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Operator: Good day, and thank you for standing by. Welcome to the Remitly Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Beckel, Vice President of Investor Relations. Please go ahead. David Beckel: Good afternoon, and thank you for joining us for Remitly's Fourth Quarter and Full Year 2025 Earnings Call. Joining me on the call today are Matt Oppenheimer, Co-Founder and Chief Executive Officer of Remitly; Sebastian Gunningham, incoming CEO of Remitly; and Vikas Mehta, Chief Financial Officer. Results and additional management commentary are available in the earnings release and presentation slides, which can be found at ir.remitly.com. Please note that this call will be simultaneously webcast on the Investor Relations website. Before we start, I would like to remind you that we will be making forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding Remitly's future financial results and management's expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially from those presented here. You should not place undue reliance on any forward-looking statements. Please refer to the earnings release and SEC filings for more information regarding the risk factors that may affect results. Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and Remitly assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following presentation contains non-GAAP financial measures. We will reference non-GAAP operating expenses, adjusted EBITDA and free cash flow in this call. These metrics exclude items such as stock-based compensation, payroll taxes related to stock-based compensation, pledge 1% contribution, integration, restructuring and other costs and other income and expense. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP metric, please see the earnings press release and the appendix to the earnings presentation, which are available on the IR section of our website. Now I will turn the call over to Matt to begin. Matthew Oppenheimer: Thank you, David, and thank you, everyone, for joining us today for our fourth quarter earnings call. Today's call is an important and especially exciting one for me as we announced the appointment of and welcome Sebastian Gunningham as Remitly's new CEO. He could have not timed joining Remitly any better. We ended this strategically important year with incredible results, growing revenue by 29% and reaching adjusted EBITDA of $272 million in 2025, exceeding our guidance for both. This very strong finish to the year and our outlook for next year reflect the strength of our product platform, team and strategy and is the result of 15 years of hard work guided by a simple vision that sending money and receiving money across borders should be reliable, fast and fair. Prior to founding Remitly, I lived and worked on 3 continents and saw how painful and uncertain basic financial flows could be for people who move money across borders. That experience was the seed for our now broader vision, transform lives with trusted financial services that transcend borders. I'm reminded of the importance of that vision every time I connect with customers like Sanjana, a customer since 2019, who joined Remitly through word of mouth during graduate school. She used Remitly initially to support her parents. Since then, she has lived in multiple countries, sending larger and larger amounts over time and recently used Remitly to transfer $60,000 in one transaction to meet tax obligations. She is what we call a high amount sender, a customer category that grew send volumes more than 40% year-over-year in 2025. She says she prefers Remitly relative to banks and other competitors because of our competitive exchange rates and the speed of transfers. That vision, our unrelenting commitment to delivering positive and trusted customer outcomes and the power of our scaled platform have resulted in substantial growth over the years. Since just 2020, quarterly active users have grown by nearly 5x and revenue has expanded more than sixfold. I'd like you to think about that for a moment. Just 5 years ago, Remitly was around $250 million in revenue, serving close to 2 million customers. We are now over $1.6 billion in revenue, serving more than 9 million customers. That momentum in our core money movement business continues. And with less than 4% share of the consumer TAM alone, there is significant headroom to expand further. Beyond money movement, our portfolio of new products provides an opportunity to grow and diversify revenue by creating stronger relationships with customers we serve. In my comments, I will share 3 key updates. First, I'll reflect on our achievements in 2025. Second, I'll share how this past year's accomplishments inform our strategic priorities for 2026. And finally, I will provide additional color on my decision to transition to the Chairman role, how I will stay engaged in that capacity and explain why Sebastian is the right leader for the company going forward. I will then turn the call over to Sebastian to more formally introduce himself. Starting with a reflection on the past year. 2025, put simply, was a phenomenal year for Remitly. Strategically and financially, it was one of the most pivotal years in Remitly's history, culminating in an Investor Day and the issuance of our medium-term outlook in which we expect to generate up to $3 billion of revenue and $600 million of adjusted EBITDA by 2028. Equally importantly, it created the right moment to accelerate execution with a new leader. Our exceptional performance in 2025 was underpinned by 3 things: first, strength in our core money movement product; second, early contributions from new products, which enable our long-term vision of becoming a leading and trusted provider of financial services that transcend borders; and third, efficiency gains and operating leverage, which drove record levels of adjusted EBITDA, GAAP profits and free cash flow. Starting with core money movement. 2025 marked another year of rapid customer growth. We ended the year with more than 9 million quarterly active users, close to $75 billion of annual send volume and more than $1.6 billion of revenue, growth of 29% year-over-year, continuing our track record of significant share gains amid one of the more challenging political and macroeconomic environments in recent memories. This growth was driven by an expansion of our reach with new customer categories like high amount senders, the strength of our platform, which allowed us to test, iterate, gather market intelligence and leverage learnings faster than ever and our continued focus on improving the customer experience. Our relentless attention to trust, reliability, speed and simplicity and delight drove further increases in retention rates and customer lifetime value. Our platform also enabled meaningful progress in the launch and adoption of new products. This past year, we launched our Send Now, Pay Later product, Flex. Flex is our first product outside of global money movement to surpass 100,000 users, reflecting its strong appeal with a large portion of our customers as it bridges timing mismatches between earnings and the transfer needs among our customer population. We ended the year with around 120,000 total Flex users and saw solid double-digit quarter-on-quarter growth in users each quarter throughout the year. We also launched a product focused on businesses, Remitly Business, a global money movement product that allows small- and medium-sized businesses to pay international contractors, vendors and employees. The focus for Remitly Business this past year was on developing and testing features that appeal first to micro businesses, while at the same time, managing a product road map that enables us to scale quickly to address the roughly $20 trillion global money movement opportunity for small- and medium-sized business customers. Early traction for Remitly Business is strong as we ended the year with more than 15,000 business customers on the platform. The third major new product launch last year was our membership program, Remitly One, which ties all our new product offerings, liquidity, Wallet and Card into a unified experience that rewards engagement and builds daily habits. Early adopters have shown strong demand for the Send Now, Pay Later feature as we continue to extend the availability and features of our Wallet and Card and refine other rewards and benefits. In 2025, we also delivered record levels of efficiency, profitability and cash generation, significantly outperforming our expectations. Just 1 year ago, the business had a negative net income of $37 million and today had net income of $68 million with $41 million of that coming in the fourth quarter alone. Momentum and profitability is being driven by several reinforcing forces. First, AI-enabled operating enhancements are fundamentally improving both efficiency and velocity. For example, a recently upgraded fraud model, leveraging AI and integrated data across our platform helped drive record low transaction losses as a percentage of send volume and lower sideline rates in Q4, contributing roughly $10 million of incremental RLTE dollars versus our forecast. And in product development, we have reduced developer time for product enhancements by combining processes that involve many data sources and human judgments into agent automated workflows, bringing up developer and engineering time for more strategic, higher-impact projects. Second, scale continues to strengthen our flywheel, driving improved unit economics across transaction expenses and other major expense categories. Third, optimization in treasury operations aided by AI models and stablecoin have driven continuous improvements to our FX costs. These factors, together with a disciplined approach to hiring contributed to an expansion of adjusted EBITDA margin of more than 500 basis points year-over-year, enabled full year GAAP profitability for the first time in our history and drove a tripling of free cash flow. We will carry this momentum from 2025 into 2026 as we progress towards the 3-year financial goals we laid out at Investor Day of up to $3 billion in revenue and $600 million in adjusted EBITDA. Slide 6 presented at our Investor Day is the strategic blueprint we will use to drive improvements in our platform and products while ensuring that we remain laser-focused on meeting the most critical cross-border financial needs of a growing group of customer categories. I'll touch on key priorities for each, starting with our platform. At Remitly, we see AI as a tremendous tailwind for improving our platform and an enabler of our strategic and financial goals. In 2026, we will further expand the use of agentic and AI systems company-wide to amplify productivity, streamline operations, lower fraud risk, improve customer satisfaction and speed product development and decision-making. We will expand our use of stablecoins by enabling broader access to USDC and further embedding stablecoin and treasury operations to generate incremental working capital efficiencies and lower transaction costs. Moving to products and specifically, our new products, credit and liquidity, wallet, membership and our money movement products targeting businesses. In 2026, we will continue to test and optimize while moving to full-scale launch for a number of our new products in key geographies. We expect in total to more than double revenue from new products this year. Vikas will provide more detail about specific growth initiatives for the upcoming year in his commentary. Finally, I'll discuss our priorities for growing the customer categories we outlined at Investor Day. In 2026, we will continue to expand our presence with high amount senders or those that send more than $1,000 per transaction, a large, important and underserved customer category. Our unit economics optimized for lower transaction amounts give us a huge competitive advantage as we extend to higher send threshold. In 2025, we saw volumes from high amount senders grow 15 percentage points faster than low amount senders, and we expect another year of strong growth in high amount send volumes as we further extend send limits. 2026 is also expected to be an important year for geographical expansion. We continue to scale in the UAE, launched outbound service in Japan early in Q1 and plan to enable sending from the Kingdom of Saudi Arabia and potentially Brazil, subject to regulatory approvals. I could not be more excited about Remitly's prospects in 2026 and beyond. Our growth today reflects the cumulative benefits of core strengths developed over the last 15 years. Trust, a proprietary global money movement network and the compounding advantages of scale. We built a digital-first platform that dramatically lowers the cost and friction of cross-border transfers, helping to significantly reduce the industry cost of sending a transfer and saving customers billions of dollars as a result. We turned a largely cash-based, slow remittance process into a near instant experience for millions of people, resulting in real tangible improvements in people's lives. Looking ahead, the work to drive positive business outcomes and the achievement of our medium-term financial target is clear and interdependent. We will further accelerate product velocity so we can convert product proofs into broad adoption. We will continue to institutionalize operational excellence with tighter cadences, repeatable playbooks and a relentless focus on execution quality. We will manage costs thoughtfully as we have done by strategically reducing headcount and reallocating resources to high-impact growth areas. And we will treat AI as a structural lever using models to speed product delivery, improve underwriting and risk controls, reduce fraud risk, automate audit and compliance and make marketing measurably more effective. Doing these things together at scale and with continued focus on capital discipline is what moves us from a global payments company to a company that offers a wider range of financial services that transcends borders, one capable of transforming lives for individuals and businesses with cross-border financial services needs. And with the foundation and plans in place, I am excited to hand the reins over to a new leader who will dramatically accelerate the delivery of new products and the realization of our vision. The transition has been and will continue to be done with a lot of intentionality. I went to the Board a while back to start discussing succession planning. I didn't know if it would take a quarter or several years to find my successor, but I had the conviction that now was the time to find an incredible successor. The company is doing exceptionally well. The vision is clear. And with the right leader, we can meaningfully accelerate delivery while I continue as Chairman. The Board and I ran a deliberate exhaustive process to identify that leader, defining a success profile, completing thorough interviews and running independent pre-hire diligence and assessments. Sebastian Gunningham emerged as the leader who is an exceptional fit for what we need in our next phase. Originally from Argentina and with extensive professional experience in Latin America, he appreciates better than most the need for timely and reliable cross-border payment solutions and a stable currency. He also has great exposure to founder-led companies and cultures at the most senior levels, reporting directly to Larry Ellison at Oracle and Jeff Bezos at Amazon. With this experience, he brings a rare combination