America): Good morning, everyone. This is Nabi. I am on with Nadeetha for Sharif. Just on the full-year guide, you raised the net revenues for the full year, but the EBITDA guide was maintained. Could you talk about the margin profile of recent acquisitions like RPT? Does it come at lower margin with other cost optimization measures in the business holding margin steady at 17–17.5? Or on the flip side, is it slightly accretive, and are there other temporary investments in the business that we should be aware of that are holding margins back a little bit? And also, net leverage—think you mentioned around 1.9x, just higher than historical levels. Could you remind us of your target range again? Could we see leverage structurally closer to the high end of your range for a period of time as Bowman Consulting Group Ltd. gets more acquisitive, or is there a plan to delever to historical levels over the near to medium term? Lastly, on the $25,000,000 BIG Fund, can you give us a sense of how much has been committed versus funded, and the runway there? Gary P. Bowman: Good morning. Bruce J. Labovitz: Yes. So I am not sure I would characterize it as holding margins back in a sense that if we continue to grow margin, we are growing it—we are committing to grow it, you know, another half to 50 to 50 plus basis points during the year. So we are very much focused on expanding margin over time. RPT is a high-margin business. But again, as a percentage of our overall business, you know, even being a significantly higher-margin business does not necessarily drag the whole business along from a margin perspective. We think that, you know, being able to get 17.5% margins is a pretty high bar for the industry. And I think that, you know, as—if you asked about, you know, contributors to that, certainly, sort of this concept that we introduced about decoupling revenue growth from headcount growth does not mean shrinking your workforce, but it means growing revenue faster than you grow workforce, and that increases margin. And that is from the tools that we are employing and investing in, as sort of as one of the earlier questions about organic investment and investing in these processes and service line expansions, I think, will add margin over time. We have talked about that, you know, we believe that this is a high-teens margin business without innovation and an even higher one with, and, you know, it is a journey that we continue to be on. Bruce J. Labovitz: Yes. So we have typically been in the, you know, the one-and-a-half kind of range. We want to—you know, the mid-ones. We made this acquisition of RPT on December 5, so did not get any of the benefit at year-end for any of the, you know, the EBITDA from that acquisition, but had all the leverage on our balance sheet. When we look ahead, it is about, on a pro forma basis, about 2x. That is before we start paying that down with cash flow, you know, that we will generate from this year. So we hit 50% cash flow generation this year. We think that is going to continue to improve. So, you know, at an EBITDA of, you know, of—in the seventeens margin on, you know, on $500,000,000 of revenue, there is going to be a good deal of cash flow to be used to pay that down. Now we will continue to be growth-oriented. And to the extent that we identify another acquisition, yeah, we would certainly—you know, there could be additional leverage from it, but there would also be significant amount of EBITDA from it. So you will see us structurally, you know, try to achieve a below 2x, keep it in that, you know, 1.5x to 2x range, which has been our sort of our target. But we have been consistent that episodically, we will be higher as we invest, you know, in growth. Bruce J. Labovitz: Yes. So I would say that we are roughly about halfway into it in terms of committed. It does not mean it has all been expended. There is a lot of proof of concept, a lot of proof of returns, you know, and a lot of other factors that, you know, over the next twelve to eighteen months, we would, you know, fund the projects that have come forward. Some of it is the investment in assets in geospatial that will facilitate some of these additional services. But I would say we are about halfway into ideas that would be funded. Gary P. Bowman: Thanks so much. Operator: As we have no further questions on the line, I will now hand back to Gary Bowman for final comments. Gary P. Bowman: Thanks again, Becky. Well, thanks to everybody for joining us on the call today. We are very pleased with where we are at, pleased with the prospects for the year. And thanks certainly to all the employees and to our investors for all the faith that you put into us. Have a great day, everyone. Operator: This concludes today's call. You may now disconnect your lines.
Operator: Greetings, and welcome to the Seaport Entertainment Group Inc. Fourth Quarter and Full Year 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jason Wilk, Senior Vice President of Finance. Please go ahead. Jason Wilk: Thank you, operator, and good morning, everyone. With me today is our President and Chief Executive Officer, Matthew Morris Partridge, and our Chief Financial Officer, Lina Eliwat. Before we begin, I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-Ks, Form 10-Qs, and other SEC filings. You can find our SEC reports, earnings release, and quarterly supplemental information on our website at seaportentertainment.com. I will now turn the call over to Matthew. Matthew Morris Partridge: Thanks, Jason, and good morning, everyone. As we outlined during our inaugural earnings call last March, our focus in the first full year as a stand-alone public company was to address multiple opportunities for improvement, including outsized priorities within the Seaport, as we work to position the organization as a scalable real estate-centric hospitality and entertainment company. Looking back and taking stock of our accomplishments, we made tremendous progress in 2025 and year to date 2026, addressing these opportunities. Some of our more notable achievements in 2025 include generating a 24% year-over-year improvement in our net loss, a 49% year-over-year improvement in our non-GAAP adjusted net loss, leasing, programming, and finalizing development plans for approximately 153,000 square feet across the Seaport, including signing agreements with Meow Wolf, Planker Kitchen and Sports Bar, Hidden Boots Saloon, Willits NYC, Cork Wine Bar, and other exciting additions I will discuss shortly, internalizing food and beverage operations across many of our company wholly owned and joint venture owned restaurants in the Seaport neighborhood, Las Vegas Aviators winning the 2025 Pacific Coast League championship, the franchise's first PCL title since 1988, and hosting and competing in the Minor League Baseball Triple-A National Championship Game, further establishing the Seaport as a premier event destination by hosting multiple rooftop and neighborhood-wide marquee events, including more than 60 concerts, the Macy’s Fourth of July Fireworks, and the New York City Wine and Food Festival, and putting 250 Water Street under contract to sell, which subsequently closed last month, early February. The process of finalizing the sale of 250 Water Street was longer than anticipated. After completing additional diligence and evaluating market conditions, we believe this transaction represented the best risk-adjusted outcome for the company. The transaction will generate net proceeds of approximately million after we work through some post-closing obligations, which should largely be resolved in 2026. With the sale complete, we have eliminated $7 million of cash burn related to interest expense and carry costs, and we now have additional capital on our balance sheet and a clearer runway to execute against our strategic priorities. In addition to the 250 Water Street sale, the other significant announcement in early 2026 was the closure of the Tin Building in its current form as a culinary experience. We are very appreciative of Chef Jean-Georges, his team, and the Tin Building staff for their partnership, dedication, and effort. Tin Building was an ambitious undertaking and Chef Jean-Georges created a truly beautiful and distinct destination. Our partnership with the Chef and his team remains strong, and we look forward to continuing to work with them both at the Seaport and more broadly as a 25% owner in Jean-Georges Restaurants. Given the historical challenges of the Tin Building, we conducted a comprehensive assessment of the operating model and evaluated a range of alternatives. In the end, we concluded that the asset required a fundamental repositioning of both its use and operating structure to achieve long-term sustainability. As a result, we signed a new lease with Lux Entertainment to bring their highly Balloon Museum experience to the Tin Building, which will serve as their flagship U.S. location. For those of you who are less familiar with the concept, Balloon Museum is an award-winning large-format interactive contemporary art experience. To date, the Balloon Museum exhibitions have toured through 23 major cities across Europe, North America, and Asia, often within historic and landmark buildings and with works from internationally recognized artists. They have welcomed more than 7 million visitors globally, and when set alongside Meow Wolf, the Rooftop at Pier 17 concerts, existing and new restaurant offerings, our recently announced expanded event space, and other retail, cultural, and event-driven initiatives, Balloon Museum further complements the growing set of experiences within the Seaport that we believe will drive broad-based visitation by local residents, New Yorkers, and tourists alike. Under our agreement with Lux Entertainment, the initial lease term is five years with two five-year extension options. The base rent includes annual contractual escalations and a percentage rent component above a contractually established revenue threshold. From a capital standpoint, work is under way at an estimated cost of approximately $5 million with delivery to the tenant expected by the 2026. Lux Entertainment will complete its interior fit-out at its own expense, and they anticipate opening this summer. Strategically, this agreement fundamentally changes the financial profile of the Tin Building, transitioning it from a negative cash-burning operation to a stabilized positive free cash-flowing asset that further complements the broader programming of the neighborhood. When compared to the financial performance of the Tin Building in 2025, the Balloon Museum lease has the opportunity to improve the company's pro forma annual EBITDA by more than $22 million. This progress has positioned us for long-term financial stability, something this collection of assets has not experienced in recent history. In terms of our go-forward focus, we have some very exciting things on the horizon. During the fourth quarter, we signed a ten-year agreement with a renowned Brooklyn-based 11,000 square feet in the historic cobblestones. We plan to announce our partner and the name of the project in the coming months, and we believe this new concept, which is centered around a multifaceted, evolving hospitality and music experience, further expands on the diversified programming we are curating throughout the Seaport neighborhood. Additionally, we will open a new 400-seat, 1,000-person open container district that will be anchored by a new restaurant called Sadie’s. Sadie’s will occupy the first and second floors of a previously vacant restaurant space located at 19 Fulton Street and will include the outdoor garden bar that sits at the center of the historic pedestrian-only cobblestones. The restaurant and bar will feature New American food at an accessible price point, filling a need for a larger format communal and approachable restaurant within the Seaport. Sadie’s will also have a robust programming calendar featuring celebrations for seasonal, sporting, and cultural moments including events centered around music-driven activations, the Kentucky Derby, People World Cup, U.S. Open, America 250, Oktoberfest, and other evergreen programming. And finally, in January, we made the difficult decision to close the Malibu Farm location at Pier 17. We have had preliminary discussions regarding several replacement concepts that we believe could be additive to our overall plan for the Seaport, including replacing some of the culinary gaps that have been created with the closing of the Tin Building. Beyond the incoming entertainment and food and beverage opportunities, we intend to expand the previously announced Pier 17 event space from 17,500 square feet to more than 40,000 square feet across three floors with a focus on premium corporate, not-for-profit, convention, and social events. This will create one of the largest multifaceted event spaces in New York City featuring iconic, expansive views of the East River, Brooklyn Bridge, and Manhattan and Brooklyn skyline. All levels will be accessible via a dedicated ground floor elevator entrance and staircases with connectivity to the Rooftop at Pier 17. The event space will also leverage Pier 17’s other unique attributes including proximity to major transportation hubs, an access-controlled driveway, and adjacency to a dense mix of entertainment and dining options. Furthermore, the expanded event space at Pier 17 provides several strategic benefits to the company including further positioning the Seaport as a destination for large-scale meetings and events through integrated partnerships with third-party planners and caterers, creating a compelling weather contingency option that improves the rooftop’s utilization for non-concert events, diversifying our revenue sources with incremental weekday and off-peak demand, leveraging our existing infrastructure and capabilities—which were on display during our campus-wide activations during the New York City Wine and Food Festival and mid-July 4 fireworks—and improving utilization of space that was previously positioned for office use. While we are still finalizing some of the details for this project, including timing, we currently expect this initiative to generate long-term unlevered cash-on-cash returns above 20% with an estimated payback period under five years. We will provide more information about the event space on our first quarter earnings call. At the Rooftop at Pier 17, which was recently named by the 2026 Rolling Stone Audio Awards as the Best Outdoor Music Venue in the United States, our team is ramping up for the 2026 Seaport Concert Series, which begins May 2. This year builds on a strong 2025 season that delivered our highest ever total attendance and all-time highs in customer experience and staff friendliness scores. From a revenue optimization standpoint, we are focused on expanding premium upsell offerings at the Liberty Club and Patriot. These initiatives are designed to drive incremental high-margin revenue while enhancing the overall guest experience with more customized and differentiated hospitality offerings. Taking a step back and looking at the Seaport overall, as of December 31, the Seaport neighborhood was approximately 90% leased or programmed, leaving roughly 47,000 square feet of vacancy. On a pro forma basis for the Malibu Farm closure, this number is closer to 53,000 square feet. For the remaining vacancy, we are predominantly focused on complementary daily-needs and amenity-oriented tenants and incremental food and beverage opportunities where we have existing restaurant infrastructure. Since we became a stand-alone public company in August 2024, we have leased or programmed more than 220,000 square feet which we anticipate will result in additional stabilized EBITDA of more than $30 million. Lastly, before we shift along to Vegas, I do want to highlight that we are continuing to explore the sale of our 21-unit apartment building at 85 South Street. We will provide further updates on that transaction if or when it is completed. Moving west, the team in Las Vegas is transitioning from the winter activation, Enchant, back to regular season baseball programming. During the fourth quarter, we internalized the day-to-day operations of Enchant to strengthen our customer engagement and introduce new audiences to the ballpark. This process resulted in some transitional costs, but overall better positions us for improved execution and profitability in 2026. In terms of early demand for the baseball season, group and season ticket sales are pacing ahead of last year, including strong momentum for Big League Weekend when the Athletics face the Angels on March, followed by Opening Day for the Las Vegas Aviators, March 27. Additionally, after last year's hiatus, Las Vegas Ballpark will once again host the Savannah Bananas for three games starting April 30 with ticket sales currently outpacing 2024 levels. Overall, we are excited about the support for the team and how it is materializing in ticket sales. And from an operating standpoint, we expect incremental efficiencies in 2026 as we apply the learnings from Enchant and better control certain variable expenses. As a result, we expect continued margin improvement in 2026 across the entire Las Vegas operation. At the corporate level, we recently received Board approval to file a $150 million shelf registration statement and a $50 million stock repurchase program. The shelf gives us flexibility and allows us to access the capital markets efficiently in the future if a strategic opportunity makes sense. At the same time, with a strong balance sheet and our recent momentum, maintaining optionality to buy back stock could be a good long-term capital allocation decision. Both programs are tools for us as a public company that provide the ability to be opportunistic, but neither should be interpreted as an immediate plan to issue or repurchase securities. Finally, before I turn it over to Lina, I want to sincerely thank our team for their resilience and hard work and compassion. Their support of the company and fellow team members, especially through these transitional moments, has been tremendous. I am proud of the progress we have made. I am confident we will continue building on the strong momentum we saw through year-end 2025 and into 2026. With that, I will now turn the call over to Lina. Lina Eliwat: Thanks, Matt. Before I get into the company's fourth quarter and full year financial performance, I would like to remind everyone of some changes made at the start of 2025, including renaming our Sponsorship, Events, and Entertainment segment to Entertainment. In conjunction with this change, we reallocated sponsorship and events revenues and expenses to the respective segments that most appropriately reflect the source of the sponsorship or event. These changes are reflected in both the current and prior-year periods presented on our consolidated and combined statements of operations. Beginning in 2025, and in conjunction with the internalization of our food and beverage operations, we consolidated the Tin Building into our Hospitality segment. In prior years, the Tin Building was accounted for as an unconsolidated joint venture, and our share of net loss was reflected in the equity in earnings or losses from unconsolidated ventures line on our consolidated and combined statements of operations. In an effort to provide more comparable information, we will refer to the 2024 operating results on a pro forma basis reflecting the inclusion of the Tin Building as a consolidated entity during the prior-year period when providing year-over-year comparisons on this call. In addition, we will reference operating EBITDA, which excludes losses on assets held for sale, impairment charges, and other nonrecurring items included in other income or loss related to the segment or on a consolidated basis, to provide more comparable operating results. Fourth quarter and full year 2025 net loss attributable to common stockholders was $36.9 million and $116.7 million, respectively, representing a year-over-year improvement of 11% for Q4 2025 and 24% for the full year 2025. On a per share basis, net loss attributable to common stockholders was $2.89 in Q4 2025 and $9.18 for the full year 2025, representing a 2045% improvement, respectively. Non-GAAP adjusted net loss attributable to common stockholders was $17.5 million for the fourth quarter 2025 and $54.1 million for the full year, representing improvements of 949%, respectively, compared to the same periods in 2024. On a per share basis, non-GAAP adjusted net loss was $1.30 for the fourth quarter 2025 and $4.26 for the full year 2025, representing a year-over-year improvement of 184%, respectively. In the fourth quarter 2025, total consolidated revenues were $29.5 million, a 7% year-over-year increase when compared to pro forma 2024. For the full year 2025, total consolidated revenues were $130.4 million, which is essentially flat to full year 2024 consolidated revenue on a pro forma basis. As a reminder, consolidated revenues exclude the financial results of our unconsolidated ventures, such as the Lawn Club and our investment in Jean-Georges Restaurants, since they are reflected in the equity in earnings or losses from unconsolidated ventures line on our consolidated and combined statements of operations. In Hospitality, fourth quarter revenues declined 23% on a pro forma basis, primarily driven by lower performance at the Tin Building and unfavorable year-over-year comparisons resulting from events and activations in Q4 2024 that did not repeat in 2025. One of those activations was a holiday-themed partnership on the Rooftop at Pier 17 with The Dead Rabbit, a world-renowned Irish cocktail bar in Lower Manhattan. Another was a large-scale private event across multiple venues at Pier 17. Total food and beverage revenues within the Hospitality segment, inclusive of Lawn Club, declined 15% year over year. On a same-store basis, food and beverage revenue declined 20%, the most meaningful difference relating to Gitano, which was not included in the same-store revenues in the fourth quarter due to it being under construction during 2024. In the fourth quarter 2025, Hospitality consolidated adjusted EBITDA, including earnings from unconsolidated ventures, improved by $11 million year over year on a pro forma basis, mainly as a result of the $10 million impairment charge recognized in the prior year relating to warrants of Jean-Georges Restaurants, which were nearing expiration. Excluding this impairment and other items included in other income and loss, Hospitality operating EBITDA improved by 17% year over year on a pro forma basis, driven by better flow-through at the Tin Building, continued growth at the Lawn Club and Gitano—which continues to drive increased revenue as they refine their operations—as well as the cost savings realized from the internalization of food and beverage operations earlier in 2025. During the full year 2025, Hospitality revenue declined by 16% on a pro forma basis. The decline was primarily driven by overall performance at the Tin Building, reflecting both the closure of certain venues within the building and increasing top-line softness, as well as declines from certain legacy stand-alone restaurants. This was partially offset by the continued growth of Gitano and the incremental revenue generated from larger events such as the Macy’s Fourth of July Fireworks event. Total 2025 food and beverage revenue, including Lawn Club, declined 8% year over year. On a same-store basis, food and beverage revenue declined 5%. This more moderate decline reflects the exclusion of the non–Dead Rabbit holiday activation and closure of some of the Tin Building outlets in 2025. For the full year 2025, Hospitality consolidated adjusted EBITDA increased $10.5 million year over year on a pro forma basis, mainly reflective of the $10 million Jean-Georges warrant impairment recorded in 2024. Excluding other income and losses—which was primarily impacted by a one-time favorable Hospitality expense reimbursement in 2024—along with excluding the 2024 warrant impairment charge, Hospitality operating EBITDA increased 25% year over year. The improvement was predominantly driven by the internalization of food and beverage operations, disciplined cost-cutting controls at the Tin Building, more measured marketing spend across the portfolio, and continued strong performance at the Lawn Club and Gitano. Turning to the Entertainment segment, fourth quarter revenues increased 68% year over year, primarily driven by the internalization of Enchant’s operations in Las Vegas. Partially offsetting this initiative was the timing of Las Vegas Aviators sponsorship revenue, the absence of the seasonal holiday activations on the Rooftop at Pier 17 in 2025, and two fewer concerts in New York during the prior year’s comparable quarter. Despite hosting fewer shows during the period, concert series food and beverage revenue increased 3% year over year, driven by increased per-show attendance and higher per-customer spend. With the concert and baseball season ending in October, Q4 2025 Entertainment operating EBITDA increased 18% year over year, mainly from better flow-through achieved by foregoing the seasonal holiday activation on the Rooftop at Pier 17, but partially offset by the lower concert count compared to 2024. Total 2025 year-over-year Entertainment revenues increased 14% due to the internalization of Enchant operations in Las Vegas, increased sponsorship revenue in both New York and Las Vegas, and new revenue from previously referenced larger-format events. On a full-year basis, adjusted EBITDA for the Entertainment segment increased by 124% when compared to the prior year, benefiting from improved collections and reduced bad debt, as well as better flow-through by foregoing the seasonal holiday activation on the Rooftop at Pier 17. Our concert business also benefited from the internalization of food and beverage operations as well as strategic reductions in per-show operating expenses. Within the Landlord segment, fourth quarter rental revenue increased 14% year over year on a pro forma basis. This is mainly from the growth of our private events rental revenue, with large-scale events such as New York City Wine and Food Festival contributing to the current quarter improvements. These gains are partially offset by the termination of the ESPN lease in 2025, resulting in the loss of year-over-year comparable rental revenue in 2025. Landlord consolidated adjusted EBITDA declined by $10.1 million on a pro forma basis, primarily driven by a $7 million write-down of 250 Water Street to its final sales price. It was further impacted by the nonrepeating $2 million legal settlement proceeds recognized in 2024. Excluding these nonrecurring items, Landlord operating EBITDA declined 37% year over year on a pro forma basis as expenses increased relating to the timing of accrual for operating expenses such as cleaning, security, and utilities, along with the effects of the nonrepeating rent reserves placed in 2024. For the full year of 2025, rental revenue increased 21% year over year on a pro forma basis, driving most of the Landlord’s 18% year-over-year revenue growth. The increases to rental revenue were driven by private event rental activity—most notably Jordan Brand’s The One Tournament Global Finals event and the New York City Wine and Food Festival—as well as termination income associated with our Nike office lease, and a decrease in rent reserves compared to prior year. As a reminder, Nike exercised their termination within their lease but remains a tenant of Pier 17 through February 2027. The Landlord segment’s 2025 consolidated adjusted EBITDA declined 55% year over year on a pro forma basis, primarily due to $13.4 million of one-time nonrecurring charges. These include an $11 million loss on the write-down of 250 Water Street in conjunction with its classification as held for sale and a $2 million write-off of capital spent on the rooftop winter structure. Excluding these nonrecurring items, the Landlord segment operating EBITDA for the full year increased 36% year over year on a pro forma basis. The improvement reflects the previously mentioned revenue growth, reduced overhead compared to the pre-spin structure in prior year, and improved operating expense savings year over year. Overall, consolidated segment adjusted EBITDA for the fourth quarter 2025—which reflects segment performance before G&A, interest, depreciation, amortization, and includes results from unconsolidated ventures—improved by $1.3 million year over year on a pro forma basis. Excluding the nonrecurring items discussed earlier, such as the loss on 250 Water Street, the prior-year warrant impairment, and the favorable legal settlement recognized in the prior year, consolidated operating EBITDA increased 5% year over year on a pro forma basis in the fourth quarter. For the full year 2025, consolidated segment adjusted EBITDA improved by $2.8 million on a pro forma basis. Excluding the nonrecurring items—the 250 Water Street for-sale loss, the rooftop winter structure write-off, the prior-year warrant impairment, the favorable Hospitality expense reimbursement and legal settlement recorded in the prior year—consolidated operating EBITDA increased 33%, or more than $13 million, year over year on a pro forma basis. Overall, with total year-over-year revenue relatively stable, this bottom-line improvement was driven by reduced costs as our operating stabilizes in our first full year as a stand-alone public company as well as overall cost optimization initiatives we have implemented across each segment in 2025. During Q4 2025, we incurred general and administrative expenses of $6.8 million, an improvement of 31% when compared to the fourth quarter of prior year. For the full year 2025, G&A expenses were $42.8 million, representing a 32% improvement compared to 2024. Prior-year G&A was higher overall due to our predecessor’s cost structure and transitional expenses related to our separation from Howard Hughes. While there were significant G&A improvements achieved in 2025 through streamlining and optimizing operations, they were partially offset by $12 million in expenses related to our leadership transition. As we continue to stabilize our operating model, we expect to continue to improve upon our cost structure with Q4 2024 as our new benchmark. During the fourth quarter 2025, interest expense increased by $3.3 million compared to the comparable prior-year quarter, primarily due to interest expense capitalized on 250 Water Street in 2024 that did not recur in the current period and a decrease in interest earned on invested cash. As a reminder, we suspended interest capitalization on 250 Water Street midway through Q3 once the asset was classified as held for sale, resulting in higher reported interest expense in the fourth quarter 2025. For the full year, net interest income totaled just under $0.5 million, compared to net interest expense of $6.8 million in the prior year, a $7.2 million year-over-year improvement driven by higher interest income on invested cash, increased interest capitalization earlier in the year prior to the held-for-sale classification of 250 Water Street, and lower amortization of finance costs following our separation. Compared to 2024, equity in earnings or losses from unconsolidated ventures improved by $9.7 million year over year on a pro forma basis, and for the full year improved $11.5 million year over year on a pro forma basis. This is mainly a result of the $10 million impairment of the warrant previously described in 2024. Excluding the warrant impairment, equity in earnings or losses from unconsolidated ventures declined approximately $300,000 in the fourth quarter year over year on a pro forma basis and increased 169%, or $1.5 million, on a pro forma basis for full year. This is reflective of continued strength at the Lawn Club as it scaled through its second full year of operations. Capital expenditures in the fourth quarter 2025 totaled $2.8 million. For the full year, capital expenditures totaled $30.8 million. Excluding capitalized costs associated with 250 Water Street development, the majority of spending was related to Meow Wolf landlord work, rooftop winter structure, completion of Gitano and Riverdeck Bar build-outs, as well as other landlord work and maintenance capital costs across our existing operations. Long-term debt outstanding as of year-end was reduced to $100.4 million, reflecting a $1 million decrease primarily related to the scheduled principal amortization on the Las Vegas Ballpark loan. Net debt to gross sales at year end was approximately 2%. Subsequent to year end, and in conjunction with the sale of 250 Water Street, we paid off the $61.3 million variable-rate loan associated with the property, further strengthening our balance sheet. Our year-end 2025 cash, restricted cash, and cash equivalents balance was just over $87 million, and pro forma to reflect the proceeds from the sale of 250 Water Street, our cash, restricted cash, and cash equivalents balance would be $163 million. As we move through 2026, our cash position provides meaningful liquidity and optionality for the company as we explore various investment and capital allocation opportunities for the long-term benefit of the organization and our shareholders. With the progress made, we have materially improved the company's financial performance, strengthened the company's balance sheet, and laid the groundwork for sustainable long-term growth and value creation. We will now open for questions. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from Matthew Erdner with JonesTrading. Please go ahead. Matthew Erdner: Hey, good morning, guys. Thanks for taking the question, and congrats on all the progress so far. Lina, you just mentioned that you guys have $163 million cash pro forma. How much of that is committed to, you know, current projects and getting them online at the Seaport? And then with whatever is remaining there, you know, what are you guys kind of targeting there for deployment? Lina Eliwat: Hey, Matt. Good morning. So we spent about $30 million in 2025 in capital. With our expectation for everything we have announced plus existing vacancy to get to stabilization is another—we expect around another $70 to $90 million. We had initially said at the onset a range of $100 to $125 million to get to stabilization. So I believe we are still, you know, expecting to target something within that range. Matthew Morris Partridge: Hey, Matt. In terms of capital allocation, you know, we are sort of at the front end of this. Obviously, we have been focused on the existing asset base. I think we are going to look at a lot of different things. Right? We are evaluating or we are starting to evaluate opportunities in the hospitality, entertainment, and event spaces. Obviously, that is core to what we are doing at the Seaport and what we do out in Las Vegas at the ballpark. I think we could potentially look at other assets similar to the Seaport, we could look at companies that operate within those businesses that have scalable intellectual property and brand recognition. But we could also be opportunistic and utilize the buyback program that we announced from a capital allocation standpoint and effectively reinvest into the company, depending on where the stock is trading. So we are going to be opportunistic. And I do not think we have any definitive path yet because we are sort of at the forefront of evaluating the opportunity. So— Matthew Erdner: Got it. That makes sense, and that is helpful. And then you know, you mentioned on the event space, kind of that 20% return there. Are there any internal hurdles that you guys are looking to achieve, you know, as you guys deploy this cash? Matthew Morris Partridge: I think it depends on the business. You know, obviously, the hospitality space is notorious for relatively low margins. I think the events business is a much better margin-oriented business. I think where we see some opportunity potentially is to leverage the existing team. We have a lot of talent in the building, and obviously, they are doing a great job executing on what we have. So if we can find things that complement the existing skill set, that is going to improve the flow-through of whatever we allocate capital to. So it is a moving target. I would not say we have any hard and fast financial targets yet, but, you know, we are obviously focused on growing earnings as efficiently as possible with the best flow-through possible. Matthew Erdner: Yep. Yep. Got it. And then, you know, as it relates to the remaining space at the Seaport, you know, have you had any discussions there? And then, you know, I guess, what additional growth do you think that can drive on top of the—call it, $33 million, $32 million of EBITDA that has been leased. Matthew Morris Partridge: Yeah. So we have, like Lina said—or maybe I said in the prepared remarks—we have got a little over 50,000 square feet left. You know, I would say a third of that is probably restaurant-oriented space, and it also includes the former Malibu Farm space. So we will be looking at some restaurant concepts that are complementary to all the stuff that we have announced and what still exists at the Seaport. I think beyond that, you know, we have got the Balloon Museum coming. We have Meow Wolf coming. We have the event space, and then we have the Rooftop at Pier 17 concert series. That is a great set of anchors. And then the removal of the Tin Building F&B, you know, I think that the anchor—or the amount of people that the anchors will drive—will benefit all the businesses, and then pulling some of the food and beverage supply out with the closure of the Tin Building and positioning it to Balloon Museum is going to help all the other F&B that we have either announced exist down here or that we will look to fill the existing vacancy with. Matthew Erdner: Got it. Got it. And then, you know, as it relates to kind of the special events, you know, you had the Wine and Food Festival last year. You know, do you have anything set up like that so far across the year? Is it, you know, going to be event-driven stuff like you said around the World Cup, you know, people going to the bars, interacting in the cobblestones and whatnot? Matthew Morris Partridge: Yeah. I think Sadie’s is definitely going to be a unique asset for us to program around. The Lawn Club has been very successful doing a lot of corporate events and social event-related business. And so I think those two concepts with the open container that we announced are going to give us a lot of flexibility. We are going to look at everything from doing concerts on the cobblestones or concerts out on the pier—obviously, we do them up on the Rooftop as well. I think FIFA and the World Cup are going to be a unique event this year. It is also America’s 250-year anniversary. So there will be a lot of activity during the summer around that, especially with the Fourth of July fireworks. We are going to do a lot of programming around cultural events and sporting events because I think, you know, whether it is watch parties, whether it is community-oriented events like what we have coming up this weekend around Holi, you know, we are going to do a lot of stuff down here, which I think will bring a lot of people down to the Seaport. It will give them an opportunity to experience everything we have down here, and it will support the businesses that we have got down here. Matthew Erdner: Yeah. Yeah. That is awesome. And then last one for me, and I will step out. Lina, you touched on it a little bit about G&A, but is there anything that we should expect kind of as a run rate throughout the year? Lina Eliwat: We have definitely been trending positively throughout the year on G&A, stabilizing our organizational structure, working through technology initiatives. We hope to continue that trend into 2026. Right now, I think Q4 is our new reference point, and we are continuing to try and refine that. But I would use Q4 as our reference point for right now. Matthew Morris Partridge: Yeah. I think it will be a little up and down, Matt. You know, Q1 is going to have some transitional costs related to the closures that we have announced, plus some other changes to the team. And then I think that will benefit us in the back half of the year. But it will be a little up and down this year. But I think, to Lina’s point, Q4 is a good reference point moving forward, and hopefully we can improve upon it. Matthew Erdner: Got it. Awesome. Thank you, guys. Appreciate it, and look forward to the continued progress. Matthew Morris Partridge: Thanks, Matt. Thanks, Matt. Operator: Next question, Patrick Stedelhofer with Kahn Brothers Group. Please go ahead. Patrick Stedelhofer: Hey, good morning, and congrats on all the recent announcements. Lina Eliwat: Thanks, Patrick. Patrick Stedelhofer: My first question is around the kind of criteria for the buyback. You have this great slide on the deck that shows that, you know, the stock is trading at $0.50 of a dollar or probably less than that. And, obviously, that is a great hurdle rate. And so a lot of companies use buybacks on weakness, but you could argue the stock has—it's been all weakness. So I am just curious what would cause you to pull the trigger on this buyback program, kind of when would you ramp it up? And how do you think about allocating it given what an incredible return on investment you can earn by doing this buyback program, which we are very happy to see. Matthew Morris Partridge: I appreciate the question. You know, for the buyback program, we will not put out any public comments related to parameters or timing. We will report after things are executed on, if and when we use it. Obviously, we think the stock is undervalued, especially given the slide that you are referencing in our supplemental. But we are also cognizant that we are building an organization that can grow over time, and we have relatively limited float. So that is always a consideration when you are using buybacks. This is my fifth public company that I have been part of. We have had buyback programs at all but one of them, and we use them opportunistically. And I think opportunistic is the approach that we will use, but that ultimately will be a Board decision, and we will continue to have those conversations with the Board as we look at the performance of the stock and our relative alternatives from a capital allocation perspective. Patrick Stedelhofer: Got it. And then the new Balloon Museum, just how do you view that as either complementing or competing with the Meow Wolf experience coming a year later? Just how do these two go together? Matthew Morris Partridge: Great question. You know, I think the Balloon Museum is definitely complementary. Both of those teams—the Meow Wolf team and the Balloon Museum—know each other, and there is a lot of mutual respect for one another. We spoke with Meow Wolf before moving forward with the Balloon Museum, and they were very supportive of it. So they are going to be complementary to one another. They are both ticketed experiences. They both have done very well in other markets. The Balloon Museum was here in 2023 and did exceptionally well a little farther up the river on Pier 36. So, you know, I think activity breeds more, and having them both open down here really gives the local population, New Yorkers, visitors—everybody—sort of a full-day opportunity to spend at the Seaport. Right? You can come down here for brunch, you can go to the Balloon Museum, you can have lunch, you can go to the Seaport Museum or do some shopping, stay for dinner and a concert, go out to some bars. So we are really trying to create a district that can support the local community because we have got a growing residential population down here, but that can also be a destination for an entire day for a family, a couple, an individual, or anybody in between. Patrick Stedelhofer: That is great. And on this apartment building you are monetizing or maybe monetizing, could you provide any more details around—kind of is it fully leased? Is it cash flowing? Just anything you can share about what you might be able to achieve by monetizing that asset. Matthew Morris Partridge: It is cash flowing. You know, there is a component of the units that are rent-stabilized. It is almost 100% leased. I think we have one or two vacant units. It has got a lot of interest. Obviously, we launched it at the end of 2025, the marketing process, knowing that it would be sort of a slow process to end the year and start the year, but the interest is definitely ramped up. So, you know, unlike 250 Water Street where we had some disclosure obligations related to the materiality of that sale, we will probably speak more to 85 South Street if and when we sell it rather than providing more real-time updates, just because providing real-time updates can sometimes put us at a competitive disadvantage when we are trying to work through a transaction. Patrick Stedelhofer: Understood. Every bit helps. And then last one from us, just how do you think about Vegas versus New York? Obviously, you have a lot happening at the Seaport and you are kind of local there. How do the Vegas properties still fit into the company given both the geographic remoteness of it and all the—just the less news from there. Thanks a lot. Matthew Morris Partridge: Yeah. I think, look, in Las Vegas, we have got a phenomenal facility with the ballpark. You know, it is at the center of Howard Hughes’s Summerlin community that they continue to add amenities to and grow the population around the ballpark. The fan base of the Aviators is largely a local population, so we would love to see Howard Hughes continuing to invest in that project. That ultimately will inure benefit to the baseball team. I think things like Enchant are where we can add a lot of value—doing 40 days of holiday activation and bringing that in-house and, ultimately, over the long term, being able to implement better cost controls and be a little more creative from a ticketing perspective because we have got a great ticketing team out there. Doing things like that in the off-season is only going to help the profitability of that overall operation out there. So I think we have got some room to create value. That being said, you know, I think live sports is a great business. It is a business that has seen tremendous value appreciation over time. So, you know, if and when somebody has an interest in the team, we will always listen. But I think we would pay some pretty high premium on the team and the ballpark given the quality of the facility and the quality of the operation that we have out there. Patrick Stedelhofer: Wonderful. Thank you so much. Matthew Morris Partridge: Thanks, Patrick. Operator: Thank you. I would like to turn the floor over to Matt for closing remarks. Matthew Morris Partridge: Thanks, everybody. Appreciate the interest and support. We look forward to providing more updates on our first quarter earnings call in early May. Have a great rest of the week. Operator: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