of product rigor and operational discipline. He grew Amazon's marketplace business to a multi-hundred billion GMV business, and he's led growth companies as CEO at various stages. Finally, he has broad experience in financial services, running Amazon payments during his tenure in Amazon and more recently, Chair of Santander Consumer Finance . Simply put, he is uniquely suited for Remitly as a product-led technology executive and strong operator with incredibly unique experience at both very large and growth stage technology and financial services companies. As I have gotten to know Sebastian, it became clear that he is exactly what Remitly needs right now, and I am so excited for you to get to know him going forward. I will remain an active adviser for Sebastian and the Chairman of Remitly. My top priority is to work with Sebastian on an organized and thoughtful transition as he ramps up as CEO in the coming months. Sebastian and I are highly complementary. He will relentlessly drive product velocity and operational cadence. I will provide a founder's perspective, support strategic external relationships and ensure continuity of our long-term vision. We will operate in a tight partnership. On a personal note, I see this more as stepping up than stepping away. I will continue to be the largest individual shareholder with no plans to sell for the foreseeable future, and I will remain deeply engaged as Chairman, not as an operator of the business where I will defer to Sebastian. I also plan to devote more time to systematic problems where Remitly's experience and scale can help. For example, remittance policies that support safe digital adoption and regional work in fast-changing sending hubs like the Middle East, where an onshore presence, policy engagement and other macro issues are important to our customers. These are longer-term cross-industry initiatives that I will pursue from a strategic vantage point and where our platform and AI capabilities provide practical levers to affect change. Let me close by reaffirming the one sentence that guides everything we do and that remains unchanged, transform lives with trusted financial services that transcend borders. That is the North Star for every product decision and every operational choice. The platform, the products and the team are now in place to deliver that ambition at a much larger scale. The work ahead is to increase velocity and execution quality, so more customers benefit faster. With that, I will now hand it over to Sebastian for a short introduction. Sebastian Gunningham: Thank you, Matt. First, I want to congratulate Matt and the entire Remitly team on an exceptional 2025. Ending the year with 29% revenue growth and $272 million in adjusted EBITDA is a testament to the strength of the platform we've built over the last 15 years. It's a privilege to join a company executing with such consistency and discipline of results. Second, I've been asked what attracted me to Remitly. The answer is a combination of mission, opportunity and time. Let me start with the mission. Remitly serves a global community that has been historically underserved and overcharged. After getting to know Matt, it became clear that this mission is an authentic reflection of the founder. This makes the work of serving this community meaningful and it makes the impact real. Next, the opportunity. Global remittances is a monster category with room for multiple strong players. Remitly has around 4% of the consumer payments segment alone. There is plenty of space for growth as money movement around the world is only going to get bigger and more important. Then the product. Customers love the Remitly product. High trust and repeat usage prove that Remitly is a product value story. That trust built across more than 5,300 global corridors is a moat that doesn't reset overnight. The unit economics also work as you are seeing in these latest results. This is a business with scale advantages that will continue to accrue into the future. And finally, timing. AI is a big tailwind for this business. For me personally, the timing is very good. I have a data and science background and have been deep in the evolution of AI. I believe AI will be transformative, and I also believe incumbents with established business models and happy customers are going to be huge beneficiaries of AI. I'm going to aggressively lead that journey at Remitly. Putting all these points together, it became a very compelling reason to say yes to leading Remitly. I've also been asked how I would brand myself as I step into this role. My career has been defined by building and launching products at some of the best companies in the world, leading large-scale engineering and business teams and operating within complex organizations. I have also spent the last 5 years working deep in banking and payments. Paired with my data science background, I'm deeply attuned to the ways AI is transforming the space. I'm a product-first operator, someone who believes in combining rigorous operational discipline with the speed of technological innovation. Let me close with this reflection. Remitly operates in a fast-growing, ever-evolving and over $22 trillion annual TAM. In this environment, in my opinion, there is only one durable advantage that matters, build the best product. In digital financial services, the product is the business. That will be my focus and the way we keep growing our customer base, delivering a great service and driving our revenue growth. I look forward to interacting with all our analysts and shareholders and to working closely with Matt and the Board to deliver on the ambitious long-term vision we have laid out for Remitly. Matthew Oppenheimer: Thank you so much, Sebastian. I am so incredibly excited that you are here. Your focus on building the best product, combined with disciplined execution is going to result in really exciting results for our company and customers. And it reinforces the strategy we laid out at Investor Day and strengthens our confidence in delivering on our ambition of $3 billion in revenue and $600 million in adjusted EBITDA by 2028. With that, I'll now turn the call over to Vikas to walk through our financial and operating highlights from the quarter. Vikas Mehta: Matt, thank you for your leadership. Sebastian, welcome to Remitly. Good afternoon, everyone. As we shared at Investor Day, we are focused on profitable growth, strong free cash flow and managed dilution to drive long-term shareholder value. Q4 and full year results clearly demonstrated our ability to do that. We delivered a very strong quarter and full year with record revenue and adjusted EBITDA. Fourth quarter was $442 million revenue, up 26% year-over-year. Adjusted EBITDA was $89 million, resulting in an adjusted EBITDA margin of 20%, our highest quarterly adjusted EBITDA margin ever. Our performance this quarter was driven by 3 primary factors: revenue growth, aided by a strong December holiday period with efficiently managed marketing spend, lower-than-expected transaction losses, reflecting the benefits of our new AI-driven fraud detection and prevention model and rigorous management of operating expenses. For the full year, we once again delivered profitable growth. Revenue was $1.635 billion, up 29% and adjusted EBITDA was $272 million, resulting in an adjusted EBITDA margin of nearly 17%, an increase of more than 500 basis points year-over-year, as you can see on Slide 12. Importantly, we delivered our first full year of GAAP profitability with $68 million of net income. We delivered these results by carefully managing both top line and bottom line throughout the year with revenue ending up more than $60 million above and adjusted EBITDA more than $80 million above the midpoint of our initial 2025 guidance. I'll begin with an overview of our fourth quarter results and then share our outlook for the full year and first quarter of 2026. Let me first unpack revenue growth drivers for Q4. Send volume grew 35% to $21 billion, consistent with the prior quarter's pace. Supporting the strong volume growth, send volume per active customer increased to over $2,200 or 13% year-over-year growth to reach its highest level, both on an absolute and percentage growth basis. This was driven by growth in both transactions per active customer and record growth in average transaction size as we continue to win share and gain traction with high among spenders and business customers. Quarterly active customers increased 19% year-over-year to nearly 9.3 million, in line with expectations. Our retention remains strong, reflecting the benefits of investments in the core product to improve speed, reliability and the overall customer experience. As expected, volume and revenue exceeded QAU growth as we saw a greater mix of send volume from high amount senders. Before I dive into our performance, let me define our 3 customer tiers by send volume. Low amount senders are those that send under $1,000 per transaction. High amount senders are customers that spend between $1,000 and $10,000 per transaction and very high amount senders are customers that spend over $10,000 per transaction. In Q4, we saw a continued shift in mix towards volumes from high amount senders and very high amount senders. High amount sender volume grew 14% year-over-year and very high amount sender volume grew 105% year-over-year, as shown on Slide 14. Growth in volume from high amount senders and very high amount senders accelerated in Q4, increasing our mix of spend volume from these tiers by over 350 basis points year-over-year. These 2 customer tiers are a strategic focus for us. And as we noted at Investor Day, now they comprise nearly 50% of spend volume. This quarter, our take rate was 2.13%, in line with expectations. Growth in volumes from high amount senders was one of the main contributors to year-over-year changes in take rate, both for the quarter and the fiscal year. Since take rate is heavily influenced by mix, it is not a great metric for analyzing our underlying business performance. We believe that RLTE dollar growth or RLTE per active customer, which I will highlight shortly, are more indicative of results than take rate for analyzing our performance. Now let me dive deeper into our revenue performance from a geographic and new product perspective. From a spend perspective, U.S. revenue grew 28%, driven by continued share gains. Rest of World revenue grew 26% year-over-year, accelerating sequentially and showcasing the geographic diversification of our business. Notably, in Q4, we saw strong adoption of our product in UAE with more than 150% quarter-over-quarter growth in new customers. On the receive side, revenue from transactions to regions outside of India, the Philippines and Mexico grew faster than overall revenue growth and now comprises over half of our revenue mix. Before moving to a review of profitability, I'll discuss progress made with new product areas, focusing on Remitly Business, Send Now, Pay Later, Wallet and Card and our membership program. As Matt noted, we are seeing strong indications of product market fit for each. Our goal over the next 3 years is to scale these products to drive adoption within our existing customer base and leverage new products as a means of attracting first-time users to the Remitly platform. As noted at our Investor Day, we expect these new products to contribute 5% to 10% of total revenue by 2028. In 2025, new products contributed a little more than 1% to our revenue, and we expect new products revenue contribution to more than double in 2026. Revenue from new products include Flex, Remitly Business, Wallet and Card and Remitly ONE. With that overview, let me share a few highlights as it pertains to our new products, starting with Remitly Business. Remitly Business is our global money movement product tailored to the 80 million small and medium businesses with cross-border financial needs. Remitly Business addresses an opportunity more than 10x the size of our core consumer payments business. As Matt noted, our early focus with this product has been micro businesses. This subcomponent of the $20 trillion business TAM wants a low-friction repeatable payment workflow that can be easily integrated into the systems small businesses use, all with the same level of trust our core consumers enjoy. We have seen strong traction for Remitly Business in the 6 months it has been offered with over 15,000 businesses on the platform. Average transaction sizes for business customers are roughly twice those of our core customer category. Remitly Business is currently available to businesses in the U.S., Canada and the U.K. with plans to expand in the EU in 2026. In 2026, we also plan to add features that appeal to larger businesses with more advanced cross-border payment means like recurring and bundled payments. Moving on to Send Now, Pay Later. We continue to see strong product market fit for Flex with active users reaching around 120,000 and revenue nearly doubling sequentially in Q4. Unit economics for Flex in Q4 are encouraging and in line with expectations. Our data reviews that Flex customers spend more than non-Flex members and loss rates are trending in line with expectations. In 2026, we'll leverage key learnings from early cohorts to continue to expand. As we have shared at Investor Day, this spring, we will also launch Remitly credit, a recourse line of credit that will offer customers access to higher funding limits and provide customers a means of establishing a credit history. Finally, Wallet and Card are foundational elements of our broader financial services offering and are expected to be a key enabler of the adoption and utility for our new products, allowing customers and businesses to store, save and spend money. We have seen encouraging early traction with over 60,000 wallets created to date despite a controlled product rollout. Flex Advance, Wallet and Card and upcoming Remitly credit comprise the core set of features for Remitly One, our flagship membership product. While members have shown a strong interest in Flex benefits, we expect to unlock wallet and cards global availability, launch Remitly Card Credit and grow other benefits and rewards as we expand penetration of Remitly One among our customer base throughout 2026. Turning to our focus on driving profitable growth on Slide 16. As I noted earlier, the Revenue Less Transaction Expenses or RLTE, is a useful indicator of our business model's long-term success. RLTE dollars grew 30% to $305 million, reflecting strong customer activity, improved partner economics, routing optimization and economies of scale. RLTE as a percentage of revenue this quarter was 69%, a record high, improving 252 basis points year-over-year. We remain focused on long-term RLTE dollar growth as we continue to attract new customers, innovate with new use cases and scale. Transaction expenses this quarter were $138 million and as a percentage of revenue was 31%, excluding provision for transaction losses, other transaction expenses were $123 million, improving 200 basis points year-over-year as a percentage of revenue as we continue to benefit from the improved network economics. The mix of digital received transactions increased year-over-year by more than 300 basis points, continuing a trend that has been positive for our business and customers. Provision for transaction losses was $15 million or 7.3 basis points as a percentage of spend volume, a record low and better than our expectations. As noted, improved performance this quarter is due in part to a recently deployed AI-driven fraud prevention and detection model. With that, let me walk you through the specific non-GAAP expense categories. Notably, we delivered leverage across all expense categories in Q4. Marketing investments remain disciplined and growth focused. We spent $88 million on marketing in Q4, up 11.5% year-over-year. As a percentage of revenue, marketing expense was 19.9%, improving more than 250 basis points year-over-year. Marketing spend per active customer was $9.49, down 6.5% year-over-year. This outcome was driven by a more focused and intentional approach to investing in customer acquisition around peak holiday periods, aided by ongoing incrementality testing, which allowed us to more efficiently meet our targets by optimizing spend across geographies. We were able to deliver these marketing efficiencies while supporting growth in high amount senders and business customers. Notable campaigns in Q4 included a focus in the U.S. on capturing and driving offline to online conversions through our WhatsApp send product and campaigns featuring awareness of the 1% remittance tax on cash remittances. Our lifetime value to customer acquisition cost ratio was about 6x, while our payback period remained under 12 months. As a reminder, our marketing investments drive returns for many years beyond our initial investment given our growing base of repeat users. Customer support and operations expense was $27 million and as a percentage of revenue was 6.1%, improving 12 basis points year-over-year and continuing a trend that we have seen over the past couple of years. AI-based assistance are driving lower agent contact rates with early customer satisfaction scores indicating AI-led interactions can perform as well or better than human agents. Technology and development expense was $56 million and as a percentage of revenue was 12.7%, improving by 83 basis points year-over-year. Technology and development expense grew 18% year-over-year, reflecting our ability to more efficiently manage technology spend while delivering robust product innovation. Across product and engineering, agentic AI is accelerating development velocity to generation and testing, enabling rapid design lockups, enhancing customer service, supporting transaction completion, streamlining document verification and empowering natural language planning. In Q4, we further increased our leading metrics across speed and reliability. Over 65% of transactions were dispersed in under 20 seconds, increasing 7 points since Q3. More than 97% of transactions were completed without customer support contact and our platform delivered 99.9% uptime. G&A expense was $45 million, an improvement of 130 basis points as a percentage of revenue year-over-year, reflecting continued leverage across the business. Overall, we continue to maintain rigorous discipline on hiring and non-headcount spend while investing in compliance, geographic expansion and AI tools. As Matt noted, we are investing in AI across the organization with AI now an important element of performance objectives company-wide. We expect to generate operational efficiencies and top line benefits from these investments through increased productivity and more targeted efficient customer acquisition. Strong revenue growth, combined with efficiency and discipline led to record adjusted EBITDA of $89 million. We also delivered a record GAAP net income quarter with $41 million of GAAP net income, a significant improvement compared to a $6 million net loss in the fourth quarter of 2024. As we noted at Investor Day, our North Star is to drive free cash flow while managing dilution. 2025 showcased our ability to drive meaningful growth in free cash flow while prudently managing dilution. Free cash flow was $283 million in 2025, which more than tripled from the prior year. Outstanding shares grew only 5% year-over-year, resulting in substantial growth in free cash flow related to growth in our share count. This quarter, we adjusted our presentation of cash flows, making it simpler for investors to calculate and model by removing the impact of pass-through customer funding activity. I'll now discuss dilution management on Slide 18. In 2025, we made progress across each of the metrics we track. Stock-based compensation as a percentage of revenue was 9.5% for the full year, approximately 250 basis points lower than in 2024. In Q4, stock-based compensation was $41.3 million, 0.8% lower year-over-year, the first year-over-year decline in quarterly stock-based compensation in the company's history. Dilution declined to 5%, 140 basis point year-over-year improvement, supported in part by the $23.9 million worth of share repurchase in 2025 under our $200 million authorization. And the net burn rate fell to 2.9% in 2025, improving 200 basis points year-over-year. With that, I'll move to our outlook. For the first quarter of 2026, we expect revenue of $436 million to $438 million or 21% growth. First quarter revenue guidance reflects a strong start to the year, continuing the momentum we have observed exiting 2025, favorable seasonality as well as early customer acquisition benefits associated with the recent 1% tax on cash remittances. Breaking down our revenue growth expectations. Consistent with recent trends, we anticipate send volume growth to exceed revenue growth and revenue growth to outpace quarterly active customer growth, driven by continued momentum among high amount senders and businesses. Send volume per active customer is expected to grow in the mid- to high single-digit range, supported by the shift in mix towards high amount senders and businesses as we continue to make strategic investments and expand engagement with these customer categories. For the full year, we expect revenue between $1.94 billion and $1.96 billion, reflecting a growth rate of 19% to 20%. I'll provide more context on our outlook for the year. The majority of our revenue in 2026 comes from prior year cohorts, giving us strong visibility into the following year. As noted, we expect revenue from new products to more than double in 2026. New products growth will be driven primarily by flat remittance volume, membership fees and growth in business remittance volumes. Now let us pivot to profitability and expense guidance, starting with RLTE. We expect Q1 and full year RLTE margin to be broadly in line with 2025 levels, adjusting for normalized transaction loss rate. As always, transaction loss rates may fluctuate quarter-to-quarter, and we remain disciplined about optimizing customer lifetime value while rigorously managing risk across our platform. Shifting to marketing. We expect continued marketing efficiencies in 2026 as we prioritize high ROI marketing opportunities in our core relevance business while continuing to invest in marketing for new products and customer categories. For Q1, we expect marketing spend for QAU to be roughly flat year-over-year. Putting this all together, we expect Q1 adjusted EBITDA to be between $82 million and $84 million, translating to an adjusted EBITDA margin of around 19%. For the full year, we expect adjusted EBITDA to be between $340 million and $360 million, representing an adjusted EBITDA margin of around 18% as product and marketing investments supporting new products are expected to build throughout the year. The improvement in adjusted EBITDA margin year-over-year reflects continued operating leverage supported by the prudent use of AI to improve operating efficiency and actions taken this quarter to better align global resources with our most significant growth opportunities. We expect to generate positive GAAP net income each quarter this year and strong year-over-year growth in GAAP net income and free cash flow. In terms of cash flow priorities, after organic investments, our top priority will remain the repurchase of shares. At current stock prices, we believe the repurchase of shares provide a strong return on capital, and we expect to increase the quarterly pacing of our buyback activity in 2026. To summarize, in Q4, we delivered very strong results across our key financial metrics, achieving 26% revenue growth and 20% adjusted EBITDA margins. We also delivered record GAAP profitability and strong free cash flow, underscoring the power and scalability of our business model. Thank you, Matt, for your inspiring leadership all these years with very strong momentum exiting 2025 and Sebastian's leadership going forward, we are excited about the future. With that, Matt, Sebastian and I will open up the call for your questions. Operator: [Operator Instructions] Our first question comes from Tien-Tsin Huang with JPMorgan. Tien-Tsin Huang: Great. Yes, I just want to add my thanks to Matt as well. I learned a lot from you, Matt, and what you built. So hopefully, we'll be able to stay connected here. My question, maybe just for Sebastian since we have you, and I'm sure we'll learn more and I appreciate your intro and yourself. But just given your background, what's really interesting, I would love to hear a little bit more on how your prior experience prepares or informs your decision to join and lead Remitly given that it is a smaller consumer platform, different than some of the larger enterprise businesses that you led. So just love to hear your thoughts on that. Sebastian Gunningham: Thank you for the question. Some of my prior experiences include leading product organizations and engineering organizations in some of the best companies in the world. Some of those were big, some of those were smaller. I've run large complex businesses in many continents. I've been a CEO a number of times. And specific to payments and the Remitly Business, I did run the payments business at Amazon, as I mentioned, both on the consumer side and on the merchant side. Those were not always big, but they did scale. And this included all the money in and the money out channels for the Amazon business. And then finally, over the last few years, I've played both a Board role and a product role at Santander, helping its very successful global digital transformations in its core business and its payments business. So I think the sum of all these experiences positions me well to lead Remitly in this next chapter of scaling. Matthew Oppenheimer: Great. Yes. And the only thing that I will add, Tien-Tsin, is a huge thank you to you. I've known you for a decade. You're an amazing analyst and appreciate all the thoughtful questions and coverage. I am incredibly excited for Sebastian to be here. And I wish you could see me because I have a huge smile on my face sitting next to him here in Seattle. I lost my voice as you can potentially hear. So I'm speaking a bit more slowly and calmly. But the feeling I have is he's calm, optimism about this change. And you'll hear more from Sebastian and Vikas today, which is great and just super excited about what's to come. Operator: Our next question comes from Ramsey El-Assal with Cantor Fitzgerald. Ramsey El-Assal: I'll also add, Matt, it's been terrific interacting with you all these years, and welcome to you, Sebastian. Matt, I'm going to spare your voice and actually ask Vikas a question. What are you seeing out there in terms of kind of macro impacts to the business? I'm thinking things like FX or immigration policy or any other external factors. I guess the more nuanced question is, did you grow through any headwinds? Or are these macro factors that are in the headlines just not impacting your business? Vikas Mehta: Ramsey, thank you for the question. And I'd start with the fact that we had an exceptional year and a quarter as we ended the year with record revenue, record EBITDA and EBITDA margin. And a lot of that was because of really strong execution, especially the December holiday period, we saw significant outperformance even compared to our internal expectations. And as we noted, it was along with driving marketing efficiencies at the same time. So a lot of it was really strong execution, understanding the customer needs and really having a product and a marketing message that has resonated with our customers. As we look forward, we shared our guide and the drivers of the guide. I'd say, first of all, building on a strong FY '25 gives us a lot of predictability coming into the year. We see that our customer is very resilient even in sort of geopolitical volatile background, which again strengthens our confidence with regards to the guidance. One additional factor, which is a good tailwind, at least in the beginning of the year is the 1% remittance tax that's applicable for cash remittances. So we definitely see a strong start to the year because of that. But overall, the diversification that we have across geographies, customer and new products, the new product momentum we have seen thus far, all of us gives us a great confidence in the guidance we have put forward. Operator: Our next question comes from Aditya Buddhavarapu with Bank of America. Aditya Buddhavarapu: Just wanted to say, Matt, congratulations on the successful run at Remitly; and Sebastian, welcome. I have a couple of questions actually for Vikas as well. When I look at the 2026 guidance, you talked about the 19% to 20% growth on revenues for the full year with Q1 actually being at 21%. So could you just talk a bit more about the cadence of revenues through the year? Is Q1 faster than the full year outlook because of the 1% remittance tax giving some tailwind given you have actually easier comps in H2, should actually there may be some degree of conservatism there given maybe macro uncertainty. So just some color on the quarterly cadence. And then also related to the outlook for '26, when you exited Q4 with 20% adjusted EBITDA margin. For '26, the implied margin is close to about 18%, 19%. So could you just talk about what's driving maybe that sort of margin for the full year being lower than Q4? Vikas Mehta: Yes. Aditya, first of all, thank you for the question, and thank you for initiating coverage on Remitly. I'll start with your second part of the question, and then I'll go to the first part. So as you noted, we exited 2024 with a very strong Q4 and a record EBITDA margin of 20%. There were a few reasons for that outperformance. And I'd say the 3 key ones being a strong holiday period, along with marketing efficiencies, which pretty much drove 1/3 of that, call it, beat to guidance. The second important factor was a record low transaction loss. It was at 7.3 basis points, which, again, was very, very strong, especially given the new AI model that we have been able to deploy. And the final one was disciplined expense management. So as we look at 2026, we think about, for example, the transaction loss tends to be volatile. And we -- in our guidance and our forecast, we look at the normal range, historical range, which is 9 to 13 bps, and we take that as, call it, the baseline. Outside of that, we really feel that with strong execution, again, we are going to continue to drive margin expansion compared to the full year FY '25. At the same time, we feel the organic opportunity ahead of us is huge. And as we have spoken about it earlier, the new product momentum has been good. So we want to invest behind that trend that we are seeing. So overall, we feel it's a very balanced profitability plus growth equation we are striking here. Shifting to your question on the revenue drivers and the seasonality thereof, the first point I'd make is that H1 versus H2, it's a similar thing that we saw last year, where the growth rates moderate in the second half. It's a little bit of the larger the