Operator: Good morning, and welcome to John Wiley & Sons, Inc.'s third quarter fiscal 2026 earnings call. As a reminder, this conference is being recorded. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. At this time, I would like to introduce John Wiley & Sons, Inc.'s Vice President of Investor Relations, Brian Campbell. Please go ahead. Brian Campbell: Good morning, everyone. With me today are Matthew Kissner, President and CEO; Craig Albright, Executive Vice President and CFO; and Jay Flynn, Executive Vice President and General Manager of Research and Learning. Our comments and responses reflect management views as of today and will include forward-looking statements. Actual results may differ materially from those statements. The company does not undertake any obligation to update them to reflect subsequent events. Also, John Wiley & Sons, Inc. provides non-GAAP measures as a supplement to evaluate underlying operating profitability and performance trends. These measures do not have standardized meanings prescribed by U.S. GAAP and, therefore, may not be comparable to similar measures used by other companies, nor should they be viewed as alternatives to measures under GAAP. We will refer to non-GAAP metrics on the call, and variances are on a year-over-year basis. We will exclude divested assets and the impact of currency. Additional information is included in our filings with the SEC. A copy of this presentation and transcript will be available at investors.wiley.com. I will now turn the call over to Matthew Kissner. Matthew Kissner: Thank you, Brian. Hello, everyone, and welcome to our fiscal Q3 earnings update. Before I get to our performance and progress, I want to acknowledge our price amid AI fears across the market. The fact is we do not share those same fears. Quite the opposite. We could not be more confident in our position in the AI economy given our proprietary content advantage, wide moat in peer review research, and unparalleled partnership ecosystem. The ongoing opportunity is twofold. AI is expected to greatly accelerate scientific discovery and research publishing output, and our enriched data and AI solutions are foundational for corporate R&D, AI models, and applications. I will discuss this in more detail later in our call. The third quarter was fully in line with our stated expectations. Revenue performance was impacted by an unfavorable comparable in research, which we called out in the second quarter, and soft market conditions in learning. We continue to accelerate in all major areas of focus. Research publishing continues to outpace the market with global output up 11%, revenue up 4% excluding AI revenue, and steady growth in our multiyear renewals. In AI and data services, we announced new leadership, launched our clinical outcome assessments partnership with IQVIA, and after quarter close, executed a strategic multiyear partnership with Open Evidence to deliver trusted research at the point of medical care. We also secured a new AI model training customer, our first outside the U.S., and realized $7,000,000 of AI revenue. We are rapidly advancing our technology transformation initiatives with the announcement of a multiyear managed services partnership with Virtusa. We also continue to deliver corporate expense savings, on an adjusted EBITDA basis, down 21% in the quarter, or $9,000,000 versus prior year. We continue to deliver material margin expansion and cash flow growth with adjusted operating margin of 280 basis points, adjusted EBITDA up 250 basis points, and operating cash flow nearly doubling to $103,000,000. And we are returning more cash to shareholders, with repurchases doubling in Q3 to $70,000,000 year to date as part of a $100,000,000 full-year target. We have returned $120,000,000 in dividends and repurchases in just nine months, a 37% increase over prior year. Let us turn to how we are executing on our fiscal 2026 commitments. Our first objective is to lead in research. It has been a robust year for research, with revenue up 4% at constant currency and adjusted EBITDA up 6%. We continue to outpace the market in submissions and output of 26–11%. Strong demand is evident across all regions. We have now migrated over 80% of journals to our competitively advantaged Research Exchange platform. Importantly, this migration is what transforms our content from published articles into AI-ready data, the foundation that makes everything we are doing in Gateway, licensing, and subscription knowledge feeds possible. And we continue to expand our journal portfolio through organic investment in our flagship Advanced collection, with eight new journals planned for launch and revenue growth of 50% in our leading open access journal, Advanced Science. Our second objective is to deliver new growth in AI and adjacent markets. We have generated a record $42,000,000 in AI revenue year to date, above last year’s total of $40,000,000, with one quarter remaining. We continue to make critical inroads into the corporate market with strategic projects executed with healthcare innovators IQVIA and Open Evidence, and other customers for subscription knowledge feeds. We are now at 36 publishing partners for our Nexus content licensing service, and we are in active discussions with others. Finally, we continue to see strong researcher interest in our AI Gateway for scholarly search delivered through partnership with leading companies like Anthropic and Amazon Web Services. Our third objective is to drive operational excellence and discipline across our organization. We continue to streamline our cost structure with corporate expenses, on an adjusted EBITDA basis, down 21% for the quarter and 12% year to date. Tech transformation took a significant step forward with our recent managed services partnership, which Craig will talk more about in detail. Let me run through our four key strategic priorities and value drivers. First, we are accelerating research core growth and delivering shared gains from our wide moat scale and highly favorable demand trends from global expansion and AI productivity. The research publishing market is growing at 3% to 4%, and we expect to deliver at the top end of that this year. We are delivering new AI and data analytics growth from our proprietary content in critical AI domains and our extensive partnership ecosystem. As noted, we have already surpassed last year’s AI revenue total with $42,000,000 and a quarter remaining. We are driving multiyear margin expansion with our EBITDA margin up 500 basis points since fiscal 2023 and plans for continued material improvement going forward. Finally, underpinning all of this is our discipline in managing our portfolio, deploying capital on high-return investments, and returning cash to shareholders. Let us turn to our core. For much of calendar 2025, we have been navigating around U.S. funding cuts to science and education. A year ago, I said that we remain fully confident that U.S. research would continue to receive federal support given the essential role that it plays in U.S. economic growth and U.S. global competitiveness. I am pleased to report that federal investment in scientific research remains resilient, with Congress ultimately enacting significantly smaller reductions than those proposed by the administration, and in key cases, maintaining or increasing agency budgets. This outcome reflects continued bipartisan recognition that sustained funding is critical to the nation’s scientific infrastructure, long-term competitiveness, and innovation capacity. Our calendar 2026 renewal season is about 82% complete, and we are encouraged by the growth we are seeing there. Our subscriptions and transformational agreements are must-have content, which is core to institutions and essential to their missions. We recently marked a milestone of 125 multiyear transformational agreements for consortia representing over 3,000 institutions. Our recurring models representing about 70% of research publishing remain robust. Let us talk about open access as an incremental growth engine. As discussed, research output is ever increasing, driven by global R&D spend and other factors. Submissions remain at record levels as the number of global researchers increase and productivity gains accelerate. The rate of research output is expected to rise significantly with AI. One recent study showed a threefold increase in the number of papers by researchers who use AI, and we are just at the beginning. Big global publishers like John Wiley & Sons, Inc. stand to benefit most. This volume increases the value of our multiyear subscription and transformational agreements and accelerates growth in author-funded open access, where revenue is a function of price times quantity. This model is growing consistently above 20%, and demand and pricing power remain robust. I want to call out our investment in the Advanced journal brand and Advanced Science in particular. Researchers are drawn to multidisciplinary publications like Advanced Science for the brand, the impact factor, and the breadth of the audience it reaches. It has become one of the leading open access journals in the world. The Advanced portfolio as a whole will exceed $70,000,000 in revenue in fiscal 2026, growing at strong double digits. Long-term trends in research look increasingly favorable. AI is expected to be a major output accelerator, and research publishing remains essential for not only discovery and prestige, but to advance researchers’ careers and secure additional funding. This is what makes the business and its growth so strong and durable through continuous technological and societal change. Because of this and expected AI-driven volume acceleration, we are expanding our journal portfolio and modernizing our published platform and workflows to continuously benefit from this evolution. Large-scale, high-quality publishers like John Wiley & Sons, Inc. are reporting market share gains, and we expect this trend to continue for the foreseeable future. And as we have seen time and time again, research funding and publication remain must-haves across economic cycles and political uncertainties. What makes us so well positioned for the AI economy? First, we provide access to much of the world’s proprietary scientific, technical, and medical content through our own portfolio and that of our publishing partners. As we know, science is constantly evolving. In fact, over 14,000 new peer-review articles are published every day. Second, we enjoy an industry-leading position in fast-growing knowledge domains that are especially relevant for AI: chemistry, material science, oncology, technology and engineering, food science, and finance. John Wiley & Sons, Inc. is the lifeblood. Third, in an ever-changing world, saturated with wrong information and skepticism, our trust and reputation are distinct advantages. Our moats are not only our journal brands but our unmatched peer review networks and editorial boards. We are home to hundreds of Nobel Prize winners and the world’s leading societies, from the American Cancer Society to the American Geophysical Union. Fourth, we are not bound by legacy platform businesses that we are trying to defend. We have embraced an AI-first approach and enjoy first-mover advantage with model developers and corporations building out AI models and applications. So much so that other publishers want to be part of our network. Fifth, we have built an unparalleled partner ecosystem. How many companies can point to a partner network that spans the world’s most prestigious universities and academic societies, the largest LLM providers and AI innovators, multinational corporations, and global publishers? Our ecosystem approach is our secret sauce. We are partnering, not competing. We are integrating, not building. We have the luxury of not having to defend existing business models which may be threatened by AI. Finally, this gives us an advantageous capital-light model. We have the content advantage. We can then leverage external interoperability while enabling broader collaboration across the ecosystem. This reduces our capital requirements and creates network effects that benefit all participants. It also means we do not have to bet on a particular technology, as our open approach works across all platforms. We see this already with our IQVIA and Open Evidence momentum, and with our connector on Claude and AWS. With that in mind, let us turn to our AI and data strategy. At the foundational level, we are a research and learning publisher leveraging our proprietary content and data for AI. Then comes our Gateway platform, which addresses a problem every researcher faces today. AI tools are proliferating, but most are built on unverified or incomplete scientific content. The full potential of AI in science will only be realized if researchers have complete confidence in the authenticity of their AI tools and the AI environment. Gateway solves this by embedding peer-reviewed full text, John Wiley & Sons, Inc. and partner content, directly into the platforms where researchers already are: Claude, AWS, Perplexity, and others. We are gratified by the early response. In just four months, 9,000 researchers have registered on the platform, in addition to a growing number of institutions signing up for enterprise access. This is early, but clear evidence of product-market fit. Gateway is not just a search tool. It is the access layer through which trusted scientific knowledge enters the AI workflow, and the layer institutions will increasingly require as a baseline for responsible AI use in research. Finally, our enriched and AI solutions become the foundation for domain-specific intelligence, which we have referred to as subscription knowledge feeds or retrieval augmentation generation. Customers here include corporations and partners in life sciences, healthcare, engineering and industrials, food and agriculture, and financial services. John Wiley & Sons, Inc. is at a pivotal point in its upward trajectory as AI-related demand for our content and research intelligence accelerates across industry verticals. The time was right to bring in a world-class leader to convert our content advantage into high-margin data services and commercialize our AI-driven offerings, and so we recently announced the appointment of Armahan Rafat as our Chief AI and Data Services Officer. Armahan brings over 25 years of experience leading technology and data organizations, serving in senior roles at North Stella, Thomson Reuters, Clarivate, and others. His track record for developing analytics products generating hundreds of millions of annual revenue has been exceptional. As he stated in the recent announcement of his appointment, in an era where AI is only as effective as the data that fuels it, the proprietary content John Wiley & Sons, Inc. publishes represents the verified foundational truth that AI and machine learning require. In terms of underlying momentum, we now count 10 corporate customers for our subscription services, and we have secured a new LLM customer for our training services. We continue to add more publishing partners to our licensing network. We expect to deliver AI revenue of $45,000,000 to $50,000,000 this year, up from $40,000,000 in fiscal 2025 and $23,000,000 in fiscal 2024. We anticipate another big year for total AI revenue in fiscal 2027. I would like to share some examples of real use cases where we are converting our content advantage into practical solutions for major corporations and through recurring revenue models. First, clinical outcome assessments, or COA, are scientifically validated instruments used in pharmaceutical trials to measure how patients feel, function, and respond. COAs are essential for demonstrating treatment impact and meeting regulatory standards for drug approval. John Wiley & Sons, Inc. and its partners have one of the largest collections of COAs going back decades. It is a rapidly growing area for us, expanding from $800,000 in 2021 to nearly $7,000,000 today. What makes this different is what it means for the pharmaceutical customer. Previously, running a clinical trial meant assembling multiple vendors, from COA licensing to regulatory guidance. That friction costs time and money. John Wiley & Sons, Inc. IQVIA consolidates that into a single trusted relationship. IQVIA is the world’s largest contract research organization, driving $16,000,000,000 of annual revenue, bringing deep pharmaceutical relationships, regulatory expertise, and implementation scale. John Wiley & Sons, Inc. brings the validated instruments, a portfolio of 100+ COA instruments managed on behalf of our society partners, and trusted scientific heritage. So it is not just a licensing deal. It is a recurring workflow transformation, the kind of deeply embedded relationship that compounds in value as trials grow more complex and the regulatory bar rises. We are really excited about this opportunity now and the scaling potential ahead. We have executed COA agreements with the top 20 pharma companies, and our global pipeline continues to grow. Two days ago, we announced the strategic partnership with Open Evidence, the most widely used clinical decision support platform among U.S. physicians, with more than 40% of doctors using the platform daily across 10,000 hospitals. Open Evidence will bring our trusted scientific content and that of our partners into their rapidly expanding AI platform. The terms of the deal include a five-year, multimillion-dollar licensing agreement for a selection of over 400 journal titles and reference books, as well as the Cochrane Database of Systematic Reviews. As part of the partnership, John Wiley & Sons, Inc. has taken a small equity position in Open Evidence, underscoring our mutual commitment to building the future of clinical AI together. Important to note, we consider this a first step in our multiyear collaboration. Let me finish with a quote from Open Evidence CEO and founder, Daniel Nadler. The hard problem in medicine right now is not just generating new knowledge. We are living through a golden age of biomedical research. The hard problem is also that it takes 17 years for a fraction of that research to reach the bedside. John Wiley & Sons, Inc. is an ideal partner in solving this problem for physicians. The depth and breadth of John Wiley & Sons, Inc.’s content reinforce the advantages of Open Evidence for physicians, and that compounds over time. As with IQVIA, this partnership is not just a licensing arrangement. John Wiley & Sons, Inc. is embedding itself into the daily clinical decision-making of physicians. Our equity position reflects our conviction that this is where trusted scientific content meets its highest value application. And importantly, we see this as a template for many others, bringing John Wiley & Sons, Inc.’s content advantage directly into the workflow platforms where critical high-stakes decisions are made. As I mentioned earlier, our partner ecosystem is a huge strategic advantage for us, bringing together AI innovators, R&D corporations, leading institutions, and other publishers. It is only the beginning. I will now turn the call over to Craig. Craig Albright: Thank you, Matt, and hello, everyone. Three summary points that define where we stand today. Research publishing is growing at the high end of the market’s long-term rate, AI revenue is tracking ahead of expectations, and importantly, we are beginning to see leading indicators of recurring revenue growth in new partnerships, pilots, and pipeline, which is where the real value gets built. And our balance sheet is very strong, giving us the capacity to invest in high-return growth opportunities. Learning continues to face macro and channel headwinds that are masking the underlying earnings power of our business, but we are managing through it with discipline and agility while keeping our focus squarely on the businesses and investments driving long-term value creation. Turning to our fiscal third quarter results, we projected a light quarter due to unfavorable comps, and overall revenue came in as expected, up 1% on a reported basis and flat at constant currency. Growth in Research Publishing and Academic was offset by moderate declines in Research Solutions and Professional. Reflecting our commitment to operating discipline, we delivered strong margin expansion and profit growth even with revenue softness. Adjusted operating income, adjusted EPS, and adjusted EBITDA were all up double digits, or 22%, 19%, and 12%, respectively. Our adjusted operating margin improved by 280 basis points, and adjusted EBITDA margin by 250 basis points. Adjusted EPS growth was driven by our operating performance and the lower share count as we remain in the market acquiring shares. This was partially offset by a higher adjusted effective tax rate. Let me turn to our segment performance, starting with Research. Research was up 1%, with a 40-basis-point improvement in EBITDA margin. Research Publishing performance was impacted by $9,000,000 of AI revenue in the prior-year period. Absent AI revenues, Research Publishing was up over 4%, driven by record submissions, solid growth in our recurring revenue models, and over double-digit growth in author-funded open access. As Matt noted, journal licensing renewals are around 82% complete and signs look good. As a reminder, about a third of our renewals come up each year, and customer retention remains above 99%. Our solid renewals combined with our continued submissions and output growth give us good visibility and confidence heading into fiscal 2027. Research Solutions declined 3% due to lower corporate spending on recruiting and lower database revenue offsetting AI revenue. Year to date, Research revenue and adjusted EBITDA were up 4%–6%, respectively, with EBITDA margin improving 50 basis points. Moving over to Learning, revenue was down 2% in the quarter, with a 5% decline in Professional offsetting 1% growth in Academic. Professional was impacted by corporate and consumer spending headwinds, notably the previously noted Amazon inventory management adjustments, although they are now beginning to stabilize as expected. We are strategically calibrating our editorial focus toward higher-value franchises where we see stronger demand and better margins. Academic rose 1%, driven by higher rights and licensing revenue and digital book sales. We saw good momentum in our Advanced content business, which includes scientific and technical books for research libraries. We increased our title signings, notably around veterinary science and health, and recently announced a publishing partnership with the International Society of Automation. John Wiley & Sons, Inc. will assume control of ISA’s backlist of approximately 70 titles and collaborate on publishing ISA’s pipeline of automation topics. Year to date, Learning revenue was down 7%, with adjusted EBITDA down 8%. Segment EBITDA margin declined 50 basis points to 34.8%. Now on to our financial position and cash generation, which continue to strengthen. All year-over-year metrics are favorable, with our leverage down to 1.7 from 2.0, CapEx down by 11%, operating cash flow up $51,000,000, and free cash flow up $57,000,000. We are tracking very well to our free cash flow outlook of approximately $200,000,000. As Matt noted, one of our four value drivers is continuing our multiyear margin expansion. Over the past three years, we have improved our margin profile by 500 basis points, and we are not done. The focus right now is technology transformation. We are creating an AI-first, data-enabled tech organization, optimizing our geographic footprint, rationalizing our application portfolio, and outsourcing support for enterprise technology. We recently announced a five-year managed services partnership with Virtusa, an important first step in accelerating this transformation. Virtusa is a leading product and platform engineering services company based in Massachusetts, with delivery centers in India and Sri Lanka. It enjoys top-tier global rankings in consulting and IT services and deep relationships with major Fortune 100 and 500 clients. The partnership is expected to lead to material operational efficiencies and cost savings, help us modernize how we manage enterprise technology, and allow our teams to focus on product innovation that benefits our customers and stakeholders. It will also free up capital for high-return AI solutions for our customers and partners. As part of this partnership and our own consolidation plans, Virtusa has assumed ownership of John Wiley & Sons, Inc.’s Sri Lanka technology operation. Overall, we continue to make good progress, with corporate expenses on an adjusted EBITDA basis down 21% in the quarter and 12% year to date. We reduced total corporate costs before allocations by $17,000,000 year to date, with tech transformation responsible for approximately 85% of those savings. Our fourth and final value driver is to optimize our portfolio and drive disciplined capital allocation. We continue to deploy capital strategically to expand our journal portfolio and content advantage. We are investing to grow presence and share in our fast-growing research markets, notably China and India. China has been a great success story with noteworthy growth in submissions and output renewals and corporate sales. India remains a huge and still-emerging growth market. A year ago, we executed on India’s One Nation, One Subscription initiative, expanding access to over 6,000 Indian institutions and supporting 18,000,000 researchers and students. Demonstrating the increasing demand we are seeing in this important market, John Wiley & Sons, Inc. India submissions are up 43% year to date. Matt talked about our capital-light model and partnership ecosystem approach to AI, which positions us well for stronger profitability, high cash flow generation, high returns on invested capital, and nimbleness in scaling. Regarding our portfolio, we continue to evaluate and manage specific businesses and products for profitability and strategic fit. We divested a small business in Research Solutions earlier this year, and we will continue to be very active on this front. Regarding acquisitions, we are in a very strong position to continue to pursue high-impact journals in Research Publishing where we see strategic value, synergies, and highly attractive returns. Last quarter, we acquired the high-impact journal NanoPhotonics, strengthening our physics portfolio and putting us at the forefront of the fast-growing optics field. And we will continue to accelerate our organic growth strategy of developing proprietary high-value research content and data. Finally, I want to highlight our share repurchases, approaching record levels with $70,000,000 returned year to date and a further target of $30,000,000 for Q4. That would put us around 3,000,000 shares repurchased for the year. On top of this, our current dividend yield is approximately 4.5%, supported by a healthy payout ratio. Turning to our outlook for fiscal 2026, we are raising our adjusted EBITDA margin and adjusted EPS guidance to the high end of the range. We remain confident on all other metrics. Revenue growth is expected to be in the low single digits. Research remains strong, expected to finish at the top end of the market. Learning has been challenged this year by the difficult macro and channel conditions. Adjusted EBITDA margin is now expected to finish at the high end of our 25.5% to 26.5% range, up from 24% last year. Adjusted EPS is also expected to be at the high end of our $3.90 to $4.35 range, up from $3.64 last year. Finally, we reaffirm free cash flow of approximately $200,000,000, driven by EBITDA growth, lower interest payments, and favorable working capital. CapEx is expected to be comparable to last year’s total of $77,000,000. With that, I will pass the call back to Matt. Matthew Kissner: As I wrap up, I want to say a few words about fiscal 2027. We will provide formal guidance in June, of course, but I want to give you a sense of what we are seeing. Expect Research growth and strong momentum to continue, driven by robust publishing output, steady growth in renewals, market share gains, and society wins. We see Learning improving to a steady state as we focus on franchise authors, digital growth, and inclusive access, and we will continue to tackle our cost base. AI momentum is expected to further accelerate from our executed multiyear partnerships and increased corporate uptake, and we expect another big year in AI revenue. We will start to see the benefits of streamlined business development and product innovation under Armahan. Finally, we anticipate copyright court decisions to start to materialize. We have talked about the Anthropic copyright settlement, the largest in U.S. history, and that is still in the claims process. We expect to know our share of that by the summer. Important to note, there are approximately 70 copyright lawsuits currently underway in the U.S. involving AI. Our operational excellence initiatives are fast-tracking with full launch of our Research Exchange platform, the kickoff of our new managed services partnership, and the momentum of our AI Center of Excellence. We expect to drive meaningful margin expansion again from tech transformation, corporate expense reduction, and AI productivity gains. And we remain focused on portfolio optimization and disciplined capital allocation to drive higher ROIC and recurring revenue growth, scale up in Research Publishing, and reward our long-term shareholders. Let me quickly review some key takeaways before opening the floor to questions. We are accelerating our progress on all major areas of focus, driving meaningful growth and momentum in Research and AI, expanding margins and cash flow, deploying capital strategically, and improving ROIC. Q3 was in line with our expectations, and we are on track to achieve our full-year outlook at the high end for margin and EPS. And finally, John Wiley & Sons, Inc. remains extremely well positioned for the AI economy. Our core publishing business is robust and uniquely secure. Our proprietary content, domain-specific intelligence, and partnership ecosystem are in continuously high demand. AI is only as good as the data that fuels it. This is where John Wiley & Sons, Inc. comes in. Thank you to our 5,000 colleagues around the world for all you do to transform knowledge into the breakthroughs that matter, and to our investors for joining us and seeing the long-term value-creation potential of our business. We will now open for questions. Operator: At this time, I would like to remind everyone: in order to ask a question, press star, then the number 1 on your telephone keypad. We will pause for just a moment. Your first question comes from the line of Daniel Moore with CJS Securities. Your line is open. Daniel Moore: Thanks, Matt. Thanks, Greg. A lot of detail there. Greatly appreciate it. Let me start, I guess we will start with AI. You know, you just laid it out very well. But two years ago, signed your first, you know, kind of initial nonrecurring deals. You know, since then, AI-related revenue doubled from $23,000,000 to $40,000,000 on our way to $45,000,000 to $50,000,000. What can you tell us about the momentum and direction of AI-related revenue and contributions that, you know, maybe you could not two years ago, as we think about fiscal 2026 as a platform for growth? Matthew Kissner: Yes. Let me start, Dan. Thanks, by the way. And that is exactly what you are seeing. It is kind of you are seeing the market evolve, and I will turn it to Craig in a minute to get a little more specific, but—and then the emergence of the business models around recurring revenue. And so you see what we have done with IQVIA and Open Evidence. Almost think of them as blueprints for what a much bigger market opportunity might look like. And you know, I know you want specifics. You know, we can talk a little bit about these, but you know, there is a lot more to come as these expand. So let me turn it over to Craig to add some more light on that. Craig Albright: Thanks, Matt. Yes. We like to think of AI opportunity in the market really moving in different kind of growth curves. As you know, we kind of, a few years ago, as you mentioned, kind of really started learning and getting into the market and partnering. And we moved into the training model. The first growth curve, if you will, was largely evidenced by nonrecurring revenue, but important for us to gain partnerships, learn, start to develop where we are headed with our next curve. And then that next curve being the one where we start to get into the recurring revenue models, subscription models, ways where we can really create true sustainable value over time. And we have really started to see that materialize. In the first growth curve, we have seen a little bit more legs to it than we initially imagined, and we are now starting to see the ramp-up of the second growth curve. So this year, we are slightly under 10% of our $45,000,000 to $50,000,000 in terms of recurring revenue, and we expect that to triple next year. And we are going to continue to work to drive that even higher. So we are excited about the progress we are making. It is still early days. And I would say we are moving as fast as our customers are moving, but really trying to seize every opportunity as we go forward. Matthew Kissner: Yes. I want to add two important points to help with the understanding. One is that comment about we can move as fast as our customers are moving because, you know, I think everyone is learning how to bring AI into their core business processes. So a lot of the growth here is going to be based on the customers’ learning on how to use AI to improve research productivity, shorten cycles, et cetera. We are there with them side by side. Second is, as I mentioned, we have a new leader for our AI and data services focus in Armahan, and he is now building out a growth plan. And, you know, I would expect as he completes that plan, we can provide more transparency into how we see this evolving. Daniel Moore: Really helpful. Appreciate it. I was going to ask you about the moat, but I think we covered that in the first 10 or 15 minutes really well. On the margin side, the—mhmm. Obviously, you reduced corporate expense, I think, million this quarter, down 20% plus. On track for 26% plus EBITDA margins. Two different questions, but one, maybe elaborate on the partnership with Virtusa, the implications around potential cost and savings as we move forward, and what does that imply about the direction of EBITDA margins in kind of fiscal 2027 and beyond? Thanks, Dan. Craig Albright: We are very excited about the partnership with Virtusa. You know, we have a preexisting relationship, and we are really expanding that on a significant scale. This relationship for us is a—you know, roughly, right, it is $150,000,000 over five years in terms of their contract size. We expect it to generate both productivity as well as agility. So we see it contributing towards, you know, our margin expansion objectives. We also see it compelling—propelling us into AI-type tools and AI-first technology infrastructure that is going to really help us continue to find innovation and productivity through the years. I would say from a margins perspective, I will not get into the details about, you know, specifics on what it yields. But I will say that tech transformation broadly has been a significant driver of our expansion this year, and we expect that to continue going forward, into the coming years, as we layer on other types of initiatives as well that are going to really help to continue to drive multiyear margin expansion. Daniel Moore: Perfect. And just Research Publishing up 4% adjusted. Article submissions, you know, continue to be really strong, up 26%. You know, I guess, outside of China, you mentioned India, any other kind of fast-growing regions or pockets of strength? And, you know, given double-digit growth in submissions this quarter, double-digit growth in output, would we expect that 4% growth to trend even higher? Or is that a good place to be from your perspective here for the near term? Matthew Kissner: Jay, why do you not begin, and I may wrap up. Jay Flynn: Yes, sure. Hi, Dan. Thanks again for the questions. Yes. We are seeing growth across, you know, a broad set of regions. The strongest momentum continues to come from the major global research markets. We saw good growth in China, as you mentioned, and India, as you mentioned, but in North America too—submissions, article volume up there. European markets as well really rebounded strongly for us. Happy to see Japan growing again after a tough couple of years in that market. So at the same time, you know, we like what is happening in the Middle East, and we like what is happening from a research and investment perspective there. Governments and universities are investing more heavily in research output and in international collaborations. That, taken together with the strong performance in the core markets, gives us confidence about the trajectory of that business. It is really important to state, as we did a year ago, that growth is not concentrated in any single geography. It reflects the continued expansion, as Matt noted in the prepared remarks, of the global research ecosystem, and that is showing up across submission and publication volumes that are growing at a healthy pace. So, as we said, you know, top end of market range for this year, and with the investments we continue to make in our top brands, with the tailwind that AI is going to provide in the core for submissions and for researcher productivity, we feel confident as before in the trajectory of the business. Matthew Kissner: Yes. That is a great summary. I think, today, what we are seeing is the resilience and durability of research on a global scale, the benefit of the global diversification that we have, as Jay pointed out, and also, our business is performing quite well, and I would expect it to continue performing at the top of the market. Daniel Moore: Looks great. Maybe one or two more and I will pass it along. But on the Learning side, yes, I think you talked about getting back to stability. If I sort of bifurcate the Academic versus Professional, you know, pieces of the business. Do we need the, you know, the library on the Professional side to feed either AI, or is it, you know, synergistic? It is just that piece of the business stands out as a little bit, you know, kind of noncore when we think about the real tilt to focus on growth and Research and wondering your thoughts on that. Matthew Kissner: You know, we have talked about this in the past, and it is, you know, these are great franchises but not growth franchises. You know. And so they are producing strong earnings and cash flow. And, you know, we are always mindful of capital allocation, as I talk about in my remarks. So there are not any sacred cows here. So, you know, we will be looking at this as we go forward, as we do routinely, Dan. Daniel Moore: Perfect. Last one. I know it is rhetorical. You know, obviously, really strong quarter, outlook very healthy. You know, you are trending toward $5 of cash—of cash earnings per share. The stock is a little over five times EBITDA. Leverage is going to be close to return pretty soon. You know, strong double-digit free cash flow yield. Other than buying back stock and, you know, making the case that you are today, very, you know, articulately, anything else we can do to keep trying to unlock shareholder value? And I know that is, you know, not a fair question, but just throwing it out there. And I appreciate all the color today. Matthew Kissner: No. It is a good question. Tough question. Craig, do you want to start? And then— Craig Albright: Yes. I think, Dan, you know, we wake up every day thinking about this: how we create value for John Wiley & Sons, Inc., for our colleagues, for our shareholders, and for all our stakeholders. You know, we think importantly about organic growth investments. You know, with Armahan coming on board, with our focus on AI and data analytics, we see a lot of potential opportunity to really create new value for customers and for—and for John Wiley & Sons, Inc. overall. You know, we continue to think where we have existing core strengths. You know, the Research business is one that continues to show strength and resolve, growing at the top end of the market. So when we think about investments we have made, whether it is Advanced brands or geo diversity, we continue to think very broadly about organic growth opportunities where we have sustainable competitive advantage in our business. You know, beyond that, you know, portfolio and capital allocation is a way of life. You know, it is—it has been part of what John Wiley & Sons, Inc. has been focused on for several years. And as we mentioned during our earnings call, we had—in my comments, we had divested a small business earlier this year. It shows evidence that we continue to look very strategically and thoughtfully about our business and where to kind of draw the resource and capital to the most effective places for the business. Beyond that, I think we are continuing to be very active on thinking about how we return capital to shareholders. We have a very healthy payout ratio. We have doubled our share buybacks, given the opportunity we have had with a strong cash flow, and we continue to do that while investing in the business. So we are not making any trade-offs here. I think the opportunities continue to be very robust in front of us, and we are excited to help bring that forward as we tell more of our story. Daniel Moore: Sounds good. Again, appreciate all the color. Matthew Kissner: Thank you, Tim. Operator: Again, if you would like to ask a question, press star, then the number 1 on your telephone keypad. Operator: At this time—There are no further questions. I will now turn the call back over to Mr. Kissner for closing remarks. Matthew Kissner: Yes. Thanks, everyone. I want to thank you for your continued confidence in us. You know, you see we are building a solid foundation for the future while delivering strong current results, which was our commitment we made, you know, two and a half years ago. And we are really looking forward to getting together in June in that regard and talking about how we close out the year. Brian Campbell: See you then. Thank you. Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
Operator: Hello, and thank you for standing by. Welcome to ATN International, Inc. Fourth Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, please press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. I would now like to hand the conference over to Michele Satrowsky. You may begin. Michele Satrowsky: Thank you, operator, and good morning, everyone. I am joined today by Brad W. Martin, ATN International, Inc.’s Chief Executive Officer, and Carlos R. Doglioli, ATN International, Inc.’s Chief Financial Officer. This morning, we will be reviewing our fourth quarter and full-year 2025 results and providing our 2026 outlook. As a reminder, we announced our 2025 fourth quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentation on our Investor Relations website. Our earnings release and the presentation contain certain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operations. These statements are subject to risks and uncertainties that could cause actual results to differ from those described. Also, in an effort to provide useful information for investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, and for further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at ir.atni.com or the 8-K filing provided to the SEC. Now I will turn the call over to Brad. Brad W. Martin: Good morning, and thank you for joining us to discuss ATN International, Inc.’s fourth quarter and full-year 2025 results. Before I get into the details, I want to recognize the exceptional work of our teams across all of our markets. The progress we delivered this year, both in our financial performance and the underlying health of the business, reflects their commitment to operational excellence and to building long-term value for our customers and shareholders. Our fourth quarter results show the continued execution of our strategic plan and further validate the operational improvements we have been implementing across our business segments. We grew revenue, expanded adjusted EBITDA, and improved operating income while continuing to expand our base of high-speed broadband homes passed and high-speed subscribers. For the full year, that execution translated into higher operating profitability, stronger cash generation, and a business that is better aligned with our strategic focus on mobility, high-speed data, and differentiated carrier and enterprise solutions. While there is still more work ahead to fully optimize the business, I believe we are on the right track. 2025 was a turning point for ATN International, Inc., as we shifted from stabilizing the business to clearly demonstrating progress against our strategy. We increased net cash provided by operating activities, reduced capital intensity while continuing to invest in our networks, and grew and improved the quality and durability of our mobility and high-speed subscriber bases across our markets. At the same time, we improved operating income, expanded full-year adjusted EBITDA, and held revenues essentially flat year over year. Together with the recently announced pending sale of our Southwest U.S. portfolio of towers, this positions us to enter 2026 with greater resilience, more flexibility, and with a clear focus on our core strategic objectives. Let me take a moment to review the performance of our two business segments in the fourth quarter. In our International segment, our network investments and focus on service quality are driving growth in mobility and high-speed data subscribers and contributing to adjusted EBITDA expansion. We are seeing the benefits in better network performance, stronger customer retention, and higher data usage, which together support a more durable earnings profile in these markets. We remain focused on deepening customer relationships, continuing to upgrade our networks, and optimizing our operations to further enhance profitability and long-term value. In our U.S. segment, we are seeing tangible benefits from the strategic shift we have been executing in response to changing industry dynamics, particularly in combat. As our large carrier customers have expanded and matured their own product offerings, our approach has been to deepen our role as a partner, to increase carrier managed services while steadily pivoting away from legacy subsidized and lower-margin consumer offerings in certain Southwest consumer markets. This strategy is gaining traction, and we are seeing improved performance as a result, particularly in the 2025. We have a durable presence in Alaska and New Mexico anchored by fiber, fiber-fed fixed wireless infrastructure that is supporting growth in the consumer broadband and carrier services. Over the past year, number of homes passed by high-speed broadband increased 25%, driven primarily by Alaska’s deployment of fiber-fed fixed wireless solutions across Anchorage, Fairbanks, Juneau, and the Kenai Peninsula. These efforts contributed to fourth quarter revenue growth and create opportunity for additional subscriber growth. At the same time, our structural cost actions drove higher operating income and improved margins, particularly in the 2025. Domestically, our broadband infrastructure expansion continued to progress as planned, with several government-supported projects advancing through key milestones during the quarter. These investments remain central to our long-term U.S. growth strategy, enhancing our network capabilities and creating new revenue opportunities as deployments are completed. We continue to leverage available government funding, including federal broadband programs, while maintaining a careful, disciplined approach to capital deployment and aligning spend with the highest return opportunities. We also recently advanced several important strategic initiatives. First, we received notice of provisional BEAD awards and preliminary commitments totaling more than $150 million in key markets such as New Mexico and Alaska, expanding our opportunity past additional homes with fiber and high-speed broadband in underserved communities, and reinforcing our position as a partner of choice in these regions. We are approaching these programs selectively, and expect to invest approximately 10% to 15% of total project costs with our own capital, ensuring that these supported builds align with our financial return thresholds and long-term infrastructure strategy. We currently expect these initiatives to begin contributing to our business results in 2027 and beyond. In addition, we completed the sale of certain U.S. spectrum assets, allowing us to unlock value and further optimize our operations, reinforcing our focus on infrastructure and service-based revenue streams. Taken together, these actions support the long-term growth potential of our U.S. business and demonstrate our ability to attract incremental government funding for network expansion and monetize non-core assets in a disciplined way. Just after year-end, we took another important step with the announced pending sale of our Southwest U.S. tower portfolio for up to $297 million in total cash consideration. Upon full completion, we expect the divestiture to modestly reduce revenue and EBITDA associated with those assets, while providing meaningful proceeds to strengthen our balance sheet and support our long-term growth plans. This transaction unlocks value from an asset we have built over many years, and importantly, allows us to sharpen our focus across ATN International, Inc. on our mobility, broadband, and carrier services business. Combined with the operational improvements we delivered in 2025, the tower sale increases our financial flexibility and enhances our ability to invest in sustainable long-term value creation. Throughout 2025, we did what we said we would do: advance our strategic plan to improve the profitability and cash generation of our operations, maintain high-quality revenue streams and customer relationships, optimize our operating structure, and strengthen the balance sheet. We also grew our mobility and high-speed subscriber base across our markets. These outcomes reinforce our confidence that we are building a stronger, more efficient ATN International, Inc. Looking ahead, we are encouraged by the steady momentum across our business segments and remain focused on disciplined execution. Our priority for 2026 is to convert the network and system investments we have made over the past several years into margin expansion, cash flow, and further balance sheet strength. We are entering the year with positive momentum in both our International and U.S. business segments with a more efficient operating model. We are maintaining a disciplined approach to capital allocation and leveraging available government funding to support continued network growth while enhancing returns. The pending tower sale is a key milestone in unlocking asset value and strengthening our balance sheet, and we intend to use the added flexibility to support our highest priority growth opportunities. Before I turn it over to Carlos for a detailed review of our financial performance, I want to leave you with a clear takeaway. Our 2025 results show that ATN International, Inc. is stronger, more efficient, and better positioned than it was a year ago. We remain confident in our ability to build on this progress and generate long-term value for our shareholders. With that, I will hand it over to Carlos for a detailed review of our financial performance. Carlos R. Doglioli: Thank you, Brad. And good morning, everyone. Let me walk you through the 2025 results and provide some context on our 2026 outlook. Our fourth quarter capped a year of improved financial performance, especially in the second half of the year. Total revenues for the fourth quarter grew 2% to $184.2 million, compared with $180.5 million in the prior-year quarter. Excluding construction and other revenues, communication service revenues increased 3% driven by growth across multiple service offerings. For the full year, revenues were essentially flat at $728 million and in line with our expectations. Increases in carrier services, construction, and other revenues offset decreases in mobility and fixed revenues driven in part by our transition away from legacy offerings in our U.S. markets. Operating income was $15.7 million in the fourth quarter, up from $8.7 million in the same period last year. The improvement reflects the benefit of cost management efforts, including reductions in selling, general, and administrative expenses, and gains on asset dispositions. For the full year, operating income increased to $28.4 million compared with an operating loss of $0.8 million in 2024, which included a $35.3 million goodwill impairment charge. Net loss attributable to ATN International, Inc. stockholders in the fourth quarter was $3.3 million, or $0.32 per share, compared with net income of $3.6 million, or $0.14 per diluted share, in the prior-year quarter. The change reflects the absence of an $8.9 million tax benefit that positively impacted Q4 2024, along with higher other expense resulting from marking a minority equity investment to market in 2025. For the full year, our net loss narrowed to $14.9 million, or $1.38 per share, versus a net loss of $26.4 million, or $2.10 per share, in 2024. Adjusted EBITDA for the fourth quarter was $50.0 million, up 8% from $46.2 million in the prior-year quarter. For the full year, adjusted EBITDA increased 3% to $190.0 million compared with $184.1 million in 2024. The year-over-year growth in both the quarter and the full year reflects our ongoing focus on cost management and margin improvement. Turning now to segment performance. Our International segment continued to deliver top-line growth and margin expansion in 2025. The combination of targeted capital investments in support of our commercial progress and disciplined cost management contributed to higher adjusted EBITDA even as we navigated heightened competitive dynamics in certain markets. Specifically, for the fourth quarter, International revenues increased nearly 3% to $97.3 million from $94.8 million in the prior-year quarter, and for the full year 2025, revenue was up 1% to $381.9 million from $377.5 million for full-year 2024. Adjusted EBITDA for the International segment increased 1% to $32.7 million for the fourth quarter and approximately 4% to $131.6 million for the full year. In our Domestic segment, during the fourth quarter, revenues increased 1% to $86.9 million from $85.8 million in the prior-year quarter, and for the full year 2025, revenue declined just under 2% to $346.1 million compared with $351.6 million for full-year 2024. Adjusted EBITDA for the Domestic segment increased 11% to $21.6 million for the fourth quarter, and declined approximately 2% to $78.5 million for the full year. Our results for the segment reflect the impact of transitioning away from legacy and subsidy-driven revenue streams in the first half of the year and the benefits of stronger performance in carrier solutions in the second half, supported by continued margin improvement efforts. Total cash, cash equivalents, and restricted cash increased to $117.2 million at December 31, 2025, compared with $89.2 million at the end of 2024. Total debt was $565.2 million versus $557.4 million a year ago, resulting in a net debt ratio of 2.36x as of year-end, an improvement from 2.54x at 12/31/2024. Just as a reminder, approximately 60% of total debt resides at the subsidiary level and is non-recourse to ATN International, Inc. parent. Net cash provided by operating activities increased 5% year over year to $133.9 million, driven in part by improved working capital management. Capital expenditures for the full year were $90.0 million, net of $84.6 million in reimbursable capital expenditures, compared with $110.4 million, net of $108.5 million in reimbursements, in 2024. Our capital spending for the year was in the lower end of our guidance range, driven by the timing of some investments that are now expected and incorporated in our 2026 outlook. The year-over-year reduction in net capital spending also reflects our commitment to maintaining more normalized levels of CapEx. We maintained our quarterly dividend of $0.275 per share, paid on January 9, 2026 to shareholders of record as of December 31, 2025. We did not repurchase any shares during the quarter. Turning to the 2026 outlook. As Brad mentioned, earlier this month, we announced that our ComNet subsidiaries agreed to sell a portfolio of 214 Southwestern U.S. towers and related operations to an affiliate of Everest Infrastructure Partners for up to $297 million in an all-cash transaction. We continue to expect the initial closing to occur in 2026 with gross proceeds of approximately $250 million to $270 million, with additional closings occurring over the following twelve months tied to construction and operational milestones. For full-year 2026, and excluding any impact from the pending sale of our U.S. tower portfolio, we expect adjusted EBITDA to increase modestly from 2025 levels to a range of $190 million to $200 million. Our 2026 outlook incorporates a headwind of approximately $5 million related to the conclusion of high-cost funding support for our U.S. Virgin Islands market. Based on current expectations of the second quarter timing of the initial closing for the tower sale, we would anticipate a reduction of approximately $6 million to $8 million to that annual adjusted EBITDA outlook. We also expect capital expenditures to remain within a disciplined range of $105 million to $115 million, net of reimbursable expenditures and reflective of the timing of some investments initially expected in 2025. Together with available government funding, this supports continued network growth while maintaining our focus on cash generation and managing leverage. We plan to revisit and update our 2026 outlook as appropriate after the initial closing of the tower portfolio sale. Before handing the call back to Brad, let me provide some insight into how we expect the quarters to play out in 2026. In the first quarter, we expect adjusted EBITDA to improve compared with the prior-year period, and we expect the second half of the year to deliver the majority of our annual results, consistent with our typical business seasonality. As part of the actions embedded in our plan to achieve our adjusted EBITDA outlook for the year, we expect to incur restructuring and reorganization expenses of $3 million to $4 million in the first half, with most of those costs occurring in the first quarter. Looking ahead, our financial focus remains unchanged: drive operating efficiencies to support margin expansion, continue to allocate capital in a disciplined way, maintain a healthy balance sheet, and expand cash flow. We believe our 2025 results and 2026 outlook show progress toward our long-term objectives and are in line with maximizing shareholder value. With that financial overview, I will turn the call back to Brad for closing comments before we open it up for questions. Brad W. Martin: Thanks, Carlos. To summarize, we closed 2025 with solid operating momentum, stronger cash generation, and a more focused, higher-quality revenue mix that supports our long-term strategy. We are entering 2026 with a healthier balance sheet, more efficient cost structure, and a clear line of sight to further benefits of our strategic initiatives and the pending tower transaction. We will now open for questions. Operator: Thank you. Ladies and gentlemen, as a reminder, to ask a question, please press *11 on your telephone, then wait for your name to be announced. To withdraw your question, please press *11 again. First question comes from the line of Greg Burns with Sidoti. Greg Burns: Morning. Could you just help us understand maybe how the sale of the tower assets might impact your business model in the U.S.? Does that in any way impact your ability to provide managed services to carriers? Brad W. Martin: Morning, Greg. Yes, so really, it is an unchanged business model. Today, we provide our carrier managed services on third-party towers and owned towers, almost about half and half. So really, the continuation business model will remain. We will just be doing more on third-party towers. Greg Burns: Alright, great. And then I see you continue to grow your high-speed data subscribers. Total broadband subscribers continue to decline. Are we nearing a point where maybe some of these legacy services that you are turning down or deemphasizing stop detracting from the overall growth of that business? Or what should we expect next year in terms of maybe your view on broadband subscriber growth? Brad W. Martin: So, Greg, yes, as you mentioned, some of the broadband reductions have been from us shutting down legacy services. That is inclusive of legacy copper services in some markets where we have overbuilt and shut down services and decided not to rebuild in areas, and similarly, in areas in the Southwest where we have taken down where we had unprofitable areas, and we decided to not necessarily compete at the consumer level as we mentioned in my prepared remarks. We will be continuing to partner with major carriers. Yes, we do have BEAD outcomes I spoke to in my remarks. We do expect that to be a key driver in the out years to expand our high-speed subscriber base and obviously expand our assets and facilities. Greg Burns: Okay. And with the expansion of the high-speed data to reach your network in Alaska, could you just talk about maybe some of the changes you have made in your go-to-market or sales strategy to start to accelerate maybe the penetration and growth of your services? Brad W. Martin: Yes. So Alaska, our Alaska market has been historically heavily weighted towards enterprise and carrier. In this past year, they announced a pretty large build-out of a fixed wireless solution. We have been building fiber facilities, fiber-to-the-home, in certain areas of Alaska as well. We do have a new leadership team in Alaska in the last couple of years. We are investing in back-office platforms to effectively enhance the customer interaction, so that is something we are targeting and continue to focus on improving our ability to execute there. But we have work to do. We did see some progress in the back half of the year on subscriber acquisitions, specifically in Alaska. Albeit starting on a small base, but we did actually show over 11% year-over-year improvement in our high-speed data subscribers. Greg Burns: Okay. Thank you. Thank you. Operator: Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Brad for closing remarks. Brad W. Martin: Thank you, operator. Thank you all again for joining us today and for your questions. We are encouraged by the progress we have made in 2025. We are confident in the path that we are on. We are focused on executing against the priorities we have outlined on today’s call. In the weeks and months ahead, our teams will be meeting with many of you at conferences and one-on-one meetings. We look forward to continuing the dialogue and continuing to update you on our progress as we move to 2026. Thanks. Have a great day. Operator: Ladies and gentlemen, that concludes today’s conference call. Thank you for your participation. You may now disconnect.
Operator: Good day, everyone, and welcome to MediWound Ltd.'s Fourth Quarter and Full Year 2025 Earnings Call. Today's conference call is being recorded. At this time, I would like to turn the conference call over to Gaia Seamus of LifeSci Advisors. Please go ahead. Gaia Seamus: Thank you, operator, and welcome, everyone. Earlier today, premarket open, MediWound Ltd. issued a press release announcing financial results for the fourth quarter and full year ended December 31, 2025. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session, relating to MediWound Ltd.'s expected future performance, future business prospects, or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today, and MediWound Ltd. assumes no obligation to update or supplement any forward-looking statements, whether a result of new information, future events, or otherwise. This conference call is the property of MediWound Ltd., and any recording or rebroadcast is expressly prohibited without the written consent of MediWound Ltd. With us today are Ofer Gonen, Chief Executive Officer of MediWound Ltd., and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Co-Development, is also participating in today's call. Following our prepared remarks, we will open the call for Q&A. Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound Ltd. Ofer? Ofer Gonen: Hi, and thank you, Gaia. 2025 was a pivotal year for MediWound Ltd. We ended the year with two significant growth drivers firmly in place: a Phase III VALUE trial advancing as planned, and an operational and expanded manufacturing facility for NexoBrid positioning us for long-term commercial growth. At the same time, we strengthened our balance sheet and outlined a multiyear revenue trajectory. Despite the ongoing conflict with Iran, we at MediWound Ltd. are fully prepared and will continue operating with the resilience and discipline that have guided us through similar challenges in recent years. Our team remained focused on our clinical milestones and commercial objectives, continuing to support patients and partners worldwide. Let me walk you through the progress. Let us start with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment is ongoing in the global Phase III VALUE study in venous leg ulcers, with the majority of sites active and enrolling. We are targeting enrollment of 216 patients across approximately 40 sites in the United States and Europe, and we expect both the prespecified interim assessment and enrollment completion by year-end 2026. Importantly, we are expanding the EscharEx clinical program beyond just VLUs. We have aligned with both the FDA and EMA on the Phase II protocol in diabetic foot ulcers and plan to initiate the study in 2026. In addition, a prospective investigator-initiated study in pressure ulcers is also expected to begin in 2026. This expansion broadens the clinical footprint of EscharEx across the three major chronic wound indications. We continue to see meaningful industry validation; B. Braun has joined the EscharEx clinical development program through a research collaboration agreement and will take part in the planned Phase II study in diabetic foot ulcers. This adds to the existing collaborations with Coloplast, ConvaTec, Essity, Mölnlycke, Solventum, and MiMedx. Taken together, continued clinical execution, regulatory alignment, expansion into additional indications, and industry engagement support the advancement of EscharEx as a long-term growth driver for MediWound Ltd. Now turning to NexoBrid. Our expanded manufacturing facility is now operational, increasing the production capacity sixfold to support growing global demand. Commercial availability from this site remains subject to regulatory approvals, which we expect in 2026. In the United States, adoption continues to expand, with utilization across more than 70 burn centers, representing the majority of Vericel's approximately 90 target accounts. To illustrate the driver of demand, here are some of the latest examples. Recently published real-world data from the Israel Defense Forces covering nearly 5,000 documented combat casualties showed that NexoBrid was clinically applicable in 71% of war-related injuries. In addition, a 15-year military analysis across multiple conflicts demonstrated a 50% increase in the proportion of severe burns among wounded soldiers. In parallel, we reported peer-reviewed prospective data showing that NexoBrid reduced embedded particles in ablation and blast injuries by more than 90%, supporting the role in acute trauma care. More recently, survivors in the tragic bar fire in Trans Montana, Switzerland, were treated with NexoBrid in medical centers across Switzerland, Italy, and Germany, underscoring the importance of pre-deployment of an advanced burn therapy for mass casualty events. Taking all this together, growing clinical evidence from both military and civilian settings reinforces NexoBrid's role in the treatment of severe burns. Following regulatory clearance of our expanded facility, we intend to prioritize support for national preparedness initiatives, including stockpiling and collaboration with military and emergency response systems. With that overview, I will now turn the call over to Hani. Hani? Hani Luxenburg: Thank you, Ofer, and good morning, everyone. Let us turn to our financial results for the fourth quarter and full year of 2025. Revenue for the fourth quarter was $1.9 million compared to $5.8 million in 2024. The decrease was primarily driven by lower development services revenue, mainly attributable to the U.S. government shutdown, which delayed budget approval and the initiation of new contracts and agreements. Gross profit for the quarter was $300,000, or 14.9% of revenue, compared to $900,000, or 15.5%, in the prior-year period. R&D expenses were $4.5 million compared to $3.0 million in 2024, reflecting continued investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million compared to $4.0 million in the same period last year, mainly reflecting lower marketing and share-based compensation expenses. Operating loss for the quarter was $7.8 million compared to $6.1 million in 2024. Net loss was $7.2 million, or $0.56 per share, compared to a net loss of $3.9 million, or $0.36 per share, in the prior-year period. The increase was primarily attributed to lower noncash financial income from the revaluation of warrants. Adjusted EBITDA loss was $6.5 million compared to a loss of $4.9 million in 2024. Looking at our performance for the full year 2025, revenue for the year was $17.0 million compared to $20.2 million in 2024. The decrease was primarily attributable to the U.S. government shutdown and lower product sales to Vericel. Gross profit was $3.3 million, or 19.2% of revenue, compared to $2.6 million, or 13%, in 2024. The margin improvement reflects a more favorable revenue mix. R&D expenses increased to $14.0 million compared to $8.9 million in 2024, driven by investments in the EscharEx VALUE Phase III trial. SG&A expenses were $14.2 million versus $13.1 million in 2024, mainly reflecting higher marketing authorization order expenses. Operating loss for the year was $25.3 million compared to $19.4 million last year. Net loss for 2025 was $23.9 million, or $2.10 per share, compared to $30.2 million, or $3.30 per share, in 2024. The reduction in net loss was primarily driven by $2.2 million of noncash financial income from the revaluation of warrants in 2025 compared to $10.7 million of noncash financial expenses in 2024. Adjusted EBITDA loss was $20.3 million compared to $14.8 million in 2024. Turning to our balance sheet, as of December 31, 2025, we had $53.6 million in cash, cash equivalents, and deposits compared to $43.6 million at year-end 2024. During 2025, we used $21.4 million in cash to fund our operating activities. In addition, our balance sheet reflects the completion of a $30.0 million registered direct offering and $3.5 million in proceeds from Series A warrant exercises. We believe our current cash position provides the financial flexibility needed to advance our key program and continue execution on our strategic priorities. That concludes my review of the financials. Ofer, back to you. Ofer Gonen: Thank you, Hani. So before we conclude, let me briefly address our outlook. We reaffirm our revenue guidance of $24 million to $26 million for 2026, $32 million to $35 million for 2027, and $50 million to $55 million for 2028. This guidance assumes continued support from BARDA and the U.S. Department of War, and the 2028 outlook includes potential initial contribution related to EscharEx, subject to regulatory approval. These projections reflect the foundation we built in 2025 and the milestones ahead. In summary, 2025 was a year of infrastructure build-out and clinical advancement. We advanced our Phase III program for key milestones. We completed and commissioned our expanded manufacturing facility. And we strengthened our balance sheet and established a multiyear revenue framework. As we move into 2026, we are focused on disciplined execution, advancing EscharEx towards pivotal milestones, securing regulatory approvals for our expanded facility, and converting our operational progress into meaningful long-term value creation. Operator? Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. Using a touch-tone telephone, to withdraw your questions, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. So, again, that is star and then 1 to join the question queue. We will now open for questions. Our first question today comes from Josh Jennings from TD Cowen. Please go ahead with your question. Josh Jennings: Morning. Thank you for taking the questions, and I hope everyone on the team is safe, and we are thinking about you guys. I wanted to start with just a question on NexoBrid and the manufacturing expansion project that has been successful. Just maybe review the pent-up demand in international regions and the timing. I think you can take this all into your multiyear guidance forecast, just the timing of MediWound Ltd. filling that demand over the next 12, 18, 24 months. Ofer Gonen: Hey, Josh. Good speaking with you. So our expanded manufacturing is now operational, and the capacity has now increased sixfold. The commercial output in this site remains subject to regulatory approvals that are expected later in 2026. Once we are approved by EMA or FDA, the product that we are manufacturing during the validation process that we are doing now can be released to the market. Our guidance assumes a regulatory approval clearance in 2026. I think it is an assumption that we believe is reasonable given where we stand today. As for the demand, it is much larger than we can actually manufacture across the territories. Having said that, I do not know if it will be the case once we can manufacture. Therefore, we guided according to what we expect, and I hope it will be better going forward. Josh Jennings: Thanks for that, and congratulations on the pace of the VALUE trial, and it sounds like things are going well there. I wanted to ask about the pressure ulcer trial. It is my understanding that, just in terms of your team's assessment of the peak sales in the U.S. down the line for EscharEx, it does not include contributions from the pressure ulcer indication. Maybe just talk about or review the size of that opportunity in the U.S. and how that will be unlocked with this trial. Thanks for taking the questions. Ofer Gonen: I have to admit that I did not hear anything. Is it because of my line or because of yours? Do you hear me? I am sorry. It may have been because of my line. Can you hear me now? I do not hear you. Operator, is it his line? Should I reconnect? Operator: I am hearing both of you. Are you able to hear me, sir? Can you, sir? Ofer Gonen: Yes, I hear you loud and clear. Josh, can you speak again? Josh Jennings: Certainly. Can you hear me now? Ofer Gonen: Yes. Can you repeat the question? Sorry. Josh Jennings: Sorry for the technical difficulties. Maybe that was on my line. Yes, I was just saying that you are making nice progress on the VALUE trial, which is a good signal. I just wanted to dive a little bit deeper into the pressure ulcer indication. My understanding is that that is not included in your team's assessment or forecast of peak sales in the U.S., which is a little bit of conservatism there. But just wanted to either review that pressure ulcer indication and the kickoff of this pressure ulcer study later this year. Thanks for taking the question. Ofer Gonen: Okay. Barry, do you want to take this one? Barry Wolfenson: Sure, absolutely. As you know, we are going to start an investigator-led pressure ulcers study this year, and along with that, we will have a third-party market research project initiated that will replicate what we did with regard to diabetic foot ulcers and venous leg ulcers. And so, ultimately, those peak sales, as you mentioned, will increase. I think from a back-of-the-envelope perspective, I would say to think about pressure ulcers as the third of the big three ulcer types along with DFUs and VLUs. There are probably more pressure ulcers than there are the other two. We still need to do the work to see how many of them require debridement and would be applicable to EscharEx. But back of the envelope, I would anticipate that when all is said and done, it will be roughly a third of the business. Josh Jennings: Thanks for that, Barry and Ofer. Appreciate it. Operator: Our next question comes from Jeffrey Jones from Oppenheimer. Please go ahead with your question. Jeffrey Jones: Thank you very much for taking the question. Josh and Ofer, I hope everyone is safe there. You mentioned in the 2026 revenue guide that this assumed continued support from BARDA and DOW. Can you clarify how much of that is based on new contracts that are not currently committed versus the award that you are anticipating, and perhaps give us an update on what you know there? Ofer Gonen: Hi, Jeff. So good to have you on as well. Let us start with BARDA. In August 2025, BARDA issued an RFP covering stockpiling, warm-temperature stable formulation, and trauma and blast injury indications. Vericel, which holds the U.S. commercial rights on NexoBrid, is leading the process in the United States. We will provide full technical and development support. Now, with federal operations normalized, we expect BARDA to resume progress on this RFP and related development and procurement activities, subject, of course, to standard government processes. I cannot add more to that. As for our collaboration with the Department of War, as you know, NexoBrid room-temperature stable formulation is being developed for a nonsurgical burn treatment for the use for the U.S. Army. We have been awarded to date a total of $18.2 million in nondilutive funding from the U.S. department for order to support this development. We are moving forward. So part of the revenue is supposed to be from BARDA and part of it from the Department of War. Jeffrey Jones: Thank you for that. You mentioned the research collaboration in the context of the DFU study, I believe. Can you speak in a little more detail about what some of these collaborators are providing and how that guides to your long-term strategy in VLU, DFU, and beyond? Ofer Gonen: Okay. Barry, do you want to speak on this? Barry Wolfenson: Sure. I mean, as you mentioned in the call, between the VLU and the DFU study, at this point we have seven of these research collaborations, all with market-leading advanced wound care companies. They include Coloplast, through their acquisition of Kerecis, Essity, Solventum, Mölnlycke, ConvaTec, MiMedx, and now the most recent one being B. Braun. Just a little bit about B. Braun: they are one of the world's leading privately held medtech companies. They are headquartered in Germany, founded in 1839. They generate over $9 billion in annual revenue, operate in over 60 countries, and employ more than 60,000 people globally. They are known for products that are used daily across hospitals, surgical centers, dialysis clinics, and outpatient settings, so they are a perfect partner when it comes to wound care. They have a big wound care franchise. Specifically with B. Braun, they are taking part in the DFU Phase II study. As with the other collaborators, they will be supplying one of the key products that is for optimal care of wounds, which will be used in both arms of the study. Specifically, they are supplying their market-leading antimicrobial wound cleanser, Prontosan, to be used during dressing changes. So each of these collaborators are putting in one kind of product, whether it be a wound dressing. In the VLU study, compression therapy is required. Post wound healing, there is a different kind of compression device that keeps everything in place. So they all supply things that are needed for the standard of care in wound care, and it allows for the study design to be that only one thing needs to be changed between the two arms, and that is the active and the control, and so it reduces any sort of variability in the study, and we get cleaner results. For the companies, the collaborators, they get the benefit of having their product used as standard of care in these very, very large, hopefully successful studies, and it also provides the opportunity for relationship building between MediWound Ltd. and these collaborators. So as we get closer to the product making it to the market, and if there are any partnering transactions to consider, all these companies will be up to date with the program, know the details of it intimately, and it will just facilitate conversations at that time. Jeffrey Jones: Great. Thank you very much for the detail. We will get back in queue. Operator: Thank you. Our next question comes from Swayampakula Ramakanth from H.C. Wainwright. Please go ahead with your question. Swayampakula Ramakanth: Thank you. This is RK from H.C. Wainwright. Good afternoon, Ofer, and I am glad to hear your voice. Just a couple of quick questions. On the VALUE trial, which includes the provision of adaptive adjustment that you could do at a 65% enrollment mark, what clinical scenarios would there be if you had to increase your sample size, and if you end up doing that, what sort of an impact would it have on your timeline? Ofer Gonen: Hi, RK. So thank you for joining. Yes, as you mentioned, the prespecified interim sample size assessment will be conducted after approximately 65% of the patients complete the treatment. Based on this assessment, the study may continue as planned, which means that the sample size stays 216 patients. The sample size may increase if necessary. We want to preserve the approximately 90% statistical power. As you know, at MediWound Ltd., we succeeded in all the 14 clinical trials that we conducted and all the three Phase II studies that we conducted with EscharEx. So we have no intention not to make it to the finish line in this study as well. So the outcome could be the study should finish the enrollment as planned, which means 216 patients, and as we guided, it would be by the end of 2026. If, let us say, we are at 80% statistical power, not good enough, we will increase the number of patients. If it is increasing by 20–40 patients, it means adding another couple of months to the study and another few millions of dollars, which is not a drama. If the outcome is that we need to increase it by 100 patients, it will be at least six months, and it will cost us another $10 million. Let us hope that the data will be very similar to what we saw in the Phase II studies, and we will be able to finish the enrollment by the end of this year. Swayampakula Ramakanth: Thank you for that. And then the question I have on supply chain for the clinical studies: as we understand how things are in and around Israel at this point because of what is going on in the geopolitical world, is that impacting anything in terms of supplying clinical product to the various centers, and if so, how are you managing it? Ofer Gonen: So it is a great question because we just had a discussion about it this morning. We checked in across the sites in Europe and in the United States. There is enough EscharEx that can support continuation of the trial for the next at least six months, so we are in a good place. On top of that, the other ancillaries are from global companies, so all of them should be in the sites. So we do not anticipate any issue regarding the supply chain that will impact the clinical study. Swayampakula Ramakanth: Thank you for that. And then the last question from me is, the revenues for 2025 were below what was expected, and is that partially a stocking issue through Vericel, or is it the pull-through in some of these active burn centers? Hani Luxenburg: RK, so the revenue for 2025 totaled $17.0 million, as you said, less than the $24.0 million that was expected. The decrease was primarily due to the U.S. government shutdown, which delayed, as you imagine, the budget approval and the initiation of new contractual agreements. There was a small part that belonged to the sales to Vericel, but the main part is the U.S. government shutdown. Swayampakula Ramakanth: So when you say that, I was just wondering about the 2026 revenue guidance. How much of the BARDA RFP award expectation is in the $24 million to $26 million that you are talking about? Ofer Gonen: We are not sharing the split. We have potential of getting from BARDA, potential from or indirectly by Vericel. We have potential to get it from the DOW, and we have revenue from product. We feel comfortable achieving the $24 million to $26 million, but we are not giving the split. Swayampakula Ramakanth: Thank you. Thank you both for taking all my questions. Operator: Next question comes from Chase Knickerbocker from Craig-Hallum. Chase Knickerbocker: Hello, everyone. This is Jake on for Chase. Wondering if you could provide a little bit more color and further discuss the decision to move forward with a Phase II for DFU rather than the adaptive Phase II/III design as previously planned. What kind of feedback from the FDA did you receive that indicated that this was the best path forward? Ofer Gonen: Hi, Chase. Good to have you with us. So the main program, as you know, is the VLUs, and we decided to expand the program into two additional chronic wound indications, as said, DFU and pressure ulcers. There are some changes in the administration. We are not certain that it will be required to execute a very large Phase III study in order to have an approval for a DFU indication. We consulted with the agencies, both with EMA and FDA, asked them what they are expecting to see in order to see the advantage of EscharEx in treating DFU patients, and the outcome was this study with 50 patients, as we detailed in our corporate deck. And if I may add, it is a 50-patient study, which is the kind of Phase II, and if we see that we need to have additional, I do not know, 100, 150 patients to finalize the Phase III, we will do it study after study. So it is a kind of a timing impact, but we are not certain that it will be done before the product is approved. Chase Knickerbocker: Appreciate that color, Ofer. That is helpful. And then same type of question on the pressure ulcers. Is it your understanding that the pressure ulcer would require a separate Phase III to get the potential EscharEx label? Barry Wolfenson: Thank you for the question. As Ofer intimated in his answer with regard to DFUs, there is a change in the stance with regard to the FDA and how they are trying to make it, let us say, easier for drugs to be approved, the most notable thing being that they are moving from the need to do two well-designed, well-controlled Phase III studies in order to get approval, and they are moving that to needing only one. And when we look at that, and we also look at, if you recall, at the end of last year, the FDA agreed that our second primary endpoint would be the facilitation of wound closure, which basically takes the onus of the closure portion away from EscharEx and puts it into the hands of already approved products like a CTP or an autograft. We intend to have a discussion with the FDA around the necessity of these large-scale Phase III studies for each and every indication, i.e., DFU, pressure ulcers, or any other chronic wound indication that is out there. The necrotic material on these wounds is all very similar from wound to wound to wound. We have excellent data and a growing base of data that EscharEx works on all of that necrotic material, owing to its several different enzymes that are in the API and multiple different targets towards the necrotic material. And we believe, in the end, that it would be likely sufficient to have, as we are doing in the DFU study, a well-designed Phase II study complemented by post-marketing real-world data to expand the pack insert to include additional indications. Chase Knickerbocker: Appreciate that additional color, Barry. Thanks for taking the questions. Operator: Thank you. Our next question comes from Michael Okunewitch from Maxim Group. Michael Okunewitch: Hey, guys. Thank you so much for taking my questions today. I guess to start off, I would like to ask a little bit about the pressure ulcer program, and in particular, the strategic considerations around prioritization in chronic wounds. We know about the prioritization between VLUs and DFUs, but pressure ulcers do seem to be a little bit overlooked in this market. So I am curious if you could comment on the market and why pressure ulcers seem to be prioritized less so than the other two chronic wounds. Ofer Gonen: Hi, Michael. I do not think it is less prioritized. The largest unmet medical need is definitely at venous leg ulcers, because these wounds are extremely painful, and you do not have any alternative. The knife, the scalpel, is not an alternative for that. Pressure ulcers are very different one from another, might be very deep. There are all kinds of complications that might be associated. For us, it seems to be the more complicated ones to treat. So we are going to start with relatively mild pressure ulcers. Having said that, it is important for us, as Barry said previously, EscharEx works on burns, it works on wounds, it does not care which type of wounds it is applied on. So our motivation is making sure that when we are very close to the finish line, having data in our venous leg ulcer trial, to make sure that everyone understands—the potential partners, the investors—that everyone understands how large this market is and how big is the unmet medical need. So the current trial with pressure ulcers will be a very small trial. We will do in parallel, as Barry said, that just demonstrates that EscharEx can debride. By a third-party consultant and market research, we will understand exactly the portion of the patients that need to debride their wounds, and only then we will know how large is our accessible market. I hope I answered your question. Michael Okunewitch: Thank you. I appreciate that. And then could you just provide an update on the status of the head-to-head study? Are there any additional outstanding items before you can get that up and running? Ofer Gonen: Yes. So, as you know, the main focus of the company, and this will definitely determine our value, is the Phase III study. In parallel, we need to conduct some supportive studies that we are doing. One of them is a PK study, for instance, one of them is a human factors study. We are doing all kinds of small trials to support the BLA submission. Specifically regarding the head-to-head study versus collagenase or other types of nonsurgical standard of care, we are doing that in order to support future market access discussions. We guided, and we are going to do that, that we will start the trial around mid this year, maybe the second part of the year. For us, it is a very important study, since it will enable us to determine what the actual price of EscharEx will be. Michael Okunewitch: Alright. Thank you. And then one last one for me before I hop into the queue. In terms of your enrollment, the complete enrollment targets for the VALUE study and the interim analysis, is that based on the current rate of enrollment, or does there need to be some additional ramp or acceleration at the sites to meet that? Ofer Gonen: To protect the study integrity, we are not sharing enrollment numbers or trends. But we feel very comfortable with the target that we gave, which means interim assessment and completion of the enrollment of the study by the end of the year. Michael Okunewitch: Alright. Thank you very much for taking my questions today. Operator: And our next and final question for today comes from Scott Henry from A.G.P. Please go ahead with your question. Scott Henry: Thank you, and good afternoon. First, just to clarify, as far as the interim analysis, when you talk about year-end, should we expect that to mean Q4? Ofer Gonen: Hi, Scott. I would expect it to be by year-end. Hani Luxenburg: Which means in the end, in the end of Q4. Ofer Gonen: I do not want to overpromise. Scott Henry: Okay. That is helpful. Thank you, Ofer. And then with regards to revenue and timing, as far as the BARDA revenues, I assume there were none in 2025. Should we expect any revenues in 2026? Just a couple of weeks left in the quarter. You might have a sense at this point. Ofer Gonen: So once BARDA agreement is signed with Vericel, I guess all of us will know. Our revenue guidance assumes that the initial revenue from those specific agreements will be only from Q2. Scott Henry: Okay. Great. So when we do model this out, just confirming, we should really expect a pretty significant increase in revenues in 2026 over the first half of 2026, given the manufacturing capacity coming on stream, given the BARDA revenue. So just want to make sure I am thinking about that correctly. Thank you. Hani Luxenburg: Yes. Scott, it was always that the second half is better in revenue than the first half. Of course, given the fact that in our model BARDA's revenue will be only recorded from Q2, and also the capacity will increase at year-end or the second half. You are very much correct. Scott Henry: Okay. Great. Thank you for taking the questions. Ofer Gonen: Thank you so much. Operator: And ladies and gentlemen, with that, we will be ending today's question-and-answer session. I would like to turn the floor back over to management for any closing remarks. Ofer Gonen: Thank you, everyone, for joining us today. We look forward to updating you again on our quarterly call. Operator: And with that, we will conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.
Operator: Thank you for your continued patience. Your meeting will begin shortly. Press star-zero, and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. A team member will be happy to help you. Thank you. Good day, ladies and gentlemen, and welcome to the fourth quarter 2025 ACRES Commercial Realty Corp. earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions to follow at that time. If anyone requires assistance during the conference, please press the appropriate key. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Kyle K. Brengel, Vice President, Operations. You may begin. Kyle K. Brengel: Good morning, and thank you for joining our call. I would like to highlight that we have posted the fourth quarter 2025 earnings presentation to our website. This presentation contains summary and detailed information about the quarterly results of the company. Before we begin, I want to remind everyone that certain statements made during this call are not based on historical information and may constitute forward-looking statements. When used in this conference call, the words “believes,” “anticipates,” “expects,” and similar expressions are intended to identify forward-looking statements. Although the company believes these forward-looking statements are based on reasonable assumptions, such statements are based on management's current expectations and beliefs and are subject to several trends, risks, and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties are discussed in the company's reports filed with the SEC, including its reports on Form 8-K, 10-Q, and 10-K, and in particular, the risk factors of its Form 10-K. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to update any of these forward-looking statements. Furthermore, certain non-GAAP financial measures may be discussed on this conference call. A presentation of this information is not intended to be considered in isolation as a substitute to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most comparable measures prepared in accordance with generally accepted accounting principles are contained in the earnings presentation for the past quarter. With me on the call today are Mark Steven Fogel, President and CEO; Andrew Dodd Fentress, Chairman of ACRES Commercial Realty Corp.; and Eldron C. Blackwell, ACRES Commercial Realty Corp.'s CFO. I will now turn the call over to Mark Steven Fogel. Mark Steven Fogel: Good morning, everyone, and thank you for joining our call. Today, I will provide an overview of our loan operations, real estate investments, and the health of the investment portfolio, while Eldron C. Blackwell, our CFO, will discuss the financial statements, liquidity condition, book value, and operating results for the fourth quarter 2025. Of course, we look forward to your questions at the end of our prepared remarks. The ACRES team remains focused on executing on our business strategy by investing in high-quality CRE loans, actively managing the portfolio, and growing earnings for our shareholders. In the fourth quarter 2025, we closed new commitments of $571,000,000, offset by loan payoffs and net unfunded commitments totaling $127,200,000, producing a net increase to the loan portfolio of $443,800,000. The weighted average spread on newly originated loans is 2.83%. New loan production in 2025 and in 2026 put us in a position to structure and price a new CRE securitization in January. On February 12, we closed ACRES 2026-FL4, a $1,000,000,000 deal that has leverage of 86.5% and a weighted average debt spread of 1.68%. The weighted average spread of the floating-rate loans in our $1,800,000,000 commercial real estate loan portfolio is now 3.35% over 1-month Term SOFR rates. The portfolio generally continues to perform, demonstrating sound and consistent underwriting and proactive asset management. The company ended the quarter with $1,800,000,000 of commercial real estate loans across 53 individual investments. At December 31, our weighted average risk rating was 2.7, a decrease from 3.0 at September 30, and the number of loans rated 4 or 5 was 10, down from 13 at the end of the third quarter. The portion of our CRE loan portfolio rated 4 or 5, based on the company's economic interest, was 17% at December 31, down from 32% at September 30. During the quarter, another 4-rated loan paid off at par, highlighting again that the vast majority of our 4- and 5-rated loans do not suffer principal losses. Looking back through our history, when ACRES assumed the management contract of ACRES Commercial Realty Corp. in 2020, the company had 23 loans with a par balance of $411,000,000, or 24% of the portfolio, risk-rated either 4 or 5. As of 12/31/2025, only two of those 4 or 5 loans remain unresolved in the portfolio. Our exceptional asset management team created sponsor-specific solutions to successfully resolve 21 of those loans, $368,000,000 of par value, recognizing a loss of only $4,800,000 on those resolutions, or just 1.3% of the par balance of those loans. We expect the same or better results on the remaining 4- or 5-rated assets in our portfolio as we work actively and strategically with our sponsors to create positive resolutions. The majority of these assets have manageable stabilized LTVs of 80% or less. To further highlight this point, as a firm since inception twelve years ago, ACRES has incurred minimal realized losses on almost $8,000,000,000 of invested capital. We are also excited to announce that we sold one of our REO assets collateralized by an office property in Austin, Texas, this quarter, which resulted in an earnings available for distribution, or EAD, gain of $1,300,000. During the quarter, we charged off a legacy $4,700,000 mezzanine loan that was originated prior to ACRES Management in 2018 and whose loss was fully reserved for and recognized in both GAAP and book value in 2022. We recognized the EAD impact this quarter in connection with settlement of that loan. We will now have ACRES Commercial Realty Corp.'s CFO, Eldron C. Blackwell, discuss the financial statements and operating results during the fourth quarter. Eldron C. Blackwell: Thank you, and good morning, everyone. GAAP net loss allocable to common shares in the fourth quarter was $3,000,000, or $0.43 per share. GAAP net loss for the quarter included $10,700,000 in net interest income, which was an increase of $2,300,000 over the prior quarter. This increase in net interest income was driven by net loan originations of $443,800,000 and corresponding facility draws during the quarter. GAAP net loss for the quarter also included a $3,000,000 net increase; the performance of our net real estate operations to net income of $156,000; and a $1,500,000 net loss on the sale of the previously mentioned office property in Austin, Texas. We saw a decrease in current expected credit losses, or CECL, reserves of $1,300,000, or $0.19 per share, as compared to a decrease in CECL reserves during the third quarter of $4,000,000, which was primarily driven by loan payoffs and net improvements in the model credit risk of our CRE portfolio, offset by a general decline in projected macroeconomic factors during the quarter. Also, as previously mentioned, ACRES Commercial Realty Corp. recorded a charge-off of $4,700,000 on a mezzanine loan that was fully reserved for in 2022. The total allowance for credit losses at December 31 was $20,400,000 and represented 1.11%, or 111 basis points, on our $1,800,000,000 loan portfolio at par, and was composed entirely of general credit reserves. Excluding the loss from the mezzanine loan that was fully reserved for in 2022, EAD for the fourth quarter 2025 was $0.20 per share. When the mezzanine loan is included, the company reported an EAD loss of $0.48 per share as compared to earnings of $1.01 per share for the third quarter. Book value per share was $30.01 on December 31 versus $29.63 on September 30. Additionally, during the quarter, we used $10,000,000 to repurchase 493,000 common shares at an approximate 33% discount to book value at December 31. In December 2025, the authorized amount was fully utilized, and since November 2020, the company has repurchased 5,300,000 shares at an average discount to book value of 49%. Available liquidity at December 31 was $108,000,000, which comprised $84,000,000 of unrestricted cash and $24,000,000 of projected financing available on unlevered assets. Our GAAP debt-to-equity leverage ratio increased to 2.8x at December 31 from 2.7x at September 30 from net originations on our CRE loan portfolio. At the end of the fourth quarter 2025, the company's net operating loss carryforward was $32,100,000, or approximately $4.89 per share. With that, I will now turn the call to Andrew Dodd Fentress for closing remarks. Andrew Dodd Fentress: Thank you, Eldron. We are pleased with continued execution of our plan to drive shareholder value. In the fourth quarter, we originated $571,000,000 of new loans, we repurchased shares at accretive levels, sold an REO asset, improved the credit quality of the portfolio, and positioned the company to resume paying a dividend to common shareholders. Mark Steven Fogel: Since assuming the role of manager in July 2020, ACRES Commercial Realty Corp. book value has increased a total of 66%. Andrew Dodd Fentress: All the team here at ACRES is energized by the opportunity that we see in front of us, both in the asset class and the competitive landscape. We will continue to deploy capital through careful underwriting, and then manage each investment to the optimal outcome for shareholders. We greatly appreciate your continued support and investment in ACRES Commercial Realty Corp., and we look forward to your questions. This concludes our opening remarks. I will now turn the call back to the operator for questions. Operator: Thank you. Press star-one on your keypad. To leave the queue at any time, press 2. Once again, that is star-one to ask a question. We will pause for just a moment to allow everyone a chance to join the queue. Our first question comes from Matthew Erdner with JonesTrading. Please go ahead. Your line is now open. Matthew Erdner: You touched a little bit more on the loans that you guys completed this quarter. It is a really impressive number in terms of net loan growth. I heard you mention the 2.83% spread there, but could you give any additional kind of color on that? And then, as well, what the current pipeline looks like? Mark Steven Fogel: Sure, Matt. This is Mark. The color on that portfolio is it was mostly multifamily-type execution. The average loan size was probably about $40,000,000 to $50,000,000. Spreads range between 2.50% and 3.25%, and we purposely focused our origination effort on multifamily this quarter and the next quarter in that we were in the process of looking to execute a new CLO, and CLO execution was extremely dependent on a significant amount of multifamily. On the bright side, our CLO execution includes reinvestment opportunity to do up to 40% of our assets outside of multifamily. Matthew Erdner: Got it. And then how long is that reinvestment period? Is it 24 months? Mark Steven Fogel: Thirty months. Matthew Erdner: Got it. Awesome. And then, with the additional kind of equity investments—page 11 of the deck—what is your plan for that? Would we, or should we, expect an exit from any of those assets as we go through the year? Mark Steven Fogel: I think on one of them right now, you can expect an exit at one of the smaller land deals that we have. We are actually under LOI right now to sell that asset. One of the other assets is out on the market right now. We expect that we will get some offers during the year, and we will make a decision based on where those offers come in. Matthew Erdner: Got it. That is helpful. And then last one for me, I just noticed something on the balance sheet. Non-controlling interest jumped up to about $130,000,000, call it, from about $1,000,000. I was just curious what that was. Andrew Dodd Fentress: Sure. This is Andrew. The company sold a position, or a portion, of its previously issued financing arrangement with JPMorgan, and so that interest is recorded as an NCI. Matthew Erdner: Got it. That is helpful. Thank you, guys. Operator: Thank you. We will now move on to Christopher Muller with Citizens Capital Markets. Your line is now open. Christopher Muller: Hey, guys. Thanks for taking the questions. Nice to see originations come in really strong, and based on your illustrative earnings slide, it looks like there is some, at least, ability to grow the portfolio and push leverage a little bit. Could we see this pace of deployment we saw in the fourth quarter in the near term, or was that mostly due to the CLO execution in January? Mark Steven Fogel: No, Chris. We expect we will see a decent amount of additional deployment. A significant amount of it occurred in 2026. We are projecting net growth in the portfolio of $500,000,000 to $700,000,000 in 2026. Christopher Muller: Got it. That is great to hear. And, I guess turning gears a little bit, I believe the capital loss carryforwards expired at the end of the year. So thinking about potential upside to book value, would any future gains on REO be fully taxed going forward, or are there any other offsets that would apply? Eldron C. Blackwell: Hey. This is Eldron. No. We—well, let me start with—we still have remaining NOLs to reach $2,100,000 at the QRS, so that is available to us. That is a when, not an if. But as long as we continue to have depreciation and some of our normal operating expenses, I do not expect in the future that any gains on those capital items would be taxable. Christopher Muller: Got it. That is helpful. Eldron C. Blackwell: Yeah. We also have NOLs in our TRS, so any activity down there is also protected. Christopher Muller: Got it. Got it. So there is still a little bit that will flow through. I guess just a quick clarifying one. The $3,400,000 of realized losses on core activities, was that just the mezzanine loan write-off that you guys talked about, or is there something else in there? Mark Steven Fogel: That was a big chunk of it. We recorded a $4,700,000 EAD loss attributable to this mezzanine loan that we inherited as part of our taking control of the REIT and recorded a specific reserve for that back in 2022. Christopher Muller: And the specific, or the CECL, reserve release in the quarter, that was a specific reserve release related to this asset. Is that right? Eldron C. Blackwell: Part of it was a specific reserve, the $4,700,000. The other $1,300,000 was just improvement in net credit of the portfolio on our general reserves. Christopher Muller: Got it. Got it. Got it. I appreciate you guys taking the questions today, and great to see the capital deployment picking up. Mark Steven Fogel: Thanks, Chris. Operator: And once again, if you would like to ask a question, please press star-one on your keypad now. Thank you. We will move on to Gabe Poggi with Raymond James. Your line is now open. Gabe Poggi: Hey, good morning, and thanks for taking the questions. I have got a couple. For year-to-date originations, has there been any change in spreads? Has there been any mix shift away from multifamily? Just anything you could provide there would be helpful. Pardon me. Mark Steven Fogel: In 2026, originations to date have mostly been multifamily. As said, we were geared towards ramping up for our CLO. Spreads overall in that portfolio are about 2.83%. We are seeing spreads come down on the multifamily side, for sure, across the board. But as I said, we are looking at other asset classes for reinvestment activity and, going forward, you will see a different type of mix within our portfolio. We are pretty heavily weighted towards multifamily right now and would expect that some of that will start to fall off over the course of 2026. Gabe Poggi: Got it. So is the goal there to kind of maintain that 2.83% spread while mixing out to other asset classes, or are you content to kind of have asset yields bleed a little bit lower just because of the competitive nature of the market? Mark Steven Fogel: No. Our intent is to be above and beyond 2.83%. There are certainly a lot of opportunities in other asset classes where spreads are better. There is more risk-reward opportunity in self-storage and office and retail. Historically, our portfolio has been only 60% to 65% multifamily, and that is where we expect it to get back to. Gabe Poggi: Okay. Thanks for that. Question on repayments in 2026. You have got about $400,000,000 update there. Obviously, the CECL reserve has come down. Do you expect just a normal cadence of repay activity for 2026? Anything in there that we should be aware of? Mark Steven Fogel: No. We expect that repayments in 2026 will be—we are projecting about $500,000,000 of repayments in 2026, mostly older vintage assets. And importantly, what that does for us, if you mix in new originations in 2026, is it brings down our older vintage, call it 2023 and older-type assets, down to about only 15% of the portfolio. Gabe Poggi: Thank you for that. And one more, and this is kind of a high-level question. But as you guys think about ramping the portfolio—right, in Slide 14 in the deck—and taking total leverage to three and a half, because of the capital structure and prefs versus common, you tilt more to a higher leverage ratio on the common level. Where is the comfort level as you think about leverage to the common? Where do you want to max out there in that ramp? I see the current state, the mid, and then the full tilt, but just how do you think about that in the bigger macro environment—where the comfort level is leveraged to the common equity? Thank you. Andrew Dodd Fentress: Yeah, Gabe. It is Andrew. I think what we show is we are inside of our comfort level at that—inside of four turns. And I do not think you will see us go above that. Gabe Poggi: Got it. So inside of four on total, my words, leverageable capital, which then could push the leverage on the common higher, but total leverageable capital inside of four. Andrew Dodd Fentress: Correct. Gabe Poggi: Okay. Helpful. Thank you, guys. Operator: At this time, there are no further questions in queue. I will now turn the meeting back to our presenters. Andrew Dodd Fentress: Thank you, everyone. We appreciate your support, and we look forward to reconnecting with all of you in the coming weeks. If you have any questions, please reach out to myself or Eldron. Have a great day. Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: Thank you for standing by, and welcome to REGENXBIO Inc.'s fourth quarter and year-end 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. I would now like to hand the call over to Patrick Christmas, Chief Legal Officer of REGENXBIO Inc. Please go ahead. Patrick Christmas: Good morning, and thank you for joining us today. Earlier this morning, REGENXBIO Inc. released financial and operating results for the fourth quarter and year ending 12/31/2025. The press release is available on our website at www.regenxbio.com. Today's conference call will include forward-looking statements regarding our financial outlook in addition to regulatory and product development plans. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted and can be identified by words such as expect, plan, will, may, anticipate, believe, should, intend, and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties. These risks are described in the Risk Factors and the Management's Discussion and Analysis section of REGENXBIO Inc.'s Annual Report on Form 10-K for the full year ended 12/31/2025, and comparable Risk Factors section in REGENXBIO Inc.'s Quarterly Reports on Form 10-Q, which will be on file with the Securities and Exchange Commission and available on the SEC's website. Any information we provide on this conference call is provided only as of the date of this call, 03/05/2026. We undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise. Please be advised that today's call is being recorded and webcast. In addition, any unaudited or pro forma financial information that may be provided is preliminary and does not purport to project financial positions or operating results of the company. Actual results may differ materially. I will now turn the call to Curran Simpson, President and CEO of REGENXBIO Inc. Curran? Curran Simpson: Thank you, Patrick. Good morning, everyone, and thank you for joining our call today. 2026 is set to be a pivotal year for REGENXBIO Inc. With great focus on advancing our late-stage pipeline in 2025, we enter the year with near-term topline Phase 3 readouts and ongoing commercial readiness activities in Duchenne muscular dystrophy and wet AMD. Last but not least, we are also entering the pivotal Phase 2b/3 program, named NAVIGATE, for diabetic retinopathy being developed in collaboration with our eye care partner AbbVie. Our clear focus on execution in 2025 has led to a robust set of important catalysts to transform REGENXBIO Inc. from a late-stage development organization to a commercial entity. Today, I am joined by Steve Pakola, our Chief Medical Officer, who will walk through the ongoing clinical advancement of our programs, and Mitchell Chan, our Chief Financial Officer, to provide our financial updates. With that, let me start with RGX-202, our late-stage Duchenne program. I am pleased to report that momentum for RGX-202, our potential best-in-class gene therapy for Duchenne, remains strong. We completed dosing in our pivotal study last fall and are seeing robust enrollment in our confirmatory trial, reflecting continued enthusiasm from the Duchenne community. Our growing clinical dataset, including the 18-month Phase 1/2 NSAA results shared in January, demonstrate meaningful differentiation from the known natural history of Duchenne across multiple validated measures. Combined with a favorable safety and biomarker profile to date, we believe RGX-202 has the potential to deliver durable, clinically meaningful benefit. With less than 1% of the global Duchenne population having received an approved gene therapy and no approved option for patients aged 1 to 3, the unmet need remains significant. We look forward to sharing additional Phase 1/2 data next week at the Muscular Dystrophy Association's annual meeting and topline data from our pivotal study early in the second quarter as we advance towards a BLA submission. We look forward to engaging with FDA midyear to discuss our planned BLA submission using the accelerated approval pathway. We have FDA engagement planned ahead of the pre-BLA meeting and intend to support our primary microdystrophin endpoint with significant functional data both in the pre-BLA meeting and at the time of submission. By 2026, we will have 12 months of functional data on the majority of pivotal trial patients. In addition, with the enrollment momentum in our confirmatory study, our safety database continues to expand. In our retinal disease programs, our partnership with AbbVie continues to progress. Topline data for subretinal Cirovec in wet AMD are expected in Q4 this year. ATMOSPHERE and ASCENT represent the largest global gene therapy program in this indication, and if approved, Cirovec would be the first gene therapy for wet AMD. I am also pleased to share that site activation plans are also underway in the NAVIGATE pivotal study in diabetic retinopathy, with first patient dosing expected next quarter, triggering a $100 million milestone from AbbVie. Finally, turning to our MPS programs, since receiving the CRL for RGX-121 two weeks ago, we have also received the clinical hold letters for both RGX-111 and RGX-121. We believe that the requirements to remove the holds are addressable and, in fact, had already been in the process of addressing them. We continue to work on the CRL response and are working towards a Type A meeting with the goal of resubmitting the BLA. We remain committed to the MPS community, the Hunter syndrome patients waiting for a treatment for this devastating disease. As we enter 2026, our focus is clear: execute against our key milestones and bring the hope for transformative gene therapies closer to patients in need. With that, I will turn it over to Steve. Steve Pakola: Thank you, Curran. I will start with the RGX-202 program for the treatment of Duchenne. As Curran mentioned, we are incredibly excited that enrollment in the AFFINITY DUCHENNE pivotal trial completed in October 2025. As a reminder, this study enrolled ambulatory patients aged 1 and older and is the most advanced clinical-stage gene therapy program for Duchenne. RGX-202 has demonstrated a highly differentiated safety and efficacy profile with consistent, robust microdystrophin expression in the Phase 1/2 study. This includes the positive NSAA data we disclosed in January. As Curran referenced, the 7.4 average improvement compared to the recognized CTAP model observed at 18 months is striking. These results are generally consistent with the October 2025 data showing all patients exceeded their expected functional outcomes when compared to CTAP, as well as matched external controls at 12 months. It is important to note the majority of these patients were 8 years and older at dosing, an age when functional decline is expected, making these functional outcomes even more impressive. The Duchenne patient and physician communities continue to highlight the excellent safety profile of RGX-202 to date. As reported in the Phase 1/2 study, we have seen no SAEs or AESIs, including no thrombocytopenia or liver injury. We attribute this to our proactive immune suppression regimen, our novel construct, and our field-leading product purity, with more than 80% full capsids. We are very pleased with how these differentiated elements enable us to deliver 202 at a 2e14 dose and maximize the potential for efficacy without compromising safety. Next week at MDA, we are thrilled to share additional new Phase 1/2 data on podium, including functional and safety outcomes. With this momentum in our pivotal study, and results to date in the Phase 1/2 study, we look forward to sharing topline data from the pivotal study in early second quarter this year. Turning now to our Cirovec franchise, which is advancing one-time treatment for wet AMD and diabetic retinopathy, or DR. Enrollment is complete in ATMOSPHERE and ASCENT, our two large pivotal studies intended to support global regulatory submissions for subretinal wet AMD starting next year. The data from the subretinal program have been excellent, with durable outcomes reported through four years in the Phase 1/2 trial. Additionally, Cirovec recipients in the fellow eye bilateral dosing study demonstrated a 93% reduction in annualized anti-VEGF injection need at 12 months, with 60% of recipients remaining injection-free through that timeframe. We look forward to sharing topline results from ATMOSPHERE and ASCENT with AbbVie in Q4. We are very excited to be advancing Cirovec into pivotal stage for DR using in-office suprachoroidal delivery with AbbVie. This progressive vision-threatening disease is a public health priority globally. It remains a leading cause of vision loss among working age in the U.S., and a one-time treatment could change the way this disease is treated for millions of people. Site activation activities are underway in the Phase 2b/3 NAVIGATE trial. This is a double-masked, sham injection-controlled trial evaluating Cirovec at 1e12, which is the same as dose level 3 in the Phase 2 ALTITUDE trial. The Phase 2b portion of the study will enroll 136 patients with nonproliferative DR, or NPDR. The primary endpoint is a two-step or greater improvement on the Diabetic Retinopathy Severity Scale, or DRSS, at one year. As a reminder, in the Phase 2 ALTITUDE trial, at two years post-treatment, with dose level 3 and short-course prophylactic topical steroids, no intraocular inflammation was observed. The majority of subjects achieved DRSS improvement, with 50% achieving at least a two-step improvement without any additional DR treatment. Cirovec at dose level 3 also reduced the risk of disease progression, demonstrating a greater than 70% risk reduction in vision-threatening complications compared to historical control. As Curran mentioned, we are working towards addressing the clinical holds for RGX-111/121. And in the interim, we have received the final genetic analysis from the SAE in the RGX-111 study. The analysis of the resected tumor was conducted by an independent third-party lab and, as we reported, detected an AAV vector genome integration event associated with overexpression of a proto-oncogene, PLAG1. Clonal integration of AAV vector elements into the PLAG1 gene was detected in the tumor tissue. Analyses supported classification as a PLAG1 family neuroepithelial tumor and are consistent with the hypothesis that AAV vector integration at the PLAG1 site contributed to tumor formation. Of note, this participant had a background of factors that could have contributed to risk of oncogenic transformation. This child underwent an unsuccessful stem cell transplant at four months of age with loss of donor chimerism, and he received chemotherapeutics that may have contributed to DNA damage. Notably, the report concludes, based on formal neuropsychological testing and developmental pediatrician assessment, that the patient's neurocognitive development is above average, which indicates mitigation of MPS I disease. We anticipate the analysis will be published in a peer-reviewed journal this year, and we are pleased that the patient continues to do well. Finally, I would like to express my sincere gratitude to all the patients, families, clinicians, site staff, and patient advocacy representatives who have supported these trials. With that, I will turn the call over to Mitchell to review our financial guidance. Mitchell? Mitchell Chan: Thank you, Steve, and good morning, everyone. REGENXBIO Inc. ended the quarter on 12/31/2025 with cash, cash equivalents, and marketable securities of $241 million, compared to $245 million as of 12/31/2024. This year-end figure reflects the $110 million upfront payment from Nippon Shinyaku in 2025 and the $145 million in net proceeds received from the royalty monetization with HealthCare Royalty Partners in 2025, offset by cash used to fund operating activities through the year. We continue to invest in de-risking our late-stage program in 2025. R&D expenses were $228 million for the year ended 12/31/2025, compared to $209 million in 2024, with much of this cost going to pivotal trial execution and manufacturing of RGX-202 and Cirovec. We also continue to bring meaningful revenue recognition in 2025, with total annual revenue being $170 million. This includes the upfront license revenue under our Nippon Shinyaku collaboration as well as an increase in royalty revenue for Zolgensma and Evrysdi, both of which are included in our royalty monetization agreement with HealthCare Royalty. We expect the December 31 cash balance reported today to fund our operations into early 2027. This cash runway guidance does not include the $100 million development milestone we expect to receive from AbbVie upon first patient dose in the NAVIGATE study or any additional funds from the May 2025 HealthCare Royalty agreement, which together could extend our runway into 2027. This guidance also does not include any future revenue from our MPS programs. In all, we find ourselves in a strong position to leverage multiple funding options as we advance towards multiple product launches. Curran Simpson: Thank you, Mitch. As you heard today, our strong execution has positioned us for an exciting and transformational year ahead as we share pivotal readouts and look to enhance the treatment landscape in Duchenne, wet AMD, and diabetic retinopathy, representing large indications and commercial opportunities. Our investment in in-house manufacturing and co-development with world-class partners keeps us in a strong position as we approach commercialization. Last week, we joined the rare disease community in recognizing Rare Disease Day, and I would like to take a moment to acknowledge these patients, families, and community leaders. We know they are counting on us to deliver innovative new medicines, and we greatly appreciate the support they have shown us, particularly on our rare programs recently. Their needs are significant and urgent, and we are inspired by their commitment to raise awareness and give voice to the critical need for new therapies. With that, I will turn the call over for questions. Operator? Operator: Thank you. To remove yourself from the queue, you may press 11 again. We ask that you please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please standby while we compile the Q&A roster. Our first question comes from the line of Mani Foroohar of Leerink Partners. Please go ahead, Mani. Mani Foroohar: Hey, guys, thanks for taking the question. So as we get closer to data and regulatory clarity in terms of submission around DMD, obviously, there is a lot of debate and concern around whether a controlled trial or an appropriate control arm could be; obviously, there are both Sarepta and Elevidys have seen that in the confirmatory and pivotal studies, respectively. What gives you confidence on your path to accelerated approval and on the design of your confirmatory study, which is a little bit different than both of those competitors? That is helpful. And as a clarifying question, when you talked about reaching alignment, submitting the protocol, including the confirmation study protocol, can you give a sense of when that happened and if those interactions were with FDA and CBER under the current leadership, or under the prior leadership preceding Dr. Peter Marks? Curran Simpson: Thanks, Mani. I think there are a number of aspects to that that give us confidence. I think, number one, the fact that the protocol was prospectively reviewed by FDA. We received comments on the design of the study and the stats plan around comparison to external controls. We feel like we have, and none of that has changed. We have not altered the pivotal protocol through execution. I think the second pillar of that is there is not a narrow difference between the results we are seeing on functional outcomes versus natural history comparatives, and this is matching many patients against the patient treated. So I think that the fact that we have such compelling data specifically in the older patients, where they are typically in a decline phase, I feel will sort of trump the concept of a placebo arm, which we do not think is ethical. And I think the other aspects of how that relates to the confirmatory study: the confirmatory study was included in the original protocol as in addition to the pivotal design. So, again, that was reviewed by FDA. We are really pleased with how the enrollment is going there. And one thing that enrolling as quickly as we have on the confirmatory study does in a positive way is it increases the number of safety exposures that we have at the time of filing. We are talking about roughly 50 total rather than the 30 that were in the pivotal group. So a broader safety database at the time of review, which will be very helpful. Because in our end-of-Phase 2 meeting, one of the things that we heard as a ticket to accelerated approval was similar efficacy but improved safety, and that was pre–black box warning for Elevidys. So I think we are in an even stronger position now around our dataset, and we look forward to discussing that with FDA in our