business gets, it tends to follow that curve. The second thing I would say is, as you noted, Q1, we benefit from the remittance tax, and there's a little bit of a shift in the Ramadan timing also moving a few weeks ahead compared to last year. And both those give us stronger confidence with regards to Q1. So overall, really looking forward to an exciting 2026. And as I said, a strong foundation from 2025 gives us a great momentum going in. Operator: Our next question comes from Will Nance with Goldman Sachs. William Nance: Matt, it's been a pleasure working with you. I guess one maybe for Sebastian. I think in the prepared remarks, Matt called out the ability to accelerate product innovation and execution and some operational benefits given your history. When you look at the business kind of exiting the year in the mid-20s on revenue, margins expanding nicely, where do you feel like you can have the most impact in some of those things that Matt mentioned at the top of the script? What do you expect to be your main areas of focus as Matt kind of hands over the reins? Sebastian Gunningham: Yes. Thanks for the question. I start as CEO tomorrow, so I don't want to get ahead of myself here. I think I'll make a couple of comments. I think these are very large markets. We are -- we've got a lot of traction in the consumer market. We see, as Vikas and Matt have said, an opportunity in the business market. And even within the business market, there are many, many subsegments. I think product -- having the right product for each of these segments is super important. So I think that overall, any velocity in product development is going to give us all kinds of opportunities in these large markets that we have to address. So a little bit early for me to have a strong opinion, but very excited about what we can do in these markets. Operator: Our next question comes from Cris Kennedy with William Blair. Cristopher Kennedy: Congratulations to both Matt and Sebastian. Just a follow-up, Sebastian. You mentioned your history with data science and your enthusiasm around AI. Can you just provide more color as to kind of what the opportunity is at Remitly? Sebastian Gunningham: So maybe I'll stay away from -- I'll make just a few general comments. I think there are a number of buckets of AI. There's the customer-facing part of AI. There's the internal efficiencies facing part of AI. There's the software product, the software factory part of AI. So -- and we've all been following this. I think the -- as I said, for an incumbent like Remitly with a very strong business model, the right unit economics and the customer that loves the product, and probably doesn't only apply for Remitly. I think that the right AI adoption just gives us a lot of tailwinds into the next few years. So that would be my general statement. I'm very optimistic with what I've seen so far. I think it's going to be a very strong multiplier for the company over time. Operator: Our next question comes from Alex Markgraff with KBCM. Alexander Markgraff: Matt, Sebastian, congrats to both of you. I guess just -- I don't know if these are for Matt or Vikas, but just a couple of questions on new products. I'd be curious to understand sort of what sort of observable benefits you've seen from Flex and One on wallet share. And then just sort of curious on willingness to pay. Anything you've learned in these early days around willingness to pay for those from customers? Vikas Mehta: Thanks, Alex. I'll take this one. We have been very impressed with what we have seen thus far from Flex. First of all, it opens up a whole new category with the Send Now, Pay Later. And as we talked at Investor Day, if you look at our customers and segment them or categorize them, you will have the low amount senders, high amount senders, businesses and receivers. And as you look at low amount senders, there's a clear mismatch between the timing of earnings and when they need to make payments. In addition to that, specifically for our customers, sometimes there's also a mismatch between their credit history versus the creditworthiness. And this is where we feel we can fill that gap and void in a meaningful way for the customer, along with driving really positive unit economics and creating shareholder value. And what we have seen thus far is pretty promising, 120,000 users, revenue almost doubling quarter-over-quarter. And along with that, clearly maintaining strong unit economics as well as having provisions very much in line with our expectations. The last point I'll make on that is we've also seen very interesting insight that the Flex users, especially members tend to send more than the non-Flex users/members. And that clearly shows that not only are we creating a new category, we are actually creating a path where higher volumes are sent and we are reducing some of the friction that was existing earlier. So overall, excited about Flex as well as Send Now, Pay Later in general. Operator: And our final question comes from Darrin Peller with Wolfe Research. Darrin Peller: Matt and Sebastian, congrats to both of you guys. I just want to touch back a quarter ago. But if you look at, it was obviously a very strong upside surprise. And so when we think about the opportunity you're seeing in terms of the higher spenders and maybe just reminding us what other scenarios, what other results drove -- I love to hear what you're seeing in terms of strategy around higher spenders and what's really driving that and maybe other factors all that you see in the quarter driving the upside. Vikas Mehta: Thanks, Darrin. Clearly, the trend that we are seeing is that the high amount spenders are spending more and the product improvements that we are doing, raising the send limits, having the right marketing campaigns are resonating as well. And this shows in the numbers. We had in record send per QAU, both from a dollar perspective, about $2,200 as well as growth at 13%. And if you fuel that further, in fact, we provided a slide that breaks out low amount senders, high amount senders, and we added one more tier to call out very high amount senders, which is people who spend or send more than $10,000 per transaction. And we are seeing really high growth rates with north of 40% on the high amount senders and north of 100% send volume growth for the very high amount senders. And again, as we say, we are just getting started there and with more product innovations and a more front-footed marketing campaign in that space, we will continue to drive higher market share gains, and we feel very excited about that in 2026 and beyond. Matthew Oppenheimer: Great. And I'll just wrap with a couple of thoughts. Our ambitions at Remitly have never been higher. And if you look at our vision of transform lives with trusted financial services that transcends borders, that is our anchor. And as we think about this transition, as we think about Sebastian coming on, as we think about its product-led leadership, operational excellence, that is going to be a huge, huge accelerant to help us accomplish the vision and financials that we laid out at Investor Day. And to wrap, as my last earnings call as CEO, I just want to say an enormous thanks to our investors, to our analysts, to all of our thousands of team members and to our millions of customers around the globe. This business is already making an enormous impact, and it is because of you, and we are very much more than ever just getting started. Operator: Thank you. This concludes the question-and-answer session and today's conference call. Thanks for participating. You may now disconnect.
Conversation: Operator: Welcome to Surgical Science Q4 Report 2025 Presentation. [Operator Instructions] Now, I will hand over to the speakers, CEO, Tom Englund; and CFO, Anna Ahlberg. Please go ahead. Tom Englund: Welcome to this earnings call for Surgical Science for the fourth quarter of 2025. My name is Tom Englund, CEO. And with me today, I have our CFO, Anna Ahlberg. We will first present a summary of quarter 4 and our results, and then we will have the Q&A session. We are pleased that like quarter 3, quarter 4 was a clear step in the right direction for Surgical Science. We had sales of SEK 269 million and grew by 15% adjusted for currency effects. And our license revenues almost exclusively from robotics companies were the highest ever reported at SEK 92 million, which was an increase of 21%. The adjusted EBIT amounted to SEK 46 million or 17%. On December 8, last year, we presented our new financial targets of annual sales growth of 10% to 15% with profitability of more than 15%. And it's gratifying to see that we're now delivering fourth quarter results in line with these targets. So if we move over to Educational Products. Performance in Educational Products was mixed with growth of 4%. North and South America showed strong growth of 43% with a good distribution between the different countries. And we are seeing a clear recovery now in this region compared with previous quarters with a higher customer activity and bigger sales pipelines. And we're also cautiously optimistic about the future. Asia, on the other hand, saw sales decline by 21%, driven by a continued challenging market situation in China with generally lower activity and demand. One of our strategic goals is to increase the profitability in all segments outside of robotics. For our high-volume products, we are now beginning to see the impact of this strategic initiative. During quarter 4, our average sales prices increased by around 9% compared with quarter 4 2024 at fixed exchange rates without us experiencing any significant effect on volumes. The impact is most felt in direct sales and indirect channels usually show a delay, but we expect further positive price effects to be seen during this year. Also during the quarter, our new PartnerPath distributor program was introduced on a broad scale, and this program aims to improve cooperation, sales and efficiency between us and our partners, which, among other things, will contribute to increased profitability. Highlighting the Ultrasound segment, the Ultrasound segment experienced a very high level of activity, both within hospitals but also in industrial customers. Although ultrasound sales increased by 48% compared to quarter 4 '24, the segment did not meet our growth expectations as pro forma sales, including the acquisition of Intelligent Ultrasound declined. The main reason for this decline we consider to be structural challenges within our own direct sales force, something that we've already addressed during the past quarter. For ultrasound, and you can see the picture of an ultrasound simulation product to the right, 3 new simulation modules were launched during quarter 4 and in January. One of these is targeted towards the diagnosis of endometriosis, which is a major health problem affecting 1 in 10 women. The module supports one of our focus areas, women's health, an area that is neglected in health care and where we have identified that our unique products and solution can create significant value and contribute to earlier diagnosis. This is one clear example of how Surgical Science fulfills our purpose of unlocking the full potential of every medical professional to improve health care outcomes and save lives. During quarter 1, you can expect the first products, which are based on the joint technology platform from Surgical Science and Intelligent Ultrasound to be launched. We are not yet done with the integration and still have a lot of work to do to realize the full synergies from the acquisition of Intelligent Ultrasound. Now moving over to Industry. The Robotics segment had a strong quarter. License revenue grew by 21% to SEK 92 million, which was an all-time high for the company. We saw strong license revenues from our largest customer, Intuitive as well as several other players in the U.S. and China. These other players are now beginning to install robots in significant numbers, which is in turn driving our license revenues. The collaboration with our largest customer, Intuitive, continued during the quarter. And in January '26, Intuitive announced that its system had been used on more than 20 million patients to date. This, together with the 18% growth in procedures during the quarter is clear evidence of the strong demand and broad adoption of robotic surgery. Both Intuitive and Surgical Science agree on the critical role that simulation plays in training robotic surgeons. Digital offerings are becoming increasingly important for robotics companies and Surgical Science is playing a central role in the development of these offerings. During the quarter, our customer, Johnson & Johnson, applied for a so-called De Novo classification in order to start marketing its Ottava robot for gastrointestinal procedures. Another customer, Medtronic, received FDA approval for the use of its Hugo robot in urological procedures in the U.S. And 2 days ago, Medtronic announced the first commercial surgery with Hugo robotic surgery system at the Cleveland Clinic in the U.S. There are now several hundred robot models that are either actively being sold or about to hit the market. Surgical Science is developing simulation solutions for most of the 20 largest robotics companies, and we feel very confident in the value and uniqueness of our offering in robotic surgery. We have a big and growing pipeline of robotics projects, and we see opportunities for deeper integration into our customers' digital offerings and our ability to create value for many years to come, in line with the recently presented strategy. The introduction of our latest simulator, RobotiX Express has been successful and sales and deliveries have started to pick up speed. 14 simulation exercises have been launched on the simulator so far, and the portfolio will be expanded on an ongoing basis. At the International Meeting on Simulation in Healthcare, IMSH in San Antonio in January, we showcased our products that are making use of AI technologies for the first time ever. In these products, AI is helping to analyze the instrument handling of laparoscopic surgeons and then recommend steps or skills for the surgeons to practice and improve. At the same time, within our core offering of real-time simulation of surgical procedures, we today see major limitations in the power and scalability of AI to handle and calculate models that could generate the complex real-time surgical simulation that our customers require. Therefore, Surgical Science's simulation technologies will continue to be the ultimate solution for high-quality real-time surgical simulation for the foreseeable future and Surgical Science's product experience will be improved significantly with the use of AI. Moving over to Medical Device Simulation. During quarter 4, continued progress was also made in strengthening the company's position within the medical device industry with a focus on endovascular applications. At the end of the year, the pipeline of ongoing development projects was 15% larger than at the same point in 2024. Our development revenue is project-based and may fluctuate between quarters and not fully reflect the underlying level of activity. At the end of '25, the proportion of repeat customers for development projects exceeded 70%, demonstrating that Surgical Science is making progress toward becoming an even more integrated and long-term partner to these customers. During the quarter, several important solutions were delivered to our customers, including the areas of peripheral artery disease and pulmonary thrombectomy. At the same time, sales of simulators to medical device companies for product-specific training fell to SEK 21 million compared with a very strong comparative quarter of SEK 43 million. So over to the strategy and the work going forward. Surgical Science's new strategy was presented at the Capital Markets Day in December last year. The aim is to continue growing the company profitably and establish a market-leading position within our 5 different market segments, all of which currently have low to very low penetration. We are now pursuing active internal efforts to deliver on the strategy and are seeing progress across all initiatives. And we feel very confident that this is the right strategy that will lead to increased shareholder value. Surgical Science is currently a world leader in medical simulation with a very strong brand. Our position is unique with market-leading products, strong and effective direct and indirect sales channels and an extensive medical expertise that our customers rely on for their training and development. Our global reach and support, which ensure reliability and presence are critical factors for our customers. 