pre-BLA meeting. Yeah. I can comment on the latter part of the question. It was under the prior leadership. This was roughly 2024 that these discussions took place. But I would say the review team that we spoke to and that this was reviewed by is pretty largely intact from what we can tell to date. Steve, if you want to discuss just the prospective nature of the data plan. Steve Pakola: Sure. Thanks for the questions, Mani. So, highlighting what Curran mentioned, the importance of prospective design. This was all set as of those discussions that Curran met. So, for example, the primary—this is accelerated approval—so we were very clear in our design of the primary being microdystrophin. We were also very clear in the secondary functional endpoints that we were looking at and the methodology for assessing that. So this is not a case where midstream we changed something or we looked at data and adjusted how we were looking at the data. And, Mani, one thing I would add in general is we understand the environment and where people are trying to assess FDA's position. From the very beginning of the study, we knew about the controversy around microdystrophin as a biomarker reasonably capable of predicting clinical benefit or functional benefit. And I think that is why the way we have designed the study and in the way we are approaching FDA, we are maximizing the functional data that we bring to the review. And I think that is an incredibly important aspect of how we are approaching this, because we feel like the functional data really supports the improved biomarker data that we have over current therapy. Operator: Thank you. Our next question comes from the line of Judah Frommer of Morgan Stanley. Please go ahead, Judah. Judah Frommer: Yes, hi, good morning, guys. Thanks for taking the question. Maybe just a follow-up on 202 to start. If FDA does end up wanting potentially longer duration follow-ups, specifically for safety, and you go down the path of a traditional approval, what would that entail? What would the trial's role be in that scenario? And then just on the Hunter's program, there is an approval decision coming up for Denali. What would you hope to learn from that program as you go back to FDA to discuss once you are well with them? Thanks. Do you have those heparan sulfate assays, if it is a relatively simple addition to the submission? Curran Simpson: Sure. Hi, Judah. I think if FDA expects longer-term functional data, the time points I would keep in mind is we completed enrollment of the pivotal study in October. So at that point this year, we will have 12-month data on the full pivotal dataset. And then, of course, there is time for QC of the data and then incorporating that into a filing. But it is a near-term event that we would have functional data on the full pivotal dataset. And then if you consider that maybe there is a larger sample size required, the fact that we immediately went into enrollment of the confirmatory study just keeps working towards more data as we go through the year. So I feel like there is no discontinuity between our pivotal and our confirmatory dataset, but we feel like the data we have seen in the Phase 1/2 is already strikingly different from natural history, and so more is not always better in that case, given the unmet need that we are seeing, the prevalent market continuing to grow. So we feel like we are in a good place, notwithstanding as well the safety profile that we are showing. We have investigators clamoring for something where they do not have to worry post-treatment of these events that have been seen in high-dose AAV. On the outcomes for 121, we certainly will pay a lot of attention to Denali's PDUFA decision, and in particular, the fact that part of that submission—and significant element of that submission—is heparan sulfate–based biomarker. If you go on ChatGPT and pull up D2S6, it clearly says that it is a subcomponent of heparan sulfate. So we see them as the same. But in the event that FDA continues to not necessarily see them the same but endorses heparan sulfate, we will be in a great position with our data to pivot to that if that is what is necessary. But we feel really strongly that our dataset using D2S6 shows really good biomarker reduction, very consistent across patients who we know are neuropathic from external reviews. And so we look forward to the Type A. But I think to your point, it will be helpful to see decisions on Ultragenyx's program and Denali's program to see how that may or may not affect ours. We do. Operator: Thank you. Our next question comes from the line of Annabel Samimy of Stifel. Your line is open, Annabel. Annabel Samimy: Hi, thanks for taking my question. I am going to be original and ask about 314. So I noticed that you were moving forward with dose level 3, and I know also that you had agreed with AbbVie to conduct a Phase 2 trial to test the higher dose, but you are going with dose level 3. So I guess the question is, why is it not going straight into a Phase 3? Does the Phase 2/3 also count as part of that pivotal? And just curious about what you found with the L4 that made you go with the L3, and what does this mean for wet AMD? Thanks. Just to follow up, are—like, I know that you are exploring deals for in wet AMD. Are you not going to move forward with that one, given the profile for DL3? I guess I am just trying to understand if there is any safety question with the L4. Curran Simpson: Great, Annabel. I will comment a bit on the trial and what is coming, and Steve can comment a little bit on the dose selection. Keep in mind for the Phase 2 studies on diabetic retinopathy, it is a relatively small sample size, but strikingly good results in terms of what we were seeing on two-step improvement, etc., that we have published. The goal really of the Phase 2b, as it stands now, is to expand that dataset to a higher number of patients and confirm that result. But it is sequenced to be off an interim look and then directly into a larger pivotal study. And I think that is just prudent risk management as we develop the program and move forward. The patients that are treated in the Phase 2b will certainly contribute to the safety database that will be created for DR. So they are helpful in some ways managing the size of the pivotals that we have to run. Now I will let Steve talk a little bit about the dose selection. And on wet AMD, wet AMD is just a trickier indication in terms of reading the tea leaves and looking for a signal in terms of efficacy compared to DR, where there is no other treatment, and you are really looking at pretty binary assessment of things like actual improvement in DR. So I think it is just more straightforward to make a decision on DR as compared to wet AMD. So we and AbbVie are continuing to evaluate the data. Steve Pakola: Sure. First, Annabel, thanks for raising certainly one of our big priorities, which is DR, given what a massive unmet need that is where we certainly believe a one-time treatment is really what is needed for this disease to make the ultimate impact. And the other thing I say is on the dose selection and the Phase 2b/3 concept is it is a real validation of not only our commitment but also AbbVie's to embark on a Phase 2b/3 program. So, as in any program, we do the dose escalation to really look at safety and efficacy. I think one of the aspects was with the time that we took to evaluate dose level 1, dose level 2, dose level 3, the longer we look, the more compelling dose level 3 became. And it really reached a point of pretty remarkable results where we were definitely hitting our target product profile, where the durability to actually see 50% of patients not only be stable but actually have at least a two-step improvement in diabetic retinopathy was really quite compelling. And I think, clinically, even more meaningful for clinicians is the fact that there was a dramatic reduction in vision-threatening complications—over 70%—compared to what you would anticipate without treatment based on natural history data. So I think this constellation was really what drove the decision for us and AbbVie. If you are already at your target product profile, and meaningfully with short-course topical steroids, zero cases of IOI, which is really the big sensitivity in the retina community when it comes to safety, we really had what we needed to go forward. And, you know, once you hit your target product profile and you are really, frankly, plateauing in terms of the results that you would anticipate, and you are seeing durability, that made it a clear decision for us and happy to move forward. Curran Simpson: Yeah. So wet AMD is just a trickier indication in terms of reading the tea leaves and looking for a signal in terms of efficacy compared to DR where there is no other treatment, and you are really looking at pretty binary assessment of things like actual improvement in DR. So I think it is just more straightforward to make a decision on DR as compared to wet AMD. So we and AbbVie are continuing to evaluate the data. Operator: Thank you. Our next question comes from the line of Alec Stranahan of Bank of America. Please go ahead, Alec. Alec Stranahan: Hey, guys, thanks for taking our questions. Two for me as well. I guess, first, just on the functional data, could you just remind us how much of this you will be providing at the topline? I guess, how many patients you expect you will have at that point for the 12-month functional data. And then just on MPS I, curious how the neoplasm in the MPS I patient maybe shifts benefit-risk discussion with the FDA, and I guess what kind of mitigation measures you are considering here, given it sounds to be AAV-related? Thank you. Got it. Very helpful. Thank you. Curran Simpson: Thanks, Alec. I can speak a bit on the topline data plans. So I think as we have previously discussed, we will have, obviously, a safety data update on the full cohort, which is n=30. We will have biomarker topline data for the primary endpoint for the full pivotal dataset as well. In terms of functional data, we have not set a specific time for the release of the topline data, so it is a little bit in flux, but I would set an expectation of roughly seven or so patients at 12 months for functional data. And then, of course, throughout the remainder of the year, we will consider updating that as additional data comes in. Historically, we did report some nine-month data early in the Phase 1/2 studies. I think we are going to try to avoid that because that really does not work well with most of our natural history comparisons that we would like to make. And I think on top of it, we just feel nine months is too early to judge stability of effect on function. But as we go past 12 months, then I think we get to a meaningful level of functional data, and they are well past the removal of immune suppression agents. Steve Pakola: And I can jump in as well, Alec, on the MPS I neoplasm. So you, of course, hit the nail on the head of, well, what does this mean in terms of the overall benefit-risk? And our view, and what we hear from clinicians as well, is that on one hand, you have the risk of a rare event such as tumor, which is not completely unanticipated given the fact that we know that integration can happen with AAVs. And, in fact, it is even included in AAV gene therapy labels for that reason: the potential risk. So fortunately, it does seem to be a very rare event. We have over 6,000 patients treated with AAVs of different sorts by different sponsors, and here is a case where an integration happened at a proto-oncogene. So the clinical community, if we raise this with the investigators and KOLs in the space, almost instinctively, their first response is, okay, there is a rare risk of a tumor versus a 100% risk of inexorable decline and irreversible brain damage. So it really comes down to that context for this devastating disease with such unmet need that the clinicians—it has not changed their view of the favorable benefit-risk. So, from our view going forward, as far as mitigations that you raised, just as in this patient, we can look at periodic MRI. We have already looked at that in the other patients, not only in the 111 program, but also 121, and not seen any other evidence. And, of course, full disclosure in the investigator brochure and informed consent. And with that knowledge, clinicians and the patient families are able to make that assessment about benefit-risk. Operator: Thank you. Our next question comes from the line of Paul Choi of Goldman Sachs. Please go ahead, Paul. Paul Choi: Hi, thank you, and good morning. Thank you for taking our questions. I have two on RGX-202, please. First, with regard to the data you will have next week at MDA, can you just clarify what patient numbers you will have and additional duration of follow-up, or should we just think of—or will it just be additional details on the 18-month data that you previously presented? And my second question is, you have, in your press release, talked about the functional data to date in the context of a CTAP analysis. Can you comment on whether, in terms of your FDA interactions, there is alignment on using these kinds of analysis versus sort of conventional North Star analysis? Any clarity there on the FDA's acceptance of that evaluation framework would be helpful. Thank you. Curran Simpson: Thanks, Paul. I think, because the MDA manuscript is in deep editing mode with Steve, I will let Steve cover the expectations for MDA next week. But it will be, I think, a pretty substantial update—maybe the last update, if you will—in terms of Phase 1/2 data as we transfer over to our pivotal program. But, Steve, maybe you want to comment on what to expect. I think one thing I would add on MDA is we have a poster that will accompany the podium presentation. We have not talked a lot about benefit to cardiac in Duchenne, and part of the reason for that is that we expect those types of outcomes to be much more long term in terms of seeing that in the clinical setting. So what we are providing at MDA is a preclinical model specifically showing the differentiation of our construct using the C-terminus in potentially preventing cardiac deterioration, if you will. Just something to have a look at as part of the total dataset. Some additional preclinical data that we think really supports what we have known from our preclinical work, where we saw good biodistribution in the MDX model in cardiac muscle. So stay tuned there. Steve Pakola: Sure. So, all patients with the primary endpoint, I think, is obviously a key aspect for what we would anticipate. We are almost there, actually, in what we have disclosed before. I think function—the key thing is more patients and longer follow-up. We are really excited about the fact that we have already disclosed previously last year and early this year several different cuts of functional data. We are really happy with what we have seen at dose level 1 and dose level 2, even out to 18 months with dose level 2 for the CTAP. So it is just really a great chance to keep building on that base of functional data. The consideration on the different ways of looking at function and what to compare to—CTAP—I think it is important to note that the program does not hinge on CTAP. It is really a supportive analysis. So our view is the totality of the data is important, that in looking at control data from external databases, it is very comforting and very validating if—and that is what we have seen to date—by different ways of looking at it, you see very consistent results. But certainly, our primary approach from a functional basis, and this is what we have prespecified as well, is the traditional approach separate from CTAP. Where that includes, as well, the propensity score weighting. So I think that is going to give audiences also a sense to see how the results are looking compared to what one would anticipate based on prior analysis. So we are going to be looking at all this, and I think you can anticipate seeing several different ways of looking at comparison to expected trajectory without treatment. And the other key thing is continued safety. So to the earlier question about how much long-term safety—each update is not just the functional, but a chance to show continued differentiation on safety. Operator: Our next question comes from the line of Luca Issi of RBC. Please go ahead, Luca. Luca Issi: Oh, great. Thanks so much for taking my question. Maybe, Steve, any update on safety for DMD? You obviously have a very strong scientific hypothesis around sirolimus and eculizumab and, you know, empty-to-capsid ratio, etc. But, you know, we have seen obviously more setbacks for the field on the safety side from Pfizer and Sarepta than we would have liked. So I guess what percentage of your patients have ALT and AST elevations at this point, and how are the kinetics of those curves in terms of both, like, peak and area under the curve, compared to Sarepta and Pfizer? I do not think we have seen those curves before, so any context there would be much appreciated. And maybe quickly, Steve, also on the CRL for MPS II, now public, why do you measure heparan sulfate at baseline versus after therapy using two different routes of access? I think the CRL notes that you used ICV at baseline versus spinal tap after therapy, which obviously created some variability. So we are just curious for why you decided to do that. Thanks so much. Steve Pakola: Sure. So, on the safety aspect, there are several reasons why we anticipated having a differentiated safety profile: the higher purity, the specific construct, and our immune modulation regimen. And I think the key factor is we have not changed our immune modulation at all since the beginning of the study. So I think that gives comfort in how to analyze the type of safety data that we are seeing. Phase 1/2, we continue to see no cases of liver injury. So it is 13 patients, but zero out of 13 is clearly different from existing therapy, where that rate is 40%. So we look forward to showing some more details on that from the Phase 1/2 study at MDA as well. Also on thrombocytopenia, no cases of thrombocytopenia as well, which is one of the key complement-mediated signals of complement activation that could signal potential risk for other more serious events. So we continue to see the differentiation that we would like to see and look forward to showing more data going forward. And, of course, we will have the topline results in the first half of the second quarter, which will be another cut for you to get more comfort on the data. So onto the CRL, there was, yes, some comment about the potential impact of route of taking the sample. There was consistency, actually, in the vast majority of patients utilizing the same approach. We actually have the benefit of screening and baseline measurement where we have total consistency of ability to match like-for-like or apples-to-apples in terms of the same method of sampling, and we see really the same results in terms of change from baseline. So that will be part of our response—showing that analysis more clearly and more upfront so that they can get comfort around that difference. Operator: Thank you. Our next question comes from the line of Brian Skorney of Baird. Please go ahead, Brian. Brian Skorney: Hey, good morning, team. A couple of questions from me. Maybe going back to some questions around the D2S6 subunit discussion on the Hunter application. There is a lot of talk about it, and I think references this was a discussion point in the mid- and late-cycle review meetings. I guess at any point were measures of regular heparan sulfate discussed and submitted in the application process? Seems like something that could have been addressed during the review. And can you share what the HS data look like in the CSF and the other organs with us? And then on DMD, given what you have been through in the Hunter review, what sort of dynamics and questions are you looking to have answered in the pre-BLA meeting with the agency? And, you know, I guess the bottom line is, does anything coming out of your BLA meeting matter if it is not coming directly from the division head? Curran Simpson: Thanks for the question. I will take the DMD one, and then maybe have Steve talk through the heparan sulfate data, which we did provide limited heparan sulfate data during the review, but it was quite late in the review cycle. But I think in terms of what are the outcomes we are looking for in the pre-BLA meeting, I think that is the point at which, if you recall all the way back to the original protocol and our end-of-Phase 2 meeting, one of the things that we discussed with FDA was correlation of the microdystrophin results to functional outcomes was something that was an expectation of FDA. Now, importantly, there was no specified number of patients of data that had to be provided to make that correlation. I think that was something that everyone considered would be a review issue at the time. I think as we have seen in our Phase 1/2 data, there is a very strong correlation that we are seeing to date: all of our patients above the 10% threshold, and we are seeing the majority of patients having not just sustained function or lack of disease progression, but improvement in age groups where you would not expect it. So I think we have really compelling data, which at the time of the BLA discussion, pre-BLA discussion, I think will be very helpful—hopefully to encourage we are ready to file the BLA. The timing of the pre-BLA meeting is optimized now to provide maximum functional data at the time of discussion. So we have moved it out slightly, but it does not really alter, I think, the overall speed at which we can file, which we could file immediately after that meeting. Typically, a pre-BLA meeting will incorporate feedback from FDA leadership. So I think that is why that is an important event for us. And obviously, ahead of that, we are going to do as much as we can informally outside of that process to assure ourselves of a positive outcome. Is that helpful? Yeah. Thank you. That is helpful. Steve Pakola: Yeah. Thanks for the question, Brian. So, to start off, D2S6, it is important to note that biologically, it is the substrate that directly would link to the enzyme that we are reconstituting with treatment. So that is why, prospectively, that is what we put forward throughout the program. We do measure heparan sulfate, and likewise, we see, not too surprisingly, a dramatic reduction in heparan sulfate. And I guess similar to the earlier question about different routes of sampling, in our response to the CRL we will certainly lay out, in greater detail, our heparan sulfate results. The other thing is we really have an opportunity to clarify a lot of the factors, not just the biomarker. And function is another area where our clinicians are very positive about what they are seeing. And, as you would expect, the longer the follow-up, the greater clarity you can anticipate seeing. So we can certainly show longer-term follow-up, which is one of the pathways that the FDA listed as a way to deal with the CRL. Operator: Our next question comes from the line of Luca Issi of RBC. Please go ahead, Luca. Luca Issi: Oh, great. Thanks so much for taking my question. Maybe, Steve, any update on safety for DMD? You obviously have a very strong scientific hypothesis around sirolimus and eculizumab and, you know, empty-to-capsid ratio, etc. But, you know, we have seen obviously more setbacks for the field on the safety side from Pfizer and Sarepta than we would have liked. So I guess what percentage of your patients have ALT and AST elevations at this point, and how are the kinetics of those curves in terms of both, like, peak and area under the curve, compared to Sarepta and Pfizer? I do not think we have seen those curves before, so any context there would be much appreciated. And maybe quickly, Steve, also on the CRL for MPS II, now public, why do you measure heparan sulfate at baseline versus after therapy using two different routes of access? I think the CRL notes that you used ICV at baseline versus spinal tap after therapy, which obviously created some variability. So we are just curious for why you decided to do that. Thanks so much. Steve Pakola: Sure. So, on the safety aspect, there are several reasons why we anticipated having a differentiated safety profile: the higher purity, the specific construct, and our immune modulation regimen. And I think the key factor is we have not changed our immune modulation at all since the beginning of the study. So I think that gives comfort in how to analyze the type of safety data that we are seeing. Phase 1/2, we continue to see no cases of liver injury. So it is 13 patients, but zero out of 13 is clearly different from existing therapy, where that rate is 40%. So we look forward to showing some more details on that from the Phase 1/2 study at MDA as well. Also on thrombocytopenia, no cases of thrombocytopenia as well, which is one of the key complement-mediated signals of complement activation that could signal potential risk for other more serious events. So we continue to see the differentiation that we would like to see and look forward to showing more data going forward. And, of course, we will have the topline results in the first half of the second quarter, which will be another cut for you to get more comfort on the data. So onto the CRL, there was, yes, some comment about the potential impact of route of taking the sample. There was consistency, actually, in the vast majority of patients utilizing the same approach. We actually have the benefit of screening and baseline measurement where we have total consistency of ability to match like-for-like or apples-to-apples in terms of the same method of sampling, and we see really the same results in terms of change from baseline. So that will be part of our response—showing that analysis more clearly and more upfront so that they can get comfort around that difference. Operator: Our next question comes from the line of Ellie Merl of Barclays. Ellie, your line is open. Eduardo Martinez-Montes: Hi, this is Eduardo on for Ellie. Thanks for taking our question. I think you mentioned you expect 12 months’ functional data from the majority, if not all, of the pivotal patients in the fall of this year. How should we think of those data in context of the regulatory strategy? Could those be submitted as a supplement? And could that extend the review timeline? Curran Simpson: That is a good question. I think that it will likely be a result of the discussion that we have at the pre-BLA meeting in terms of what level of functional data is required to submit. There is no point to submit early if we are going to get additional data requests. So I think getting clarity on that with FDA will be very helpful. We will be in a position—and we have already, obviously, completed our nonclinical work in that module well along. We have completed substantially the manufacturing work related to the BLA, and that module will be ready quickly. So I think, to answer your question, the timing of the full filing for the BLA will be dependent on the clinical data and the functional data that we incorporate into it. The chance to add it is the 120-day safety update that is part of a BLA submission. That has historically been very difficult to include additional clinical data beyond safety as part of it. So I am not confident that we would be able to add at that point more functional data. So I think when we file, we want to be confident that that is acceptable with FDA. Yeah. The BLA submission could happen directly after the pre-BLA meeting. One of the topics in the pre-BLA meeting will be the timing of submission with FDA. So I think post that meeting, we will be in a good position to update on the overall filing timeline. But, yes, it is possible that we can still file within 2026. That is really dependent on these ongoing discussions. Appreciate it. Thank you. Operator: Our next question comes from the line of Daniil Gataulin of Chardan. Daniil, your line is open. Daniil Gataulin: Alright. Hey, good morning. Thank you guys for taking my question. On 202, you mentioned a pre-BLA meeting in mid-’26, but also additional planned interactions in the first half. What is the agenda for those meetings? And secondly, what do you expect the regulatory path and timelines to look like for European approval? Curran Simpson: In terms of the regulatory interactions, we have planned meetings with FDA ahead of the pre-BLA meeting to get at some of the questions we have today around our data analysis methods, some of which are new because we have been able to access additional natural history databases. And as Steve mentioned, and we have published additional CTAP data. So just trying to ensure that when we deliver our pre-BLA package, it is in line with FDA expectations. We have not discussed the timing of those meetings, but they will be interspersed with things like topline data and our pre-BLA meeting as we go forward. So the whole idea here is to de-risk the pre-BLA meeting with ongoing dialogue with FDA and ensure that we are fully aligned so that we have a high-probability submission in terms of FDA acceptance. And I think, again, that is why we continue to publish our functional data, because that is what we think is the most compelling aspect of this on top of safety. There is a huge unmet need in Duchenne, and we see the prevalent population actually growing. We see a pretty narrow payer band in terms of patient ages that are being reimbursed, and so we expect there to be a lot of energy around additional therapies being made available, and with our data, we think we have a compelling case to do that quickly. Is that helpful? It is. Thank you. And with respect to the regulatory path and timelines for Europe approval. For European approval, right now, we are getting feedback on designs that include a placebo arm that are feasible to run ex-U.S. We do not have a specific timeline that we have put out in terms of when that study would start, but we will be more specific about that post that official feedback from EMA. Got it. Okay. Alright. Thank you very much. Operator: Thank you. Next question comes from the line of Bill Mahon of Clear Street. Bill, your line is open. Bill Mahon: Hey, good morning, and thank you. So it seems that there is kind of a broad effort to read the 121 CRL and extrapolate that to 202. So I was just hoping that you could point out specific points within the 121 CRL that you expect to differ in 202 and not keep it from approval. And then I know, Steve, you mentioned that 6,000 patients have now been treated with AAV in one form or another. Is there a difference in the rate of AAV-associated neoplasms across different tissue types or serotypes or disease states? Curran Simpson: Yeah. It is a great question. I think there are some real clear differences between 121 and 202, and some of it goes back to the history of development for both programs. The 121 program really was based on a biomarker premise, meaning D2S6 being reasonably likely to predict clinical benefit, and we felt like we had closed that loop in terms of the RMAT designation we got on the program in 2023. In the case of 121, sometimes you need several years of post-treatment follow-up for those patients to clearly state that they are deviating from natural acquisition of skills and cognitive improvement. And so going into that filing, we did not have the extent of clinical data supporting the biomarker that we do on 202. So in Duchenne, thinking ahead on that and knowing that there was controversy around microdystrophin within FDA, we leaned in heavily on recruiting as quickly as we possibly could and also putting together the functional data to correspond directly with the biomarker data. And so we know going into the review process that we will need both. So that was not the case on 121. We were really relying on the biomarker premise and that supporting data, but we only had, at the time of filing, six months of clinical data. In this case, for Duchenne, even going back to dose level 1, we will have beyond two years’ worth of data showing durability of effect, and then for DL2, as we mentioned, several of our patients—maybe half the cohort—out past 12 months. So a much different discussion with FDA that will be armed with clinical data showing correlation to what we think are very positive biomarker results that show benefit. So I think that that is probably the main difference between how we see it—between how those programs will go and why we think 202 will be, you know, more successful in providing that kind of data. Steve Pakola: And from the actual results, we also have the benefit of the safety differentiation again. And I think also the greater your data is, the clearer you can believe that there is an actual difference. So I think the 8-and-older data in particular that Curran mentioned earlier, where patients are not just stable, they are actually improving. So I think that goes into the delineation here as well, where that is definitely not something one would anticipate without treatment and even with existing therapy—to have an actual improvement in those tough-to-treat older boys. Yeah, from preclinical data and clinical data, there does not appear to be any particular difference between different serotypes in terms of the rate of integration. So I think that is why, across different programs, that issue is raised—that there is the possibility that, given that there is rare integration, at some point you could have the integration basically go where you do not want it to go. But, no, there is no real strong evidence of a particular predilection. Of course, you look at other factors like where do you give the drug, what is the promoter, what is the target tissue, and those are the aspects that give us a lot of comfort in terms of how this is really walled off from our other bigger opportunities of 314 and 202. Operator: Thank you. Our next question comes from the line of Sean McCutcheon of Raymond James. Please go ahead, Sean. Sean McCutcheon: Hey, guys, thanks for the question. Now that you have announced NAVIGATE, with the Phase 2b focusing on two-step DRSS improvement, how are you thinking about, if at all, the flexibility on that endpoint on binary or ordinal DRSS going into Phase 3, particularly as it relates to pulling out a benefit at one year versus the two-year timeframe where you saw the clearest benefit on two-step improvement at dose level 3 in ALTITUDE? Thanks. Curran Simpson: I think I will let Steve take a shot at that. Steve Pakola: Thanks, Sean. Yeah. We are very pleased with the FDA's openness to looking at different types of endpoints and not just the traditional binary two-step improvement or two-step worsening, and the precedent that is now out there. We and AbbVie decided to stick with the traditional two-step change that has traditionally been used. But I think you raised a great point, and it is one of the positives of the Phase 2b/3 design that we have. Yes, we are starting with the at-least two-step improvement, but we have the flexibility to take into account that data to assess is it more sensitive or, in another way, power per number of patients that you have if you use an ordinal endpoint. And I think it is reasonable to think that that may be the case, because we are seeing benefit on both ends. We are seeing not only a higher rate of patients improving, but also, critically, a higher percent of patients who are not getting worse. So an ordinal endpoint, when we look at things with AbbVie, is certainly an option. Operator: Our next question comes from the line of Yi Chen of H.C. Wainwright. Please go ahead, Yi. Eduardo Martinez-Montes: This is Eduardo on for Yi. Just a quick question going back to 202. I am curious if you have used the CTAP method to apply towards placebo arms in the Elevidys study. Obviously, one of the big gripes with the historical competitors is that the placebo arms do not necessarily track with them. So I am curious if you have actually used that method to see if you predict the placebo arms in these other randomized trials. Steve Pakola: Yeah. So there are different studies out there, of course, and there is always the caveat you have to mention about cross-study comparisons and specifics that might be different. Certainly, when we look at what is out there with Elevidys in terms of CTAP or other models, particularly in the older boys, again, we do not see this evidence of older boys getting better versus just stabilization. So a lot of differentiation tends to be driven by the control data and approach. But, again, I guess I would circle back to it is important to look at CTAP, external matched control, and also the propensity score weighting. So I think when we have our next data updates, it is going to be easier for the clinicians in the broader community to try to compare what has been seen previously. But, again, what we are seeing so far, if we continue to see that, we feel very confident about the differentiation by whichever method that we will be presenting. Thanks so much for answering the question. Operator: Thank you. Ladies and gentlemen, that does end the Q&A portion of our call and conclude today's conference call. Thank you for participating. You may now disconnect.
Operator: Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the Global Ship Lease, Inc. Fourth Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. I would now like to turn the conference over to Thomas Lister, Chief Executive Officer. You may begin. Thank you very much. Thomas Lister: Hello, everyone, and welcome to the Global Ship Lease, Inc. Fourth Quarter 2025 Earnings Conference Call. You can find the slides that accompany today’s presentation on our website at www.globalshiplease.com. As usual, Slides 2 and 3 remind you that today’s call may include forward-looking statements that are based on current expectations and assumptions and are, by their nature, inherently uncertain and outside of the company’s control. Actual results may differ materially from these forward-looking statements due to many factors, including those described in the Safe Harbor section of the slide presentation. We would also like to direct your attention to the Risk Factors section of our most recent annual report on our 2024 Form 20-F, which was filed in March 2025. You can find the form on our website or on the SEC’s website. All of our statements are qualified by these and other disclosures in our reports filed with the SEC. We do not undertake any duty to update forward-looking statements. The reconciliations of the non-GAAP financial measures to which we will refer during this call, to the most directly comparable measures calculated and presented in accordance with GAAP, usually refer to the earnings release that we issued this morning, which is also available on our website. I am joined, as usual, today by our Executive Chairman, George Youroukos, and our Chief Financial Officer, Anastasios Psaropoulos. George will begin the call with high-level commentary on Global Ship Lease, Inc., and then Anastasios and I will take you through our recent activity, quarterly results and financials, and the current market environment. After that, we will be pleased to answer your questions. So turning now to Slide 4, I will pass the call over to George. Thank you, Tom. George Youroukos: And good morning, afternoon, or evening to all of you joining us today. Both the supportive supply and demand trends and heightened geopolitical uncertainty that we have previously highlighted remained firmly in place throughout 2025 and then, in recent days, have clearly ratcheted up even more. Tariffs, the prospect of new port fees in the US and elsewhere, security concerns in and around the Red Sea, and now the situation in Iran shifting from tense to violent conflict—the list goes on. These and other factors have all combined to increase unpredictability and volatility, fundamentally alter and fragment trade patterns, and make supply chains more inefficient as a consequence. At the same time, and perhaps surprisingly, given the noise, aggregate global containerized trade increased in 2025 by 5%, with import volumes to the US also growing year over year. In this environment, demand for midsize and smaller container ships has remained remarkably strong. As a result, we have continued to lock in charter coverage at attractive rates, with $2,240,000,000 in contracted revenue over the next 2.7 years, with 99% contract coverage for 2026 and 81% in 2027. Maximizing optionality remains a key focus for us in order to both mitigate risk and seize value-accretive opportunities. With this in mind, we have transformed our balance sheet, reduced debt, and increased liquidity, all serving to bolster our resilience and agility in the process. This progress has been reflected by the affirmation of our strong credit ratings by leading rating agencies and has also supported payment of a quarterly dividend, which we raised again with a dividend paid in December 2025. On an annualized basis, we now pay $2.50 per common share. Another thing at the front of our minds is strategic but highly selective fleet renewal. We were pleased to announce a transaction in December for three vessels that make our fleet younger and larger, and replace some of our aging cash cows, which we had previously monetized at a cyclically attractive flat price. Tom will discuss this more in a few minutes, but we see these as great ships that are in the post-Panamax sweet spot, acquired at a fantastic price, de-risked right out of the gate, and with compelling upside potential. In short, just the sort of deal for which we keep our powder dry. Taken together, this progress and these successes are possible because we have worked diligently to maximize optionality in order to manage risks and seize opportunities in a cyclical industry and a turbulent world. On Slide 5, we thought that it would be helpful for newer investors, and a nice refresher for our friends who have stuck with us and made money with us over time, to put our current status in some historical context. Over the past five years, we have transformed the business and dramatically increased all of our key earnings and cash flow metrics while simultaneously de-risking our balance sheet. And we have returned capital to shareholders both by way of opportunistic share buybacks and by introducing a dividend, which we have repeatedly upsized as we made progress on delevering and building our contract cash flow. And our share price has responded accordingly, tripling over the period. The profound improvements that you can see here are a testament to a dynamic capital allocation policy, the discipline and patience to stick with it through the cycle, and the ability and confidence to seize opportunities as they arise. We fully intend to continue building on this track record, generating shareholder value by making Global Ship Lease, Inc. even more competitive, robust, and resilient for the long term. With that, I will turn the call over to Tom. Thomas Lister: Thank you, George. Hello again, everyone. Please now turn to Slide 6, where you will see our diversified charter portfolio. As of December 31, we have over $2,200,000,000 in forward contracted revenues, with 2.7 years of remaining contract cover. Throughout 2025 and the first two months of this year, we added 52 charters, including options exercised, for $1,260,000,000 in additional contracted revenues. So it has been a pretty good year. Turning to Slide 7, we take a look at our dynamic capital allocation policy, through which we are able to mitigate the risks and capitalize on the opportunities inherent in the natural cyclicality of our industry, not to mention the so-called black swan events the industry seems now to be confronting on a regular basis. We have delevered our balance sheet to reduce risk and build equity value. Our increased cash position has made us more resilient and capable of handling whatever may arise, from upheaval in the Middle East, to tariffs, to an evolving regulatory landscape, and, of course, to opportunities as they appear. And, as always, a top priority is returning capital to shareholders, and in late 2025, we upsized our dividend yet again to reach $2.50 per share on an annualized basis. We aim to provide investors with a liquid and stable platform from which they can participate in the shipping cycle, maximizing access to upside opportunities while minimizing exposure to downside risks. Slide 8 shows our patient and disciplined approach regarding investments. As you can see from the chart, we have a strong track record of buying ships during market downturns when asset values are low and then contracting them on super lucrative charters to lock in the good times of the upcycles. It is easy to say “buy low,” but it is much more difficult to do, especially as access to capital also tends to be constrained during downturns. That being said, I would underline the following points. First, our capital allocation policy is dynamic and has us well prepared to pounce on value-accretive opportunities when they arise. Second, our relationships throughout the industry give us insight into nascent deal opportunities, often before they are known in the broader market. And third, our combination of long-term focus and balance sheet strength puts us in a position to take a holistic and through-the-cycle view of risk, returns, and option value. Which brings us to Slide 9. On December 1, we announced the purchase of three high-specification, fuel-efficient 8,600 TEU container ships that were built in 2010 and 2011, and had already been fitted with valuable eco-upgrades by their previous owners. This deal was executed on short notice with cash on hand, is de-risked from the get-go, and offers high upside potential in the years to come. Moreover, as these are sister ships to high-demand, high-earning ships already in the Global Ship Lease, Inc. fleet, we have the added advantage of extensive firsthand knowledge of their operating and commercial profiles. By purchasing the ships with below-market charters attached, we were able to achieve an aggregate purchase price of $90,000,000, which is not far off what a single ship would cost charter-free, meaning this is essentially a three-for-the-price-of-one deal. Added to which, their aggregate scrap value alone is around $40,000,000, and long-term historic average charter rates for ships like these are over $40,000 per day. So we are looking at just the sort of low-risk, high-upside-potential deal we like very much. And there is a nice symmetry in that we funded this fleet renewal almost to the dollar with proceeds from the sale of much older, smaller ships that we had monetized at cyclically high values during the course of 2025. With that, I will pass the call to Anastasios to discuss our financials. Anastasios? Anastasios Psaropoulos: Thank you, Tom. Slide 10 shows our finance highlights in 2025. I would like to emphasize a few key takeaways. Full-year earnings and cash flow were up compared to 2024. Our cash position is $637,000,000, of which $164,000,000 is restricted. The remainder ensures that we can fully cover our covenants, working capital needs, and manage the potential financial implications of geopolitical issues, which seem to be arising with increasing frequency and intensity. It also provides dry powder from a position of almost net zero debt, both for CapEx to keep our existing fleet commercially relevant and for disciplined investments in fleet renewal when the right opportunities emerge. And all of this without compromising our ability to reliably pay a healthy and recently enlarged dividend. The latest $85,000,000 refinancing has pushed our average debt maturity to 4.5 years and our blended cost of debt down to 4.49%. We also realized a $46,200,000 gain from the sale of four older ships, and we have strong credit ratings from the leading credit agencies. Slide 11 highlights our progress in delevering our balance sheet and building equity value. The graph on the left shows our lower outstanding debt, which stood at $950,000,000 at the end of 2022, was under $700,000,000 at the end of 2025, and is on track to be well below $600,000,000 by the end of 2026. The graph on the right tells a similar story, but with broader context. We have worked diligently to reduce our leverage from 8.4x in 2018 to 0.5x today. These comprehensive efforts are shown further on Slide 12, where we have lowered our borrowing costs from a blended 7.56% in 2018 down to 4.49% in 2025. We have also maintained low breakeven rates through multiple years of inflation by aggressively reducing our interest expense. This keeps us both competitive and resilient in any market environment. With that, I will turn the call back over to Tom to discuss the market and our fleet. Thomas Lister: Thanks, Anastasios. On Slide 13, we put our fleet in context, restating our focus on midsize and smaller container ships between 2,000 TEU and 10,000 TEU. In contrast to the really big ships, which require specialized port infrastructure and tend to be constrained to the big East-West “mainlane” trades, midsize and smaller container ships are highly flexible and can be employed worldwide without being reliant on or captive to any industry or country. As such, they provide the liner companies, our customers, with valuable optionality at a time when trade patterns are in flux. And, by the way, it is often overlooked that roughly three-quarters of containerized trade by volume already takes place in the non-mainlane North-South and intraregional trades, like intra-Asia. We will discuss this further over the coming slides. On Slide 14, we turn to the situation in the Middle East, a subject that is, of course, top of mind for us as it is for many across the shipping industry and beyond. We will not pretend to be geopolitical analysts or forecasters here, but we can provide some facts and context. Fundamentally, two key Middle East shipping chokepoints, the Red Sea and the Strait of Hormuz, are now more or less closed at the moment. First, the Red Sea and Suez Canal, through which around 20% of containerized trade volumes would normally transit. Here, the initial green shoots of cautious optimism have been decisively cut back, with the Houthis calling for renewed vessel attacks in the southern Red Sea. Even before this setback, a large majority of transits continued to go the long way around, around the Cape of Good Hope, which absorbs around 10% of global fleet supply in the process. Recent updates suggest that this is likely to remain the case for the time being. The new chokepoint to address is the Strait of Hormuz, through which shipping traffic has pretty much ceased since the outbreak of hostilities, with multiple major regional ports suspending operations in part or in full. While it is more famously a gateway for global energy flows, a normal year would also see between 3%–4% of global container volumes move through the Strait of Hormuz, serving ports such as Jebel Ali in Dubai, which is the ninth-busiest port in the world, as well as Doha, Abu Dhabi, and Dammam in Saudi Arabia. While the overall volumes themselves are not huge, the knock-on effects are much bigger given, among other things, the importance of Jebel Ali as a transshipment hub and the challenges of serving Gulf destinations by alternative routes. So this is a big deal. Container supply chains, which were already complex, now have additional challenges and inefficiencies to confront. We will see how the liner companies adapt, but we are, of course, in the very early days of all this. In summary, the situation is highly dynamic, and the longer-term implications are unclear. However, the paramount concern for the industry amid the turmoil is, and must continue to be, seafarer safety. Turning to another source of disruption, on Slide 15 we look at tariffs. While the sands keep shifting on this issue, looking back to February, tariffs under the first Trump administration could be at least directionally instructive in how things develop moving ahead. As expected, the tariffs in 2019 did indeed result in a reduction in direct trade between the US and China. Perhaps unexpectedly, however, there was an increase in demand for midsized and smaller container ships during this period as supply chains shifted and decentralized. Intraregional trade, particularly intra-Asia containerized trade volumes, rose. Trade networks grew more complex and more inefficient, and those conditions tend to be supportive of earnings for providers of shipping capacity like Global Ship Lease, Inc. Slide 16 is where we cover some of the other geopolitical and regulatory trends affecting the shipping world. This slide is backward-looking, as who knows what other surprises 2026 has in store. USTR port fees were introduced by the US in October 2025, and while they caused some disruption, the industry was able to adapt to the new circumstances given the lead time with which they were announced. However, China’s port fees did not offer the same lead time and were much more disruptive as a result. Fortunately, the port fees from both countries were suspended until the fourth quarter of 2026. While these policies and their implications have been deferred for now, the situation was a reminder of how fast things can change and how optionality is more valuable than ever within the current global framework, both for us and for our customers. Notably, the White House’s recently unveiled Maritime Action Plan points to the possibility of future such port fees. Along with the rest of our industry, we will certainly closely monitor future developments on this front. The IMO’s net zero framework faced a similar delay to 2026. This decision is expected to provide a boost to existing conventionally fueled vessels such as those in the Global Ship Lease, Inc. fleet. Amidst this heightened geopolitical uncertainty, we will stay prudent, disciplined, and agile, doing our best to maintain and to leverage the optionality at our disposal. On Slide 17, we highlight supply-side dynamics and scrapping trends, where little has changed from last quarter. Both idle capacity and scrapping activity have remained near zero. With minimal slack in the system due to fragmented and inefficient supply chains, the charter market rate environment has remained strong, and charterers have proven willing to pay attractive rates even for late-in-life ships. Unsurprisingly, owners have responded by keeping those ships on the water and profitably in service for as long as possible. Slide 18 shows the order book, which has grown meaningfully in recent years, but importantly, mostly in the larger vessel segments where Global Ship Lease, Inc. does not participate. For ships over 10,000 TEU—in other words, the really big ships—the orderbook-to-fleet ratio stands at 55.5%, which drives the overall orderbook-to-fleet ratio to almost 35%. However, for the size segments below 10,000 TEU, the ones relevant to Global Ship Lease, Inc., that number halves to 16.9%, with deliveries spread over the next five years or so. In addition to the smaller order book, if we were to assume all ships 25 years or older were scrapped through 2030, the sub-10,000 TEU fleet would actually shrink more than 6%. If supply remains low and rates remain high, we will be happy to continue locking in coverage at attractive rates. If, on the other hand, the market were to experience a normalization or even a downturn, we would expect the arrival of new ships to be offset, in large part at the very least, by a sharp rise in scrapping activity. Similarly, we would expect such a scenario to yield interesting investment opportunities for a patient and well-capitalized owner such as Global Ship Lease, Inc. We take a look at the charter market on Slide 19, and it is important here to remember that our daily breakeven rate is just over $9,800 per vessel per day, which is well below market rates. In these supportive conditions, we have been hard at work locking in as much charter coverage as possible, to the tune of $2,240,000,000 over the next 2.7 years or so, providing good forward visibility and insulation against any downside turbulence. And on that note, I will turn the call back to George on Slide 20. George Youroukos: Thank you, Tom. To summarize, we have continued building our forward visibility on cash flows, now with $2,240,000,000 in contract revenues over 2.7 years, with 99% coverage for 2026 and 81% for 2027. Optionality remains a core focus. Even with the deferral, for the time being, of US and China port fees and of the IMO’s net zero framework, the geopolitical and regulatory environments remain volatile, and we are constantly at work to make Global Ship Lease, Inc. more resilient, robust, and able to capture opportunities. The current situation in the Middle East and around the Strait of Hormuz, of course, adds more complexity to a situation that was already highly complex and dynamic. The supply chains have become fragmented, decentralized, and increasingly inefficient, which drives further demand for midsize and smaller container ships. We have successfully delevered, pushed down our cost of debt, extended our average debt maturities, and lowered our daily breakeven rates to well below market rates. Our fortress balance sheet, which brings us close to being net-debt neutral, positions us well for the opportunities and challenges of the market. We increasingly look to renew our fleet in a disciplined, prudent manner to support earnings now and into the future. And we always look to return capital to shareholders. To this end, we increased our quarterly dividend in 2025, now up to $2.50 per share on an annualized basis. Finally, looking back on the last five years, it is gratifying to see the credit rating agencies acknowledge the progress we have made. Much more gratifying still is to see the stock price triple over the same period, and we will do our best to ensure that positive momentum continues. Now, with that, we will be very pleased to take your questions. Thank you. Operator: We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star then the number one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. Our first question comes from the line of Liam Burke with B. Riley Securities. Liam Burke: Yes, thank you. Hi, George, Tom. George Youroukos: Hi, Liam. Liam Burke: Hello. This is probably bad timing for this question, understanding the geopolitical situation both in the Red Sea and the Strait of Hormuz. But the gap between charter and freight rates is staying wide. All things being equal, is there anything that you would anticipate to have those movements converge, in terms of freight and charter rates converging? Thomas Lister: Good question, Liam. I will have a crack at it and no doubt George will add to it. It is very difficult to comment on the freight market side of that equation, which is obviously much more responsive to day-to-day events, given the contract cover is much more limited in terms of duration. However, I can comment on the charter side of things. What we are seeing is that appetite from charterers remains to lock in charters at attractive rates. So, at least for the time being—and it is very difficult to predict anything in today’s slightly crazy world—but for the time being, we are seeing our customers looking to continue to lock in charters at high rates for meaningful durations. Of course, it is worth highlighting at this stage that 99% of our positions for 2026 are already contracted, and over 80% for 2027 are already contracted, but broadly speaking, there is still charter market appetite. Liam Burke: Great. Thank you. Your leverage ratios are low. You pay a very healthy dividend through the cycle. What about the cash, and how do you see allocating it this year and next year? Thomas Lister: Sure. In this cyclical industry, the way to make genuinely attractive returns for our shareholders is making sure that we have cash to move on opportunities—ideally at the bottom of the cycle, when no one else has capital. That is when you make the most money for shareholders within shipping. So holding that cash on our balance sheet, we see as super valuable in that respect. In fact, the three ships that we mentioned during the course of the call, these three 8,600 TEU ships that we acquired at the tail end of last year, are a perfect representation of that. We went from zero to completion within about 30 days or so on that deal, and you can only do that if you have capital at your disposal, which, happily, we did. Liam Burke: Great. And I apologize for asking such a specific question, but Anastasios, SG&A jumped considerably. Is there a one-timer in there, or is that just another level to anticipate? Anastasios Psaropoulos: No. It has to do with the valuation of the incentive plan that we have, calculated in the order we have calculated. It is a non-cash item, and you could see much more detail in our upcoming 20-F. Liam Burke: Great. Thank you, Anastasios. Thank you, Tom. Thomas Lister: Pleasure, Liam. Thanks a lot. Operator: And, again, if you would like to ask a question, press star then the number one on your telephone keypad. Our next question comes from the line of Omar Nokta with Clarksons Securities. Your line is open. Thank you. Omar Nokta: Hi, guys. Good afternoon. Thank you for the update. You obviously touched on this, Tom. I think—Hi, Tom. I think you talked about this and maybe touched on it also in response to Liam’s question, but just about what is going on in the Middle East and the turmoil and whatnot. There has been clearly a lot of focus on the impact on energy and exports out of the region. But in terms of containers—and presumably it is a lot more of an import market than export, I would think—but just in general, what has been the impact? We have seen a spike in different commodity prices, and we have seen energy shipping rates go through the roof. What have you seen here over the past few days with respect to your business? Have you seen any shift in the freight market dynamics or time charters? Thomas Lister: I would say not in time charters. The appetite remains, as I mentioned to Liam, from charterers at attractive rates and for attractive durations. I think in the freight markets, the industry is just struggling to adjust to this massive curveball. Although only 3%–4% of containers actually flow into or out of the Persian Gulf, there is a tremendous volume actually transshipped there, particularly in Jebel Ali. So although the overall numbers are comparatively modest in percentage terms as far as global trade is concerned, the ramifications through the liner company networks are considerable. I think one analyst calculated that roughly 10% of the global fleet actually under normal circumstances calls at ports within the Persian Gulf. So, although the volumes in terms of import and export are not huge, the implications for liner companies’ networks are much bigger than that, and that confusion and complexity breed disruption in the networks, which breeds inefficiency, which breeds the necessity for more ships. That is what we are seeing so far, but it is very early days. George, do you want to add to that? George Youroukos: Yes. What I would add is that we see clearly the statement of Houthis that they will resume their attacks in the Red Sea, so the Red Sea is out of the question right now. There was a process where planners were returning slowly, but right now this is not the case. And then the second thing—we should see this very similar to COVID. There is going to be a big region that is not going to be serviced by ships until this conflict is over or at least this conflict is to a point where ships can cross the Hormuz. There is going to be a big starvation of cargos in the region. As you can imagine, this is going to create disruption, and I think it will lead to raising the freight rates at the point when passing through the Hormuz is possible but not clean-cut as it was before the war. I think the freights are going to go up for the ships that are going to go through, and once the Hormuz is open completely, there is going to be a lot of cargos that need to go that have not been going for a while, and hence backup trade in the ports. They are going to be waiting, and all of that—a similar mini situation over the region, a mini situation of COVID, I would imagine. So if you ask me, I think the earnings of liner companies should increase for a period of time, and the fleet is going to tighten further for a period of time again. Omar Nokta: Thanks, George. That is quite helpful. And thanks, Tom. You answered the second question in there for me, so thank you. And then maybe just one final quick follow-up on the balance sheet. I noticed a big jump in the long-term restricted cash, going from $23,000,000 to $113,000,000 quarter over quarter. Is that actual restricted cash due to a financing, or is that just a long-term bank deposit? Anastasios Psaropoulos: It is actually, Omar, a revenue received in advance. Like the previous time that we had in our account, we have received a revenue received in advance, which has to be restricted, and it will be released following the service of the charter. Omar Nokta: Okay. And how long of a duration is that? Anastasios Psaropoulos: If I remember correctly, it is three years. Omar Nokta: Okay. Okay. Thanks, Anastasios, and thanks, guys. I will turn it over. Thomas Lister: Omar, I think, just to correct, I think it is actually five years. Five years. Omar Nokta: Okay. Thank you. Operator: There are no further questions at this time. I would like to turn the call back over to Thomas Lister for closing remarks. Thomas Lister: Thank you very much, operator, and thank you, everyone, for joining today’s call. We look forward to regrouping for our 1Q earnings once they are ready. Stay safe. Thanks for joining. Bye-bye. Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining in. You may now disconnect.
Operator: Good day, ladies and gentlemen, and welcome to the Miller Industries, Inc. Fourth Quarter 2025 Results Conference Call. Please note, this event is being recorded. And now at this time, I would like to turn the call over to William G. Miller at Miller Industries, Inc. Please go ahead, sir. William G. Miller: Good morning, everyone. And thank you for joining us for our fourth quarter and full year 2025 earnings call. I want to begin by thanking our employees around the world for dedication throughout the year. Our results and strategic progress reflect the commitment and passion of our team, our suppliers, our customers, and our shareholders. As always, our remarks today will include forward-looking statements. Actual results may differ materially. Please refer to our SEC filings and the Safe Harbor statement included in today's presentation. I would like to start with a brief overview before I hand the call over to Deborah L. Whitmire, who will review our results in greater detail. We were pleased to deliver a fourth quarter that led to generating full year revenue in line with our revised expectations despite a challenging industry environment. I am incredibly proud of the way our team rose to the challenge this year, focusing on operating discipline in the areas of the business within our control. We have over 1,500 employees across Tennessee, Pennsylvania, France, the United Kingdom, and Italy. And our footprint gives us unmatched reach, capability, and reliability. During the year, we made many difficult but necessary decisions to protect the long-term health of the business. These included strategically decreasing production in response to elevated field inventory in our North American distribution network, rightsizing our cost structure for the current environment, and strengthening our supply chain to mitigate the impacts of tariffs. We also achieved meaningful milestones, completing the acquisition of OMARS in an effort to expand our European footprint and take advantage of the strong demand we are seeing in the region, particularly for our heavy-duty products. More on that shortly. Our core philosophy remains exactly as it has been since day one. Miller Industries, Inc. has the best people, the best products, and the best distribution network in the towing and recovery industry. That philosophy is the backbone of Miller Industries, Inc.'s 35-year history and continues to position the company for future growth. I want to directly acknowledge our teams across the United States, Europe, and the United Kingdom, who delivered through a challenging market and delivered recalibration of production. Their execution enabled us to finish the year with momentum and enter 2026 from a position of strength. I will now turn the call over to Deborah L. Whitmire, who will provide an update on our financial results in more detail, before returning with some more specific thoughts on our markets in 2026, capital allocation priorities, and guidance. Deborah L. Whitmire: Thank you, Will. Before I begin, I would like to note that we closed the acquisition of OMARS on December 2, so our fourth quarter results only reflect approximately one month of contribution from OMARS. For the fourth quarter, revenue was $171,200,000, down 22.9% year-over-year as expected. This decline reflects our decision earlier in the year to reduce production and allow distributor inventories to return to historically normalized levels. Gross profit was $26,500,000, or 15.5% of sales, and diluted EPS was $0.29 per share. We saw sequential improvement in retail order activity late in the quarter, and that momentum has continued into 2026 consistent with our expectations. As a result, we have already begun to increase production levels at all the U.S. facilities to meet this demand. For the full year 2025, revenue was $790,300,000, down 37.2% from 2024. Gross profit was $120,400,000, or 15.2% of sales, and net income was $23,000,000, or $1.98 per diluted share. With distributor inventory now back to historical levels, we have greater visibility into retail demand and are operating with an improved production cadence. Our SG&A expenses increased on a year-over-year basis for both the fourth quarter and full year 2025 primarily due to one-time expenses related to the voluntary retirement program in the third and fourth quarter, and as we executed planned workforce transitions across the organization. Also, transaction and integration costs related to the OMARS acquisition, which represent an important investment in our European growth strategy, and higher stock compensation expenses to retain key leadership talent and further align the executive team to the interest of shareholders. These were all planned and strategic investments and expenses that advance our future growth strategy. Now I will turn the call back to William G. Miller to discuss our markets and our outlook for 2026. William G. Miller: Thank you, Debbie. In the domestic market, we now see normalized distributor inventory, steadier retail demand, and improved sales order entry. As we move into 2026, we expect production levels to rise methodically throughout Q1 and Q2 to match this demand recovery. Our export business remains a major, and the 2026 outlook is very encouraging. Three drivers stand out in particular: consistent European demand; growing demand in other international markets such as Australia, Japan, Mexico, Indonesia, and many others; and a robust pipeline of global military RFQs, which we will discuss further later in the presentation. These should provide a strong multiyear growth tailwind. In the acquisition of OMARS and our expansion of GEA, both will play large roles in this expected growth. Our integration of OMARS, Italy's premier towing equipment manufacturer, continues to progress extremely well. As we have previously shared, we expect our OMARS acquisition to be accretive in the first year. OMARS provides Miller Industries, Inc. with new sales, a stronger brand presence in Europe, and a strategic manufacturing and distribution hub in a key growth reach. OMARS is critical to our long-term growth in the European market. This acquisition should also increase U.S. production levels to supplement OMARS integration capacity and equip them with the necessary resources and scale to capitalize on the strong demand for their products. At Zuzain in France, our €8,000,000 expansion is on schedule and is anticipated to double their heavy-duty integration capacity. We are expected to complete the expansion project by mid-2027. Meanwhile, at Boniface in the United Kingdom, we are investing in production efficiencies to increase capacity and support the growing need for both light- and heavy-duty products. Demand in Europe remains strong, and to support this, our U.S. operations, especially Uttarwat, increased heavy-duty production capabilities. We will supply Xizhe, Boniface, and OMARS with reduced lead times, consistent quality, and increased production volumes. Earlier, I mentioned our robust pipeline of military RFQs. We began 2026 with more than $150,000,000 military, with production scheduled to begin in 2027, with the majority of revenue to be recognized in 2028 and 2029. We are also actively engaged in a substantial pipeline of additional military RFQs. This level of military activity is unprecedented for our company and represents a major long-term growth factor. To service future demand, we are beginning one of the most significant projects in our history: a 200,000-plus square foot addition to our Oodawa facility. This estimated $100,000,000 investment should unlock new capacity, streamline heavy-duty workflow, and enhance our manufacturing efficiencies. With more than $150,000,000 in military commitment secured and additional global RFQs underway, the new facility will be key to producing global, high-volume, defense-grade recovery vehicles as well as meeting increased demand for our global export markets while maintaining the ability to service our North American customer base. We anticipate the new facility will be production ready in late 2027. As we continue our strong cash generation, and debt continues to decline, we anticipate funding the majority of our expansion organically through operating cash flow over the next several years. We remain disciplined in how we allocate capital, focusing on five key priorities: paying a consistent quarterly dividend, which the Board of Directors increased 5% to $0.21 per share this quarter; debt reduction, which has been reduced to $20,000,000 in January 2026 through our diligent reduction in working capital; share repurchases, including $2,200,000 in 2025; selective M&A opportunities; and ongoing investments in automation, innovation, people, and capacity. We are extremely proud that we have paid our dividend for 61 consecutive, and in 2025, we returned approximately $15,100,000 to shareholders between our dividend and share repurchase program. This balanced approach strengthens the company while also returning value directly to shareholders. For 2026, we expect revenues between $850,000,000 and $900,000,000. We also expect that performance will accelerate into the second half of the year as manufacturing activity increases throughout the first and second quarters and product mix normalizes. We anticipate that revenue will approach $250,000,000 per quarter by the 2026. Additionally, as product mix shifts to a historical percentage of manufactured product and chassis, we would also expect gross margins to return to historical levels in the mid-13% range for the full year. We look forward to meeting with investors to speak about these exciting developments throughout 2026 at the Three Heart Advisors Conferences in New York, Chicago, and Dallas, at D.A. Davidson's Industrial Conference in Nashville, and additional non-deal roadshows to be scheduled. We always welcome continued dialogue with our shareholders. In closing, I want to emphasize that 2025 was a difficult year, and our team managed multiple challenges extremely well. We now enter 2026 with normalized distributor inventories, stronger retail demand visibility, a growing international platform, major military momentum, a significant expansion of our U.S. manufacturing footprint, and a strengthened balance sheet. We are exceptionally well positioned for long-term global growth, and I am proud of the work our team has done to get us here. As always, I would like to thank our employees, customers, suppliers, and shareholders for their ongoing support of Miller Industries, Inc. Thank you again for joining us. Operator, please open the line for questions. Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using a speakerphone, please select the handset before pressing any key. First question comes from Michael Shlisky at D.A. Davidson. Please go ahead. Michael Shlisky: Absolutely. Good morning, guys. So help me understand, yes. Hey, guys. So I guess I am, I guess I am trying to figure out the margin story first. I would just say that the gross margin expectation for 13% range is better than you have seen in the past for the mix that you are expecting. I am trying to make sure that the cost suggestions that you have undertaken are kind of having the desired effect. Or at least that we might see on the operating margin line an improvement when you consider your cost reductions, you know, now that they are behind you. Or is it better or worse than it has been in the past? It is what I am trying to figure out here. I believe they are normalizing. William G. Miller: I think our margins are better than they were pre-COVID levels in 2019, where we saw margins in the mid-12% to high-12%. But I think you will see that return back to, on an average year, if you look at 2023 and 2024, in those mid-13s, although we did have some fluctuations quarter to quarter due to chassis availability and timing of shipments of chassis. But I think over a year period, you are going to see them normalize back in the mid-13% range. Michael Shlisky: So the cost reductions that you have had, the people cost, etcetera, that you have done over the last 12 months, they have not had any impact on margins? Or I am just trying to figure out whether you are seeing a better margin profile. Maybe it is operating margin rather than gross. Do you feel you are going to get the benefit that you are expecting on the margin end from all those cost reductions? William G. Miller: Well, most of our people reduction was hourly employees that were focused on the reduction or lower levels of production. As we start to ramp back up, we will intentionally add some people back. We did have some retirements that will help on the SG&A level. However, some of those employees have also been replaced as we moved on, and we progressed to the had plans to replace them throughout the process. Michael Shlisky: Okay. That makes sense. I get it. That is totally fair, Will. And then the top line outlook, I think back a year, what happened back then, you know, we on our end were blindsided by some of the, you know, how fast tightened. I think some of that even surprised you in the swiftness of how the market changed and things that happened in 2024. So the outlook you have now for 2026 at this time of the year, do you feel like you have got a better sense of the confidence in this time around than you had this time last year? What has changed, etcetera, that makes you feel like you have got the $850,000,000? William G. Miller: I think our confidence level is higher this year. We saw an abrupt change and downward projections mid-year last year, and really a couple of things. We have utilized the technology that we have internal to be able to better analyze and project what our distribution needs and retail activity is going to be on an average basis. We have a lot more—we had the data, but actually putting it into a format to be able to project what we think future needs will be. Also, distribution inventory is back to, as we said, historical average levels. We are starting to see that order intake pick back up. And really what we are looking at is retail activity. Retail activity or retail demand from our distributors to the end users was consistent throughout all of 2025, and we see that consistency moving right back into 2026. So, really, what we are projecting is that we are just ramping back production to meet the average retail demand levels that we saw consistent through 2025 and into 2026 so far. Our confidence level is pretty high. Michael Shlisky: And so you would characterize the mix between the chassis-plus-tow sales and the tow-only kind of packages as more normalized in 2026 and in your current outlook? William G. Miller: Absolutely. Michael Shlisky: And does that mean that is 50/50 or some other kind of fraction? William G. Miller: No. It is not one-for-one, as you realize, that we do have distributors that provide their own chassis—what we call customer-supplied chassis. You also have municipalities that drive their own chassis along with all of our export product and our sales over in Europe. So it is not one-for-one, but it is returning to a normalized level. I mean, every tow body that we manufacture does have to have a chassis to create a tow truck, but that does not mean that we sell every chassis with the body. Michael Shlisky: Right. Okay. Just switching over to OMARS real quick. You have an outlook for accretion in 2026, if I am not mistaken. But it sounds like your description of it, Will, was more that OMARS is going to help in a lot of other ways, help your U.S. capacity, help your European business with some synergies and cross-selling and some cross, I guess, cross-manufacturing. Your comment that it was going to be accretive just based on, you know, just layering in the existing OMARS P&L, it is something that there is a lot more accretion that could happen once the synergies start to roll. Is that a verification? William G. Miller: Yes. It is more of a long-term play. Right? Currently, you are going to see their P&L drop in dollars, and we do believe that they will be accretive in year one. However, moving forward, we are now focused on, in our European facilities, what product we should build where and what is most successful. And also looking at purchasing throughout those three facilities and how to best purchase product. And then augmenting OMARS’ heavy-duty production, which they make a great heavy-duty product, but also giving them additional production capabilities in the United States so we can export to them to increase their sales capacity, similar to what we are doing with Xizhe, as both Xuzhou and Boniface currently use about 50% of their heavy-duty product manufactured in the United States that they sell in the European market. So we believe there is a significant level of synergies other than bringing on just their additional revenue to our organization. Not to mention they have an amazing state-of-the-art factory with some great capacity and capabilities as well. Michael Shlisky: Sounds great. I appreciate all the color. I will pass it along. Thank you. William G. Miller: Thank you, Mike. Operator: Thank you. We have no further questions. I will turn the call back over to William G. Miller for closing comments. William G. Miller: Thank you. I would like to thank you all again for joining us on the call today, and we look forward to speaking with you on our first quarter conference call. If you would like information on how to participate and ask questions on the call, please visit our Investor Relations website at millerind.com/investors, or email investor.relations@millerind.com. Thank you. May God bless you, and may God bless our troops. Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.
Operator: Greetings, and welcome to the Olaplex Holdings, Inc. Fourth Quarter 2025 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Oriolo, Vice President of Investor Relations. Thank you. You may begin. Michael Oriolo: Good morning, everyone. Welcome to our fourth quarter fiscal 2025 earnings call. Joining me today are Amanda Baldwin, Chief Executive Officer, and Catherine Dunleavy, Chief Operating Officer and Chief Financial Officer. Before we start, I would like to remind you that management will make certain statements today are forward-looking, including statements about the outlook for the Olaplex Holdings, Inc. business and other matters referenced in the company's earnings release issued today. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied by such statements. Additional information regarding these factors appears under the heading “Cautionary Note Regarding Forward-Looking Statements” in the company's earnings release and the filings the company makes with the Securities and Exchange Commission that are available at www.sec.gov and on the Investor Relations section of the company's website at ir.olaplex.com. The forward-looking statements on this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Also during this call, management will discuss certain non-GAAP financial measures, which management believes can be useful in evaluating the company's performance. The presentation of non-GAAP financial measures should not be considered in isolation as a substitute for results prepared in accordance with GAAP. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the company's earnings release. A live broadcast of this call is also available on the Investor Relations section of the company's website at ir.olaplex.com. Additionally, during this call, management will refer to certain data points, estimates, and forecasts that are based on industry publications or other publicly available information as well as our internal sources. The company has not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Furthermore, this information involves assumptions and limitations, and you are cautioned not to give undue weight to these estimates. For today's call, Amanda will start by providing highlights of fourth quarter and fiscal year performance and discuss the progress we have made on our strategic areas of focus. Then Catherine will discuss our financial results and 2026 outlook. Following this, we will turn the call over to the operator to conduct the question-and-answer session. With that, I will now turn the call over to Amanda. Amanda Baldwin: Thank you, Mike, and good morning, everyone. I am pleased to be here today to share that for the full year of 2025, we delivered on our financial expectations while advancing our transformational goals. Net sales were flat at $423 million and adjusted EBITDA margin was strong at 22.2% even as we invested to strengthen our foundation for the future. The year ended on an encouraging note, with fourth quarter revenue growth of 4% and adjusted EBITDA outperforming expectations. I am incredibly proud of this team and feel that we are well on our way in our transformational journey to deliver long-term sustainable growth built on the incredible scientific foundation that is at Olaplex Holdings, Inc.'s core. As a reminder, in 2024, we focused on the research and foundational work needed to build a brand and a business at a global scale. We began the development of our innovation and marketing functions, reconnected with our pros and our partners, designed new business processes, and assembled an experienced and passionate executive team. In 2025, we introduced our Bonds and Beyond vision to create a foundational health and beauty company powered by breakthrough innovation that starts with and is inspired by professional hairstylists. We moved from planning to making that vision a reality across three priorities: generating brand demand, harnessing innovation, and executing with excellence. As I reflect on where we are today, we have reclaimed our rhythm, sharpened our tools, and solidified what we believe is a stable investment model. Now we step into a new chapter focused on optimizing our investments and moving faster with both purpose and precision. From the start, we have called out that transformation is not linear, and that remains the case. But we believe that we have made great progress toward delivering long-term value creation in an industry that is healthy and growing. Our industry remains vibrant. According to Euromonitor, premium hair care is forecasted to grow at 6% to 7% through 2029. We believe hair care is in the early innings of premiumization, with premium hair care representing only 20% of the overall hair care market. As beauty, health, and wellness continue to converge, we believe Olaplex Holdings, Inc.'s scientific capabilities, new brand positioning, and transformational agenda position us well to participate in and get back to leading the premium hair care market. As I just mentioned, to capture this objective, we introduced our Bonds and Beyond vision and outlined three strategic priorities for 2025: generate brand demand, harness innovation, and execute with excellence. I am pleased to share progress against each. Our first priority in 2025 was to generate brand demand. To achieve this, we launched a comprehensive new visual identity supported by a 360-degree marketing engine. We successfully refreshed the brand across every touch point, physical and digital, in an effort to ensure that our market presence reflected both our scientific credibility and the emotional resonance of our professional heritage. This transformation included a revamped website featuring elevated brand storytelling, refreshed in-store visual merchandising across our key retail and professional partners globally, and a revitalized content strategy spanning social media, influencer partnerships, and education. The results of this relaunch were clear and measurable. According to our brand health tracker at the end of 2025, brand awareness rose 7%, sentiment improved 3%, and purchase intent trended upward against our pre-launch baseline. We saw significant gains in key brand associations, specifically, we saw improvement in Olaplex Holdings, Inc. as essential to my beauty routine, and Olaplex Holdings, Inc. as containing special ingredients. Beyond sentiment, we significantly expanded our share of voice. In 2025, we increased earned media value by 14% year over year, engaged with nearly 4,000 creators, and generated approximately 2 billion impressions across our 2025 campaign. Our commitment to a pro-first philosophy remains at the center of the flywheel of our business. We moved beyond simple outreach to execute a multilayered strategy designed to put the pro back in the picture. A key highlight was our market blitz program. By deploying teams across seven high-density markets, we reestablished direct, high-touch relationships with stylists. These markets outperformed the baseline, driving average sell-through mid-teens higher on a percentage basis in the 60 days following an activation. In an effort to foster long-term retention, our newly scaled professional education team overhauled nearly 60 core educational assets, modernizing our curriculum to be modular and digital-forward. By integrating these assets with our field efforts, we are providing the professional community with a platform designed to reinforce our position as their most trusted partner. With our new visual identity and 360-degree marketing engine now fully operational, we believe the foundational work of our brand relaunch is complete. As we transition into 2026, our focus shifts from building the engine to high-performance execution. We are committed to raising the bar with every launch, better optimizing our investments, and remaining agile as we continue to sharpen our messaging in a dynamic market. Our second priority for 2025 was harness innovation. Over the past two years, we have worked to systematize our go-to-market engine, aiming to transform our scientific heritage into a consistent pipeline of high-impact launches. We aim to capture the unmet needs for both pros and consumers with the right product, timing, and global support. The potential of this engine was on full display this year, Olaplex Holdings, Inc. delivered four of the top five prestige hair care launches in the industry, according to Circana. To further fuel our long-term trajectory, we made the strategic acquisition of Pervala Bioscience. Pervala specializes in transformative, bio-inspired technologies that can be utilized to enter additional verticals across health and beauty. With a highly curated portfolio of only approximately 30 SKUs, we see significant white space ahead of us. Our third priority for 2025 was to execute with excellence. We have built out the people, processes, and tools we believe are needed to drive executional excellence and efficiency on a global scale. We developed integrated business planning, established clear KPIs, and implemented data analytics designed to improve our speed and outcomes. Additionally, we executed an international realignment that aims to ensure consistent execution globally and prioritizes investments of both time and dollars in markets with the greatest growth potential. We built a strong culture and believe we have hired the right talent that is committed to our vision and driving results. In conclusion, we continue to refine our approach as part of our transformation. Putting in place all the building blocks I have just discussed has already led to sales and sell-through metrics moving in the right direction. After a 35% decline in 2023, and an 8% decline in 2024, we stabilized sales in 2025. While for the full year of 2025, sell-through remained down, we exited the year with improving trends. In fact, in December, we recorded positive sell-through in key accounts reflecting the cumulative efforts of our strategic priorities over the year. The team and I are energized by and confident in the road ahead. So now turning to 2026. In 2026, we will enter a new chapter of our transformation. We have moved beyond the heavy lifting of a strategic recalibration and process building. Today, our focus shifts from our successful initial implementation to crisp execution, optimization, and the deliberate acceleration of our Bonds and Beyond strategy. We believe our foundational pillars are now firmly in place: a 360-degree marketing engine, a robust innovation pipeline, a realigned international strategy, and a strong leadership team. With our core infrastructure stabilized, productive partnerships, and the professional community reengaged, we are ready for our next phase. To drive this next phase, we have identified three strategic priorities for 2026 that continue to align with our Bonds and Beyond framework. First, energize our hero products. Second, fuel science-based innovation. And third, expand our diversified, scalable, go-to-market model. Let us dive into each of these. Our first priority is to energize our hero products. This year, we are utilizing our 360-degree marketing engine to maximize the productivity of our core franchises, which remain the most significant contributors to our brand health and overall volume. As I mentioned earlier, in December, we recorded positive sell-through in key accounts, reflecting the cumulative efforts of our strategic priorities over the year. In 2026, we intend to build on our sell-through momentum by positioning our heroes as the definitive choice in the market. We are upgrading and expanding our core assortments by capitalizing on what makes Olaplex Holdings, Inc. unique, specifically our proprietary claims and compelling proof of performance. We intend to continue to elevate our science-meets-style positioning through targeted marketing support and elevated storytelling. To support these assortments, we are focused on turning our brand awareness into consistent, repeatable conversion. Our second priority is to fuel science-based innovation. Olaplex Holdings, Inc. has always been about bringing technical solutions to real-world hair concerns, and in 2026, we are focused on doing that with even greater emphasis. This year, in addition to our heroes, we are continuing to build out our foundational portfolio. Our R&D and new product development processes have been refined to quickly prioritize innovation that addresses specific, meaningful consumer and professional needs. Our disciplined approach allows us to pursue growth in new verticals that are a natural extension of where we exist today. We are focusing on targeted, science-backed solutions that simplify the user experience and deliver visible results, and as a result, we expect to bring even more innovation in 2026 than we did in 2025. Our third priority is to expand our diversified, scalable go-to-market model. Following the success of our 2025 initiatives, we are focused on sharpening our execution across every channel. First, we intend to capitalize on our renewed professional momentum. After successfully reengaging the stylist community this past year, 2026 is about turning that advocacy into a high-velocity flywheel, ensuring our pro partners have the tools and support to remain our most powerful brand ambassadors. Second, we are deepening our point-of-sale partnerships to ensure our marketing and messaging translate well at every touch point, and utilizing key promotional windows to drive visibility while protecting our premium positioning. Finally, we intend to scale our global reach in a disciplined, repeatable way. Through our three-tiered international strategy, we are prioritizing high-potential regions and improving local execution. This priority also includes efforts to optimize our points of access to meet our consumers where they shop and ensure that as we extend our footprint, we do so with an unwavering commitment to brand integrity. The execution of our three priorities is already visible in our first activations of 2026, which center on the three icons that started it all: No. 1, No. 2, and No. 3. In January, we relaunched our original pro-focused No. 1 Bond Multiplier and No. 2 Bond Perfector with new messaging, education, and available as stand-alone products. This was in direct response to stylists' feedback, intended to remove purchase friction and allow pros to restock their backbars with greater flexibility. This relaunch is a critical reset moment for our professional community. We are currently executing a global retraining program with our partners aimed at allowing our pros to be the ultimate authority on bond building and hair health. Additionally, last week, we unveiled our most significant product innovation for 2026, No. 3+. Over a decade ago, we created the at-home treatment category with No. 3 Hair Perfector. It became a global phenomenon, selling on average one unit every six seconds since 2019. Nevertheless, consumer needs have evolved and so has our science. No. 3+ represents the next evolution in bond repair. Powered by Olaplex Holdings, Inc.'s patented bond-building technology and its new Damage Defense Cationic Complex, No. 3+ now repairs damage across the hair's inner structure and surface simultaneously. It delivers the long-term strength Olaplex Holdings, Inc. is known for, while providing the immediate softening and conditioning that today's consumer looks for, all in a fast, intuitive, three-minute in-shower treatment. The result is hair that is visibly transformed with clinically proven results: three times stronger, three times softer, and healthier-looking after just one three-minute use. In addition, we launched a backbar size to ensure that this new technology is available to our pro community. We believe the opportunity for this product is significant. Our internal research, supported by Circana panel data, indicates that there are approximately 40 million prestige hair care consumers who experience daily damage from heat, mechanical stress, and the environment, yet are not currently using a prestige treatment. Many of these consumers find the category overwhelming and the marketing claims confusing. It is our job to offer a solution. To mark the launch of No. 3+, we have built on our Billion platform with the launch of a campaign “Science Never Looked So Good,” inviting consumers into the Olaplex Holdings, Inc. lab to discover the innovation behind the formulas that have defined the bond repair category for over a decade. The work features actor and comedian Chloe Fineman as Olaplex Holdings, Inc.'s Chief Hair Officer, whose long-term relationship with the brand through her stylist, Olaplex Holdings, Inc. ambassador Jacob Schwartz, offers an authentic perspective on how advanced hair repair shows up in real life. The campaign brings joy and approachability to complex hair science, reinforcing Olaplex Holdings, Inc.'s transparent, science-led, and future-focused approach to hair care innovation. To maximize this moment, we are coordinating a unified global launch across media, influencers, and retail and pro partners. This includes a refreshed visual identity for our No. 3+ packaging that elevates our package design to match our scientific credibility. This refreshed packaging will be brought across our entire portfolio, reflecting our new brand identity with a phased implementation. In summary, we entered the year with brand momentum, a robust innovation pipeline, stabilized margins, and strong cash flow. Our strategic priorities are designed to accelerate our Bonds and Beyond vision. We believe that we have the right model, the right team, and the right actions in place to create long-term shareholder value built on the incredible scientific foundation at Olaplex Holdings, Inc.'s core. With that, I will turn it over to Catherine to review our fourth quarter and fiscal year 2025 results and 2026 outlook. Catherine? Catherine Dunleavy: Thank you, Amanda, and good morning, everyone. We are pleased with our results, which reflect the disciplined execution of our transformation plan. For the full year 2025, we delivered or exceeded the expectations we shared across net sales, adjusted gross profit margin, and adjusted EBITDA margin. Beyond the numbers, we have fundamentally strengthened our operating architecture, implementing more rigorous processes and establishing what we believe is a more stabilized adjusted EBITDA margin base upon which we can build for long-term growth. Fourth quarter net sales reached $105.1 million, a 4.3% increase year over year, led by strong holiday performance across professional and D2C channels. For the year, sales were $423 million, or flat year over year. Perhaps most encouraging and reflective of our transformational progress is our fourth quarter ending velocity. While total fourth quarter sell-through was slightly lower compared to the prior year, we exited December with positive year-over-year sell-through trends across our key accounts. We are moving into 2026 with clear sequential momentum. By channel, professional increased 18.9% year over year in the quarter to $36.8 million, with net sales increasing 5.5% for the year. In the fourth quarter, growth was driven by high-impact U.S. innovation and strong participation in global holiday events. As we execute our three-tiered go-to-market strategy, we deliberately shifted international volume towards the professional channel as a primary growth engine. Specialty retail declined 14.5% year over year in the quarter to $24.7 million, with net sales decreasing 8.3% for the year. This reflects our deliberate strategic pivot in international distribution, moving volume away from retail distribution partners towards pro partners. Additionally, sell-through remained down on an annual basis, but we saw encouraging momentum exiting the fourth quarter as our initiatives hit the market. Despite the top-line decline, retail outperformed our expectations in the fourth quarter. It is important to note that we believe inventory levels at our key partners are healthy. Direct-to-consumer increased 6.6% year over year to $43.6 million in the quarter, with net sales increasing 3.1% for the year. Our revamped digital strategy successfully captured demand around key shopping events. In the fourth quarter, we delivered strong holiday performance, which led to richer replenishment activity. Over Cyber Weekend, we outperformed select retail partners' expectations with our Wash and Shine kit ranking number one in shampoo and conditioner and our No. 7 ranking number one in hair oil within the premium hair care category. Additionally, we successfully sold on TikTok Shop during the fourth quarter, and while a small contributor to overall revenue, it significantly outperformed our expectations. We expect to expand the strategic channel in 2026 with a focus on recruiting new customers and boosting our overall content engine. By region, in 2025, U.S. net sales were down approximately 3% with international sales up approximately 3%. U.S. net sales remained down while we continue to focus on sequentially improving sell-through. International benefited from the execution of our new go-to-market strategy and our increasingly disciplined promotion process. Adjusted gross profit margin for the quarter was 70.6%, up 200 basis points year over year, driven by supply chain management, which offset lower margin on new products that have not yet reached full production scale or efficiency. Fiscal year 2025 adjusted gross margin was 71.8%, a 40 basis point improvement. Adjusted SG&A was $61.4 million for the quarter and $211.4 million for the year, an increase of $40.8 million year over year. This increase is aligned with our strategic priorities and primarily reflects increases in sales and marketing, which increased $5.9 million year over year in the quarter compared to the previous year and $26.7 million for the year. We entered 2025 with a clear intent to invest in our brand, our people, and our core infrastructure. We believe that we have now reached the right level of investment, and our focus in 2026 turns to refining and optimizing this spend. Adjusted EBITDA was $12.9 million for the quarter, representing a 12.2% margin. This compares to a 17.4% margin in the fourth quarter 2024. For the year, adjusted EBITDA was $93.9 million, representing a 22.2% margin compared to 30.7% in the prior year. This year-over-year change reflects the strategic investments in marketing and people we are making to position our business for sustainable long-term growth. We generated positive operating cash flow again in the fourth quarter. For the year, we generated operating cash flow of $58.7 million, reflecting strong management of our working capital and the power of our asset-light business model. We ended the quarter with cash and cash equivalents of $318.7 million and debt of $352.3 million. Inventory was $60.2 million, down $15 million from $75.2 million in 2024, representing our improved working capital discipline. Regarding our 2026 outlook, we expect net sales in the range of approximately minus 2% to plus 3% versus fiscal year 2025, adjusted gross profit margin between 71% and 72%, and adjusted EBITDA margin of 21% to 22%. This guidance assumes no material impact from tariffs. While the trade environment remains fluid, we believe our global supply chain is minimally exposed. Furthermore, it does not include disruption that may occur from the geopolitical environment. The full range of our outlook balances the momentum we see exiting 2025 and the confidence in our 2026 plan with a recognition that we remain in a state of transformation. Key drivers of our net sales guidance include improved sell-through. We expect sell-through to improve sequentially and turn positive for the year. The range reflects the magnitude and the pace of this recovery. Brand evolution and supply chain. 2026 marks the rollout of new packaging following our February 2025 visual identity launch. While we have robust plans in place, managing this transition alongside a multiyear innovation pipeline adds operational complexity. Our outlook prudently accounts for these evolving supply chain processes. Additionally, this guidance reflects a normalized impact from promotional activities in 2026 as compared to 2025. Macroeconomic context. Finally, we continue to monitor an uncertain global macroeconomic environment and shifting consumer sentiment. Ability to hit the high end of the range is tied in large part to the speed and effectiveness with which we execute on our three core priorities: energizing our hero products, fueling high-impact innovation, and expanding our diversified go-to-market model. As we continue through our transformation, we expect the slope of our demand to be weighted toward the second half of the year. We expect sell-through for both our heroes and our new launches to build sequentially throughout the year as our strategic initiatives take full effect. Specifically, for the first quarter, we expect sales to land below our full-year guidance range on a percentage basis compared to the prior year. We are strategically pacing the sell-in of No. 3+, whereas early 2025 innovation sell-in was more concentrated to the first quarter. Furthermore, EBITDA will be significantly pressured in the first quarter as we front-load marketing to support No. 3+. For the remaining of the year, we expect to see marketing efficiency improve year over year. We will also begin to fully lap our 2025 foundational investments, which started late in 2025, which we believe will allow us to optimize marketing spend. We expect non-sales and marketing operating expense to increase as we annualize the 2025 investments in people and processes that we believe are integral to the success of our transformation. Importantly, we believe our expected 2026 adjusted EBITDA margin range is a sustainable base upon which we can execute our vision, drive sustainable long-term growth, and unlock Olaplex Holdings, Inc.'s true potential. We entered 2026 with stable revenue and EBITDA margins, and are squarely focused on executing our transformation to support our long-term growth. As it relates to our capital allocation, we possess an advantaged asset-light business model that generates consistent, robust cash flow. This, along with our strong balance sheet, allows us to invest in opportunities to accelerate our strategic priorities and drive growth, explore tuck-in acquisitions similar to Pervala, and expand our long-term potential, and evaluate opportunities to return value to shareholders. In conclusion, we met or exceeded our financial expectations in 2025 while restoring brand momentum and strengthening the fundamentals of our business. We are navigating this transformation with discipline, and we enter 2026 with more stabilized margin and clear strategic priorities designed to accelerate our Bonds and Beyond vision and move Olaplex Holdings, Inc. towards consistent long-term value creation. Operator, we are now ready to take questions. Operator: Thank you. We will now be conducting a question-and-answer session. Please limit yourselves to one question and one follow-up, and requeue for any additional questions. The first question is from Susan Anderson from Canaccord Genuity. Susan Anderson: I guess maybe just to start out, maybe if you could talk about, I guess, just the discrepancy between the specialty retail and DTC. I guess, the retailer destock in the quarter? Did the specialty retail channel kind of play out as you expected? And then as we look to next year, you mentioned just first quarter being a little bit lower, but maybe also if you could talk about kind of the cadence the rest of the year and then any major launches you are expecting to impact the sales of the quarters? Thanks. Catherine Dunleavy: Thanks for the question. So let me take the first one you were asking about, which is our specialty retail. And again, we run the business and encourage everybody to look at it as our flywheel, and we also run the business for a total year. Our job is to put the product in front of the customer wherever they want to buy it, and initiatives that we might put in place that appear in the pro channel may actually drive revenue into the D2C channel. So we feel very pleased with the way our flywheel is working. Specialty retail, as we mentioned, outperformed expectations in the fourth quarter, and sell-through did improve sequentially in the fourth quarter versus the third quarter level. We had strong exit rate sell-through velocity, and our top customers turned positive. Additionally, when you look at consolidated retail performance, there continues to be noise with our international realignment, which serves as a headwind to that channel. So in conclusion, in retail, we are pleased with the momentum we are seeing, and sell-through turning positive we believe sets us up for a nice 2026. The second part of your question was about just the first quarter and going through the year. Let me take us on the journey of where we are as a company. 2025 was really our year of initial implementation. We went from planning in 2024 to our initial implementation in 2025. We introduced our Bonds and Beyond vision. We had our first three priorities against that vision: generate brand demand, harness innovation, execute with excellence. We are pleased, as Amanda just went through, with the progress we have made. We successfully relaunched our brand. We launched a full 360 marketing campaign. We accelerated our innovation. We built people, processes, and tools we need to actually execute. We executed our international alignment. And the progress was measurable. Sales were flat after an 8% decline in 2024 and a 35% decline in 2023. Sell-through improved sequentially throughout the year. Awareness, sentiment, purchase intent all increased. We had four of the top five prestige hair care launches. So we are in a much healthier place as we enter 2026 than we were in 2025. The first quarter revenue is going to be below the range and EBITDA significantly below the range. In the first quarter of last year, 2025, we had a very significant pipe for our No. 4 and No. 5 launch, and the pipe for the No. 3 this year is more balanced throughout the year. However, we are putting a lot of marketing spend against the launch of No. 3, which we expect to benefit all the rest of this year and well into the future. And that laps 2025, where we had not yet started to invest in marketing. We think we started at the end of the first quarter. So those two factors combined really drive our EBITDA margin outside of the range for the first quarter. As you think about the second and third and the fourth quarter, we expect sell-through to sequentially improve as we go through the year as we launch our innovations and our initiatives take effect, and our marketing outside of the first quarter you will start to see leverage. We put in place our foundational investments in 2025, and we get to benefit from those in 2026. That benefit will be partially offset by the people cost from the hiring that we did in the back half of 2025 annualizing throughout 2026. So for the year, our SG&A cost will be relatively flat, and we are confident in the EBITDA margins that implies. And we plan to hit our guidance just like we did in 2025. Susan Anderson: Okay. Great. Thanks for all the color there. Good luck this year. Catherine Dunleavy: Thank you. Operator: The next question is from Sidney Wagner from Jefferies. Please go ahead. Sidney Wagner: Can you share more on those additional verticals across beauty? Just curious, maybe any sense on timing of those? And then where do you see the most opportunity or consumer permission? And then one more just on where are the easy wins in share gain opportunity? You mentioned that you were seeing premiumization in hair. We have certainly seen that as well. How do you think about the TAM in terms of maybe a mass shopper trading up to prestige for the first time? Anything strategically or from a marketing perspective that you need to do to capture those consumers? Thank you. Amanda Baldwin: Hi, Sidney. It is Amanda. I will talk about that. And, obviously, innovation is the lifeblood of Olaplex Holdings, Inc. and certainly something that we have been focused on from, you know, over two years ago when I joined the organization. Job number one was to get this innovation engine going because there is so much opportunity. I would really focus this on things that we see as opportunity within hair care and the fact that we are a 30-SKU business, which if you look in comparison to other competitors in the market, the large competitors in the market, is significantly under what you might see. And as we talked about innovation and our strategy going forward this year, I think there are two different buckets. One that we are highlighting is the impact of hero SKUs, No. 3+ being obviously the most important of that and a real core launch for us this year. I think that there is a lot of opportunity, to your point about bringing people into this industry and into the premiumization. Through hero SKUs is often how one is able to do that. We have done research, and we alluded to this in the call today, that there are a significant number of consumers. We all experience daily damage due to everything that is going on, and our launch around No. 3+ today is that many do not yet understand the power of a treatment to fix that. And one of the things that I have seen in the hair care category, and we spent a lot of time, you know, again, very research-driven, very data-driven, a lot of social listening, and I have concluded that this is the highest passion, highest confusion category that exists in beauty, which I think is an extraordinary opportunity for us as a brand given that we are very fact-based and science-led. And so we will really be focusing, and I think we have talked over the last couple of years about the opportunity to put the marketing and the education behind our hero SKUs. We are now ready for it. We have not been ready for it yet, and so I think that is a really, really important moment for us. The second that we highlighted was this idea of science-based innovation and finding other areas where we can compete. You know, I will not share yet the future innovation pipeline in this organization. But I will say that it is quite robust, and as Catherine spoke to, we expect to have more innovation coming this year than we have in the past and just getting that engine going. We see a lot of white space in areas where we just simply do not compete. And lastly, that Pervala acquisition allows us to do these things with forward-thinking science and efficacy-driven positioning. Catherine Dunleavy: Yeah, I would just add on that, you know, as Amanda said, one of the first things she did when she came was to restart that innovation engine. We worked throughout 2025 to put in place robust operating processes that allow us to focus innovation and get to market as quickly as we can. We look out not just in 2026, but we have a multiyear innovation calendar where we have competing priorities for every slot that there is. We have more products that could fill that, so it is a nice place to be when you think about the strength of our innovation pipeline that has been built. Operator: The next question is from Owen from Northland Capital Markets. Please go ahead. Owen: Can you just walk us through and provide maybe a little more color on the strong performance in the professional channel and whether it was distributor restocking, new salon wins, stronger sell-through per door, the Blitz program—just any more color there would be great. Amanda Baldwin: I can speak to that. Nice to hear your voice, Owen. So really, there were two things that were job number one and job number two. Job number one was innovation. Job number two was get back to supporting the pro. This is the heritage of the brand, and so we really have been focused on this as the center of our flywheel from day one. It is a lot of different moving pieces, as you spoke about, that really come to being in contact with the pros, supporting the channels in which they purchase. The Blitz program was a very important piece of this, and I would also highlight our education program. That is something that is really brand new, overhauled over the course of approximately the last year when we put leadership in place into our education team, built out that team, built out the assets, and this—this, I think, of pro is something that does operate slightly different than the consumer business. It is much more human-to-human and education-focused than you might see in what I will call classic marketing in a consumer business. So we are just starting to see the benefits of that. We also had benefits of how we are handling promotions in that channel across the organization. We are just being a lot more thoughtful and disciplined in that approach. So there is a combination of a lot of things. And lastly, the international realignment that you also spoke about is the other key driver of this, and that was really about making sure—and this has been a story also over the course of the last two years—making sure that we have the right partners who are invested in supporting the pro is a really important piece of how we are thinking about our international business. Owen: Got it. Super helpful. And then secondly for me, focusing on that international front, strong year-over-year growth there. What markets drove that performance? And does 2026 guide assume that international continues to grow faster than domestic? Catherine Dunleavy: Thanks for the question. We really manage our business as a global business, as a global flywheel, and so we do not typically break out regional performance. We are pleased with our international strategy. We believe that it is what you are seeing in the numbers, and we are optimistic about our global guidance for 2026. Operator: The next question is from Olivia Tong from Raymond James. Please go ahead. Olivia Tong: Great. Thanks. Good morning. First question is just around the top-line progression, better understanding the Q1 expectation on sales. You mentioned obviously the base period comparison to a driver of a tougher start to the year, but I am a bit confused by that as you saw a lot of destocking last year, and it sounds like that is less of a factor this year. So, you know, when I look at the comps on a one-year basis, you have got a negative; on a two-year basis, you have the least demanding comp on a two-year stack. So just wondering if you could provide a little bit more color on sort of the cadence as the year progresses. And then what gets you on a full-year basis from the high end to the low end of the year given it is plus or minus a few points around flattish? Just trying to understand what is embedded in that expectation. Catherine Dunleavy: Thanks for the question. So let us talk about the first quarter. As we have consistently said, we manage the business annually, especially as we are moving through a transformation. Revenue performance in the first quarter is largely driven by the timing difference in the innovation shift. In 2025, we had a large concentration of shipments of No. 4 and No. 5. This year, we are strategically phasing in our No. 3+ innovation. So that is what you are seeing in the numbers. I can talk about the adjusted EBITDA margins again. You know, we will be significantly pressured in the first quarter as we are investing to support that launch, and you are going to see that return during the entire year. Amanda Baldwin: I would just build on that also to say that it was a very deliberate and strategic choice to launch No. 3+ at this moment in time. And so I think we have the opportunity to focus on our hero and really think about how that can build throughout the entire year. So it is just a very strategic choice to make sure that we are coming out of the gate strong. Operator: The next question is from Katie Sarah Grafstein from Barclays. Please go ahead. Katie Sarah Grafstein: Thanks. When you think about the development of the prestige hair care category over time, why do you think it has been less developed than the other prestige beauty categories? And is there a benefit of being a scaled player in this category just as you think about the importance of the pro channel? Thank you. Amanda Baldwin: Yes. Thanks for the question. I think there are a couple of different things at play. I think that historically in prestige hair, the channels were much more tightly defined than they exist today. So the flywheel that we are talking about is relatively new. The history of premium hair, if you rewind, I am going to go with probably ten years ago, there was a very strong line between products that were available in the pro channel for salons and things that were available elsewhere. So you really did not see premium or pro hair available outside of the salon. So just the size opportunity and scale opportunity of the channel has changed dramatically as we are able to access retail channels and direct-to-consumer, which is obviously where much of the business in the beauty industry is happening. I think the other thing is actually intention of the consumer. Like I said, there is a lot of passion around hair. I think that there is a growing interest in hair and how it actually works. It is something that I think we have actually seen in the skincare industry before. I think it is an interesting model of comparison to look at where there was a probably earlier-stage prestige skincare business, and we have seen that grow significantly over time as people have learned to understand the impact of a more premium product and the impact of science on the efficacy and the results that we see. I think that is why Olaplex Holdings, Inc. is so well positioned at this moment in time, and I would venture to say that Olaplex Holdings, Inc. really started the conversation around scientific and science-led hair care. And we are really excited to get back to leading that conversation. So I think it is a lot around consumer behavior. There is channel behavior. And what we are seeing from our partners around the globe is that they are very excited about what the potential is in this category, which I think bodes well for our future. Operator: The next question is from Andrea Teixeira from JPMorgan. Please go ahead. Andrea Teixeira: Hi, good morning, Amanda and Catherine. Thanks for the question. I was hoping if you can please talk about your distribution and shelf into this innovation? And is the outlook that you are embedding in 2026 for distribution to be flattish, or any movement up or down? And then when you think about sell-in and sell-out, I was just hopeful to see how you exit. And you talked about sell-through getting better in December, which is encouraging. But I was hoping to see as you launched March, I just want to see how those dynamics have been playing out and the same with the pro, anything that you have—you talked about the backbar and then the way they have been encouraged with the relaunches. So just to feel like how the sell-through, the sell-in and sell-out have been pacing and consumption in general. If you can talk about consumption into the first few months of the year, that would be wonderful. Thank you. Amanda Baldwin: Yes. What I can say is that there is no pull forward of anything in this launch, and we do not talk about specifics of exact distribution. But I think if you go in and you look at our product on shelf, you will see the No. 3+, and it really looks great in stores. And so we are very pleased that we are starting to really hit our stride around all the investments that were made in visual merchandising and the opportunity around the brand. So that is what I would comment at this point. Operator: This concludes the question-and-answer session. I would like to turn the floor back over to Amanda Baldwin, Chief Executive Officer, for closing comments. Amanda Baldwin: I just wanted to say thank you to everyone for being with us here today, and we hope you have a great day. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Good day. Welcome to Teads Holding Co.'s fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to Teads Holding Co.'s Investor Relations. Please go ahead. Good morning. Matt (Investor Relations): And thank you for joining us on today's conference call to discuss Teads Holding Co.'s fourth quarter and full year 2025 results. Joining me on the call today we have David Kostman and Jason Kiviat, the CEO and CFO of Teads Holding Co. During this conference call, management will make forward-looking statements based on current expectations and assumptions, including statements regarding our business outlook and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. These risk factors are discussed in detail in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated in our subsequent reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the call's original date, and we do not undertake any duty to update any such statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's fourth quarter and full year 2025 results announcement for definitional information and reconciliation of non-GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors.teads.com, under News and Events. With that, let me turn the call over to David. David Kostman: Thank you, Matt. Good morning, everyone, and thank you for joining us. About a year ago, we brought Outbrain and Teads Holding Co. together. The goal was and still is to build a best-in-class digital advertising platform that delivers results across every screen, from the phone in your pocket to the TV in your living room and for every advertiser objective, from branding to actual sales. Year one was a transition. We managed the friction of merging two different cultures, technologies, businesses, while navigating some tough market conditions. Also make a deliberate choice to build a sustainable premium marketplace and walk away from some low-quality revenue. It was a hard call, but we believe it was a necessary one to protect our marketplace and ensure that we can grow our business with the world's biggest brands. The lessons we learned allowed us to sharpen our focus in the second half of the year. We have simplified the org chart, right-sized our cost, and brought in fresh leadership. Now we believe we are moving into 2026 with strong alignment on our strategic priorities and a well-defined execution plan. We expect this to be the inflection point and the year we return to growth. Looking at Q4, we hit the high end of our guidance on ex-TAC, beat our adjusted EBITDA target, and generated positive free cash flow. Beyond the numbers, there are a few key indicators I want to highlight. First, CTV is accelerating. Our focus on the living room is paying off. We crossed the $100 million annual revenue mark with growth hitting 55% in Q4, and with strong growth on the home screen placements. Second, performance cross-selling was scaling. We saw a 300% jump in sales to enterprise customers compared to Q3. Now to be clear, that is still just a few million dollars per quarter, but we believe it demonstrates how much headroom we have to grow. Third, in Q4, we renewed several of our joint business partnerships with leading global brands and have many more in process of resigning in Q1. The feedback from surveying our partners, one year into the merger, is excellent, highlighting creative excellence, innovation, and media-added value, and the renewals demonstrate the strategic nature of these relationships. On the operational side, we expect that our December restructuring would save us between $35 million to $40 million annually. In addition, we have added top-tier talent like Molly Spielman, our Chief Commercial Officer, Danny Christian, our Chief Marketing Officer, and Eiralee Jain, who heads our North American business. We have also flattened the leadership structure to make sure our teams can move faster and drive speed and accountability. For 2026, the strategy for our enterprise advertisers is built on three pillars. First, we will continue to lead with our CTV offerings by focusing on two clear differentiators: home screen leadership and omnichannel branding to performance. On the home screen, we are continuing to win. We are not just another ad midstream. We are an entry point to the living room and TVs. And our leadership is anchored by our strategic partnership with leading OEMs like LG, Samsung, NVIDIA, and Vizio. In Q4, we further solidified our position by expanding our relationships with LG, signing exclusive partnerships in Italy and Greece, and in Q1 of this year, we expanded our footprint through an exclusive partnership with Samsung TV in certain regions in Asia-Pacific. We are further expanding this reach through new integrations with Google TV and Rakuten, all focusing on integration of these OEMs and bringing these premium, highly visible, and valuable placements directly into Teads Ad Manager. In terms of scale, we have access now to well over 500 million addressable TVs globally and already ran well over 3,500 campaigns on home screens. What we hear from our partners is that they choose to work with Teads Holding Co. due to the unique combination of our direct relationships with the most premium brands of the world through our 50-plus joint business partnerships, the quality of our creative services in ensuring the creatives are well adapted to the unique environment of the home screen, and the integration with our platform, Teads Ad Manager, which makes transacting on multiple OEMs easier and faster. And we are proving that CTV plus web is a winning combination. Our thesis is simple: using the big screen for awareness, then retargeting on mobile drives measurable sales. For example, our recent partnership with Accor, a global hotel operator, demonstrated that omnichannel activation on Teads Holding Co. not only drove 23% lift in brand favorability, but also a 17% increase in purchase intent. That is a massive win for our advertisers and a differentiator for Teads Holding Co. Second point on enterprise: we are deepening our strategic relationships with agencies. We are working on integration of our audiences with the world's leading agencies and on other data collaborations. A great example of this is our new integration with Havas, which allows their planners to activate our audiences directly from their own planning environment, driving both speed and efficiency. Third, we are scaling our performance business for enterprise advertisers. We are integrating performance capabilities, leveraging Outbrain know-how directly into Teads Ad Manager designed to create a frictionless experience for agencies buying full funnel. And we are advancing our algorithmic capabilities and investing in superior post-campaign measurement. We expect these investments to drive continuous improvements in ROAS and overall campaign performance for our enterprise advertisers. Turning to our direct response advertisers. They are purely focused on ROAS, plain and simple, and internally on driving efficiencies that grow profitability. The 2025 trimming of our supply and demand sources to ensure higher quality will impact our year-over-year comparisons early on, but the foundation of our business is significantly stronger today than it was a year ago. We also see here exciting opportunities such as running direct response performance campaigns on CTV. In Q4 of last year, we had several million dollars of such sales. One general comment: you will hear our peers discuss supply path shortening as a new initiative, but for us, it is a foundational architecture. We provide a straight line to the source of premium supply, whether that is an LG home screen or a top-tier global publisher, which is one of the reasons we can deliver superior outcomes from branding to performance. AI is the engine behind many of these growth areas. It is both a performance driver for our clients and a productivity tool for our engineers and teams. On the algorithmic side, we have progressed on the integration of our AI and data infrastructure, and we are already seeing tangible results. In addition, by using LLM models to sharpen our predictive delivery, for example, by analyzing the content of ads to extract additional relevant signals, we are achieving two goals at the same time. We are hitting better KPIs for our advertisers, specifically by lowering the cost per acquisition, and we are seeing the path forward expanding our own margins at the same time. We are also investing in transitioning from manual campaign setups and toward agentic-driven goal setting, which we believe will simplify the experience for our partners and allow our technology to optimize for outcomes more effectively. To sum it up, I believe the heavy lifting of the transition is behind us. We have used the second half of last year to build a leaner, faster, and better Teads Holding Co. We saw some positive indicators in Q4 into Q1. We have started the year with strategic clarity, a well-defined execution plan, and the right leadership, which I am confident will allow us to make 2026 a breakout year. I will now turn it over to Jason to walk through the financials. Jason Kiviat: Thanks, David. As David mentioned, we achieved our Q4 guidance for ex-TAC gross profit at the high end of our range and exceeded our range for adjusted EBITDA, generating positive adjusted free cash flow in both the quarter and for the full year. Revenue in Q4 was approximately $352,000,000, reflecting an increase of 50% year over year on an as-reported basis, primarily reflecting the impact of the acquisition. On a pro forma basis, we saw a year-over-year decline of 17% in Q4. I spoke last quarter about the drivers of volatility in our top line, stemming from both legacy Teads Holding Co. operating businesses. I will reiterate them briefly here in the context of what we anticipate for 2026. But an important takeaway is that since we last reported in November, we have seen a more stable top line. Within our enterprise clients, we saw a deceleration in our top line starting in June that we attribute largely to operational challenges and distraction of the merger. This primarily impacted us in several key markets, most notably the U.S. and U.K. However, the changes we implemented in leadership and operations in Q3 are yielding positive indications in Q4 and into Q1, giving us confidence that we can see a return to growth by Q4 of this year. TPV growth has accelerated, top line in the U.K. has stabilized, and our sales of performance campaigns to enterprise customers, including cross-selling, is accelerating. Within our direct response clients, through both strategic decisions around quality and external factors, including deliberately exiting lower-quality demand and supply sources from our ecosystem, we turned a small but meaningful segment of arbitrage-based customers. This impacted our revenues primarily in H2, and most meaningfully in Q4. And while we feel we have a healthier long-term business from these changes, we expect that this will impact our year-over-year comps through much of 2026. The year-over-year comparison impact for 2026 is expected to be a headwind of approximately $20,000,000 of ex-TAC with the vast majority of that in H1, phasing down to a minimal amount by Q4. X-TAC gross profit in the quarter was $152,000,000, an increase of 122% year over year on an as-reported basis and a decline of 19% on a pro forma basis. Note that ex-TAC gross profit growth is outpacing revenue growth due to a net favorable change in our revenue mix post-acquisition, as well as the continuation of improvements to revenue mix and RPM growth that we have been seeing for the last few years. Other cost of sales and operating expenses increased year over year, primarily reflecting the impact of the acquisition as well as a non-cash impairment in goodwill. As a result of recent declines in our share price and overall market capitalization, we were required under accounting standards to perform an impairment assessment and ultimately recorded an impairment to goodwill of around $350,000,000. This accounting adjustment is entirely non-cash and does not impact our liquidity, operating cash flows, or our debt covenants. I also want to be clear and emphasize we fully believe in the fundamental strategy of our omnichannel full-funnel offering, but as we have reported, the operational challenges have led us to a timetable longer than we initially anticipated, resulting in this impairment charge. As our actions exemplify, we are committed to returning to growth and improving profitability, and to that end, in the quarter, we recognized $6,000,000 of restructuring charges, primarily related to the reduction in force we announced largely executed in December. The restructuring is expected to save approximately $35,000,000 to $40,000,000 annually from the elimination of both filled and unfilled roles. Adjusted EBITDA in Q4 was $37,000,000, and adjusted free cash flow, which, as a reminder, we define as cash from operating activities plus CapEx, capitalized software costs, as well as direct transaction costs, was approximately $3,000,000 in the fourth quarter and $6,000,000 for the year. As a result, we ended the quarter with $139,000,000 of cash, cash equivalents, and investments in marketable securities on the balance sheet, and continue to have €15,000,000, or about $17,500,000, in overdraft borrowings, classified in our balance sheet as short-term debt. Additionally, we have $628,000,000 in principal amount of long-term debt at a 10% coupon due in 2030. As we have said in the past, we are always evaluating our cost and capital structure opportunities to improve our financial profile. In that regard, we are evaluating opportunistic alternatives that may be available to us to strengthen our balance sheet and build a more durable capital structure. Now I will turn to our guidance. We are focused on operating as a cash flow generating business. We have taken recent steps to improve our cost structure, we will continue to look for opportunities as we further advance our integration and leverage the exciting avenues to streamline operations that are now available with AI. We have taken steps to realign our team, appoint new leadership, and enhance our focus on the areas that we feel will help us return to top line growth. While we feel good about the steps we are taking and the progress we are seeing, we acknowledge the uncertainty of the overall environment and how it may impact the timeline and progress as we pursue a return to top line growth. With that, we have provided the following guidance. For Q1 2026, we expect ex-TAC gross profit of $102,000,000 to $106,000,000. We expect adjusted EBITDA of breakeven to $3,000,000. And for full year 2026, we expect adjusted EBITDA of approximately $100,000,000. While this level of annual EBITDA could potentially result in a small use of cash, we are comfortable with our cash balance and borrowing ability, and additionally, we see opportunities to generate positive free cash flow this year. Now I will turn it back to the operator for Q&A. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Laura Martin with Needham and Company. Please proceed with your question. Laura Martin: Sure. Thank you very much for taking the questions. On the salesforce, I was just wondering, are we pretty much staffed up now on the salesforce from the integration, and do you expect smooth sailing going forward on those kinds of hires? And then secondly, I was really interested, David, in your comments on the exclusive deals with Samsung and LG. Are those for home page programmatic the way Nexon is talking about, or is that for—I was just wanting you to expand on what rights you have that are exclusive right now. Thank you. David Kostman: Thanks, Laura. Good morning. So first on the salesforce, we are confident we have the right leadership team and the right team in place. So do you anticipate smooth sailing? Nothing is smooth, but we are very confident. We have a good team. I think we replaced the people we wanted to replace, and I am very confident with what I have seen the last few months with the new leadership. On the home screens, we have been at this for about two years working on a home screen. So we have exclusive in certain geographies with LG. We have an exclusive relationship in certain geographies with Samsung. We had until last year an exclusive relationship with Vizio, which now also NexGen is involved. But what we do and where our advantage is really that we work directly integrated between Teads Ad Manager and the home screen. It is a very unique special format, and the advantages we have around creative adaptation to the different formats and the ability of advertisers to really buy and optimize across multiple OEMs in one platform, that is a huge advantage. You can activate it programmatically, but when you activate it programmatically, it is very different in terms of the, you know, outcomes that you can drive. The premium brand relationship we have directly are a big factor why these companies work with us exclusively. We have a global footprint in more than 50 markets. They do want those premium brands on that home screen. I mean, there is no tolerance for the type of brand, so that is a huge advantage that we have. So between Teads Ad Manager direct integration, ability to run campaigns across multiple OEMs, the creative adaptation, and the premium brands, that gives us a, you know, a huge scale and then I think a huge heads up on that business. And it is also driving other parts of our business. We talked on—I mentioned on the call the omnichannel, so the ability to activate on the home screen and then on the web is a big advantage. And the ability to drive just performance campaigns. So we believe we have a two-year head start there, and it is a great differentiator for us. Operator: Our next question comes from the line of Matthew Condon with Citizens. Please proceed with your question. Matthew Condon: Thank you so much for taking my questions. The first one, just can you provide additional color just on the securitization of the business, and just what trends are you seeing so far in Q1? Do you see confidence that you have got this back on the right track? My second one is on the organizational changes. Just do we have the right team in place today across the entirety of the business? And should we expect anything else and or any other changes going forward? Thank you so much. Jason Kiviat: Thanks, Matthew. So this is Jason. I could take the—I think I got—this is a little broken, but I think your first question is about Q1 trends and what gives us confidence, so if I miss anything you said, I will just start there. Yeah. Look. I think we are seeing improvements in Q1. Right? Maybe—I know the numbers might be a little funky with the timing of the acquisition last year being a few days into February, and so the pro forma and the as-reported periods are slightly different. On an as-reported basis, we are guiding, you know, at our midpoint to something, you know, fairly flat year over year for ex-TAC. And on a pro forma basis, it is down, but not down to the same level we saw in Q4 where we were down a bit more. So what we are seeing, you know, in this early part of Q1 and what we expect for the full quarter is, you know, closing of the gap quite a bit here, and, you know, that means we are better than what is typical in Q1 relative to Q4. And it is really concentrated in the areas that we are focusing on, which obviously when you are focusing on something and you see improvement in it, it gives you some confidence. Right? So, you know, CTV is accelerating, you know, through the home screens and the omnichannel as David said. You know, we are focused on driving more performance sales. Obviously, a big part of the kind of synergies of the combination, and we do see momentum there. And then I know I have talked a little bit about some of the operational challenges that have been driving the headwinds for much of the last year or six months or so. And, you know, U.K. and U.S. are the countries I have kind of called out. You know, in the U.K., we do see a relative improvement and a big shrinking of the gap, you know, starting in Q1 here. As David mentioned, in the U.S., we had new leadership in Q1, and we do feel good and gain some confidence from the pipeline that we see in March and beyond. So, you know, cautiously optimistic, but, you know, we have taken meaningful steps to focus and reduce cost and focus and realign around the things that we think will drive growth, and we are starting to see good indications of those things. David Kostman: And I think, maybe in terms of the team, I am very comfortable. I mean, we started the year with a very clearly defined execution plan. We sort of elevated to the leadership team some people from the product and tech side. So I am very comfortable with where we are. We rolled out very specific goals and targets. And I think the execution plan is well defined with the right team at this point. Matthew Condon: That is very helpful. Thank you so much. Operator: Our next question comes from the line of James Heaney with Jefferies. Please proceed with your question. James Heaney: Yeah. Great. Thank you, guys. Just what are the assumptions behind the full year EBITDA guide? How should we think about the linearity of growth and margin as we move throughout the year? And then any color you can maybe also provide around linearity of ex-TAC gross profit growth? I think you said getting to growth in Q4, but any other things to think about moving throughout the year? Jason Kiviat: Sure. Yeah. Thanks, James. I will take that. It is Jason. I mean, our guidance of approximately $100,000,000 of EBITDA, it does not, you know, imply a full year ex-TAC growth on a, you know, on a pro forma basis. But we do expect to get to growth by the end of the year by Q4. So maybe some color on kind of how we see that playing out, you know, a couple points of context. You know, for one, I did mention on the call, we have this year-over-year, you know, comp headwind—about $20,000,000 of ex-TAC from the quality cleanup. And just to put that into kind of when we see that happening, you know, it started to really impact us, you know, fully in Q4, and, you know, maybe about half of the impact we talked about in Q3 from the supply cleanup and some of the early impacts there. So the full impact, about $8,000,000 of a headwind in Q4 of ex-TAC, and we expect that same $8,000,000 to impact Q1 and Q2 as well before starting to, you know, shrink in Q3 and be de minimis for Q4. So the comps do ease as the year goes on. That is the biggest kind of headwind that we see kind of moving forward. And, generally, you know, we expect it will take a few quarters to build back to growth from the year-over-year decline that we reported in Q4. We see improvement, as I said, in Q1. We think it will take a few quarters to get to growth, but believe, you know, that our changes in focus, leadership, and operations are driving this change, start to see it in Q1 from the things we did last year, and the things that we are doing in Q1 will help more and more as the year goes on. So on a pro forma basis, we expect to see improvement each quarter of the year and then Q4 being where we hit the positive growth. In terms of expenses to get to EBITDA, you know, obviously, you can see in our guidance for Q1, it is substantially reduced expenses from, obviously, from the restructuring and the step-up of, you know, full year of synergies now that we have compared to last year. So you can see the lower cost base, and that is even, you know, despite FX headwinds of a few million dollars that we see from the weakening of the dollar versus, you know, the euro and the shekel. But, you know, for the rest of the year, a few million dollar step-up probably in Q2 and Q3 just based on seasonality, revenue-related items, and some, you know, fully staffing where we have some empty roles right now, and then a normal Q4 seasonal step-up as you have seen in our results this year as well would be what I expect. James Heaney: Yeah. Very thorough answer. Thank you. Maybe just quickly, for either of you, anything on just specific ad verticals that you would want to call out in terms of strength or weakness? I mean, any particular standouts that you would want to highlight. Thank you. David Kostman: Maybe I will take that. I mean, there is nothing really that is material. I mean, we do not have any vertical that is sort of double digit even. So we see some weakness in CPG and automotive, some strength in health and finance, but nothing really of note. James Heaney: Great. Thank you. Operator: Our next question from the line of Zach Cummins with B. Riley Securities. Please proceed with your question. Zach Cummins: Hi. Good morning, David and Jason. Thanks for taking my questions. I wanted to ask about the Google TV opportunity. I mean, can you maybe go a little more into detail around that announcement, and what type of growth opportunity does that unlock for you as we move forward in 2026 for CTV home screen? David Kostman: Overall, CTV home screen is a huge opportunity for us. We are, as I said, I mean, two years into it. We have a huge base of OEMs. We added Google TV to that. I am sorry. This is the New York background noise. So we added Google TV recently. We added TCL, Vewd, and many others. So the overall opportunity is huge. I mean, it today accounts for a big percentage of our CTV business. We have grown 455% and expect similar growth rates or better for this year on the business. And I said it earlier, I think we have clear differentiators there. I think the direct access is a big differentiator. The premium direct premium advertiser relationship is a big advantage, and that is why I think these OEMs and other applications on CTV really sign up with Teads Holding Co. in order to make sure that that experience on the home screen is the best they can offer to the audiences. So it is a large opportunity and it also helps us to, as I mentioned earlier, to omnichannel sales, sell more campaigns to our advertisers also around the online video, combining the CTV home screen and the web. So it is a very big opportunity. It is a big area of investment for us, and we are very excited about it. Zach Cummins: Understood. And my one follow-up question is just around the proactive cleanup of some of the inventory throughout 2025. Obviously, a meaningful headwind when you think of ex-TAC over the next couple of quarters. But is that process largely behind us now? Do you have the ideal mix of inventory now that you are focusing more so on enterprise-level brands? David Kostman: Yes. I think it is behind us in terms of executing on that cleanup or trimming of supply and demand quality. So we walked away from about $20,000,000 in revenue. The impact will continue into the first half of this year. It was about an $8,000,000 headwind in Q4. It will continue through the first half of this year, but we have a much healthier network. We are actually delivering better ROAS for our performance advertisers, and the network and the marketplace is much more suitable for the premium brands we work with. Zach Cummins: Great. Well, thanks for taking my questions, and best of luck with the rest of the quarter. Operator: And this concludes—we have reached the end of the question and answer session. I would like to turn the floor back over to David Kostman for closing remarks. David Kostman: Thank you very much for attending today. As you can hear, we are somewhat encouraged by the sequential trends that we see. We do believe that 2026 will be an inflection point for us. We are very focused on execution and also finding the sort of right to invest in the attractive growth areas that we see, like CTV. So excited about the future and look forward to updating you. Operator: Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation. Have a great day.
Operator: Good day, and thank you for standing by. Welcome to the Invivyd, Inc. Fourth Quarter 2025 Earnings Conference Call. At this time, participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Katie Falzone, Senior Vice President of Finance. Please go ahead. Katie Falzone: Thank you, operator. A short while ago, we issued a press release announcing our Q4 2025 financial results and recent business highlights. That press release and the slides that we are using on today's webcast can be found in the Investors section of the Invivyd, Inc. website under the Press Releases and Events and Presentations sections, respectively. Today's discussion will be led by Marc Elia, Chairman of Invivyd, Inc.'s board of directors. He is joined by Timothy Lee, Chief Commercial Officer; William Duke, Chief Financial Officer; and Dr. Robert Allen, Chief Scientific Officer. During today's discussion, we will be making forward-looking statements concerning, among other things, our corporate and commercial strategy, our research and development activities, our regulatory plans, certain financial expectations, our future prospects, and other statements that are not historical facts. These forward-looking statements are covered within the meaning of the Private Securities Litigation Reform Act and are subject to various risks, assumptions, and uncertainties that may change over time and cause our actual results to differ materially from those expressed or implied today. Forward-looking statements speak only as of the date of this call, and Invivyd, Inc. assumes no duty to update such statements. Additional information on the risk factors that could affect Invivyd, Inc.'s business can be found in our filings made with the U.S. Securities and Exchange Commission, including our most recent Form 10-K, which are also available on our website. I will now turn the call over to Marc. Marc Elia: Thank you, Katie, and good morning, everyone. I will make a few quick remarks by way of executive summary, and then we will discuss our clinical progress. Of note, this morning, you may have seen that we have brought an esteemed physician-scientist into the Invivyd, Inc. fold to serve as our Chief Medical Officer. Michael was unable to join our call this morning; I am sure many of you will enjoy hearing from him going forward. After the clinical discussion, Timothy Lee, our Chief Commercial Officer, will review our work with PEMGARDA, and some of our pre-commercial preparation for VYD2311. William Duke, our Chief Financial Officer, will touch on our financial results for Q4, then we will be happy to take your questions. Now on to the highlights. Our Revolution clinical program is well underway, with the aim of providing Americans with an option for what we believe is needed protection from symptomatic COVID disease. We know investors have many questions about our progress, and we will provide as much detail today as we can. Our commercial work with PEMGARDA continues, and we were pleased to demonstrate growth in the fourth quarter. Commercial activities are establishing an attractive basis for broader commercialization of VYD2311, if approved, by demonstrating the power and durability potential of Invivyd, Inc. monoclonal antibodies. We are continuing to build awareness and understanding of our work with monoclonal antibodies among HCPs, professional societies, vulnerable populations, and government public health entities. We believe that the ongoing American experience with COVID vaccination has left an extraordinarily high medical and economic value opportunity to advance standard of care via monoclonal antibody prophylaxis. In the pipeline, we are excited to begin clinical exploration of our antibodies in long COVID and post-vaccine syndrome as disclosed earlier this quarter. We are very interested that the Advisory Committee on Immunization Practices, or ACIP, a group which advises the U.S. Centers for Disease Control, has recently announced that they are having a full discussion on both topics. The ACIP meeting is currently scheduled for March, and we will be watching with interest. Our collaboration with key academic thought leaders in this space, the SPEAR study group, has yielded a clinical trial design we are moving with all haste to action in light of the substantial unmet need for millions of Americans suffering from long COVID and vaccine injury. In the fourth quarter, we were pleased to share our identification of a highly potent, potentially best-in-class RSV antibody. As you may know, there are today two RSV antibodies approved and recommended for the prevention of RSV in certain neonatal and pediatric populations, and we believe the properties of our antibody are highly competitive with standard of care. As we advance our work across multiple infectious diseases, you may notice a special interest in pediatrics. RSV, COVID, and indeed other viruses exert substantial medical burden on both the elderly and the very young, as well as immunocompromised persons. Finally, as previously guided, expect us to update the Street on our measles program in the first half of this year. In light of the substantial and rapidly growing burden of disease, we are excited to share our progress with you, as well as describing what we see as the potential medical value of such an antibody, which we hope can be both first and best in class. Slide five. Moving on to our clinical update. On slide six, we know that there are investors who are new to the Invivyd, Inc. story, and so we would like to review quickly the medical and scientific background for our work with VYD2311, which hopefully will add context to the updates we provided on the Declaration study in our press release this morning. First, it is important to remember that SARS-CoV-2 has been an extraordinarily unwelcome and ongoing medical burden on the human species. As an ACE2 receptor accessing betacoronavirus adapted for high human virulence and transmissibility, it has exerted medical toll in two distinct phases. In the initial pandemic phase, the virus swiftly moved through the human population, exerting substantial morbidity and mortality, especially among vulnerable populations such as the elderly, and people with relevant comorbidities such as preexisting cardiovascular and renal disease. After vaccination and mounting seropositivity, we see a predictably less violent mortality but still extraordinary medical burden from this virus generally in the same populations. As a vascular, prothrombotic, immunomodulatory virus that circulates pervasively, we now see accelerated human aging and broad health effects in Americans from acute infection, with attendant risks through the substantial growth in long COVID prevalence. Even American economic data collected by the Fed appears to show an unwelcome, impressive growth in American disability since COVID entered our population. We must be less tolerant of this burden. Second, given all of the relevant sociopolitical and medical aspects of this controversial field, we must touch on the evidentiary and regulatory history we have in COVID prophylaxis. The mRNA-based COVID vaccines were each formally studied in a single placebo-controlled clinical trial in 2020. These studies assessed vaccine safety and efficacy versus placebo in a seronegative American population against highly immunologically responsive Wuhan-derivative virus variants, for about seven to eight weeks before unblinding. These studies demonstrated high short-term protection and short-term safety. However, these original datasets also reflect the last opportunity we had as a species to assess absolute safety in randomized, placebo-controlled trials. Given the broad vaccine mandates and rapid virus spread, we as a human species are now all routinely exposed to SARS-CoV-2 and its spike protein, which we see as a type of toxin. And absent a new medical option, we as a species have no real opportunity to avoid exposure to spike protein chronically going forward. Shortly after those original vaccine studies and rollout, our entire species became immunologically educated or seropositive, either through the original campaign or circulating virus, all while undergoing excess morbidity and mortality. Omicron phylogeny virus arose quickly following an evolutionary acquisition of population immunity. Omicron viruses are defined by immune evasiveness or the functional avoidance of human immunologic pressure, whether vaccine-induced or natural. One major consequence of Omicron virus was a natural, predictable, apparent reduction in COVID vaccine efficacy, which has been reliably estimated by epidemiologists at CDC over the past years, and was directly measurable in diminished vaccine titers when vaccine manufacturers updated COVID vaccine compositions from Wuhan-variant virus to Omicron BA.4/5 virus. These analyses can be seen in the relevant vaccine labels, and we see them as predictive of diminished efficacy. COVID vaccine boosts have undergone five structural updates since Wuhan virus vaccines, just on the basis of immunologic comparison. Ongoing new placebo-controlled vaccine studies should provide us all with more insight into these issues in the coming quarters. By contrast, Invivyd, Inc. is now conducting its third randomized, placebo-controlled trial for a COVID monoclonal antibody in five years. Our antibodies change one to the next, rather like the vaccines, to make allowance for virus evolution, although we hope to stay ahead of virus variation rather than chasing it from behind. On a percentage basis, our antibodies change by about the same tiny amount as vaccine antigens, but in contrast to COVID vaccines, we see our antibodies as a much more natural, welcome approach to prophylaxis than serial exposure to spike protein in vaccine form. To us, given the apparent short duration of vaccine-induced protection and the potential risks of administering spike protein in either mRNA or protein form, it is natural to now move to supplemental immune support via monoclonal antibody to exert protection. From an evidentiary and regulatory point of view, our antibodies have undergone more extensive placebo-controlled characterization than the COVID vaccines, including now multiple placebo-controlled clinical trials and, in our recent CANOPY study, long-term characterization of pemivibart in a modern seropositive population and against Omicron virus variants. That brings us to our latest antibody, VYD2311, designed as an alternative to COVID vaccination. VYD2311 is much more potent than pemivibart in vitro, and has a longer measured half-life—properties which we believe may combine to deliver equivalent protection to PEMGARDA, but in a much more scalable and convenient intramuscular form. You can see on slide eight a reminder of the initial pieces of the Revolution clinical program. The Declaration study is a triple-blind, randomized clinical trial once again evaluating the safety of VYD2311 and its ability to reduce the risk of symptomatic disease versus placebo. Our target enrollment for Declaration is approximately 1,770 human subjects, randomized 1:1:1:1—three active arms, one placebo arm. We were recently notified that the Declaration clinical trial has reached target enrollment, and indeed, as is normal in these situations, may modestly over-enroll as sites are given permission to complete any ongoing screening and enrollment before closing. Of note, recently, the Declaration Independent Data Monitoring Committee, or IDMC, conducted a prespecified review of unblinded safety and tolerability data associated with initial experience of Declaration subjects. While the IDMC is completely separate from Invivyd, Inc., we are pleased to relay their written communication to us following that review, which included three recommendations. First, that pregnant and breastfeeding women may now enroll in the study. Second, that women of childbearing age enrolled in the study are no longer required to use contraception. And third, that prespecified safety visits at days 8, 38, and 68 post dosing are no longer required. Finally, Declaration is a study designed to assess the performance of VYD2311 in lowering the risk of symptomatic, PCR-positive COVID-19 versus placebo. In every infectious disease prophylaxis study, a sponsor like us faces an unknown so-called attack rate, or the rate of infection observed in the study, to power our efficacy assessments. Because monoclonal antibody technology in COVID has typically involved a very high efficacy hazard ratio or VE traditionally, it has not taken more than a high single-digit or low double-digit number of events in a study to generate statistical significance. As you may recall, alignment with the FDA on the VYD2311 clinical development pathway included recognition that in our CANOPY clinical trial, pemivibart’s placebo-controlled arm demonstrated robust exploratory efficacy with strong statistical support on the basis of nine total COVID events at three months. America is in the middle of a COVID wave, and we are pleased with the speed of our study recruitment. The majority of our recruitment has occurred only in the past few weeks, and COVID events have begun to appear in our study. We see Declaration event accumulation as on track to date, and on a projected basis, we anticipate suitability for robust assessment of VYD2311 effectiveness if the clinical performance of VYD2311 matches our modeling and prior experience with COVID antibodies. Of course, attack rate in the community and in our study is outside of our control and could change going forward. As a result, Declaration includes a prespecified upsizing algorithm to allow for additional patients in the trial should our event rate projections indicate that Declaration would benefit from more statistical power. This resizing feature is dependent on overall progress, and at this point, our best estimate is that such an analysis would take place in approximately April. We will make an announcement to the Street about our next steps one way or the other at that time. However, depending on overall recruitment rates, with which we have been very pleased so far, a modest upsizing to add statistical power may not meaningfully delay our achievement of “mid-year” timing guidance for Declaration, which we consider as Q2 or Q3 2026. Of course, any upsizing would have some level of timing impact, but we would endeavor to stay within our original guidance boundaries. When we get to that point, we will be happy to provide any updated timing estimates. Irrespective of the overall number of COVID events, we are looking forward to data and believe that it may be a profound next step for our company and for infectious disease medicine if Declaration can demonstrate attractive VYD2311 safety, high antiviral titers, and a demonstration—for the third sequential time—of the vaccine-free protection that an avid monoclonal antibody can provide. With that, I would like to turn the call over to Timothy Lee to discuss our commercial update. Tim? Timothy Lee: Thanks, Marc. It is a pleasure to update you all on our work. As we see it, more and more clinicians are turning to monoclonal antibodies. And, frankly, it is common sense. Thomas Paine once wrote that common sense is often the most powerful kind of reasoning. In health care, when evidence accumulates and risk is clear, the logical course becomes difficult to ignore. Our goal is straightforward. It is not simple. We want to give people a choice as they seek protection against COVID. We believe that choice has significant potential because there are still millions of individuals who remain vulnerable and underserved. The medical community increasingly recognizes the importance of antibody therapy, and the long-term consequences of COVID continue to be serious. From in utero exposure risk to children, neurological effects, cardiovascular complications, and more, avoiding infection matters. That perspective is reflected in clinical guidelines. Leading organizations, including the Infectious Diseases Society of America and the National Comprehensive Cancer Network, recommend monoclonal antibodies for prevention of SARS-CoV-2 infection in appropriate high-risk patients. This inclusion of PEMGARDA in the NCCN guidelines for B-cell lymphomas underscores that recognition. We are encouraged to see growing interest and utilization across hematology, oncology, rheumatology, infectious disease, transplant, neurology, and other appropriate specialties. The adoption curve is expanding, and that momentum reinforces our belief in the long-term value of this platform. There is a great deal reflected here on this slide. Many of these data points we have discussed on prior calls. I am pleased that we continue to grow PEMGARDA to serve certain adults and adolescents who are moderately to severely immunocompromised, thus leaving them vulnerable to infection from SARS-CoV-2. What you are seeing is Invivyd, Inc. is building a category. This category has served to expand upon the foundation that is PEMGARDA. Nationally, we see continued growth of accounts who have utilized PEMGARDA, clearly understanding the benefits of protection offered by antibody therapy. We have created this durable foundation with a high degree of accounts reordering PEMGARDA at 77%. We continue to increase available sites of care nationally and across multiple specialties, showing a high confidence for repeat utilization. Our GPO sites of care continue to grow, and the team has been busy providing education at conferences across the nation in hematology, oncology, rheumatology, neurology, pulmonology, transplant, and more. As a team that is defining a treatment paradigm, we are in the right places talking to the right audiences, and our position is strengthening after each engagement. We secured more than 15,000 contracted GPO sites, significantly expanding our commercial footprint. Taken together, these milestones position us to evolve beyond serving a more limited patient population that we have today with PEMGARDA. With our next-generation monoclonal antibody, we see the potential to redefine COVID prevention, moving toward a vaccine-alternative strategy designed to protect broader populations against viral infection. Invivyd, Inc. is proud to partner with Lindsey Vonn because she exemplifies the power of disciplined preparation as the foundation of enduring strength. In her memoir, “Rise: My Story,” Lindsey writes, “Preparation is the one thing I can control, so I have always controlled it to a capital T.” Lindsey prepared at an elite level to always perform at her best, and that requires foresight to minimize anything that can get in her way. That mindset really mirrors our approach. Invivyd, Inc.’s monoclonal antibody platform is built on the belief that proactive immune protection—preparing the body before viral exposure—is the most effective way to preserve performance continuity and long-term health. Viruses should be kept in check to allow everyone to give their best performance. Staying well helps you continue showing up for the moments that matter, and antibodies can help a person stay well. For this reason, Lindsey is an amazing partner to help educate on the importance of antibodies in all of our well-being. With that, I will turn the call over to William Duke to discuss our financials. Bill? William Duke: Thank you, Tim. I will quickly review our financials, and then we will open the line for your questions. Our PEMGARDA net revenues continued to grow in the fourth quarter, up 31% over third quarter 2025 and up 25% over fourth quarter 2024. Full net revenues in 2025 totaled $53.4 million, reflecting our continued efforts on driving awareness in the market. After raising over $200 million in 2025, we ended the year with $226.7 million of cash and cash equivalents. This leaves Invivyd, Inc. well capitalized through anticipated pivotal data for VYD2311 in mid-2026 and, depending upon continued PEMGARDA growth and continued operational discipline, potentially well beyond. With that, operator, please open the line for questions. Operator: Our first question comes from the line of Patrick Trucchio with H.C. Wainwright. Your line is now open. Patrick Trucchio: Thanks. Good morning, and congrats on all the progress. Just a couple of follow-up questions from us. Just curious, I think it was mentioned that the potential trial resizing decision in the Declaration program could occur around April depending on event rates. Can you talk a little bit more about that, what the specific statistical criteria would be that would sort of trigger that decision, whether enrollment expansion may be needed? And then just separately, I think, beyond symptomatic PCR-confirmed COVID, I am wondering if you are collecting secondary endpoints such as viral load, symptom duration, or health care utilization, and how that could help the clinical benefit profile that is emerging. Marc Elia: Sure. Thanks for the questions, Patrick. Happy to do my best to enlighten. So on your first question on the resizing, everything we do related to powering is, of course, effectively a two-by-two matrix. Right? You have to understand both the expected VE for which you are powering and then the number of events that accumulate that would allow you to project a final study power. And so right now, as we sit here, we feel pretty good about our progress in the study. All of these algorithms are essentially prespecified, of course, to avoid the potential for bias. And so I think the way I would look at it is like this. And again, I am speaking in concepts because, of course, we are not at that resizing yet, and we do not know what the next few weeks will hold. I think if we were to not trigger the upsizing trigger, it would be because we are highly confident in our ability to statistically assess even a lower-than-anticipated VE, or hazard ratio. And if we do, it really could not even be read as a concern about underpowering as such. It would be simply because the way the trigger is designed it would serve to potentially add power in case the target efficacy is lower than we might otherwise anticipate. So we think of it as really a safety mechanism to ensure, to the best of our ability—which, again, is unfortunately subject to that—the best of our ability to support the power of the study in case VE pencils out as lower than our modeling would suggest. Now the good news in all of that is actually related to the speed of our recruitment. The upsizing target is not particularly onerous. Okay? So you can imagine, in your mind’s eye, approximately another 30% of the study or so as an upsize target. And importantly, of course, that cohort would be time-shifted, right? A little deeper into the spring and then into the summer, which you might imagine collectively would add to the probability that you accumulate more cases, for example, in a future COVID wave. So while perfect is unavailable here and we are not endowed with godly insight into the future weeks, what we can confidently say is we are very pleased with what we are seeing, and we truly do not know whether such a resizing would be triggered. I think what is nice to consider is that if it is, we would simply be in a position to feel better about ultimate study powering. And I think, stepping back way back to reflect on this endeavor, our goal is to have a successful study, if that is what the clinical profile of 2,311 allows. And so to the extent that such an upsizing might incur a relatively modest timing and overall financial penalty, I think we would rather “make the mistake” of having upsized and then only later find out we did not need to, than do it the other way around. So I hope that adds some level of color around the design and thinking. I think it will be very difficult for us to elaborate much more because we speak to the Street only periodically. And, of course, these things occur semi-stochastically. Right? We have just recruited up the bulk of the study. We just have most of the exposure out there, and so far, things are looking great. So we will make sure to update you as we go forward. In terms of secondaries, of course, you can imagine in a study like this, we will be recording all manner of interactions between participants and, for example, the health care complex, which is behind one of the questions you asked. And I am sure a great deal more will always come from this study as it did from CANOPY. I think I would caution on expecting meaningful powering of low-frequency clinical events, e.g., hospitalization or death. I think that would be well beyond the intended power of this exercise. But I think that is also for a reason. Meaning, at this stage in the game, I think we see pretty clear linear biophysical truth—if not, you know, that is sort of a level beyond plausibility, but let us just say it like that—that if you do not get sick from SARS-CoV-2, it is pretty unlikely for you to be hospitalized with SARS-CoV-2 or die from SARS-CoV-2. And so our progress as a species, I think, over these last six years has demonstrated that one of the best ways to stay well is to not get sick. And that is really what we are fixated on trying to demonstrate here. I think that is an evergreen principle. I think it has been well elaborated in all manner of these studies. I think those relationships are pretty clear in all of the data, even from the vaccines. And so our primary focus is really on, I guess, a revisit of what was an earlier-in-the-pandemic message: do not get sick. Most good things, we would think, would follow linearly and logically from that. I think that is the regulatory paradigm in which we are pleased to operate. And I would suspect that if we are successful going forward, there will be many, many opportunities, as our antibodies move into bigger and bigger populations, to demonstrate these kinds of things in, you know, classically post-approval registry and other-type situations in which we will all look eagerly to make sure that we are right—in effect, that not getting a symptomatic infection following virus is just a globally good thing. So, again, not trying to be coy or not answer. I think we will collect a lot of stuff. I do not know how meaningful many of those endpoints will be from a quantitative empowering standpoint, but they will certainly be collected. Patrick Trucchio: Yeah, that is really helpful. If I could, I would just like to ask about the measles antibody program. I think there is an update expected in the first half of this year. Can you give us a little bit more detail on what the envisioned use case is? Is it outbreak prophylaxis? Is it sort of a pediatric bridge therapy, you know, before newborns could get the vaccine? Or are we looking at more of a broader prevention strategy? Marc Elia: Great. So thanks for asking, and I hope it does not diminish your interest when we are in a position to more formally update. So I will just stay in concept land for a little while. Look, you have hit upon the use cases, I think, quite nicely in large part. Right? One of the things we very much like about this modality is that there is not a pharmaceutical premise that we—or use case we—prosecute separate from what native human immunobiology prosecutes. So why do we all have antibody suites? It is to prevent the presentation of symptomatic disease, to treat and knock down viremia once an infection is established, and yeah, as you know, that means we could use such an antibody theoretically for treating active disease. It means we could use—and by the way, that is, we have noted in the past, I think, something that sometimes we will use intravenous immunoglobulin, or IVIG, to do. You could imagine, of course, responding to outbreaks with essentially ring immunization via monoclonal antibody, which might be, you know, an enhanced way to look at the kinetics and potency of what we are able to put on board relative to vaccination. And then more generally, you highlighted something there that I think we have been putting a lot of thought into, which is—I think you used the concept of bridge to vaccine. We think about it almost more in the sense of vaccine enhancement. Meaning, I would just observe, and I think this is noncontroversial, children—babies—are born without a fully developed adaptive immune system, especially the B suite. And so there are data demonstrating that delaying vaccination actually has the ability to improve the profile of vaccination, meaning higher, more durable titers from vaccinating older and older kids, and potentially lower possibility of seronegativity or failure to seroconvert after vaccination, not to mention the potential benefits associated with allowing for early childhood neurocognitive, motor development, all these other things. So look, we are going to be in a position, we hope, to contemplate a lot of things that really, I think, the medical complex has not been in a position to contemplate before, and that is because, justifiably, absent other tools, I think that pediatric schedule is thoughtfully assembled in order to try to have the least vulnerability possible beginning with vaccination at an early age. Well, certain antibodies, especially, you know, nirsevimab (Beyfortus) and others, have demonstrated the benefits associated with passive prophylaxis in the very young. There may be other benefits we can explore going forward, but look, it is premature to say more, although Robert Allen is leaning in, and that usually tells me he wants to add something. So I am going to stop in a second. But I guess I would just say stay tuned because I think we are really intrigued by the potential for some use cases, as you put it, that just have never been contemplated before. And I think our view is there is a potential substantial quantum of medical and potentially economic value to create. Dr. Robert Allen: Yeah, I would agree with that answer. And I think that the main thrust of this has come from inbound requests from HCPs for something to provide them with a solution in cases where they have a need for treatment or for post-exposure prophylaxis for measles. And this antibody has been designed with those use cases in mind, as well as some of the potential future use cases that Marc mentioned. So that is really where we are headed with this antibody at this point. Patrick Trucchio: Terrific. Thanks so much. Operator: Thank you. As a reminder, to ask a question at this time—our next question comes from the line of Tom Schrader with BTIG. Your line is now open. Tom Schrader: Good morning. Congratulations on the progress. I think you are making positive event comments, and certainly the safety news is fantastic. We have talked a little bit, Marc, about your ability to sculpt the trial a little bit to try to hit hot-spot areas. If you could talk in broad brushstrokes about how well that has gone, and is that in fact self-enforcing—that the people who enroll are, in fact, they know they are in areas where it is a big deal? And then a more specific question: On the myocarditis monitoring, is that going to be clinical myocarditis—yes/no—or is that a more detailed study where you are looking at, I do not know, muscle protein, things like that? Or is that a deeper study, or is that just the rare clinical myocarditis event? Thanks. Marc Elia: Hey. Good morning, Tom. Thanks for the questions. Happy to give you some view here. So, okay, listen. With respect to the Declaration study, the what we have been discussing is, on the margin, our ability to have sites that are in areas that are, we believe, undergoing some level of community COVID attack rate. Right? Now you can see some of that in the ways that we see it—whether it is clinical sequencing, whether it is wastewater sequencing, or sometimes whether it is, for example, emergency department or, you know, sort of one of those things called the sort of, like, low-acuity walk-in clinic kind of census data on where people are reporting symptomatic, positive COVID. So, look, we operate a U.S. study with a relatively broad catch area because a lot of this was designed in October, November, December timeframe, and we were not in possession of such a map. But, you know, we have some ability on the margin to try to place exposures where we see COVID. I think it is also a risk to over-interpret the map because these things move. And they move fast. And so, for example, over the next few weeks or months, to the extent that air conditioning goes on across the U.S. South, the map can move. But we feel pretty well prepared and pretty well configured to hopefully keep seeing event accrual. Now is it self-reinforcing? I could not even begin to answer because I have never even contemplated such a thing. So I guess I will leave it as I do not know. But we will see, in hindsight, whether there is any discernible behavioral aspect to it. On myocarditis, I think at first pass, this is going to be a yes/no exercise mainly because the LIBERTY study where we are looking for that is small, and I think the risk of overt myocarditis or pericarditis following vaccination is relatively low. Now, like all clinical studies, we gather samples. We will look at data. There can always be room for more detailed exploration or follow-up. And again, if we were to see such an event following vaccination, I think we would become very—I will not speak on behalf of the broader scientific or academic community or regulators—but I imagine a lot of people might be interested in that. I just want to double underline: myocarditis/pericarditis is not something we see with antibodies. Right? This is a function of studying mRNA-based COVID vaccination in our comparative and combination LIBERTY study. So, look, we will see. Right? LIBERTY is certainly not powered, or even close to powered, to detect events that we would imagine are at that lower frequency. But let us all find out together. Tom Schrader: And if I can ask a quick follow-up, you apparently have an RSV antibody you like. That would seem to be a high bar. That has been a very active area for a long time. Can you give us any detail on maybe what you are improving or how hard you think it would be to have an antibody that was good enough to take on what is a pretty entrenched competition? Thanks. Marc Elia: Sure. And now I really saw Dr. Robert Allen’s body language change, so I know he is going to have some thoughts on this topic. But I would just say this. You know, the RSV antibody field goes back, I believe, to 1998 with palivizumab, or Synagis, and was really only updated at the molecular level, I want to say—and forgive me if I am wrong—in 2023 with the arrival of nirsevimab (Beyfortus). Now nirsevimab is a lovely antibody. We think ours is a lovely antibody, and I think it has some properties that we see as quite compelling. And so, you know, typically in the pharmaceutical industry, when we look at a blockbuster, high-growth antibody space, it is hard to sit back and conceive of the fact that that will be the one thing forever and only and always. And indeed, at the molecular level, we really like what we are seeing and expect to have the ability to compete. I will let Robert elaborate in a minute, but I would also just note we look at RSV as a really attractive component of an emerging strategy. You might well notice now as we go from COVID to RSV, perhaps to measles, perhaps onward to other viruses in which having a commercial portfolio and a real presence in pediatrics has the potential to open or expand on a field that is, I would argue—by contrast to your assertion—in its infancy, no pun intended. Nirsevimab, in year three now, is early. I think its dramatic commercial success is a function of the quality of the medicine. And so, to the extent that we feel great about the quality of our medicine, I can say we are very much looking forward to competing. And now that is a long way off, but we have opportunity in front of us to be clever in clinical trial design, to be clever in, you know, some other aspects that might define our overall profile. And now that Robert is good and warmed up, why do you not add color as you see fit? Dr. Robert Allen: I think, you know, what you can know is that we learned a lot in the era of generating COVID antibodies about trying to be upfront about addressing evolutionary drift. Drift represents a change in context that deserves to be addressed periodically. When we look at RSV, in the time since the screening was done for the two known actives that are in the market now, there has been a considerable amount of drift, and really the design of our program was meant to address that. And with that drift, also address some of the known liabilities for the two known actives and overcome those liabilities by design. And so this is where we find ourselves with a very high-quality antibody that is contextualized by the recent evolutionary past of that virus. And I think that, as we see with RSV, we can depend on it to drift—not as much as SARS-CoV-2, rather—but it will drift, and so we will continue to address that as it comes up. It is really the overall strategy that we have with our antibodies: to be very upfront about updating antibodies periodically to match the environment that we find ourselves in. I hope that helps. Tom Schrader: Yeah. That is perfect, thank you. Dr. Robert Allen: Thank you. Operator: And I am currently showing no further questions at this time. I would like to hand the call over to Marc Elia for closing remarks. Marc Elia: All right. Well, thank you very much, all of you, for joining us this morning. We will look forward to having, I am sure, some follow-up calls throughout the day. Have a great day. Thank you. Operator: This concludes today’s conference. Thank you for your participation. You may now disconnect.