2025 has been a challenging year in many ways, particularly in relation to the news surrounding our largest customer, Intuitive and the development of our share price. At the same time, Surgical Science has made great strides forward in many respects and is now, in many ways, a significantly stronger company than it was a year ago. Demand for our product is growing steadily, driven by a greater need for training, increased digitalization and a more complex health care. I'm optimistic about the future where our solutions will become a central part of health care training and our ability to generate profitable growth over time. And with that, I would like to hand over to Anna to present the financials in more detail. Anna Ahlberg: Thank you, Tom, and welcome, everyone. We start with sales. For the quarter then we had sales of SEK 269 million, up 7%. SEK 14 million came from Intelligent Ultrasound. And I should just mention, Intelligent Ultrasound is today renamed to Surgical Science UK, but we will still use IU when we talk about this acquired business throughout the presentation. And all IU sales are attributable to the Edu Products business area and the ultrasound product group. In local currencies, sales were up 15%. And we have, after Q1 of last year, since then seen a significant negative effect from currencies on our overall sales. And also on our result, that I will come back to that later. We are just below 80% of revenues in U.S. dollars. We are mitigating this as best we can, except for raising prices that Tom also talked about. We also now quote more countries in euros instead of in U.S. dollars, for example. However, this will not mean a very large change in the ratio between different currencies since a lot of our revenues originate from the U.S. Looking at the business areas, the split was 48% for Edu and 52% for Indu for the quarter, where then Edu was up 4%, but down 8% if we exclude IU. And as Tom mentioned, the Asia region declined 21% compared with the same quarter last year, and that was attributable to China having a weaker quarter, while countries such as Japan and the Philippines showed good sales. Sales in Europe was weaker than last quarter, meaning Q3, but still remained strong and increased by 4%. France and Poland did particularly well in this quarter. And then the comparative figure also includes a major order to Romania. But mentioning Poland, Poland, this market has been really strong for us during these last quarters. It was at an all-time high for last year as a total, and it is also our largest market in Europe. The North and South America region increased by 43% compared with the corresponding quarter last year. And this is attributable to the U.S., which is really nice to see since we have had some tougher quarters there. And this is even when excluding sales from Intelligent Ultrasound that is also -- that part of the business is our largest market. But even if we excluded it, the increase is attributable to the U.S. Indu, up 10%. We had, as mentioned, all-time high license revenues of SEK 92 million. Development revenues were also very strong, while simulator sales within the business area was weaker. I will come back to this when we look at the revenue streams on the next slide. But for the full year, then this means that sales were SEK 992 million. This is an increase of 12% or 19% in local currencies. And in that number, IU is included with SEK 75 million. Their sales for the full year was SEK 80 million. They are in our books and consolidated as of February 18, 2025. And that meant that in SEK, sales were down approximately 30%. This is largely attributable to the U.K. and lower sales to NHS. We've talked about that before, and it's something that we are, of course, not at all satisfied with. The U.K. market was also a market where we saw that sales should be coming from the full product range, also the other Surgical Science products as it then moved to being a direct market. However, and as Tom talked about, we do see a lot of positive signs for our ultrasound product group, where we are now merging our technologies, and we have really exciting products in the pipeline. Edu for the full year 2025 was up 13% and Indu 11%, where license revenues were up 11% for the year. And looking then at the revenue streams, license revenues for the quarter were 34% of our total revenues compared to 30% last year. We saw really good sales, both from Intuitive, and that was then both from dV5 as well as from the older generations, as well as a larger batch revenue order from one of our other robotic companies, customers. So as I think you're all aware of them, we did during the fourth quarter on November 25, received a cancellation from Intuitive on the memorandum of understanding that was signed in January. And this memorandum of understanding implied that all dV5s would be equipped with simulation from us. The cancellation meant that we now, as of January 1 this year, go back to the previous existing agreement between the companies and advanced simulation from us will only be offered to a minority of the customers. For the older generations such as Xi, for example, the agreement has not been changed. It was always an optional feature. And our estimate for this was and still is that it will impact license revenues negatively by SEK 60 million to SEK 90 million for this year. However, as we have also emphasized and Tom talked about it, we still have significant revenues from Intuitive, and we continue to work very closely together on a road map for future simulation. Moving on then to the next revenue stream, simulator sales that was as a whole down 12% compared to Q4 2024. This is due to the industry business area. This is more lumpy than for sales within Edu since it's usually tied to larger projects where development is also involved. And it sometimes also has to be seen together with development revenues. And as an example, the project that we have in Southeast Asian country, that is still in the development revenue phase. This will then during this year and towards the end of this project, move from being pure development revenues to pure simulator sales. So it is usually a mix of the 2 and the simulator sales also usually comes towards the end of the different projects. Development revenues then up a lot also for this quarter and the project that I just mentioned, here, we had revenues of USD 0.7 million, and we estimate the same for this quarter, Q1. So this is, of course, a factor for the increase, but not at all entirely. We had very good development revenues also for other customers. Our gross margin for the quarter was 66% versus 68% in Q4 2024. The fact that license revenue made up a higher share of total sales than in the corresponding period had a positive effect. However, currency effects have a large negative impact on the margin, approximately 2.3 percentage points. And unfortunately, the lower USD exchange rate has less impact on the cost of goods sold than on other cost items because our input goods are primarily purchased in other currencies than in dollars and also production and the associated wage costs, they are also not in U.S. dollars. Then another factor impacting the gross margin negatively that we have seen throughout the year and commented on is that we do have lower gross margin on the IU products. But then also on the positive side, we see that our price increases are starting to have an effect. And that is, as mentioned, something we will continue to pursue. Regarding OpEx, sales costs, they were 17% of sales for the quarter, 20% in the corresponding quarter. And here, we see that the reductions in the sales force following the acquisition of IU have now reached their full effect. And then for the quarter, we also had some lower costs of a more nonrecurring nature due to lower agency fees. This is attributable to sales in certain countries. So it depends on if we sell more or less to these countries. So that means that the cost level was maybe a bit on the low side because of this. But as I said, we have definitely lowered our level for the sales costs. And we have, during the year, also worked a lot with operational efficiency, and we have done reorganizations in line with this. Administration costs, 9% of sales, the same as Q4 last year and R&D costs, 22% of sales. We activated slightly less, SEK 9 million instead of SEK 10 million. And then we had, in this quarter, restructuring costs on this line of approximately SEK 3 million. And this is related to the termination of development personnel in Seattle. During Q4, we restructured our U.S. operations, and this resulted in us closing our Seattle office. We consolidated our operations to our office in Cleveland, and that is then our hub for all commercial activities and services and customer interaction. In Seattle, we had primarily development personnel. And so in connection with this restructuring, these employments were terminated. We still have a few other roles working remotely, and we have the lease for the Seattle office until October 2027. So as I mentioned, the quarter then saw the full impact of the cost reductions we've done after the acquisition of Intelligent Ultrasound. We have done more than we said we would do. We said between GBP 1.5 million and GBP 2 million. On an annual basis, we have done GBP 2.5 million and that then meant approximately SEK 8 million in the fourth quarter. Still then because of the lower sales that we discussed and lower than expected, primarily in the U.S. -- in the U.K., sorry, the operating result for IU was a loss for the quarter of approximately SEK 5 million. Other operating income and operating costs, that is then mainly costs for the company's option programs as well as the revaluation of operating assets and liabilities in foreign currencies. We had a negative impact on this line and on profits in the amount of approximately SEK 7 million during the quarter. And during Q4, we did an internal dividend from Israel. We are taking, as I mentioned also before, certain actions to reduce the effect of the weakening U.S. dollar. So we're both reducing intercompany items, and we also have as little cash as possible in USDs. So that's something we're working actively with. Following this then, our operating profit for the fourth quarter was SEK 40 million, corresponding to a margin of 15%. And for the full year, the FX effects that I mentioned before on the line other, that was a negative SEK 38 million then for the year. And if we exclude these and we also recalculate our revenues and costs with last year's exchange rates and also then exclude acquisition and restructuring costs for the year, and that was in an amount of SEK 30 million, then we reached an EBIT of SEK 177 million for the year or 17%. Organization-wise, we were 313 people at the end of the period, and that is 15 less than going out of Q3. The majority of the change then attributable to the closing of the Seattle office. With the IU acquisition, we added 48 people. And today, we have 11 less here. Adjusted EBIT for the quarter, the result was SEK 46 million. And as mentioned, we had some restructuring costs due to the closure of the Seattle office. Excluding those, we had an adjusted EBIT margin of 18%, same as last year. For the full year, then the adjusted EBIT margin was 12% compared to 19% in 2024. Finance net and taxes. no loan financing meant that net financial items that mainly consist of interest income on bank deposits and then also revaluation of some loan liabilities to subsidiaries, effect of IFRS is also impacting the finance net. Then regarding taxes for the year, the expense here is consists of estimated tax on profit for the year and the change in deferred tax assets. This year's tax expense includes U.S. taxes attributable to the previous year and also taxes that are not linked to taxable income. And combined with the effect of the loss in Intelligent Ultrasound, this means that the effective tax rate increased. And then also for the year, our profit includes the acquisition costs of approximately SEK 23 million. And those are not tax deductible. That is then also impacting the rate. And then cash flow. Cash flow from operating activities was SEK 73 million for the quarter compared to SEK 57 million for Q4 in 2024. Changes in working capital was really small, a small negative of SEK 3 million. Inventories were pretty much unchanged and accounts receivable decreased. Accrued income increased, and this is primarily due to higher license revenues, and they are then paid in the coming quarter, meaning now in Q1, and they have already been paid. So that basically means that the last day of the quarter is when this amount is at its highest. Investing activities, we invested approximately SEK 3 million in the quarter in our ongoing construction of new production facilities in Tel Aviv. We -- they are expected to be commissioned in the second quarter of this year. And then for financing activities, the larger amount underlying for lease liabilities is actually an adjustment in the quarter, so nothing to mention here for the year. And cash flow then was a positive of SEK 32 million for the quarter before FX adjustments. And we ended the year with SEK 616 million in our bank accounts. And with that, I hand back to you, Tom. Tom Englund: Thank you, Anna. So to summarize, we believe that quarter 4 was a solid quarterly result and that Surgical Science is moving in the right direction. We see a continued rapid development of the company in a dynamic market where we can see positive signals both in our external work with our customers and in our internal efforts to create a stronger, more efficient and more profitable company. Our new strategy, which we also now execute on will make us a company with several more revenue streams and a company which addresses a significantly larger market than today. And with that, I would like to open the floor for questions. Operator: [Operator Instructions] The next question comes from Simon Larsson from Danske Bank. Simon Larsson: My first question is related to the strong growth for licenses here in the quarter. Is it possible to quantify the number of robotic customers that bought licenses here in Q4 and how that has developed versus, for example, let's say, a year ago? I'm just trying to understand the underlying strength given the expected negative Intuitive effect we will see from Q1. So any color on the