Operator: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0 and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0 and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Welcome to the Stabilis Solutions, Inc. Fourth Quarter 2025 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode. Following the presentation, we will open the line for questions. Lastly, if you should require operator assistance, I would now like to turn the call over to Andrew Lewis Puhala, Chief Financial Officer. Mr. Puhala, please go ahead. Good morning. Andrew Lewis Puhala: And welcome to Stabilis Solutions, Inc. fourth quarter 2025 results conference. I am President and CFO of Stabilis Solutions, Inc. And joining me today is our Executive Chairman and Interim President and CEO, J. Casey Crenshaw. We issued a press release after the market closed yesterday, detailing our fourth quarter and full year operational and financial results. This release is publicly available in the Investor Relations section of our corporate website at stabilissolutions.com. Before we begin, I would like to remind everyone that today’s conference call will contain forward-looking statements within the meaning of the Private Securities Reform Act of 1995 and other securities laws. These forward-looking statements are based on the company’s expectations and beliefs as of today, 03/05/2026. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. The company undertakes no obligation to provide updates or revisions to the forward-looking statements made in today’s call. Additional information concerning factors that could cause those differences is contained in our filings with the SEC and in the press release announcing our results. Investors are cautioned not to place undue reliance on any forward-looking statements. Further, please note that we may refer to certain non-GAAP financial information on today’s call. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. Today’s call is being recorded and will be available for replay. With that, I will hand the call over to J. Casey Crenshaw for his remarks. J. Casey Crenshaw: Thank you, Andy, and good morning to everyone joining us on the call. We closed out 2025 with strong execution as we successfully wound down operations on two major multiyear contracts: our truck-to-ship marine bunkering contract with Carnival Corporation and our contract with a leading global provider of mobile power generation servicing an electrical cooperative in Louisiana. The completion of these agreements resulted in a year-over-year decline in revenue and adjusted EBITDA for the fourth quarter. The conclusion of the contracts during the quarter reduced fourth quarter revenues by approximately 28%. In both cases, we remain in a strong position to continue supporting these clients as they assess their future needs for our integrated last mile LNG solutions. Their ongoing engagement is a testament to our platform and the strength of our team and our people. As we move into 2026, we continue to see significant, significant and growing demand across our key markets. That said, we expect lower revenues and profitability in the first half of the year as we bridge toward the startup of several new customer contracts that are expected to begin in mid-2026 and early 2027. As we announced on February 17, we were awarded an estimated $200,000,000 two-year contract to support behind-the-meter power generation for a U.S. data center. Upon commencement, it will represent the company’s largest ever contract in operation. Deliveries will begin in 2027 and are expected through 2029. As the United States continues its historic investment in data center infrastructure, the rapidly expanded power needs of these facilities create a substantial opportunity for behind-the-meter LNG-based power generation. Over the past several months, we have seen a notable increase in customer interest in LNG for both commissioning and bridge power for U.S. data centers where pipeline-delivered gas or electrical power is not available. Our last mile LNG solutions network is a highly reliable solution in these environments. We are also seeing strong demand in our aerospace market where commercial launch activity remains robust. Our commercial team continues to pursue opportunities with both new and existing customers in this sector. At the same time, we work toward FID on our Galveston liquefaction project. We are also seeing strong long-term demand trends for the marine bunkering offtake. We continue working toward a final investment decision on the Galveston facility. We are in active discussions and negotiations with potential project equity sponsors and lenders on the financing structure. In parallel, we have 60% of the facility’s planned capacity contracted and are working to sell the remaining available capacity. We continue to work with our advisors on a special purpose vehicle structure funded with project-level debt and equity from third-party investors. This structure is expected to create long-term value for all stakeholders while enabling Stabilis Solutions, Inc. to further expand our core operations amid accelerating end market demand for flexible LNG fuel solutions. As we work toward FID, we are actively engaged in engineering design and ordering long-lead-time items to maintain the project schedule. We remain committed to providing periodic updates to our shareholders as key project milestones are achieved. In summary, 2026 represents an important transitional year for Stabilis Solutions, Inc. Achieving FID on our Galveston liquefaction facility will mark a foundational milestone, positioning the company for meaningful change in long-term value creation. At the same time, our commercial and operational teams remain focused on delivering best-in-class service, reliability, and quality across our other growth markets. Contracts we have in hand provide strong visibility into sustainable multiyear growth beginning in 2027 with momentum building as we progress through late 2026. As always, we remain committed to creating sustainable long-term value for our shareholders and look forward to keeping you updated in the quarters ahead. With that, I will turn the call over to Andy for a detailed review of our financial performance. Andrew Lewis Puhala: Thank you, Casey. I will begin with a discussion of our fourth quarter performance followed by an update on our balance sheet and liquidity. Fourth quarter revenue decreased 23% year-over-year driven by a 22% decrease in lower rental and service revenue. At an end market level, marine bunkering revenues fell 42% year-over-year while power generation revenues decreased 56% due to the conclusion of the large multiyear contracts in both markets. This was partly offset by a 17% increase in aerospace revenues and a 12% increase in industrial revenues compared to the same quarter last year. Adjusted EBITDA was $1,500,000 during the fourth quarter, compared to $4,000,000 last year. Adjusted EBITDA margin was 11.5%, down from 23.2% in the fourth quarter of last year. The decrease in our adjusted EBITDA margin primarily relates to the conclusion of the two large contracts, a nonrecurring favorable SG&A adjustment, and a gain on asset sale, both occurring in the prior-year quarter. Cash from operations totaled approximately $670,000 for the quarter. Liquidity at quarter end was $10,200,000, consisting of $7,500,000 of cash and approximately $2,700,000 of availability under our credit facilities. Capital expenditures totaled $3,100,000 during the quarter, primarily related to early engineering and design work and long-lead items for the proposed Galveston facility. In 2026, we anticipate $1,000,000 to $2,000,000 of additional capital in the project and for routine maintenance CapEx. Additionally, we expect to invest additional capital into mobile equipment and related assets required for the significant data center contract set to begin in early 2027. This capital investment will be funded by prepayments made by the customer. That concludes our prepared remarks. Operator, please open the line for the Q&A session. Operator: Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing 2. Thank you. Our first question comes from Martin Whittier Malloy with Johnson Rice. Please go ahead. Your line is open. Martin Whittier Malloy: Good morning. Congratulations on all the progress you have made on the data center front and Galveston LNG and aerospace. A lot of moving parts here, a lot of positive news. First question I have is about data centers, and I think there is a growing recognition that behind-the-meter power for these data centers might be utilized over a longer period of time, and then you have some temporary backup power needs. Can you maybe talk about what you are seeing in terms of customer demand in the data center market? And I know this contract that you have talked about is for two years in initial length. Can you talk about opportunities to extend that? J. Casey Crenshaw: Yes, sure. Happy to. And by the way, thanks for joining today and I appreciate your feedback. So when we think about the last mile LNG solution for the behind-the-meter data center or high-speed computing area, there are really a couple of different areas that Stabilis Solutions, Inc. can participate really well in. And I am going to take it from the shortest to longest duration. The first is around the commissioning of these facilities, where it could be 50 to 100 megawatt volume and could last anywhere from three to nine months, where they are working to commission blocks of these data centers, and these are one range of activity. They may be waiting on gas pipeline or different power electrical hookup during that period of time, but they are trying to commission the facilities in advance of that, whether it be the water, the cooling, and all the different things they are commissioning. The second, which is similar to this other project, is what we call a bridge solution where we are providing last mile LNG solution to a power generation company and they are providing either a two- to five-year bridging while they are waiting on the natural gas pipeline or the power lines to be brought into the facility. And so there is a chance that things do not work out on perfect scheduling and there are extensions to those contracts. And the last is there is a growing volume of permanent gas power generation for data centers, and LNG becomes a backup solution on those. So they have a pipeline connected in, they have natural gas, they have natural generators that are running off natural gas, but they bring in LNG as a backup solution in case there is any outage or issues with the pipeline. So I hope that explained the three different sectors and where we participate in the space of behind the meter for specifically data centers. And I want to add Stabilis Solutions, Inc. is actively providing distributed power activities around all different types of applications, not just data centers. But data centers are definitely a growing area right now for the company. Martin Whittier Malloy: Okay. And I was wondering if you might be able to, you know, this contract is much larger than what we have seen previously. Could you talk about any factors that we should consider in thinking about EBITDA margins on this kind of contract that would cause it to be above or below or on average with historical averages, or maybe not the specific contract, but just in general, larger contracts that you might be looking at. J. Casey Crenshaw: Well, there are a couple of different things we have worked on this one. And one is to have the client support us on additional CapEx that is related to the project and to be able to perform around contracting third-party supply, etc. So we have structured the contract to give the most solution around very strong results for the client and protecting the downside for Stabilis Solutions, Inc. if there is any delay or gap in service. And so we have done that through customers supporting us with credit enhancing features to support us on the CapEx and the OpEx related to locking down the supply to support them. That is one thing we have done as a risk mitigator. When I think about EBITDA margins and some of that stuff, I feel it is consistent with historical business, and we do not prefer to give any project-based specific details around that out, other than to acknowledge that it is not it for the clients and stakeholders and it is not anything different than historically would be provided other than they provided a lot of credit enhancement to protect us in case there are any scheduling delays. Martin Whittier Malloy: Great. Thank you. Very helpful. I will get back in queue. Operator: Thank you. Our next question comes from Tate H. Sullivan with Maxim Group. Please go ahead. Your line is open. Tate H. Sullivan: Hi, thank you. Good day. A follow-up to your last comments too on the two-year contract estimated revenue of $200,000,000, do you base that on forward prices for your LNG supply? Or can you go a little bit into how you generate that $200,000,000? J. Casey Crenshaw: Yes. So that is based on—thank you for the question and thank you for being on the call today. And that is a good question. That is based on expectation of the cost of the LNG and all the additional costs associated with delivering it, and that is based on their expected demand that they have given us over that two-year period. Not any extensions or none of that. So maybe I hope that answered the question. Tate H. Sullivan: Okay. Yes. Thank you. And then when you talk to customers such as the data center owner or operator, what are the pricing discussions like when they are talking about diesel generators versus backup energy storage systems, or how do you address any pricing concerns from customers of LNG and other solutions? J. Casey Crenshaw: Yes, I think that is a great question. And I think when we really think about where—and I hope we are being clear about this to you guys—that these three different areas where LNG really can participate. One is the shorter term, you know, three months to one year where we are doing the commissioning and support. Sorry, them on the power generation for the commissioning. That is probably the least price sensitive area. Bridging is more price sensitive. And then that final area is the most price sensitive, if you are permanent installed power base, you know, are competitive projects and they are looking at what their kilowatt per hour and everything is. And so, you know, we are always comfortable competing with diesel. But if you look at kind of, you know, grid cost power or you are looking at pipeline cost, those are normally cheaper than an LNG turnkey solution. Tate H. Sullivan: Okay. Thank you for the background. Thanks. Have a good day. J. Casey Crenshaw: Thank you. Operator: Thank you. Our next question comes from William Dezellem with Tieton Capital. Please go ahead. Your line is open. William Dezellem: Thank you. I have a group of questions. First of all, discuss with this large contract how you are going to fulfill a couple hundred million in revenues. I mean, it is clearly, that is not—presumably, that is not coming from George West. So walk us through just practically how this will unfold, if you would, please. J. Casey Crenshaw: Bill, thanks for the question. I appreciate that because I think that will add some clarity. This project is not in a region that is going to be supported by our own liquefaction facilities. So we are using our third-party network. We speak a lot about this third-party network of Stabilis Solutions, Inc., you know, through our acquisitions and the buildup of who Stabilis Solutions, Inc. is today through a number of companies that did not have their own liquefaction capacity and always used third parties. So we are using third-party liquefaction offtake agreements, and we are providing the turnkey LNG solution providing the logistics and then the on-site storage and regasification of the molecule back to the gaseous state to hit the generator. So that is, you know, the way we are doing it. And there is LNG available in these regions in these markets. And it really provides an easy data point of why Stabilis Solutions, Inc. is unique and special in the fact that we do have our own liquefiers and then we have the ability to provide this kind of turnkey solution even if we are not making the LNG ourselves. So I hope that answers it. Yes. It is not in the Gulf Coast region, and due to some confidentiality protections, we do not talk about where it is in the United States or in North America. William Dezellem: So, Casey, with that in mind, is there any reason that you could not do, I mean, hundreds of these type of contracts? And I recognize there are not hundreds out there, but really an unlimited number since it is not your molecule that is being consumed. J. Casey Crenshaw: Well, eventually, yes. Bill, that is a great question. So let us break it back down to those three options. One is the commissioning. We can do a lot of those. Those are really good, you know, six months to one year projects. Really good, lots of that is available. We are working on lots of conversations around that. And then this bridging project is really good as well. Yes, we can do a lot more. It is not limited by our liquefiers, but there is some limit to the total available LNG out in the different regions and how far we can move it via truck. So what happens is it becomes more price sensitive. And then when you then look at the backup solution at longer term, that is where, you know, the economics of these facilities, how long they are bridging, what their timeline is, all plays into the price that they are willing to pay and how far we have to move it to provide that. So first phase, the commissioning testing, lots of opportunity, lots of availability, just really strong. Bridging a little bit less, two to five years. There are some projects that will absolutely do that. We do believe we can scale that as well. And then the backup is a really strong longer-term opportunity where they really do not want to do the backup with diesel if they could help it. They want to continue to do their backup with natural gas, and they want to be toggling between grid prices and their own behind-the-meter power generation is kind of the perfect world for these data centers. And, you know, there is still, you know, to be honest with you, we are still early stages in the development of how to optimize the power on all of these, and they are just trying to get them in. So what we are excited about at Stabilis Solutions, Inc. is that we are an active participant in the distributed power market. This is the data center part of it. We are excited that we are working on it. We have been talking to you guys about it. We are equally excited about the aerospace business. We are equally excited about the marine bunkering activity and what we are seeing there. But this is an area that we are recently seeing contracting activity and we are delighted to be able to share with you guys some tangible contracted success around the space. In the data center, distributed power we have been in and doing and continuing to do. William Dezellem: Thank you. One additional data center question before we jump to marine bunkering. So is rolling stock a limitation at some point because of production capacity, or is this—I guess I am trying to understand what other limitations are there besides the ones that you aptly laid out in your response to my question? J. Casey Crenshaw: Well, I will go over all three of them. One is third-party supply or self-generated supply. And some of these projects are long enough, they may want us to build liquefaction nearer to the facility. So some of them are that bridging where they say, hey, could you consider putting a plant up nearer the facility and truck it in. So it is the molecule availability, and it is the logistics equipment, and then it is on-site storage and regasification equipment. All three of those are gating items and are really determined by the volume needed at the site and the distance. So we go into this with the largest logistics fleet and regasification fleet in the country due to the fact that Stabilis Solutions, Inc. had consolidated and been in this space in a number of end markets for years. And so we have the largest cryogenic fleet and regasification storage fleet in the United States. So that is an inherent benefit. As we continue to have growth in this space beyond what our logistics and on-site storage equipment and even liquefaction is, these customers are working with us to support and enhance the credit of the contracts to allow this solution, which we saw in this project where they were supportive of that on how they handled the contracting. So in this contract that we have discussed, we are adding logistics equipment. We are adding, you know, n+3 kind of protection around on-site storage and regasification. So they are super supportive on making sure they have everything in place that performs for their data center needs. William Dezellem: Alright, thank you. And then moving to the Galveston facility, since we are talking about FID by the end of the month, I mean, that looks like it is fully on track. But I will take the negative side of the question: what could derail it at this point since we are 25 or 26 days away from the end of the quarter? J. Casey Crenshaw: Yes. Well, hopefully, we have laid it out. There are a couple different things that we are in conjunction working on. One is the additional offtake. So we said we have 56% of the offtake contracted. We are in active discussions with customers around contracting the balance of the facility. The balance of the facility offtake agreed to optimize the capital structure in the project. Secondly, the capital structure. We are still in active negotiations and working with our capital partners, both the term debt part and then the preferred equity kind of sponsor in the SPV. So those work in conjunction with the offtake, and so we are working all that as one group. And then we are working to have the timeline be consistent with what our clients that have already contracted need that to be. So long-lead items, engineering, so we continue to work on it while we are trying to get that locked up and finalized. William Dezellem: One derailleur of timeline might be a global war, which we happen to start this past weekend or started this past weekend. So that kind of changes the dialogue. J. Casey Crenshaw: We think it enhances the need for stable, low-price, consistent fuel in the United States, specifically in the Houston Ship Channel. We think this enhances the project long term and shows why Stabilis—means Greek for stable—means having capacity and supply in the Houston Ship Channel, Galveston area is positive for the United States and the customers that call on these ports. So we think it is an enhancer, but it definitely is a new variable that got inserted in the process this week. So I hope I have laid it out. There is the commercial side. There is the financing matching with that. And then there is just the lead time and execution for the current clients that have the 56% of the offtake. And then there are kind of third-party things that are in play like the conflict in the Middle East, which is driving up the global cost of LNG, which is making the LNG that we can produce more optimal for our clients to contract. William Dezellem: That is helpful. And let me ask relative to the Carnival contract not being renewed. As it was shore to—or truck to—ship, would you please walk us through the dynamics of why they are not renewing, then what they are going to do for fuel in the intermediate time period before the Galveston plant is up and running. J. Casey Crenshaw: Sure. I will give you a little bit of color. I cannot always—we cannot speak for our client, but I will speak to what we understand and what we are, you know, pretty comfortable telling you guys is that they would have liked to have extended that contract. The Jones Act vessel that they had contracted separately that we delivered to, that delivered the fuel to them, was no longer going to be available starting in 2026. And that availability of a Jones Act bunkering vessel for this project is what made the extension not happen. William Dezellem: So they had, you know, verbally and letter agreements— J. Casey Crenshaw: Told us they wanted to extend it. But it was based on them having that available vessel, and that vessel was not available. That changed their ability to extend. In the medium term, short term, they will have to either have their vessel rerouted to an area where they may get LNG, whether that be The Bahamas, or do some routing difference, or they will have to use marine gas oil, which is called MGO, which we refer to as MGO. It is their alternative fuel source. Does that answer your question or is there any follow-up to that? William Dezellem: Yes, it answers the question, but maybe this is highlighting the lack of equipment for bunkering—that maybe that I certainly did not appreciate or understand. So maybe just as my final question, would you lay out the supply-demand dynamics of the bunkering vessels that exist and how rare or prevalent they are and why this particular bunkering vessel was no longer available to continue the contract. J. Casey Crenshaw: Absolutely. I think the best way to think about it is the maturity of the different bunkering markets. And I would say the most mature bunkering market with Jones Act bunkering vessels is in the Florida or the southern part of the United States in the Florida area. It was the first to start adopting and became the earliest, and I believe my number may be off by one, but I think it was about five Jones Act vessels that are bunkering LNG in the United States, and they are all in Savannah or in Georgia down through Florida. And so that is the availability of Jones Act LNG bunkering vessels in the United States, there are five or six and those are all in that area. And so that area was developed first. And so one of the reasons we are excited to bring this to the Gulf Coast and, over time, in other areas is because it is not a new technology. This is adopted, is working. It is just a shortage of vessels. And so that vessel was able to be moved back and have plenty of work over in that region. William Dezellem: That is helpful. Thank you, and good luck with the FID process. Operator: Thank you. We will move next to Ed Proskovich with WP Capital. Please go ahead. Your line is open. Ed Proskovich: Good morning. Casey and Andy, I have been involved in Stabilis Solutions, Inc. for some years, probably going back to GTLS—GTLS, Chart Industries’ initial investment. I have just a quick question, a good follow-up question. I see you have leased or chartered a vessel from Seaspan, the Garibaldi? I am wondering how that fits into the SLNG picture since it cannot bunker the United States, but it could bunker places in The Caribbean or Panama Canal. Hello? Operator: Just one moment please. We are having technical issues. Please remain on the line. To our location line, we are having technical issues. Speakers are back in conference. Ed Proskovich: Anyway, hey, guys. Hey, I have been a holder since the Jeep days. I really like the company. Everything is super. I have one question that feeds in well to the previous question. I see we leased a bunkering vessel, granted not Jones Act approved. Can we get any updates on that? What is it going to be used for? Are we not going to use it or what? J. Casey Crenshaw: Well, we are still in process on that. We would like to circle back with you on the next call. That was a plan to work toward trying to support our clients and customers, but let us circle back with you on the details on that. But— Ed Proskovich: Okay. We are not prepared to go over that— J. Casey Crenshaw: Just yet. Okay. I will speak to you guys later. Thanks for joining, and we appreciate you being a shareholder and being active on the call today. Thank you. Thanks, Ed. Ed Proskovich: Okay. Thank you very much. Bye. Operator: Thank you. We do have a follow-up from Martin Whittier Malloy with Johnson Rice. Please go ahead. Martin Whittier Malloy: Thank you for taking my follow-up question. Just wanted to ask kind of a bigger-picture question relating to aerospace. I guess the potential has been out there for years that we might see something more on the contracting side there with respect to aerospace. Now with more demand for LNG for, yeah, data centers, manufacturing, bunkering, is there any change in the way that the aerospace companies, space companies, are viewing their LNG supply and maybe trying to secure it more with a contract, have more visibility on the security of the supply there? J. Casey Crenshaw: Well, I will start and I will let Andy kind of come back on this. Like we do have contracted work we do with them. And it is done on one-year and re-extended contracts, etc. And we have a number of contracts inside the space. But when we think about contracting, we are talking about multiyear take-or-pay type discussions. And so we are contracted, they are just not multiyear take-or-pay contracts. And, you know, it is an exciting time for them. Their commercial consistency on really, you know, making money, sending stuff up and how that works with satellites and what their total business is and how that interlocks with the data center AI kind of growth and macro—they are really together. They are actually coming together on activity, not separating. And we do think there is going to be a lot of need for closer supply both in Florida and in the other areas where they launch and how they go about that. And then there are still quality differences on what their rockets need and how they need it. We continue to work with all of our clients in that area about how we can put, you know, specific-purpose liquefiers in for them, how we can contract longer term. They are, as they are continuing to grow their needs and develop more consistent flights, I think that is becoming more and more of a question and an issue. You know, obviously, some of them like to self-perform everything. Some of them want to do more outsourcing. So, you know, I think there is just a blend there. So not trying to not answer it real directly, but I do want to say we are contracted with these good companies. We do expect to see meaningful growth in overall revenue in 2026 versus 2025. North of 30-plus percent growth, maybe more than, more 40% growth in that space. That is our expectation and we are seeing it grow. But we have not today a line of sight on putting an asset in for one of them yet as in the liquefier fit for purpose. And we are actively having discussions with that being available. We just have not got that contracted yet. Martin Whittier Malloy: Great. Thank you. Very helpful. Appreciate it. Operator: Thank you. We will move next with Spencer Lehman, a Private Investor. Please go ahead. Your line is open. Spencer Lehman: Hi, good morning. I am very excited about what you guys are doing, what you have got lined up. Sort of my dream come true. After many years. And I just turned 90, so I think maybe I am going to get a chance to watch all this develop. I do wonder if you had considered the possibility of instead of going alone, maybe merging with a larger company where all the financing could be done by their balance sheet. But it looks like the train sort of left the station. Right? And is that still a consideration? Or you think you can handle this whole thing? It seems like it is pretty ambitious for such a small company, but you feel pretty confident? J. Casey Crenshaw: Yes, Spencer, we do. And first of all, just thanks for being a long-term shareholder and we are more excited than you because we are just big believers in how this turnkey LNG solutions is just a game changer on all three of these growth markets, aerospace and the distributed power and the marine bunkering, and we are just, you know, wildly excited about it. Yeah. You know, I think we laid it out that in the marine bunkering project where we are doing a lot of infrastructure right now, we are talking about how to finance that through a project financing special purpose vehicle and we think that is the most optimized capital structure. It allows us to retain our equity, while we believe the equity is not fully priced into the opportunities and growth of Stabilis Solutions, Inc. And so it allows us to have growth without meaningful dilution. And so we still believe that is the right path. When we look at distributed power, customers are supportive and credit enhancing to help us meet that growth with them. And when we look at space, you know, we are absolutely—or aerospace—available to put in some assets and do some stuff if they contractually would like us to do that. So we are not against putting debt, enhancing the capital structure, or really doing anything that unlocks value for the shareholders. And furthermore, we have a duty to unlock that value for the shareholders. And so you are not going to hear us in the management team saying never say never on anything. Our goal is to grow the company profitably with these three big end markets that we are discussing. For you shareholders to know that we want to grow the company, and we believe this is a growth space—both infrastructure, logistics—there is just all kinds of growth. And as we need to tap different financial markets to accomplish that, we have a duty to go do that and we intend to. And so we appreciate the question. Right now, we feel like we have got adequate support with the clients and the contracts right now. But we do not want to pretend there is a negative bent on anything other than profitable growth for our shareholders and for our stakeholders. Spencer Lehman: Well, thank you. And I think that is a great answer, and I am very pleased that you try to keep the dilution at a minimum. So thank you very much. J. Casey Crenshaw: We are in alignment there. Okay. Spencer Lehman: Alright. Go get them. Thank you, Spencer. Appreciate you joining this morning. Sorry our phone got disconnected. Yeah. Okay. Operator: Thank you. We will move next to George Berman with Cabot Lodge Securities. Please go ahead. Your line is open. George Berman: Good morning, and I also want to join the previous callers congratulating you to a very, very good job. I think things are looking definitely up, up and away for us. One particular question I have, I discussed this with your CFO a few times. We are owners of an ownership stake valued at about $10,000,000 on your balance sheet that is throwing off about $1,000,000 a year with a China joint venture. Is there any chance of maybe monetizing that because I think that would add some nice firepower for your current projects. J. Casey Crenshaw: Well, I appreciate the question. And we are really proud of that stake with that partnership with BAMKO and with our joint venture in China. We are proud of the company. We are proud of the management team. And we are delighted to be partners with Baumco in that business. Because we are not the majority shareholder and we are a partner and heavily represented on the board, we do not control all the perfect timing of how that strategic asset would be monetized. There are specific things in the joint venture agreement that allow it to be monetized at certain time periods. And those are specific. But it is a wonderful company. I think there is a lot of value, but I think the negative with that is, you know, the geopolitical challenges associated with China right now make that a bit of a, you know, is this the most time to do something there or not? Should we wait till things normalize better? Is that a better step-up value? But it is a great company. It is a wonderful group over there and if you know, that was part of the existing company that Stabilis Solutions, Inc. reverse merged into. You know, one of the only assets inside the company as we reverse merged into it. But we are delighted to have that. We participate as board members, both me and Andy, and are actively in that and have an executive that watches it and is in China working on it for us. And the million dollar plus a year that you received is nothing to shake a stick at either. We are proud of their performance and their consistency on providing the shareholders dividends and cash dividends as it relates to that business. George Berman: Right. And you are currently—you have the one big plant in, I believe, it is George, Texas, produce the LNG. You also mentioned last year on a conference call that you had already acquired the necessary equipment to build a second one. Has that gone any further? Is that part of the overall picture right now where to put it? J. Casey Crenshaw: Yes, that is. We have two liquefiers, one in Port Allen, real near Baton Rouge, Louisiana, and one in George West, Texas. And then we acquired a complete additional plant to—we call it a train or a plant or a liquefier—to install. The best place to install that is George West. That is where we would like to install it because the construction cost is lower and we get the benefits of having all the infrastructure already there. However, we have both marine clients and distributed power clients and space clients all looking at maybe they would like it near their offtake agreement. And so we have left it as an uninstalled asset to try to come up with where the most interested customer and client might want it with the longest term, you know, opportunity and offtake being. So it is available to deploy and has not been finalized on where that deployment is because we have not had the customer finalization of where to put it. George Berman: Right. So you would say—or we could say—that you basically right now are in the driver’s seat, fielding offers, and whatever is most appropriate for the company, you can take it and proceed. J. Casey Crenshaw: Yes. I appreciate the comment. We believe customers are in the driver’s seat. We are just waiting on which one would like to have that availability and that surety of supply. We are kind of under their direction. But it is a valuable strategic asset to have and have the ability to deploy it quickly relative to a greenfield application. George Berman: Right. Right. Well, Mr. Crenshaw, I also want to thank you for taking over the leadership there. I think we are definitely going in the right direction, and I will be looking forward to much higher equity prices once we get the financing for these big opportunities on the ground. J. Casey Crenshaw: Well, I agree that we have a great team here. I am looking forward to higher equity pricing for all of us as well. We have an amazing management team here. Andy, you will get to speak to a lot—our CFO, our balance of team here with Matt and Sage and Colby and just can go on and on with our team here. I mean, it is hard for me to throw out names because we would have to throw them all out. We have an incredible team, the most skilled turnkey LNG solutions team in the world. And these three core markets that we talk about with the best team in the world, period. Getting to the most profitable growth and the most profitable projects is something that we need to keep working on and optimizing for the shareholders. But we have a great team, a great set of assets, great set of logistics, plants and customers and end markets, and we are just so lucky to have all of our good clients. And we are working hard to keep them. And even though we had these two contracts roll off, the fact that we are still working with both clients and active with both clients is a testament, as we stated earlier, to our company and our team and people. So thank you for calling in today. George Berman: Thank you. Operator: Thank you. This concludes the Q&A portion of today’s call. I would now like to turn the floor over to Andrew Lewis Puhala for closing remarks. Andrew Lewis Puhala: Well, thank you all for joining the call today and your support of the company, and we look forward to keeping you updated as we have things to share and look forward to speaking with you on next quarter’s call as well. Thank you. Operator: Thank you. This concludes today’s Stabilis Solutions, Inc. Fourth Quarter 2025 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the JD Health International Inc. 2025 Annual Results Conference Call. [Operator Instructions]. I will now turn it over to [indiscernible], Head of Investor Relations. Unknown Executive: Thank you, operator. Good day, ladies and gentlemen. Welcome to the JD Health 2025 Annual Results Conference Call. Joining us today are JD Health's Executive Director and CEO, Mr. Dong Cao; and CFO, Ms. Deng Hui. Before we start, we'd like to remind you that today's discussion may contain forward-looking statements, which involve a number of risks and uncertainties. Actual results and outcomes may differ materially from those mentioned in today's announcement. In this discussion, the company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-IFRS financial measures for comparison purposes only. For a definition of non-IFRS financial measures and the reconciliation of IFRS to non-IFRS financial results, please refer to the annual results announcement for the year ended December 31, 2025, issued today. For today's call, management will read the prepared remarks in Chinese and will only be accepting questions in Chinese during the question-and-answer session. A third-party interpreter will provide simultaneous interpretation in English on a separate line for the duration of the call. Please note that English translation is for convenience purposes only. In the case of any discrepancy, management's statements in the original language will prevail. I would like to turn the call over to Mr. Dong Cao. Please go ahead, sir. Dong Cao: Hello, everyone. I'm Cao Dong, CEO of JD Health. It is a pleasure to share with you our 2025 full year results. In 2025, China's economy maintained a steady and resilient momentum in industrial foundation for company's continued development. The government actively promoted development of new quality productive forces in the health consumption sector and encourage the standard adoption of AI across the health care sector, charting a clear path for long-term sustained growth. 2025 marked the return of JD Health's return and profit to a trajectory of rapid growth, further reinforcing our positioning as a market leader. As industry-leading health care service provider, we continue to deepen our presence across key health care segments through our omnichannel, super pharmaceutical supply chain infrastructure, comprehensive AI-powered online health care service capacities and the full life cycle health care management ecosystem. We remain committed to delivering accessible, convenient, high-quality and affordable health care products as well as our solutions. In 2025, we continued to capitalize our super pharmaceutical supply chain advantages and industrial direct sales capacity building AI-enabled full-scenario healthcare services ecosystem that supported sustainable high-quality growth. In fourth quarter, revenue reached RMB 21 billion, representing year-over-year increase of 27.4%. Non-IFRS reached RMB 1.1 billion, up 13.5% year-over-year with margin of 5%. For 2025, our revenue reached RMB 73.4 billion, representing year-over-year about 26.3%. Non-IFRS profit totaled RMB 6.5 billion, up 36.3% year-over-year with our non-IFRS profit margin 8.9%. Notably, we delivered revenue growth of more than 20% year-over-year for 4 consecutive quarters, while our full-year non-IFRS profit margin reached its highest level ever since IPO in the pharmaceutical sector. Leveraging our supply chain strength, we continue to gain from partnership with pharmaceutical companies as the first online marketplace for new and specialty drug launches. We introduced more than 100 new drugs during the year, a significant growth from 30 in 2024. Taking the DAYVIGO as an example, this flagship collaboration between Eisai and JD Health exceeded 20,000 orders in launch month alone. At the same time, by working closely with pharmaceutical companies to promote innovative integrated consultation, pharmaceutical and service closed-loop model, we are strengthening those partnerships and establishing a novel health care ecosystem that supports comprehensive collaborative relationship. For instance, we established strategic collaboration with Novo Nordisk, drawing on omnichannel expertise in chronic disease management and treatment solutions together with JD Health [indiscernible] in healthcare service. We jointly established a dedicated public health hub on obesity. This initiative supports a one-stop diagnosis and treatment and medical solution for diabetes and drug [indiscernible]. We also formed a strategic partnership with Eli Lilly to promote the innovative digital health solutions for patients in China who are living with obesity and type 2 diabetes or alopecia areata. Those solutions integrate patient education, live consultation, medical supply and long-term disease management. In health supplement, we fully harnessed our direct sales capacity, actively engaging in product co-development, supply chain structuring, professional service enhancement and industry standard setting to reinforce our platform central role across our value chain. By focusing on the senior nutrition, child development, beauty supplements and ready-to-consume nutrition products, we have helped the brand partners to achieve sustainable long-term growth. For instance, while the standard deep-sea fish oil market strategy matured, we identified the growing consumer demand for high-purity, high adoption products with significant untapped potential. Based on this insight, we worked with [indiscernible] to develop a premium fish oil product tailored to market needs to tap the high-end segment, featuring 97% of high-quality EPA. The product garnered over 15 billion impressions on its launch date on JD Health's platform. In medical device, we fully integrated our supply chain strength to build a seamless online-to-offline service loop, driving industry-wide upgrades through the ongoing technological innovation, for instance, in collaboration with Yuwell Medical, we launched the JD brand continuous glucose monitoring on our platform, which can be connected directly to JD Health's app via Bluetooth to deliver integrated blood glucose management experience, covering monitoring, analysis, intervention and tracking. For users who require device setup or configuration systems, we offer in-home support with health care professionals providing hands-on guidance through the process. In response to national initiatives to foster new quality productive forces in the health, we provide the capacities and medical AI solutions to a wide range of ecosystems. We aim to enable high quality and sustained development such as the Dr. Da Wei and a suite of multi-role intelligent service agents, AI doctor digital twins, and AI health chatbot, Kang Kang. At the end of 2025, Dr. Da Wei has completed hundreds of millions of interactions. The JOY DOC 2.0 version comprehensive management solution spanning 3 key areas: clinical nutrition, pharmaceutical services and weight management. This product provides health care institutions with standardized traceable and highly efficient digital intelligent support. We work together with the First Affiliated Hospital of Wenzhou Medical University and Union Hospital of Tongji Medical College to cover 5 million patients in 2025. Our on-demand retail business also achieved breakthrough through the year. We continued to expand the online medical insurance payment services as well. We have been expanding coverage to 29 key cities. By 2025, we have established more than 300 self-operated pharmacies nationwide. By integrating those stores with our on-demand retail business, we have further differentiated our product offerings and enhanced the overall user experience. Additionally, we continued to strengthen our integrated online and offline medical services. JDH's at-home rapid testing service maintained strong growth momentum with full year order volume increasing by 81.9%. Our at-home rapid testing service pioneered a hospital-grade home testing service during the year, extending the professional practice of hospital laboratories into the home setting, processing for cities including Beijing and Shanghai. This service exemplifies the deep integration we have achieved across our supply chain and digital platform strength and the professional medical expertise of the public hospitals during the peak respiratory seasons. It effectively eases hospital congestion, shortens patient visit time and lowers the risk of cross infection caused by JD Health service basket and digital coordination system. The process from sample collection to delivery takes an average of 3 hours and can be completed seamlessly with the app. Looking ahead, we will continue to strengthen our super pharmaceutical supply chain advantages centering on user experience, cost and efficiencies. By capitalizing our direct sales capacities and deepening collaboration with brand and ecosystem partners, we further cement our leadership in the health care retail market and reinforce user awareness of JD Health as a go-to platform for online health product services. At the same time, we will continue to advance technological innovation in AI applications, empowering our integrated consultation, examination, diagnosis, pharmaceutical service, closed-loop through an AI plus supply chain strategy and supporting the high-quality growth and sustained development of the broader health care sector. By steadily expanding our health care ecosystem service scope and consistently enhancing our integrated online and offline medical services, we will share better experiences to the business. Now please welcome CFO, Ms. Deng Hui, to share details of financial performance. Deng Hui: Good to see you. Thank you for attending and joining the JD Health earnings conference call. This is Deng Hui. It is my pleasure to provide you update on our fourth quarter full year 2025 financial performance. In 2025, China's macroeconomic landscape continued to show a cost recovery trend, showing new development opportunities. For AI-driven health industry, JD Health actively responded to a policy directive of fostering new quality productive forces in the health consumption sector. Achieving sustained and high-quality growth in 2025, the revenue reached RMB 73.4 billion, representing a year-over-year increase of 26.3%. Non-IFRS profit amounted to RMB 6.5 billion, up 36.3% year-over-year with a profit margin of 8.9%. It's worth noting that our revenue growth rate has maintained above 20% for the consecutive quarters, while our non-IFRS profit margin reached its highest level since its listing. In the fourth quarter of 2025, revenue totaled RMB 21 billion, up 27.4% year-over-year. Non-IFRS profit for the quarter reached RMB 1.1 billion, increased by 13.5% year-over-year with a profit margin of 5%. As of December 31, 2025, our annual active user accounts for the past 12 months stood at approximately 220 million with a net addition of 34 million compared to December 31, 2024. Among other revenues, direct sales revenue reached RMB 60.9 billion in 2025, representing year-over-year increase of 24.8% and accounted for 82.9% of total revenue. This growth was primarily driven by increased sales of chronic disease related drugs and expanded first launch partnership for innovative drugs as well as health supplements, where we focused on strengthening our direct sales capacities and cultivating growth in high-quality segments and sales of new created medical devices. Meanwhile, service revenue reached RMB 12.6 billion for the full year of 2025, up 34.1% year-over-year and accounting for 17.1% of our total revenue, an increase of 1 percentage point year-over-year with platform commissions and advertising services maintaining strong growth momentum. During the year, we prioritized the onboarding of emerging brands, significantly increased resource allocation to merchant support, and expanded the merchants access to our omnichannel infrastructure and resources, fostering growth for both the platform and our merchant partners. We continue to advance our on-demand retail business in 2025 to be more efficient and accessible on-demand services to our users by continuously strengthening synergies among supply fulfillment, payment and expertise experiences. In health care services, we further deepened our Internet plus health care service ecosystem through AI empowerment this year, achieving scaled deployment of AI technologies across consultation, examination, diagnosis, pharmaceutical scenarios. We launched a series of AI-based solutions tailored for users, doctors, hospitals, primary health care institutions, including AI Jingyi and JOY DOC, establishing the industry's most comprehensive AI enhanced health service matrix. Our AI agent, Dr. Da Wei, has completed hundreds of millions of user interactions with a 98% satisfaction rate. Meanwhile, JOY DOC has served over 5 million patients across several hospitals, including the First Affiliated Hospital of Wenzhou Medical University and Union Hospital of Tongji Medical College. From the profitability level, JD Health's gross margin was 24.8% in 2025, up 1.9 percentage points year-over-year. The improvement highlights the core strength of our supply chain as well as the ongoing enhancement of our direct sales capacity. Our direct sales mode effectively drove gross margin expansion through economies of scale, while empowering our professional procurement and sales teams to identify industrial trends and capitalize high potential subsegments, boosting overall operational efficiency. At the same time, we encourage a greater resource investment from merchants fulfilling growth in higher-margin business such as advertising services on a non-IFRS basis. Our fulfillment expense ratio was 10.4% in 2025, up 0.2 percentage points. Our selling and marketing expense ratio maintained largely flat at 5.2% in 2025 compared with last year with [indiscernible] hitting the road this year, promoting awareness of our quality standards for nutrition products while helping drive sales growth in the health supplement segment, although selling and marketing expenses rose by 26.9% year-over-year. Our R&D expense ratio was 2.2% in 2025, up (sic) [ down ] slightly by 0.1 percentage point year-over-year as a result of our ongoing investment in AI technologies. As of the end of December, we had over 880 R&D personnel, increased compared with the previous year. As revenue continued to grow, the proportion of fixed R&D expenses will decline accordingly, while the productivity of our R&D team will also improve. We remain committed to investing in health AI technologies and have launched a suite of AI-powered products, serving users, hospitals and primary health institutions across multiple health care scenarios. Moving ahead, we will continue to deepen our efforts in these areas. The G&A expense ratio was 0.8% for the full year of 2025, flat with 2024. Our back-end staff and operational management efficiency levels continue to lead the industry. Finance income was RMB 1.5 billion in 2025, attributable to increased cash balance. Other income and gains, net was approximately RMB 1.6 billion (sic) [ RMB 0.77 billion ] in 2025, mainly reflecting fair value changes in wealth management products. Excluding share incentive, our non-IFRS profit for 2025 increased by 36.3% year-over-year to RMB 6.5 billion with a margin of 8.9%, up 0.7 percentage points from last year, reaching its highest level ever since our IPO. Our cash flow from operating activities reached RMB 10.2 billion for the full year of 2025. As of the end of December, cash and cash equivalents, restricted cash, term deposits and wealth management products measured at fair value through profit or loss at amortized cost totaled RMB 96.5 billion (sic) [ RMB 69.5 billion ], a net increase of RMB 10.1 billion compared to December 31, 2025 (sic) [ 2024 ]. In summary, JD Health delivered high-quality growth in 2025, underpinned by continuously optimized operational capacities and steady profitability growth. Our strong performance highlights our persistence, enhancing user experience, while improving cost and efficiency by developing and refining AI-powered health service scenarios. We broadened our business scope, further validating the distinctive value propositions of our dual-engine business model. That concludes our prepared remarks. We are now open for questions. Operator: [Operator Instructions] Now we are going to welcome Miranda Zhuang from American Bank. Xiaomeng Zhuang: In 2025, you achieved a faster growth, and you had very good growth momentum with better profit margin. That is great news. I have a question to you. Can you share with us the near term and the 3-year middle-term prospects, what will be the main growing points? And what will be your strategies? Dong Cao: Thank you for the question. You're my old friend, Miranda. I want to share with you the general directions about the track for the future growth. We know that pharmaceutical sector, health products and medical devices are belonging to one community. The market size is around RMB 3 trillion to RMB 4 trillion. This is the size of the total market share, and we have to check different proportions. So you could fully understand, in the entire year, the revenue is RMB 17 billion (sic) [ RMB 73.4 billion ]. Compared to the potential of the market, we are still having a big room to grow, which means that we have a lot of opportunities to grab. Currently, we could achieve more than one digit growth potential. I believe that this is a huge market. Despite the fact that JD Health is a huge pillar, we could also go faster and we could go deeper. That is our inspiration, and that is our commitment to go deeper and go faster built on our existing advancements and results. The next point is from the perspective of the users. Currently, around 220 million users were out there and the total number is still growing, and we have a lot of active users, but not as big as the total user base of the JD Group. Because we are JD Health, we could still have a big room to grow. So I'm just sharing with you the size of the sector as well as the users of JD Health. I believe that from both fronts, we could do a lot of things to grow our potential. To be more specific, for the next 1 to 3 years, what will be happening and what will be the key drivers. To start off, I want to go back to the product portfolio and what will be the growing momentum. I'm going to speak about the pharmaceutical products. For the long run, we are in the leading position and we are growing very fast. We continue to improve our performance in 2025. The new drugs are taking 15%, and we are growing very fast compared to the velocity of 2024. You could feel the change and you could feel the transformation. Built on the mindset of JD Health, more brands, more pharmaceutical companies and more manufacturers will come to us. They will finally realize JD Health is a huge platform. We could help them, we could empower them. We could bring to them additional value. The new products, the special drugs could have very good sales at our platform, driving us to embrace a larger number of new drugs on their first sales. This is a very positive trend and I am very happy to share with you. I believe that in terms of the pharmaceutical companies, we will continue to grow. I believe that this market will grow, of course. We have the in-hospital and off-hospital market and off-hospital market will be moved to the online setting at even faster manner. Those are the trends we could observe on the market. That's why I'm so confident in sharing with you our growing potential and growing [indiscernible]. In terms of the health supplements, I know that you've followed us for long-term. When we are discussing the pharmaceutical companies and health supplements, you can know we are offering the best quality products. We could offer you very good user experience as well. We go very fast and we are highly efficient in delivering our services and offerings. We are doing more than selling. We are also providing the evidence-based solutions. It's like we are collaborating with GNC. We are jointly releasing the white paper, providing better service and educational resources to the users. We are also providing a premium fish oil, improving the user experiences in the overall manner. We want to add to user experiences, and we want to add user value. We are not selling products in an efficient manner. We're also helping the users to select the best ever products. And we are also an online platform having huge integrated logistics chain advantages, which means that we are having this pillar and we will grow this as well. The next topic is about medical devices. I want to give you a case. We're collaborating with Yuwell to offer customized products. The monitoring of the glucose device. It is well set. And for the next step, we have more plans. In terms of the sales, we will provide software, hardware as well as integrated chronic disease management plan. If you tried our products, you can know how well it is. It is very unique and it's very special. If you try the Yuwell glucose monitoring device, you can know how good it is, you could know which food is good for you and what are the foods bad for your health. I believe that is the best collaboration model. You could manage your food, you could manage your diet, and you could complete all those processes for our product. And we are now promoting AI-empowered health management device. This will be the new ecosystem. AI is keyword, very popular. In 2025, we launched the AI doctor, Dr. Da Wei, completed hundreds of millions of interactions with online users with a high level of satisfaction ratio. The AI matrix includes the 2B, 2C and 2H front with very good performance separately. Those performances are not yet fully matured. They are not translating directly into sales revenues. However, we can safely say that they will be the future drivers, helping JD Health to garner potential profits. In the long run, they will be our long-term drivers. I'm just sharing with you those highlights for reference. Thank you, Miranda. Thank you for the rest of investors. Now please start your second question. Operator: The next question comes from UBS, Henry Liu. Henry Liu: Thank you for the prepared remarks, the management, and thank you for having my questions. Can you say a few words about the competition landscape of the company. For instance, we have the e-commerce platform, we have the brick-and-mortar physical stores. How you can stay competitive among all those competitors? Dong Cao: For the long term, I'm confident in standing out of all those competitors and market players. If you are watching and following us for the long run, you know we are a company with a lot of pragmatic mindset and behaviors. You know how we check and observe this market landscape, you know how we view our competitors. From the perspective of JD and JD Health, we are good at managing the supply chains. We are good at managing our own brand products, because we want to manage the quality of the products, we want to ensure the best efficiency on this market. In terms of health care market, those elements are maturing. We want to manage the health of the users, and we have a strong mindset. That is why we are standing out compared to other competitors. That is in our DNA, that is in our blood veins, and we are maximizing our DNA. In the company, the revenue is growing very fast, of course. And our market penetration rate is not as good as we expected. In the future, the market will be highly fierce, of course. But this market is not yet fully competitive. It's not receiving full competition. Every company could have their own proportion and share. You could manage your supply chain, you could play up your strengths and you could do somethings with a lot of pragmatic behaviors and you could improve the health. So we could extend our strength in the long run, and we could further extend our market scale. That is my general impression, and that is my short answer for your question. Next question, please. Operator: The next question comes from Haitong International, Meng Kehan. Kehan Meng: I'm from Haitong International. Congratulations. Thank you for sharing with us the great results in 2025. I have some questions to you. For the next few years, what will be your plan to start the brick-and-mortar stores? And what will be the impact for the online practices? And for the ILC, what will be your future plan? Would there be any change? Would there be any large M&A plans? Dong Cao: I want to take those questions with more elaboration. I believe a lot of investors are very interested in those points. First of all, we don't have the plan to have a large-scale M&A. But it doesn't mean that we don't care about the offline practices and offline maneuvers. The efficiency, the cost of running the brick-and-mortar stores is one of our key strengths, of course. I talked about the medical insurance policy. This is very key in managing the brick-and-mortar store, the pharmacy. 35% of the gross margin will be the bench line. It's not that high, of course. And we have a lot of good chances. We are not relying 100% on the medical insurance, and we could ensure the security of the business. Of course, the gross margin was not as high as we expected when we are running it online, but still very satisfactory, but still satisfied with those results. When we are running the offline stores, we prioritize. We also care about their practices, because around RMB 2 trillion -- in terms of the market share, RMB 2 trillion belong to the offline practices, and some of them belong to the in-hospital market, around 7% to 8%. It matters. I don't think the online business can 100% replace the offline business. Still, we have to watch closely to the development of the offline business, but how we are going to maximize our strength. There are 2 sets of practices. The offline pharmacies for one thing. We are running 300 offline pharmacies up to now, 300. Those pharmacies are serving their neighbors. We are consistent in promoting the offline pharmacies. Those offline pharmacies are good at delivering immediate service requirements and demand. In terms of the data, they are accounting for 10% in terms of market share. Some patients want to have immediate medical products. The size of the pharmacy is not big. Our priority is on B2C business to customer. But this is a very important scenario for us to manage the customer relationship, and we would do a good calculation, how we are going to manage the stores, how are we going to manage the operator or the users. And this is a platform with a lot of openness, and we are collaborating with the chain pharmacies as well. Those are our business patterns and business scenarios to better serve the users, bring them the premium experiences. So I don't think we're going to have a large-scale M&A to cover the offline pharmacies. I don't think so. We may maintain the structure, the size. And offline pharmacies in terms of number is too many. Altogether, 700,000 in totality. I believe that we can do more to improve their overall efficiency. The next is about the checkup centers. I believe that checkup centers are providing us a new area to grow our business range. We can do a better job improving the quality, and that will be the new entry to collect different dots. I believe that the offline checkup centers will be the entry point to manage the health. Now we have several checkup centers in operation. We're not in a hurry to duplicate the model. We want to maximize the JD DNA, be pragmatic. We'll be patient, we'll be accepting the market changes. We will never go too fast. We are having a long-term vision to be the guardian of the people's health in China, and we want to do a good job. That is our practices for the offline business. We will never do it overnight. We'll not complete all the business over the short term. We will be stable and we'll be cautious. It's a step-by-step manner. All in all, the business here will be extended and there will be no obvious shock to our core business. So we believe that whatever we are doing, the AI-empowered practices, the offline pharmacies, we will go very steadily, step-by-step, improving the users experiences. Before each step we are marching on, we'll find out what will be the long-term mission, what will be our purposes before we are taking up this step. Now we are using a lot of AI technologies. We are improving the general efficiencies very positively. The AI nutritionist is also a good practice. The conversion rate is even higher than the real person nutrition practitioner. I believe that the offline pharmacies will also be greater scenario, faster use and to administer the AI practitioners. So don't worry about large M&A from JD Health. We will do everything step-by-step with very good reason. Operator: Next question from Goldman Sachs, Lincoln. Lincoln Kong: Congratulations for you to have the 2025 outcome. I have a question on the progress of AI+. Please share your opinions about the supply chain, about your practices for the future. Dong Cao: Again, I want to give you our overall planning. There are several directions ahead of us. The first is the 2C, to customer direction. You could check what happens in JD application. On JD Health application, we have the doctor, Kang Kang. We have the JOY DOC. For the 2C side, you have the Jingyi. They are doctors, Dr. Da Wei. We have the pharmacists, we have the nurses. They are AI bots, they are AI twins. A lot of consultation services are out there, the shopping services, the before and after sales services are out there. The conversion rate, the satisfaction rate, the user experiences are very positive. The online consultation is booming, empowered by the AI technologies. Those are the good outcomes from the 2C front. However, it's not right time for us to commercialize all those practices and assets, but still we're in a good position, we're in a good direction to have the commercialization. Now we have the Jingyi. We have the 2H to hospital front. In the future, I hope that we could get connected to the hospitals. We are speaking about 70% of the resources of the 2 trillion market size will be in different hospitals. We want to expand our market share, rely upon the partnership with different hospitals. The hospitals will help us to manage the patients. For instance, we could do the pre-consultation, helping the patients to check in the right departments. Those are some things we could down before the hospital entry. For the post-operation diet and nutrition, we could also have the AI to help those patients, and we can collaborate with the hospitals. In the future, we could manage this business with incremental growing momentum. And for the 2B side, the 2B side is operated for the doctors totally free of charge. However, how we are going to set up a good business model, how we're going to have the final commercialization, we are still in the process of pondering on. In China, it's very special for the doctors to pay. Still, I believe that as long as the products and the services are excellent, we could have sort of some method to charge. Still, it's a very complicated value chain in the medical sector. There will be the right payer. That is the question we have to keep thinking. And we have to avoid the homogeneous competition. No matter what, those are the directions we are embarking on, and we are seeing a much more clear directions and light at the end of the tunnel. In the near future, I believe that we could see more frequent AI application with positive outcome. If there's any feedback, I will let you know, and we will keep a close eye on this market. But please keep it in mind. JD Health has very good AI innovation practices, and we go very steady by collaborating with the stakeholders, and we will continue to promote innovative drugs. When we are checking the market, it looks very dynamic, it looks very popular, but we will be the one who speak deeper to this market, and we will give you good solutions, because all in all, we want to serve the patients, we want to serve the users with good experiences. We are more than observer, we are a practitioner. Thank you. Operator: For time's sake, we are going to close the Q&A session. Now I'm going to welcome you give us the closing remarks. Dong Cao: Thank you once again for joining us today. If you have further questions, please contact the IR team directly. Thank you.
Operator: Good morning, ladies and gentlemen, and welcome to Automotive Property (sic) [ Properties ] REIT's 2025 Fourth Quarter and Year-end Results Conference Call and Webcast. [Operator Instructions] Please be aware that certain information discussed today may be forward-looking in nature. Such forward-looking information reflects the REIT's current views with respect to future events. Any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward-looking information. For more information on the risks, uncertainties and assumptions relating to forward-looking information, please refer to the REIT's latest MD&A and annual information form, which are available on SEDAR+. Management may also refer to certain non-IFRS financial measures. Although the REIT believes these measures provide useful supplemental information about financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please refer to the REIT's latest MD&A for additional information regarding non-IFRS financial measures. This call is being recorded on March 5, 2026. I would now like to turn the conference over to Milton Lamb. Please go ahead, Mr. Lamb. Milton Lamb: Thank you, Morgan, and good morning, everyone. Thank you for joining us. With me today on the call is Andrew Kalra, our Chief Financial Officer. 2025 was an instrumental year for Automotive Properties REIT. We acquired 13 automotive properties, including our first 3 properties in the United States for an aggregate purchase price of approximately $200 million. These acquisitions contributed to our significant growth in rental revenue, cash NOI, AFFO per unit in 2025, which supported our distribution increase effective August of 2025. Compared to 2024, our property rental revenue increased by 8.5%. Cash NOI was up 8.4% and AFFO per unit diluted increased to $0.998 from $0.932. As the majority of our acquisitions were completed in the second half of the year, our Q4 results show even greater growth with property rental revenue up 19.3% compared to Q4 a year ago. Cash NOI grew 18.6% and AFFO per unit diluted increased to $0.251 from $0.232. Our $57.1 million equity offering in the quarter, which helped finance our acquisitions impacted our Q4 AFFO per unit but we still generated nearly $0.02 increase to AFFO per unit. Supported by our contractual fixed or CPI adjusted rents -- annual rent increases, our same-property cash NOI increased by 1.9% and 2.1% for Q4 2025 and the full year, respectively. During Q4, we deployed approximately $57.3 million for the acquisition of 4 dealership properties in Greater Montreal, including a portfolio of 3 properties located in Dorval consisting of a full-service Subaru, Honda and VW dealership properties tenanted by affiliates of Dilawri, and a full-service Honda dealership in Ile-Perrot tenanted by an affiliate of Group Auto Force, which adds to the sixth property portfolio we previously acquired in Q3, which is also tenanted by affiliates of Group Auto Force. We expect to benefit from the full impact of our 2025 acquisitions in 2026. Subsequent to year-end, on January 1, we completed the acquisition of a full-service 40,000-foot Hyundai dealership situated on 6 acres of land in Quebec City for a purchase price of $13.25 million. And yesterday, we announced that we've waived conditions for the purchase of the real estate underlying automotive and service property located at 3280 Corporate View in Vista, California from a third party for a purchase price of USD 16 million. Vista is located in Northern San Diego County. The Vista property is tenanted by Rivian under a midterm net lease that includes contractual fixed annual rent increases with renewal options. The Vista property consists of a 60,000-foot Rivian delivery and service facility that is situated on approximately 3.7 acres of land. The acquisition is expected to close during the first half of 2026, and we expect to fund the purchase price by drawing on our revolving credit facilities. We expect these property acquisitions to drive continued growth in our AFFO per unit, and we are entering 2026 with solid growth momentum. I'd now like to turn it over to Andrew Kalra to review our Q4 financial results and position in more detail. Andrew? Andrew Kalra: Thanks, Milton, and good morning, everyone. Our property rental revenue for the quarter increased to $27.9 million from $23.4 million in Q4 a year ago, reflecting growth from the properties we acquired during and subsequent to Q4 last year and contractual annual rent increases partially offset by the reduction of rent from the sale of our Kennedy Lands property in October 2024. Total cash NOI, same-property cash NOI for the quarter totaled $23.2 million, $19.6 million, respectively, representing increases of 18.6% and 1.9% compared to Q4 a year ago. Interest expense and other financing charges for the quarter were $7.5 million, a $1.9 million increase from Q4 last year, reflecting additional debt incurred to acquire properties during and subsequent to Q4 2024 and increased interest rates. Our G&A expenses were $1.8 million for the quarter, a decrease of $0.4 million from Q4 last year, in line with our expectations. Net income and other comprehensive income was $13.9 million compared to $12 million in Q4 last year. The increase was primarily due to higher NOI and a change in noncash fair value adjustments for interest rate swaps, partially offset by higher interest costs and changes in noncash fair value adjustments for investment properties and for Class B LP units and unit-based compensation, partially offset by a foreign exchange loss of $1 million. FFO and AFFO increased by 20.4% and 18.4%, respectively, compared to Q4 last year, reflecting higher rental revenue from acquisitions, contractual rent increases, partially offset from the reduction of rent from the sale of the Kennedy Lands. On a per unit basis, FFO increased to $0.259 diluted in the quarter, up from $0.236 in Q4 last year, and AFFO per unit increased to $0.251, up from $0.232. We paid unitholders distributions of $11.32 million or $0.206 per unit, representing an AFFO payout ratio of 82.1% compared with 86.6% in Q4 last year reflecting the positive impact of the properties acquired during and subsequent to Q4 last year and contractual rent increases, partially offset by the reduction of rent from the sale of the Kennedy Lands and the increase in our monthly cash distributions effective August 2025. The cap rate applicable to our portfolio was 6.75% at year-end, which is essentially flat quarter-over-quarter. The $6.8 million fair value adjustment for the year was primarily related to write-off of closing costs, including land transfer taxes associated with the new acquisitions. We continue to be proactive with our debt strategy to limit our exposure to interest rate fluctuations, enhance our financial flexibility. During the quarter, we renewed or entered into $25 million of floating to fixed interest rate swaps for a term of 5 to 6 years at a rate or under 4.5%. We increased the amount of the non-revolving portion of Facility 3 by $40 million and extended the maturity to March 2028 at the same credit spread. At year-end, we had a debt-to-GBV ratio of 49.9%, providing further acquisition capacity. Subsequent to year-end, we entered into floating to fixed interest rate swaps within Facility 3 in the amount of $45 million for terms ranging from 5 to 7 years with interest rates between 4.45% and 4.59%. And we increased the amount of the revolving portion of Facility 1 by $25 million and extended the maturity from June 2027 to June 2029. As at the date of this MD&A, on a trailing 12-month basis, the borrowing capacity under our 3 credit facilities increased by an aggregate $140 million, and we extended maturities. We have a well-balanced level of annual maturities with less than $40 million of swaps maturing over the next 12 months. We have a weighted average interest rate term and mortgage remaining of 4.1 years at year-end. As at March 4, 87% of our debt was fixed through interest rate swaps and mortgages, and we had approximately $102.3 million of undrawn capacity under our revolving credit facilities and 10 unencumbered properties with an aggregate value of approximately $130.2 million. I'd like to turn the call back to Milton for closing remarks. Thank you very much. Milton Lamb: Great. Thanks, Andrew. 2025 marks our 10th anniversary since the creation of the REIT. And over that period, we've established ourselves as an important partner to major automotive dealership groups and OEMs in Canada and now in the United States. As a result, we've successfully diversified our tenant base, market presence and brand representation while more than tripling the value of our investment properties. We further built upon this progress in 2025 and strengthened our position for growth through the acquisitions of 13 properties for an aggregate purchase price of approximately $200 million. Our entry in the U.S., combined with our entry into a heavy equipment dealership vertical late last year has broadened both our revenue base and our potential acquisition pipeline. We are successfully executing on our key objectives, including driving AFFO per unit to build value for unitholders. We're pleased to have implemented a 2.2% increase to unitholder distributions this past year. And looking ahead, you can expect us to continue to build on these positive factors to drive unitholder value supported by a growing property portfolio, featuring essential retail and service properties with 100% rent collection since our IPO over 10 years ago, prime metropolitan markets anchored by GDP and population growth, high-quality tenants with resilient business models, attractive single-tenant net lease structures and embedded fixed or CPI-adjusted rental growth. We look forward to benefiting from a full year of the financial impact of our 2025 acquisitions in 2026. That concludes our remarks. Now I'd like to open it up for questions. Morgan, please go ahead. Operator: [Operator Instructions] Your first question comes from Sairam Srinivas with ATB Cormark Capital Markets. Sairam Srinivas: Congratulations on a good 2025. Obviously, 2025 has been very active for the acquisitions pipeline and it looks like 2026 is pretty active as well. So can you comment on the outlook ahead and what you're seeing developing in your markets? Milton Lamb: Yes. I mean we experienced during COVID and just after a bit of euphoria where some of the pricing on these properties went to a level that we were not comfortable proceeding at. That's now normalized to what we've traditionally seen where we can buy properties in that, call it, 6.5 to low 7s and put financing in place in the mid-5s -- sorry, in the mid-4s. That allows us to be at a number of opportunities that are appealing to us. We're still being selective. And as you can tell, looking at Florida and California plus Montreal, these are markets that are very healthy for real estate and the economy overall. Sairam Srinivas: That's definitely the case. And maybe just a follow-up there. Looking at the U.S., you essentially been focusing on Rivian and Tesla tenanted dealerships there. Is that part of your broader strategy as well in terms of the U.S. market? Milton Lamb: As a broad strategy, we certainly believe. We watched Tesla for a while before we did our first. And then currently, we have 7. We're excited about what Rivian is doing with the R2 that will launch shortly. So there tends to be some merchant developers in the states that are providing long-term leases with Rivian and Tesla in major markets that when we underwrite the real estate, both for the existing tenet and for the actual dirt building an area that we're excited about. It is not our sole strategy. We still believe that we will look for and be able to complete some automotive traditional dealership properties as well. It's early days, but we still think there will be a diversified portfolio that we end up building out. Operator: Your next question comes from Jonathan Kelcher with TD Cowen. Jonathan Kelcher: I guess just continuing on that last line of questioning. Pro forma, when this close -- when this deal closes, what percent of your net rents will come from Rivian? Milton Lamb: We don't give forward-looking exact, but it's going to be under 5%. I mean it may be 3 properties but these are not very large properties. And again, we certainly underwrite it for the dirt underneath. We like the assets, and we like the tenant. Jonathan Kelcher: Okay. Helpful. And then just, I guess -- well, second follow-up/second question. Just on the balance sheet, you talked about pushing $45.9 million post quarter into fixed rate. Like what -- Q4, you were 20% floating. What would you be pro forma right now? Andrew Kalra: In terms of our swaps coming due over the next 24 months, we've got about $40 million. We're going to push -- we're going to -- with the acquisitions, we use our revolving balance, so our revolver will go up. And then with respect to as at the date of the MD&A, our overall non-revolving is 87% fixed. Okay. We're in a comfortable zone, and we ended up doing swaps in an opportune time in the beginning of February and got some good rates as well. Operator: [Operator Instructions] Your next question comes from Jimmy Shan with RBC Capital Markets. Khing Shan: So just in terms of the acquisition pace this year, do you expect it to be as active as last year? Milton Lamb: I think we're building some momentum both in Canada and the U.S. and the -- we went through some of the math a few moments ago. So that works. I think we have to be selective, and we continue to be selective. So for us, it's a cost of capital balancing with the opportunities that we see. So it will be -- we expect to see some opportunities and it will be an interesting year. But we still believe that our multiple reflects a bit of a hangover of USMCA affecting auto, and they don't finish that sentence that says auto manufacturing. So I think we're caught in the word scramble of a title of 6 words versus 7 words, making a big difference in how we're viewed. So once that dissipates, I think our cost of capital will come back in line, and we're pretty excited on what our pipeline can and should be. Khing Shan: Okay. As you build out the U.S. portfolio, so how are you thinking about the markets you want to be in? Do you want to build a critical mass first? Or are you now just looking at the credit and you're kind of market agnostic? Milton Lamb: Yes. No, we're not -- we've never been market agnostic. So I guess I'd answer that in 2 ways. One is the underlying kind of philosophy of the REIT has always been metropolitan with population growth and GDP growth. Certainly, there's more markets in the U.S. than in Canada, just by the sheer size that fit that category. The good news is on a net lease business, we don't have those operating need for capabilities, risk management. It tends to be a bit more of an asset manager as opposed to a property manager leasing level. But we still do like, call it, that Southeast market. And then as you kind of move over into the Arizona, Texas and California. We like to see the dirt and the underlying economy and population supporting the real estate that we buy. It helps our tenants and it helps the dirt. Khing Shan: Okay. Sorry, just one last. Do you have any update on the Pfaff, the Audi space there in Vaughan, what you plan to do there? Milton Lamb: It's early days. It's a bit of a balancing act. I mean it's a great property. I keep on saying dirt but it's also got a great building on it. So the combination is the demand now for leasing income versus there is higher and better use, good density there. But in today's market, you're not getting paid for the density. So it's a balancing act of how long do we want to commit on that property versus how long until we get access to potentially the underlying value. And that's what we're going through right now and looking at different opportunities and different structures. It's early days but it's a high-quality property. Operator: Your next question comes from Giuliano Thornhill with National Bank. Giuliano Thornhill: Just a question. How do the cap rates compare for the Rivian deals compared to just regular kind of dealerships in their areas? Are they on similar like same ballpark? Or are they different? Milton Lamb: It really depends on the market. But I would think the Rivians, it's -- they haven't been around as long as some of the other dealerships or Tesla. So that's reflected a bit. But again, it's the -- what I find interesting is that they're at market rates or at numbers that we are -- I shouldn't say it overall. The ones that we've been doing are at market rates that we're very comfortable with. We've seen a number across our desk at a high number per square foot that makes us extremely uncomfortable. So it is a bit of a balancing act between the actual real estate and the tenant in place. But I would say, Rivian, with their upcoming R2, we could expect to see some cap rate compression going forward, assuming that, that launch goes as well as people anticipate. Giuliano Thornhill: And do you think of the EV transition more of like a risk or an opportunity for your kind of your existing tenant base? Milton Lamb: I think it's opening up more demand for the real estate that is zoned for automotive in Canada, whether that's including potential new Chinese entrants or just overall. I think for the existing, call it, traditional dealership base, a lot of them are going to have to have the service capabilities and the delivery capabilities for both -- well, for 3 for ICE, hybrid and for EV. So I think that broadens out their needs. But it's really going to be consumer preference, and there's going to be some investment that has to occur. But I don't see this being a hard pivot. I think it's going to be gradual over the next 15 to 25 years. And they're going to have to continue to service ICE vehicles and at the same time, move up the chain through hybrid and ICE -- sorry, hybrid and EV. Operator: This concludes the Q&A session. I would like to turn the call back over to management for any further remarks. Milton Lamb: We appreciate everyone's time, and we look forward to talking to you shortly. Have a good day, everyone. Operator: This concludes today's call. Thank you so much for attending, and have a wonderful rest of your day.
Operator: Ladies and gentlemen, welcome to the publication of the consolidated Annual Report 2025 Conference Call. I'm Lorenzo, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Herbert Juranek, CEO. Please go ahead, sir. Herbert Juranek: Good afternoon, ladies and gentlemen. Let me welcome you to the presentation of the results of the business year '25 of Addiko Bank on behalf of my colleagues, Ganesh, Tadej, Edgar and Stefan. We have prepared the following agenda for you. I will start with the key highlights and the related achievements of '25. After that, I will pass on to Ganesh, who will update you on our results on the business side. In the second chapter, Edgar will share insights into our financial performance, while Tadej will outline the progress made in the risk area. At the end, I will present to you the cornerstones of our new midterm specialization program and our updated guidance 2026. After that, we will move on to Q&A. So let's begin with the highlights. I'm confident to inform you that despite negative influences coming from the legislative changes in several countries, we were able to close '25 with a net profit of EUR 44 million. These results includes a net profit for the fourth quarter of '25 of EUR 8.7 million, which is EUR 1 million higher than the result of EUR 7.7 million in the fourth quarter of 2024. Our earnings per share for '25 amount to EUR 2.28 and our return on average tangible equity comes in at 2.5 -- sorry, 5.2%, also influenced by the increased equity base. Overall, 2025 was a challenging year for Addiko because of reasons we will come back later on. Nevertheless, we were successful to achieve a 20% growth rate on new business in consumer lending and finally, to return to a positive trend in SME with an 11% growth rate on new business. Net interest income was with 1.8%, slightly lower year-on-year, driven by the impact of the lower interest environment on our back book and on our national bank deposits. A key positive is that thanks to our strong sales performance and the strategic cooperation agreement in our insurance business, we were able to increase our net commission income by 7.6% year-on-year. Altogether, we managed to slightly improve our net banking income by 30 basis points despite a significantly lower rate environment. Ganesh will give you more insights into the business development during his presentation. Because of our strict cost management, we accomplished to limit the increase of our administrative costs below inflation to only 1.6%. Nonetheless, due to the factors mentioned before, our operating result ended up at EUR 109.8 million compared to EUR 112.3 million in '24. Let's briefly comment on our positive risk performance. We successfully reduced NPE volume further to EUR 125.5 million compared with EUR 144.7 million at the end of 2024. Consequently, our NPE ratio also improved to 2.5%, down from 2.9% in the previous year. On top of that, our coverage ratio continued to improve to 81.7% from 80% at the end of last year. Ultimately, the cost of risk on net loans ended up at 0.96% or EUR 35.2 million compared to EUR 36 million last year. Tadej will give you more details on the risk development later. Our funding situation remained quite solid with EUR 5.3 billion deposits and a loan-to-deposit ratio of 70%. Our liquidity coverage ratio is currently comfortable above 300% at group level. And finally, our capital position gets even a bit stronger with 22.4% total capital ratio, all in CET1 based on Basel IV regulations compared to 22% based on Basel III in the previous year. Next page, please. As mentioned earlier, Addiko faced interventions from regulators and governments that negatively impacted the bank's performance in several of our markets. Croatia introduced a 40% debt-to-income cap for nonhousing loans effective 1st of July '25 and required banks to provide essential banking services free of charge since January '26. Serbia, Republika Srpska and Montenegro introduced interest rate caps, fee restrictions and debt caps. Overall, these measures are having a significant negative impact on our core revenues. Consequently, we have introduced initiatives to counterbalance the income reductions and to develop new income sources. Going forward, all regulatory effects, as known of today, are already reflected in our updated guidance. As reported in our earnings calls last year, we entered the Romanian market via our Slovenian bank through EU passporting, offering a fully automated digital lending solution for consumers. In the second half of '25, we launched several marketing campaigns to build awareness and strengthen our brand positioning. Although we achieved our recognition and recall targets, the conversion rates were below our expectations. Consequently, we refined our marketing approach. The new marketing campaign supported by an Addiko Song with life-size Oskar combined with targeted brand-building initiatives was launched in mid-February. We will keep you updated on the progress and will conduct a results-driven review in the second half of this year. Now with regards to our ESG program, I can confirm that all initiatives remain on schedule and are advancing in line with plan. Additional information is set out in the appendix of this presentation. Let me briefly touch on our regulatory sustainability disclosures. As part of the updated EU taxonomy framework, the commission has introduced a temporary opt-out for financial institution. In our case, this is fully aligned with our business model. Addiko made use of its opt-out as we do not engage in taxonomy-relevant lending activities. This approach avoids unnecessary administrative burden while maintaining full transparency in our ESG reporting. Next page, please. Let me briefly comment on our share performance and the scheduled changes to our listing. Addiko's share price increased noticeably during 2025, closing the year at EUR 22.5 and continued to rise further in 2026 to EUR 27.4 as of yesterday evening. At the same time, trading volumes and overall liquidity has remained persistently very low, making professional market making difficult and not economically viable for providers. As a consequence and in line with the Vienna Stock Exchange rules, our shares will be reclassified from the Prime Market to the Standard Market with effect of 1st of April 2026. This reclassification has no impact on our strategy or operations, but better reflects the liquidity profile of the stock. Let me now address the regulatory concerns regarding our shareholder structure. Following the sanction imposed by the European Central Bank in 2024 for exceeding the 10% ownership threshold without prior approval, certain regulatory uncertainties continue to persist. Although the voting restrictions applicable to a specific shareholder group were lifted in early February 2025, the supervisory authorities continued to identify residual uncertainties concerning the bank's shareholder structure. The bank remains fully committed to maintaining a transparent, cooperative and constructive relationship with all relevant regulatory bodies and we continue to engage actively with them to address the outstanding supervisory considerations. In this context, I need to mention that the current shareholder situation continues to create significant additional efforts and a severe distraction for the bank. Nevertheless, we will carry on to do our best to fulfill the increasing related demands put upon us by our regulators. In line with supervisory expectations and regulatory requirements, the dividend distribution for the financial year 2025 remains suspended, taking into account regulatory considerations related to the shareholder structure. From the perspective of the bank's long-term stability and in the best interest of all stakeholders, the Management Board maintains its position that dividend payments will not be resumed until the share -- until the ownership structure has been conclusively clarified and the related concerns raised by the supervisory authorities have been fully resolved. Now let me briefly outline how we performed against our '25 guidance. The positive message is that despite headwinds, we delivered on our '25 guidance. In income and business, our loan book grew by 7% year-on-year, supported by strong consumer demand and the renewed pickup in SME in the fourth quarter. Our NIM ended up at 3.7% and net banking income held stable. Costs were managed well with OpEx at EUR 195.4 million, coming in below guidance. In risk and liquidity, performance remained fully in line with expectation. We kept the cost of risk below 1%, achieved an NPE reduction to a level of 2.5% and closed the year with a loan-to-deposit ratio of 70%. In profitability, we reached a return on average tangible equity of 2.5% (sic) [ 5.2% ]. Overall, these results reflect our disciplined approach in a demanding environment. Now let me hand over to Ganesh for further insights into the business development. GaneshKumar Krishnamoorthi: Thank you, Herbert, and good afternoon, everyone. Moving to Page 7. As Herbert mentioned, 2025 has been a challenging operating environment. Credit demand remained resilient across our markets. However, interest rates declined rapidly during the year. This intensified competition and created significant pricing pressure. As a result, loan book retention also became more challenging as customers increasingly refinance their loans at the lower rates. At the same time, unexpected regulatory interventions also affected market dynamics. The most notable example is Croatia, where a 40% debt-to-income cap was introduced on July 1. In Serbia, authorities mandated lending rate caps, which led to interest rate reduction. These measures tightened our lending conditions and also affected our pricing in both the markets. Nevertheless, despite these headwinds, our continued focus on digital-savvy customers, the micro SME segment and point-of-sale financing combined our strategy of offering lower-ticket, high-margin loans with speed and convenience while maintaining prudent risk discipline enabled us to deliver strong growth. Consumer new business strongly increased by 20% year-over-year, resulting in 10% growth of our consumer loan book with an attractive new business yield of around 7%. In the SME segment, the new business grew 11% year-over-year with a yield of around 5%. Overall, our focused loan book expanded by 7% year-over-year with a blended yield of 6.4%. As a result, the focus book now represent 92% of our total portfolio, demonstrating the resilience of our specialized strategy, even in a more competitive and regulated environment. Please turn to Page 8 for a more detailed outlook. Looking more closely to our Consumer segment, the strong double-digit growth we delivered was driven by several key factors. First, we benefited with solid market demand across our core geographies. Second, we successfully launched full digital end-to-end lending with zero human interventions in 3 of our core markets, clearly differentiating our offerings from competitors and significantly improving speed and customer convenience. Third, our point-of-sale proposition continues to perform well, delivering 14% year-over-year growth, further supported by the launch in Bosnia and Herzegovina. Fourth, we identified a sweet spot between growth and pricing, allowing us to proactively retain customers and protect the loan book through disciplined repricing actions. In addition, we launched newly redesigned mobile app with the introduction of new card features, including Google Pay and Apple Pay integrations, which contributed to a 12% year-over-year increase in net commission income. Finally, in response to evolving regulatory environment, we are already implementing mitigating measures, including downselling, introducing co-debtor structures and focusing on high-quality customer segments with larger ticket size. We are confident that these initiatives will not only offset regulatory headwinds, but also strengthen the foundation for sustainable quality growth going forward in 2026. Let's turn into SME segment. Our core business model remains unchanged, to be the fastest provider of unsecured lower-ticket loans to underserved micro and small enterprises through our digital agents platform. As mentioned earlier, the market environment remained challenging due to aggressive pricing, which has created some pressure on our loan book retention. However, with improving market demand, we implemented several targeted initiatives to reignite the growth. First, our turnaround plan in Serbia supported by new leadership team delivered strong momentum with 43% year-over-year growth in new business. Second, we placed a strong emphasis on retaining quality clients and protecting the loan book through more targeting pricing, loan prolongations and enhanced service delivery. Third, while maintaining our core focus on unsecured lending, we broadened our product offering by placing also greater focus on slighter larger tickets and secured lending, supported by experienced and high-quality teams to ensure continued risk discipline. This resulted in double-digit year-over-year growth in investment loan volumes. Finally, we launched a new digital SME tool designed to process high ticket loans, faster and with greater simplicity, providing a clear competitive advantage. Overall, we believe these initiatives will position us well to return to sustainable growth in the SME segment going into 2026. Lastly, let me briefly touch on our progress in AI adoption last year. We are actively investing in AI technologies to enhance both operational efficiency and customer experience across the organization. The 2 AI applications are already live, one supporting employees by handling HR-related inquiries and others assisting our call center by analyzing customer inquiries and generating response recommendation. In addition, we are currently exploring further AI use cases across IT, risk and marketing with the aim of strengthening operational efficiency and enabling core data-driven decision-making across the bank. To summarize, while 2025 presented a challenging operating environment, it also pushed us to further refine our specialist business model and adapt our pricing approach. Most importantly, we launched several new propositions that enhance speed, convenience and value for our customers across Consumer and SME segment, positioning us well for continued growth going forward. Looking ahead to 2026, we will continue to focus on profitable growth while implementing measures to mitigate the impact of the recent regulatory restrictions, in particular, we aim to accelerate growth in Romania through a refreshed marketing approach and strengthened broker partnerships, and we will launch our point-of-sale lending business in Croatia. At the same time, we will further enhance our end-to-end digital value proposition and refine our dynamic pricing capabilities to better balance growth and profitability. In parallel, we are developing a new specialized program focused on new lending products aimed at deepening customer engagement and further expanding our fee-driven income streams. Herbert will provide you more details on this later. Please let me hand over to Edgar. Edgar Flaggl: Thank you, Ganesh, and good day, everybody. Let's turn to Page 10 for an overview of our performance for the full year 2025. Despite a challenging interest rate environment and cost pressures, we delivered stable results, supported by a resilient consumer lending, strong fee income and a robust capital position. Now let's take this one by one. Our net interest income came in at EUR 238.4 million, a slight year-on-year decrease of 1.8%. This reflects the lower rate environment, which weighed on income from our variable back book, so circa 13%, 1-3%, of our book and the income on National Bank deposits. At the same time, balanced treasury and liquidity management activities as well as lower funding costs acted as a stabilizer. As a reminder, the rate backdrop shifted materially throughout the year with 4 rate cuts totaling 100 basis points during 2025, which also pressured pricing on new loans and elevated early repayments of higher-priced parts of the back book. On the business side, as Ganesh pointed out already, momentum in our Consumer segment remained quite strong, with interest income up 6.3%, driven by the 10% growth in the Consumer loan book. Overall, the focus book grew 7% year-on-year, showing also a slight improvement during the last quarter of 2025. On the fee side, we delivered solid growth. Net fee and commission income rose 7.6% to EUR 73 million, driven by bancassurance, accounts and packages and card business, which altogether grew 13%, 1-3%, year-on-year, with bancassurance as a key contributor. Looking into the year 2026, those new regulations in Croatia limiting fees on banking products already have an impact on fee generation today and we'll keep having an impact going forward. Putting it together for 2025, net banking income came in at EUR 316.9 million and was broadly stable year-on-year despite a challenging environment. Our general administrative expenses, in short OpEx, increased slightly to EUR 195.4 million, up 1.6% year-on-year, mainly due to wage adjustments, targeted operational investments and general indexation increases. When excluding the EUR 3 million in extraordinary advisory costs related to the takeover offers in the year 2024, operational costs were up just 3.2% year-over-year. Our cost-income ratio came in at 61.7%, which is a tad higher than last year. The operating results landed at EUR 109.8 million, down 2.3% year-on-year. The other result, which includes costs for legal claims as well as for operational banking risks remained manageable for the full year. We have allocated some additional provisions for new legal claims in Slovenia and made a rather small top-up in Croatia as part of the year-end closing also to reflect increased lawyer costs. The main point in Slovenia remains what the higher courts will rule upon regarding the applicable statute of limitation and if that will be in line with the currently dominant legal opinions. When it comes to risk costs, our expected credit loss expenses were EUR 35.2 million, which translates into a cost of risk of just south of 1% on net loans for the full year. Tadej will provide more insights in just about a moment. All in all, we delivered a net profit after tax of EUR 44 million, which translates into a return on average tangible equity of 5.2%. So while operating in a lower rate environment and managing cost pressures and new regulatory constraints, our focus business remained resilient with solid momentum in consumer lending and continued support from fee-generating activities last year, while also SME lending started to pick up again during the fourth quarter last year, specifically also in Serbia. Turning to Page 11 and our capital position which remains a real strength. Our CET1 ratio came in at a very robust 22.4% at year-end 2025. For context, that's slightly up from the 22% at year-end 2024, which, however, was based on Basel III. While as we all know, for 2025, the new Basel IV or call it CRR3 rules apply. This CET1 ratio now includes the audited profit for the year with no dividends being deducted in line with supervisory expectations and taking into account regulatory considerations related to the current shareholder structure. You will also notice that our risk-weighted assets increased and that's mainly driven by changes in risk weighting under Basel IV as well as the new interpretation of EBA guidelines on structural FX, which we discussed in previous earnings calls. Looking ahead, we have already reported on the final SREP for 2026, which includes a small increase of our Pillar 2 requirement, so up by 25 basis points to 3.5%, while the Pillar 2 guidance remains unchanged at 3%. So in short, our capital is strong and our buffers are ample, supporting controlled growth while we navigate the evolving and not often straightforward regulatory landscape. With that, I will hand over to Tadej for more on risk management. Tadej Krašovec: Thank you, Edgar, and good afternoon, everyone. Let me provide an overview of our credit risk performance for the year 2025. As indicated on the chart to the left, one of our key risk management initiatives was reducing of NPE volumes. We achieved this through proactive portfolio management, portfolio and forward flow sales, write-offs, targeted restructuring and collections. The result is clearly visible. We achieved a significant EUR 19 million reduction in NPE volume compared to the end of the previous year. Out of that, as illustrated on the right-hand side of the slide, the NPE portfolio decreased by EUR 14.5 million in the last quarter alone, driven by high NPE outflow and a well contained inflow. Consequently, we concluded 2025 with an NPE volume of EUR 126 million and attained a record low NPE ratio of 2.5%. Throughout the year, we placed significant emphasis on developing statistically driven credit risk steering approaches and enhanced monitoring tools. This allowed us to promptly identify subsegment and channel developments that did not align with our expectations, enabling swift implementation of risk restructures or also relaxations to positively influence the bank's portfolio quality. Particularly in declining interest rate environment, rigorous oversight of our risk profile and optimization of risk return balance remain essential to operate within our risk appetite, mitigate adverse selection and ensure the resilience of the bank's balance sheet. However, not all regions performed entirely in line with our forecasts. The micro segment posted ongoing challenges in Croatia, Serbia and Slovenia. And furthermore, the SME sector in Slovenia exhibited variances from our 2025 outlook, necessitating additional controls within the credit process. We are confident that the refined risk criteria and enhanced controls introduced will help mitigate further adverse selection. Moving to Slide 13. Loan loss provisions totaled at EUR 35.2 million in 2025, resulting in a cost of risk of minus 0.96% on net loans, both figures notably better than anticipated. This positive outcome was largely attributable to exceptional late collections, an area we have improved as part of our acceleration program during '24, which exceeded even our ambitious targets. The segment's breakdown for '25 is as follows: the Consumer segment recorded a negative 0.79% cost of risk; SME segment, minus 1.9%; while the nonfocus segments contributed to provision releases with a positive cost of risk of 1.88%. In the final quarter, that means Consumer provisions were EUR 1.7 million; SME segment, we generated EUR 8.6 million; and in nonfocus segment, we saw a release of provisions in the amount of EUR 1.4 million. The SME segment figures were impacted by a single large case in Slovenia, I elaborated on in previous earnings calls already. The post-model adjustment was slightly reduced from EUR 1.4 million to EUR 1.2 million. To summarize, Addiko's portfolio position remains robust and resilient, supported by strong collection performance and active portfolio management. Our focus remains on decision models, intelligent risk rules, advanced and automated statistical monitoring and rapid response when every critical risk indicators or the risk return balance require attention. Thank you. And with that, I'll go back to Herbert. Herbert Juranek: Thank you, Tadej. Now I would like to present the highlights of our new specialization program to you. The new specialization program has just been launched and is designed as a 3-year program running from 2026 to 2028. It supports the execution of our specialist banking vision and aims to unlock additional value through a focused performance and transformation agenda. The first pillar is business expansion. Here, we will broaden our product stack and strengthen our ecosystem, meaning we will enhance our core offering, add relevant adjacent products and create a more connected experience for our customers. In addition, we will explore selective new market opportunities in a measured and disciplined way, focusing on areas where our digital lending capabilities can be applied effectively, where fee-based revenues can be expanded and where we see sound risk-adjusted potential. The second pillar focuses on our engine and platform. We will upgrade our platforms and decisioning capabilities with AI-enabled tools to further strengthen analytics, risk processes and service excellence, supporting greater efficiency and competitiveness. The third pillar is competencies and people. We'll continue to invest in skills, training and development while ensuring the right capacity and efficiency across our teams to support the next phase of our strategy. We consider this an important investment in order to enable the successful implementation of our ambition on Pillar 1 and Pillar 2. Overall, our approach is to expand our offering, grow fee-based revenues, strengthen customer engagement and continue optimizing costs through automation and AI-assisted processes. This program sets the foundation for scaling our specialist model and supporting sustainable growth in the year ahead. We will present more details of the program in our presentation of our Q1 results on the 13th of May. Now let's move on to the final page. Before I walk you through our updated guidance, let me briefly outline the context behind our assumptions. Despite the fact that the global economic environment has become increasingly unpredictable, our CSEE markets continue to show comparatively resilient performance. We expect our region to deliver higher growth rates over the next 2 years than the European Union average. Nevertheless, the combination of regulatory fee and rate restrictions, aggressive pricing behavior by several competitors and cost pressure driven by governmental-related factors such as increases in minimum wages requires us to further strengthen our operating model. This is precisely why our specialization program will play a key role. It is designed to enhance efficiency, strengthen competitiveness and improve risk-adjusted performance in the coming years. Now let me walk you through our operating guidance, starting with loan growth. We expect our loan book to continue expanding at a healthy pace with a CAGR of more than 6% over the period from '25 to '27. This reflects the momentum in our core segments and the continued scaling of our specialist model. Looking ahead, looking at our interest margin, for the coming years, we anticipate the NIM to remain above 3.6%, taking into account the regulatory environment, interest rate caps and a more moderate rate trajectory. Based on impacts resulting from the latest regulatory-driven measures, we expect NBI to remain broadly flat in 2026, before returning to growth above 5% in 2027 as our business mix evolves and the effects of our specialization program begin to materialize. Operating expenses. Our focus on efficiency continues. We keep our OpEx below EUR 205 million in both '26 and '27, while still investing selectively to support our transformation agenda and competitiveness. Cost of risk and risk -- and asset quality. We expect a cost of risk of around 1.3% going forward, reflecting prudent underwriting and disciplined risk-adjusted growth. At the same time, we aim to keep the NPE ratio below 3%, which remains our guiding principle for portfolio quality. Capital and liquidity. We expect the total capital ratio to remain above 18.8%, subject to the yearly SREP outcome. Our capital strength provides a solid foundation for controlled growth. Accordingly, we plan to gradually increase the loan-to-deposit ratio towards 80%, supporting loan expansion while maintaining a conservative liquidity profile. Based on this assumption and the higher capital base, we expect the return on average tangible equity to be around 4.5% in 2026, rising towards 6% in 2027, supported by growth, efficiency measures and the contribution from the specialization program. Regarding the dividend, I addressed the situation earlier. However, in this context, I would like to stress again that the current shareholder situation continues to create significant additional efforts for the bank, which is a severe distraction. Nevertheless, we will carry on to do our best to cooperate and to fulfill the increasing related requests put upon us by our regulators. The management of the bank is fully focused on protecting the bank and acting in the best interest of all stakeholders. In this spirit, we will continue working with full energy to make Addiko the leading specialist bank in Southeast Europe, creating value for both our clients and our shareholders. With that, I would like to conclude the presentation. Our next events are the Annual General Meeting on the 20th of April 2026 in Vienna and the presentation of our Q1 results on the 13th of May. Thank you very much for your attention. We are now ready for your questions. Operator, back to you. Operator: [Operator Instructions] The first question comes from the line of Dodig, Mladen from Erste Bank. Mladen Dodig: It's not Madlain, it's Mladen. Congratulations on the results, and I particularly congratulate on the revamped growth and movements finally in SME, that where my first question comes. If I look at the guidance and the last year update for '25, '26, it appear a little bit conservative, if I remember correctly. Actually, I'm looking at it, it was more than 7% CAGR, and now it's more than 6%. I mean it's a small tweak, but would you consider that a little bit conservative considering the effect that you have started -- finally started to catch up with the market and competitors? And just for the moment, I will forget now about the whole situation right now, we have geopolitically. Herbert Juranek: So first of all, thank you very much, Mladen. Before I hand over to Ganesh, I would say we looked at it. And I mean, you call it conservative, but we also need to see the restriction put upon us coming from the regulatory front in several markets, which are also influencing the overall growth potential. But Ganesh, you want to comment this? GaneshKumar Krishnamoorthi: Yes. Mladen, so I think we believe the 6% CAGR is a reasonable growth, considering all the restrictions what we have. We do have some challenges also in SME in some other countries, which we need to work on. So yes, I mean, considering all these facts, that's why we revised from 7% to 6% CAGR. Mladen Dodig: And a little tweak on return on average tangible equity, I would say that also comes from the fact that your equity now keeps growing without chance to moderate it, right? Herbert Juranek: That's right. That's right. So I mean, as long as -- as I said, as long as the shareholder situation does not change and the regulatory fuel to that, we will not pay out the dividend. And consequently, the equity base will increase. Mladen Dodig: Of course, yes. And second question or third, 0.96 basis points risk versus 1.3 guidance, do you think that this might still go lower below this 1.3 in '26? GaneshKumar Krishnamoorthi: I think today speaking here, I think, yes, I think it will be below 1.3. This is our expectations also, also driven by coming back to the limitations in each individual country, right? They protect us to play in the subsegments that are a bit more risky, but where we achieve higher interest rate. But of course, cost of risk at the end will also be lower due to that. It will be below 1.3% is expectations, I can estimate, yes. Mladen Dodig: Just looking also on net banking income last year, the guidance, '26, you just molded to '27, the growth more than 5%. And for '26, you expect flattish development. Of course, I would say, as you mentioned in the call, aggressive pricing from the competitors too. But do you expect that there might be some more decreasing interest rate environment, although now it's very difficult to make such a statement as we already these days are seeing the inflationary pressures coming from the Middle East conflict? I mean probably I would like to see in outlook '26 some percentage for the net banking income growth, but as you stated flat, perhaps this is kind of a global explanation, right? Edgar Flaggl: Mladen or Modlin whatever you prefer. This is Edgar speaking. So a straight answer, our rate assumptions are flat. So as you rightfully say, who knows what the reality will be what's going on in the Middle East. But we assume a flat environment, so deposit facility rate 2% throughout our guidance. When you compare also movements in terms of net banking income, please don't forget that all these regulatory and legal restrictions that have been put in place either last year or starting this year, for example, the Croatian topic on free accounts, et cetera, et cetera, this has a full year 2026 impact of EUR 10.5 million on the top line alone. So you will... Mladen Dodig: EUR 10.5 million only in Croatia? Edgar Flaggl: No, no, not only Croatia. Mladen Dodig: No, fee and income, okay. Edgar Flaggl: Yes. Croatia would be roughly 70% if you take the NCI and the DTI restriction. I think we disclosed that in the Q3 earnings call. So you will probably find this in the script as well. Mladen Dodig: Okay. And a final question from my side, again, of course, about dividend. So let's assume that some situation gets resolved and you get a nod from the regulator to pay out something, what do you think how that might look like? And what would be your -- where will you be leaning to paying a lot immediately or some gradual payments, of course, provided that a regulator would agree to that, too? Herbert Juranek: Well, so first of all, we will decide it when this situation is here. I mean our clear ambition as a general comment as a management is to pay a dividend. I mean that's the whole purpose of the thing. And we had this -- our guidance was around about 50% before this was introduced. So I think this is an area we are aiming for. You also know that if you want to pay out a dividend, which is above the yearly profit, you need -- so out of equity, you need the approval of the regulator for that. So what we would do is when the situation is solved, we will look at it. We will look at the state of the bank, what is healthy and what we can do and then we will judge and decide on that. But for the time being, we don't want to comment it. We feel also obliged vis-a-vis our supervisors, and we share with them the view that currently, we will not pay out something. Operator: There are no more questions on the phone at this time. Herbert Juranek: Okay. Do we have any other questions? Edgar Flaggl: We also have no questions on the webcast. Herbert Juranek: Okay. So as there are no further questions, we thank you for your attention and wish you all the best. Thank you for dialing in. Goodbye.