strength or sort of the breadth of the license growth here would be helpful. Tom Englund: Simon, Tom here. So we have said that we have 20 robotics companies as customers right now. And last quarter, it was around 5 of them who bought licenses from us. Simon Larsson: Sorry, it was 20 active customers during Q4 or that's the total scope? Tom Englund: That's the total number of customers that we have, robotics companies that we have, significant robotics companies that we have and about 5 of them had revenue streams this last quarter. Anna Ahlberg: And as you know, Simon, that can vary between the quarters since most customers with the batch sales, it can vary between the quarters. That's what we commented on also throughout last year. Simon Larsson: Yes. Understood. Understood. And then I guess my second and final question for this time at least. I noticed on the balance sheet, accrued income item has increased quite a lot if we look at both year-over-year and quarter-over-quarter. Is there any sort of special customer -- specific customer group that's sort of driving this increase in accrued income? Or yes, any help to understand the dynamic behind that figure would be also helpful. Anna Ahlberg: Yes. That is what I just mentioned before on the cash flow that is due to -- primarily due to increased license revenues and it is being paid in the quarter after and for Q4, it has been paid. So that's the number I referred to as being sort of always at its highest at the last day of the quarter. So there's no like increased risk or that we accrue more in a different way than we've done before or anything like that. So it's really positive in a way. And again, they have been paid and are always paid in the quarter after. Simon Larsson: Okay. So it should come down sequentially already in Q1 then unless it's a very big quarter again for licenses. Anna Ahlberg: It varies a lot with the license revenues. Yes. Operator: The next question comes from Ulrik Trattner from DNB Carnegie. Ulrik Trattner: A few questions on my side, and I will limit it to 2, of course. But can you talk about the sales growth momentum in licenses for Intuitive if we were to exclude the dV5, given that this is the last quarter where it will be included as sort of basic skill simulation. Essentially, are you seeing growth outside of the dV5? And for '26, if we were to exclude the effects that you already quantified, would you expect that Intuitive would grow in 2026? Tom Englund: In terms of in terms of attach rates, we see for the other products, not the dV5 that we have sort of the same attach rates that we've had before with the license sales. And so that means that the customers are actively using simulation within those products as well. And then regarding this news that Intuitive will only supply Surgical Science simulation to a subset of the dV5s, that we believe then will have a negative effect of SEK 60 million to SEK 90 million during the entire 2026 compared to 2025. And we have very sort of low visibility on the attach rate for our simulation solutions in the dV5 offerings here for the coming year, both when it comes to the full year and also the quarterly distribution and the quarterly attach rates. Ulrik Trattner: Sure. But I was kind of aiming for here if we were to completely exclude the dV5 and just look at sort of the legacy platforms from Intuitive, the SP, the Xi, et cetera, et cetera. And I know it's a little transparency in terms of attach rate. But would you assume that there would still be any type of growth for those products? Tom Englund: We will not go into more detail regarding the exact growth within the different product lines for our customer. And it also becomes very complex because, of course, Intuitive also has an exchange program where they exchange dV4s or [ dVXs ] to dV5 and so in certain geographies and in certain geographies, they do not. And that entire kind of dynamics is very difficult for us to get into. So we report this kind of overall general revenue impact that we think that it will have for 2026. And once again, we have limited visibility into exactly how this will play out. Ulrik Trattner: Yes, I understand. And second question before getting back into the queue, and that would be on the cash flow side. And you reiterated that there will be some growth and some profit expected, not that sort of your targeted level. Is there anything that suggests that the cash flow for 2026 should not follow, i.e., are there sort of investments needed on your end? Or do you need to beef up working capital? Or are we to expect roughly sort of cash flow growing in the same extent as profits? Anna Ahlberg: There are no structural changes when it comes to cash flow as it has looked before and going forward. No, we have no -- I mean, the investments we do is primarily in staff and in development personnel. I mentioned that we are investing now in a new production facility in Israel, but it's not -- I mean, it's not major amounts. Operator: The next question comes from Christian Lee from Pareto Securities. Christian Lee: Would it be possible to quantify the larger package order received from one of your robotics customers in Q4? And excluding this package, would license revenues still have shown year-on-year growth in Q4? Tom Englund: Christian, we would not actually want to give that detail away when -- about these package orders, they become lumpy. I think that the main point here is that the robotics market is developing rapidly. And there's more and more players that are coming to market or are about -- or are already in the market. And many of these players are also customers to us. And that drives the demand for simulation and training on these robotic platforms in general. And that is kind of an accelerating trend that it's a long-term trend, and it's also kind of a revolution within health care right now. So overall, that will drive the need for simulation from Surgical Science. And then it will be lumpy, both because of the packages, as you say, certain quarters will have revenues when customers buy a large amount of packages or license packages from us. And it will also be driven by how quickly these robotics players will get their market acceptance and our customers. So you should think of this as an inherently attractive market to be in, in the long term with some fluctuations quarter-to-quarter. Christian Lee: Okay. Understood. And my second question then is regarding the cancellation of the memorandum of understanding with Intuitive. Could you please elaborate on why the impact of this is having the magnitude of this -- magnitude if it relates solely to dV5? And could you also please elaborate on the key variables that determine whether the impact lands closer to SEK 60 million or SEK 90 million? Tom Englund: So the dV5 is obviously the flagship product of Intuitive, and they will continue to sell the other products, the dVX and Xi as well alongside the dV5. And the sales focus right now is, of course, on the dV5 very much for the markets where dV5 has been launched. And for the markets where dV5 has not been launched, Intuitive continues to sell dVX and Xi. So the drop here in revenue, the SEK 60 million to SEK 90 million has, of course, to do with the delta of being available in all the different dV5 units that are shipped versus just a subset of it. When it comes to the factors that determine kind of where you land on the SEK 60 million or the SEK 90 million, it is very much related to the attach rate, which has been the same mechanics as with the previous models when we have sold simulation exercises in the X and Xi, we have spoken a lot about the attach rate. And it's then difficult for us to understand exactly how the attach rate will be on the dV5 given that there are so many factors at play here. So in terms of the rate at which dV5 grows in the market and so on, I mean, you can look at the Intuitive reports, it's around 18% procedural growth, and they have -- they also state the numbers of dV5 that they ship and so on. But I think that, that's pretty stable. It also has to do with how quickly their organization can actually install and get these systems active. So the main factor from our perspective is the attach rate. Operator: The next question comes from Ulrik Trattner from DNB Carnegie. Ulrik Trattner: And then another focus area, medical simulation outside of robotics. You enjoyed a very strong growth in 2024. We have seen quite a big decline in 2025, and now you talk about 15% increase in projects end of the year versus sort of end of the year last year. So what is to be expected from sort of these numbers and then what to be expected in 2026? And given the fact that there is a big fluctuations between the years in terms of both revenue and projects, one would assume that these are short-cycle projects, and that would assume that it's short-cycle revenue as well. So you should have a little bit higher visibility, right? Tom Englund: Again. So regarding the growth here in the number of projects, the reason why we state this clearly in the report here about 15% is that it's a lead indicator for the simulator sales later on, right? So the development revenues, if we are successful with the development project, it will lead to simulator sales. And that simulator sales can either happen immediately where the customer buys a bulk orders of simulators can be spread out over several quarters or even several years. So the largest medical device order that we ever got, which we announced a few quarters back here, that will be a simulator sale that will go on for 3 to 4 years. So it's a lot dependent on kind of the size of the customer, the importance that our -- that the simulation that we sell into the importance of the product for that customer and how quickly they in turn can both educate and sell -- educate their organization and then sell their product in the market. So I think that the way you should look at it is that the more projects that we have, especially with big customers like Medtronic and Johnson & Johnson and Gore and so on, the higher the potential simulator sales should be over time. And it's, of course, very difficult then when you're a small P&L or a small revenue because then it gets lumpy, right, which is what we see here now. But then it's, of course, important to track the lead indicators, which is the number of returning customers and the growth in the number of development projects that you have. And I think that we can fairly say that now we have a quite healthy mix of the number of projects we have. We have a quite healthy mix towards larger players and larger potential projects and smaller players and quicker turnaround projects, both within development revenue and simulators. Ulrik Trattner: Okay. That's great. Is it possible for you to quantify how many of your sort of medical device customers that are currently utilizing your simulation in sort of a commercial product rather in development? Tom Englund: Yes, it's -- if you look back all years, I mean, it's going to be -- for all products, it's going to be somewhere around 30 or more, I would assume. Ulrik Trattner: And these, in general, should generate recurring revenue, right? Tom Englund: That's the idea. They are not all doing that today, but that's one part of the strategy and also one part of the profitability increase that we want to see in other parts than the license business and robotics. So that's something that we're working towards. You're absolutely right. Ulrik Trattner: Sorry for being a stickler ballpark, out of the 30 or so that are on the market, how many of those are essentially today recurring products? Tom Englund: A minority, a low percentage. Anna Ahlberg: And then just... Ulrik Trattner: Again, why would that be? Tom Englund: Because usually they buy a solution today that consists of both hardware and software, the entire product packaging, right? They want to develop a medical device and they want to make a simulation for that. So they bring a part of the hardware and we build a simulator around and also develop the software, and that's sort of sold in a package. In the future, where we want to go is we want to create the hardware as a platform on which you can sell multiple software modules on. And we can also then have a more continuous value delivery where we can charge on these on a recurring revenue basis. Right now, we have taken the first step where we sell more software onto the same platform, but it's still not on a recurring basis. It's on a perpetual basis. So that's then the next step in the strategy. Ulrik Trattner: So just I understand it correctly, the [indiscernible] that has been launched on to the market, they have essentially fulfilled their demand out there? Tom Englund: Sorry... Ulrik Trattner: In terms of installation -- in terms of devices, given that there are no sort of recurring revenue on these type of products of the [indiscernible] that has been launched, that implies that, I guess, they're used for training purposes, but that would assume that these products or sort of the number of devices placed have sort of fully supplied the market's demand and there is sort of... Tom Englund: Sorry, you can't really look at it like that. If you take Medtronic, which is one of our absolutely biggest customers and where we provide a simulator for one of their key critical products, they are going to have an increasing demand of simulation as the revenue for their product increases, right? So there's going to be more sales and education staff that needs to be trained. It's also going to be more countries that are onboarded onto this product that also need to be educated. And that's -- it's almost like it's a product SKU for a specific company, but the company is so big, so it becomes like a marketing itself, right? So you can think of it as a recurring business also to continue to sell the hardware and the solution for several years to come. It's not like they place one bulk order and then it's over with. That's the 4 years that I spoke about before. So... Ulrik Trattner: And then my second question would be on Intelligent Ultrasound. And just also going back to if I understood one of your comments correctly there, Anna, because I do note that the losses that IU brings is significantly lower here in the fourth quarter, whereas sales volumes are down sequentially as well from Q3. And did you talk about lower agency fees related to IU affect this result... Anna Ahlberg: Sorry if that was unclear. No, it's not related to IU. That was more a general comment that the sales costs can go up and down depending on what countries we sell to or what structure we have and how they are paid, if it's more a rebate or if it's sort of commission and that can affect the sales cost line, and that's what happened in this quarter. So no, it was not... Ulrik Trattner: Yes. Understood. And then the natural follow-up question would be, it looks like at least the losses are declining and it's becoming more manageable. Do you have any more levers to pull? Or is this more a game of hoping for volumes to increase in NHS funding coming back? Tom Englund: In U.K. specifically, I mean? Ulrik Trattner: I mean in IU specifically. Tom Englund: We have many more levers to pull. They are 3 of them, it's sales and sales efficiency and the way we sell and market the product. It's product related, how we develop and package the products. That's why I spoke about in the CEO message that in this quarter and in the coming quarters, we will start releasing the ultrasound simulation products that carry the combined technical base of both Intelligent Ultrasound and Surgical Science, and that can actually also drive profitability. And then, of course, we can work on production improvements and COGS improvements to drive profitability. So there are several different angles you can improve, and we are working on all of them. Ulrik Trattner: Perfect. And just sort of to be fully clear here, obviously, you don't want to guide, and I guess IU will not be disclosed as sort of separate EBIT contribution for 2026. But it would be fair to assume that given everything that you've done in terms of cost savings and the 3 points that you alluded to here that losses for IU would be lower compared to 2025, right? Anna Ahlberg: Yes, because they have gone down sort of sequentially as we have done these restructurings and benefiting from the cost savings there. So yes, since they have the full effect in Q4, that's correct. Tom Englund: Thank you. We have a question from the feed here from [ Austin Groves Family Office ]. Are you currently tracking with other major robotics players such as Medtronic or J&J to have similar penetration install rates as you do with Intuitive? In your discussions with non-Intuitive customers so far, are you competing with other customers for that business? What would you say is the main limiting factor holding that business back? And when, how will it be resolved? So are you currently tracking with other major robotics players such as Medtronic and J&J with penetration install rates? It's depending on the customers' requirements and the customers' wishes about how this customer wants to package the simulation, either as a mandatory piece, digital part of the full robotic experience or as an accessory that we sell on. So it depends a little bit from customer to customer. Some customers will have 100% attach rate of our simulation into their digital ecosystem and some customers will have a lower attach rate. It also depends a little bit on the different product models that these robotic companies have. We are -- we feel that we have a very high market share within robotic simulation for these robotic companies and that there is not that much other competition out there. And actually, frankly, it's not the competition holding us back. The main limiting factor holding us back is our capacity to create compelling simulations for our customers and tying this closely into the digital ecosystems of our customers. And the other limiting factor is how the robotic companies want to train the surgeons on the robotic consoles, meaning the integration of simulation into the training curriculum and training ecosystem of those robotic manufacturers and making sure that, that is smooth and easy from a surgeon's point of view. Those 2 things are holding us back. And then a third structural thing that is holding us back that we have addressed with this RobotiX Express is still that the training usually takes place in the operating room on the console itself. And that's a constraining factor, meaning because that console is also used for clinical procedures. And that we're solving them with our RobotiX Express, which is a generic robotic training that you can use outside of the operating room. So I hope that answers your question, Austin. Anna Ahlberg: And then we have one more written question in the feed. If there are any one-off effects from switching from subscription to license model with the dV5. It is fully and will continue to be a full subscription model? So that is not the difference than the difference is, as Tom discussed before, the attach rate for the dV5. So that is the change, so to speak. And for the older generation, there is no change because that was also before offered as an option. Tom Englund: So we have no further questions in the feed, and we have a few minutes left. Do we have any other questions, Anna? Anna Ahlberg: I don't think so. No. Tom Englund: Okay. But then thank you all for listening to this quarterly report, and I see you again soon. Take care. Bye-bye. Anna Ahlberg: Thank you. Bye-bye. Operator: Welcome to Surgical Science Q4 Report 2025 Presentation. [Operator Instructions] Now, I will hand over to the speakers, CEO, Tom Englund; and CFO, Anna Ahlberg. Please go ahead. Tom Englund: Welcome to this earnings call for Surgical Science for the fourth quarter of 2025. My name is Tom Englund, CEO. And with me today, I have our CFO, Anna Ahlberg. We will first present a summary of quarter 4 and our results, and then we will have the Q&A session. We are pleased that like quarter 3, quarter 4 was a clear step in the right direction for Surgical Science. We had sales of SEK 269 million and grew by 15% adjusted for currency effects. And our license revenues almost exclusively from robotics companies were the highest ever reported at SEK 92 million, which was an increase of 21%. The adjusted EBIT amounted to SEK 46 million or 17%. On December 8, last year, we presented our new financial targets of annual sales growth of 10% to 15% with profitability of more than 15%. And it's gratifying to see that we're now delivering fourth quarter results in line with these targets. So if we move over to Educational Products. Performance in Educational Products was mixed with growth of 4%. North and South America showed strong growth of 43% with a good distribution between the different countries. And we are seeing a clear recovery now in this region compared with previous quarters with a higher customer activity and bigger sales pipelines. And we're also cautiously optimistic about the future. Asia, on the other hand, saw sales decline by 21%, driven by a continued challenging market situation in China with generally lower activity and demand. One of our strategic goals is to increase the profitability in all segments outside of robotics. For our high-volume products, we are now beginning to see the impact of this strategic initiative. During quarter 4, our average sales prices increased by around 9% compared with quarter 4 2024 at fixed exchange rates without us experiencing any significant effect on volumes. The impact is most felt in direct sales and indirect channels usually show a delay, but we expect further positive price effects to be seen during this year. Also during the quarter, our new PartnerPath distributor program was introduced on a broad scale, and this program aims to improve cooperation, sales and efficiency between us and our partners, which, among other things, will contribute to increased profitability. Highlighting the Ultrasound segment, the Ultrasound segment experienced a very high level of activity, both within hospitals but also in industrial customers. Although ultrasound sales increased by 48% compared to quarter 4 '24, the segment did not meet our growth expectations as pro forma sales, including the acquisition of Intelligent Ultrasound declined. The main reason for this decline we consider to be structural challenges within our own direct sales force, something that we've already addressed during the past quarter. For ultrasound, and you can see the picture of an ultrasound simulation product to the right, 3 new simulation modules were launched during quarter 4 and in January. One of these is targeted towards the diagnosis of endometriosis, which is a major health problem affecting 1 in 10 women. The module supports one of our focus areas, women's health, an area that is neglected in health care and where we have identified that our unique products and solution can create significant value and contribute to earlier diagnosis. This is one clear example of how Surgical Science fulfills our purpose of unlocking the full potential of every medical professional to improve health care outcomes and save lives. During quarter 1, you can expect the first products, which are based on the joint technology platform from Surgical Science and Intelligent Ultrasound to be launched. We are not yet done with the integration and still have a lot of work to do to realize the full synergies from the acquisition of Intelligent Ultrasound. Now moving over to Industry. The Robotics segment had a strong quarter. License revenue grew by 21% to SEK 92 million, which was an all-time high for the company. We saw strong license revenues from our largest customer, Intuitive as well as several other players in the U.S. and China. These other players are now beginning to install robots in significant numbers, which is in turn driving our license revenues. The collaboration with our largest customer, Intuitive, continued during the quarter. And in January '26, Intuitive announced that its system had been used on more than 20 million patients to date. This, together with the 18% growth in procedures during the quarter is clear evidence of the strong demand and broad adoption of robotic surgery. Both Intuitive and Surgical Science agree on the critical role that simulation plays in training robotic surgeons. Digital offerings are becoming increasingly important for robotics companies and Surgical Science is playing a central role in the development of these offerings. During the quarter, our customer, Johnson & Johnson, applied for a so-called De Novo classification in order to start marketing its Ottava robot for gastrointestinal procedures. Another customer, Medtronic, received FDA approval for the use of its Hugo robot in urological procedures in the U.S. And 2 days ago, Medtronic announced the first commercial surgery with Hugo robotic surgery system at the Cleveland Clinic in the U.S. There are now several hundred robot models that are either actively being sold or about to hit the market. Surgical Science is developing simulation solutions for most of the 20 largest robotics companies, and we feel very confident in the value and uniqueness of our offering in robotic surgery. We have a big and growing pipeline of robotics projects, and we see opportunities for deeper integration into our customers' digital offerings and our ability to create value for many years to come, in line with the recently presented strategy. The introduction of our latest simulator, RobotiX Express has been successful and sales and deliveries have started to pick up speed. 14 simulation exercises have been launched on the simulator so far, and the portfolio will be expanded on an ongoing basis. At the International Meeting on Simulation in Healthcare, IMSH in San Antonio in January, we showcased our products that are making use of AI technologies for the first time ever. In these products, AI is helping to analyze the instrument handling of laparoscopic surgeons and then recommend steps or skills for the surgeons to practice and improve. At the same time, within our core offering of real-time simulation of surgical procedures, we today see major limitations in the power and scalability of AI to handle and calculate models that could generate the complex real-time surgical simulation that our customers require. Therefore, Surgical Science's simulation technologies will continue to be the ultimate solution for high-quality real-time surgical simulation for the foreseeable future and Surgical Science's product experience will be improved significantly with the use of AI. Moving over to Medical Device Simulation. During quarter 4, continued progress was also made in strengthening the company's position within the medical device industry with a focus on endovascular applications. At the end of the year, the pipeline of ongoing development projects was 15% larger than at the same point in 2024. Our development revenue is project-based and may fluctuate between quarters and not fully reflect the underlying level of activity. At the end of '25, the proportion of repeat customers for development projects exceeded 70%, demonstrating that Surgical Science is making progress toward becoming an even more integrated and long-term partner to these customers. During the quarter, several important solutions were delivered to our customers, including the areas of peripheral artery disease and pulmonary thrombectomy. At the same time, sales of simulators to medical device companies for product-specific training fell to SEK 21 million compared with a very strong comparative quarter of SEK 43 million. So over to the strategy and the work going forward. Surgical Science's new strategy was presented at the Capital Markets Day in December last year. The aim is to continue growing the company profitably and establish a market-leading position within our 5 different market segments, all of which currently have low to very low penetration. We are now pursuing active internal efforts to deliver on the strategy and are seeing progress across all initiatives. And we feel very confident that this is the right strategy that will lead to increased shareholder value. Surgical Science is currently a world leader in medical simulation with a very strong brand. Our position is unique with market-leading products, strong and effective direct and indirect sales channels and an extensive medical expertise that our customers rely on for their training and development. Our global reach and support, which ensure reliability and presence are critical factors for our customers. 2025 has been a challenging year in many ways, particularly in relation to the news surrounding our largest customer, Intuitive and the development of our share price. At the same time, Surgical Science has made great strides forward in many respects and is now, in many ways, a significantly stronger company than it was a year ago. Demand for our product is growing steadily, driven by a greater need for training, increased digitalization and a more complex health care. I'm optimistic about the future where our solutions will become a central part of health care training and our ability to generate profitable growth over time. And with that, I would like to hand over to Anna to present the financials in more detail. Anna Ahlberg: Thank you, Tom, and welcome, everyone. We start with sales. For the quarter then we had sales of SEK 269 million, up 7%. SEK 14 million came from Intelligent Ultrasound. And I should just mention, Intelligent Ultrasound is today renamed to Surgical Science UK, but we will still use IU when we talk about this acquired business throughout the presentation. And all IU sales are attributable to the Edu Products business area and the ultrasound product group. In local currencies, sales were up 15%. And we have, after Q1 of last year, since then seen a significant negative effect from currencies on our overall sales. And also on our result, that I will come back to that later. We are just below 80% of revenues in U.S. dollars. We are mitigating this as best we can, except for raising prices that Tom also talked about. We also now quote more countries in euros instead of in U.S. dollars, for example. However, this will not mean a very large change in the ratio between different currencies since a lot of our revenues originate from the U.S. Looking at the business areas, the split was 48% for Edu and 52% for Indu for the quarter, where then Edu was up 4%, but down 8% if we exclude IU. And as Tom mentioned, the Asia region declined 21% compared with the same quarter last year, and that was attributable to China having a weaker quarter, while countries such as Japan and the Philippines showed good sales. Sales in Europe was weaker than last quarter, meaning Q3, but still remained strong and increased by 4%. France and Poland did particularly well in this quarter. And then the comparative figure also includes a major order to Romania. But mentioning Poland, Poland, this market has been really strong for us during these last quarters. It was at an all-time high for last year as a total, and it is also our largest market in Europe. The North and South America region increased by 43% compared with the corresponding quarter last year. And this is attributable to the U.S., which is really nice to see since we have had some tougher quarters there. And this is even when excluding sales from Intelligent Ultrasound that is also -- that part of the business is our largest market. But even if we excluded it, the increase is attributable to the U.S. Indu, up 10%. We had, as mentioned, all-time high license revenues of SEK 92 million. Development revenues were also very strong, while simulator sales within the business area was weaker. I will come back to this when we look at the revenue streams on the next slide. But for the full year, then this means that sales were SEK 992 million. This is an increase of 12% or 19% in local currencies. And in that number, IU is included with SEK 75 million. Their sales for the full year was SEK 80 million. They are in our books and consolidated as of February 18, 2025. And that meant that in SEK, sales were down approximately 30%. This is largely attributable to the U.K. and lower sales to NHS. We've talked about that before, and it's something that we are, of course, not at all satisfied with. The U.K. market was also a market where we saw that sales should be coming from the full product range, also the other Surgical Science products as it then moved to being a direct market. However, and as Tom talked about, we do see a lot of positive signs for our ultrasound product group, where we are now merging our technologies, and we have really exciting products in the pipeline. Edu for the full year 2025 was up 13% and Indu 11%, where license revenues were up 11% for the year. And looking then at the revenue streams, license revenues for the quarter were 34% of our total revenues compared to 30% last year. We saw really good sales, both from Intuitive, and that was then both from dV5 as well as from the older generations, as well as a larger batch revenue order from one of our other robotic companies, customers. So as I think you're all aware of them, we did during the fourth quarter on November 25, received a cancellation from Intuitive on the memorandum of understanding that was signed in January. And this memorandum of understanding implied that all dV5s would be equipped with simulation from us. The cancellation meant that we now, as of January 1 this year, go back to the previous existing agreement between the companies and advanced simulation from us will only be offered to a minority of the customers. For the older generations such as Xi, for example, the agreement has not been changed. It was always an optional feature. And our estimate for this was and still is that it will impact license revenues negatively by SEK 60 million to SEK 90 million for this year. However, as we have also emphasized and Tom talked about it, we still have significant revenues from Intuitive, and we continue to work very closely together on a road map for future simulation. Moving on then to the next revenue stream, simulator sales that was as a whole down 12% compared to Q4 2024. This is due to the industry business area. This is more lumpy than for sales within Edu since it's usually tied to larger projects where development is also involved. And it sometimes also has to be seen together with development revenues. And as an example, the project that we have in Southeast Asian country, that is still in the development revenue phase. This will then during this year and towards the end of this project, move from being pure development revenues to pure simulator sales. So it is usually a mix of the 2 and the simulator sales also usually comes towards the end of the different projects. Development revenues then up a lot also for this quarter and the project that I just mentioned, here, we had revenues of USD 0.7 million, and we estimate the same for this quarter, Q1. So this is, of course, a factor for the increase, but not at all entirely. We had very good development revenues also for other customers. Our gross margin for the quarter was 66% versus 68% in Q4 2024. The fact that license revenue made up a higher share of total sales than in the corresponding period had a positive effect. However, currency effects have a large negative impact on the margin, approximately 2.3 percentage points. And unfortunately, the lower USD exchange rate has less impact on the cost of goods sold than on other cost items because our input goods are primarily purchased in other currencies than in dollars and also production and the associated wage costs, they are also not in U.S. dollars. Then another factor impacting the gross margin negatively that we have seen throughout the year and commented on is that we do have lower gross margin on the IU products. But then also on the positive side, we see that our price increases are starting to have an effect. And that is, as mentioned, something we will continue to pursue. Regarding OpEx, sales costs, they were 17% of sales for the quarter, 20% in the corresponding quarter. And here, we see that the reductions in the sales force following the acquisition of IU have now reached their full effect. And then for the quarter, we also had some lower costs of a more nonrecurring nature due to lower agency fees. This is attributable to sales in certain countries. So it depends on if we sell more or less to these countries. So that means that the cost level was maybe a bit on the low side because of this. But as I said, we have definitely lowered our level for the sales costs. And we have, during the year, also worked a lot with operational efficiency, and we have done reorganizations in line with this. Administration costs, 9% of sales, the same as Q4 last year and R&D costs, 22% of sales. We activated slightly less, SEK 9 million instead of SEK 10 million. And then we had, in this quarter, restructuring costs on this line of approximately SEK 3 million. And this is related to the termination of development personnel in Seattle. During Q4, we restructured our U.S. operations, and this resulted in us closing our Seattle office. We consolidated our operations to our office in Cleveland, and that is then our hub for all commercial activities and services and customer interaction. In Seattle, we had primarily development personnel. And so in connection with this restructuring, these employments were terminated. We still have a few other roles working remotely, and we have the lease for the Seattle office until October 2027. So as I mentioned, the quarter then saw the full impact of the cost reductions we've done after the acquisition of Intelligent Ultrasound. We have done more than we said we would do. We said between GBP 1.5 million and GBP 2 million. On an annual basis, we have done GBP 2.5 million and that then meant approximately SEK 8 million in the fourth quarter. Still then because of the lower sales that we discussed and lower than expected, primarily in the U.S. -- in the U.K., sorry, the operating result for IU was a loss for the quarter of approximately SEK 5 million. Other operating income and operating costs, that is then mainly costs for the company's option programs as well as the revaluation of operating assets and liabilities in foreign currencies. We had a negative impact on this line and on profits in the amount of approximately SEK 7 million during the quarter. And during Q4, we did an internal dividend from Israel. We are taking, as I mentioned also before, certain actions to reduce the effect of the weakening U.S. dollar. So we're both reducing intercompany items, and we also have as little cash as possible in USDs. So that's something we're working actively with. Following this then, our operating profit for the fourth quarter was SEK 40 million, corresponding to a margin of 15%. And for the full year, the FX effects that I mentioned before on the line other, that was a negative SEK 38 million then for the year. And if we exclude these and we also recalculate our revenues and costs with last year's exchange rates and also then exclude acquisition and restructuring costs for the year, and that was in an amount of SEK 30 million, then we reached an EBIT of SEK 177 million for the year or 17%. Organization-wise, we were 313 people at the end of the period, and that is 15 less than going out of Q3. The majority of the change then attributable to the closing of the Seattle office. With the IU acquisition, we added 48 people. And today, we have 11 less here. Adjusted EBIT for the quarter, the result was SEK 46 million. And as mentioned, we had some restructuring costs due to the closure of the Seattle office. Excluding those, we had an adjusted EBIT margin of 18%, same as last year. For the full year, then the adjusted EBIT margin was 12% compared to 19% in 2024. Finance net and taxes. no loan financing meant that net financial items that mainly consist of interest income on bank deposits and then also revaluation of some loan liabilities to subsidiaries, effect of IFRS is also impacting the finance net. Then regarding taxes for the year, the expense here is consists of estimated tax on profit for the year and the change in deferred tax assets. This year's tax expense includes U.S. taxes attributable to the previous year and also taxes that are not linked to taxable income. And combined with the effect of the loss in Intelligent Ultrasound, this means that the effective tax rate increased. And then also for the year, our profit includes the acquisition costs of approximately SEK 23 million. And those are not tax deductible. That is then also impacting the rate. And then cash flow. Cash flow from operating activities was SEK 73 million for the quarter compared to SEK 57 million for Q4 in 2024. Changes in working capital was really small, a small negative of SEK 3 million. Inventories were pretty much unchanged and accounts receivable decreased. Accrued income increased, and this is primarily due to higher license revenues, and they are then paid in the coming quarter, meaning now in Q1, and they have already been paid. So that basically means that the last day of the quarter is when this amount is at its highest. Investing activities, we invested approximately SEK 3 million in the quarter in our ongoing construction of new production facilities in Tel Aviv. We -- they are expected to be commissioned in the second quarter of this year. And then for financing activities, the larger amount underlying for lease liabilities is actually an adjustment in the quarter, so nothing to mention here for the year. And cash flow then was a positive of SEK 32 million for the quarter before FX adjustments. And we ended the year with SEK 616 million in our bank accounts. And with that, I hand back to you, Tom. Tom Englund: Thank you, Anna. So to summarize, we believe that quarter 4 was a solid quarterly result and that Surgical Science is moving in the right direction. We see a continued rapid development of the company in a dynamic market where we can see positive signals both in our external work with our customers and in our internal efforts to create a stronger, more efficient and more profitable company. Our new strategy, which we also now execute on will make us a company with several more revenue streams and a company which addresses a significantly larger market than today. And with that, I would like to open the floor for questions. Operator: [Operator Instructions] The next question comes from Simon Larsson from Danske Bank. Simon Larsson: My first question is related to the strong growth for licenses here in the quarter. Is it possible to quantify the number of robotic customers that bought licenses here in Q4 and how that has developed versus, for example, let's say, a year ago? I'm just trying to understand the underlying strength given the expected negative Intuitive effect we will see from Q1. So any color on the strength or sort of the breadth of the license growth here would be helpful. Tom Englund: Simon, Tom here. So we have said that we have 20 robotics companies as customers right now. And last quarter, it was around 5 of them who bought licenses from us. Simon Larsson: Sorry, it was 20 active customers during Q4 or that's the total scope? Tom Englund: That's the total number of customers that we have, robotics companies that we have, significant robotics companies that we have and about 5 of them had revenue streams this last quarter. Anna Ahlberg: And as you know, Simon, that can vary between the quarters since most customers with the batch sales, it can vary between the quarters. That's what we commented on also throughout last year. Simon Larsson: Yes. Understood. Understood. And then I guess my second and final question for this time at least. I noticed on the balance sheet, accrued income item has increased quite a lot if we look at both year-over-year and quarter-over-quarter. Is there any sort of special customer -- specific customer group that's sort of driving this increase in accrued income? Or yes, any help to understand the dynamic behind that figure would be also helpful. Anna Ahlberg: Yes. That is what I just mentioned before on the cash flow that is due to -- primarily due to increased license revenues and it is being paid in the quarter after and for Q4, it has been paid. So that's the number I referred to as being sort of always at its highest at the last day of the quarter. So there's no like increased risk or that we accrue more in a different way than we've done before or anything like that. So it's really positive in a way. And again, they have been paid and are always paid in the quarter after. Simon Larsson: Okay. So it should come down sequentially already in Q1 then unless it's a very big quarter again for licenses. Anna Ahlberg: It varies a lot with the license revenues. Yes. Operator: The next question comes from Ulrik Trattner from DNB Carnegie. Ulrik Trattner: A few questions on my side, and I will limit it to 2, of course. But can you talk about the sales growth momentum in licenses for Intuitive if we were to exclude the dV5, given that this is the last quarter where it will be included as sort of basic skill simulation. Essentially, are you seeing growth outside of the dV5? And for '26, if we were to exclude the effects that you already quantified, would you expect that Intuitive would grow in 2026? Tom Englund: In terms of in terms of attach rates, we see for the other products, not the dV5 that we have sort of the same attach rates that we've had before with the license sales. And so that means that the customers are actively using simulation within those products as well. And then regarding this news that Intuitive will only supply Surgical Science simulation to a subset of the dV5s, that we believe then will have a negative effect of SEK 60 million to SEK 90 million during the entire 2026 compared to 2025. And we have very sort of low visibility on the attach rate for our simulation solutions in the dV5 offerings here for the coming year, both when it comes to the full year and also the quarterly distribution and the quarterly attach rates. Ulrik Trattner: Sure. But I was kind of aiming for here if we were to completely exclude the dV5 and just look at sort of the legacy platforms from Intuitive, the SP, the Xi, et cetera, et cetera. And I know it's a little transparency in terms of attach rate. But would you assume that there would still be any type of growth for those products? Tom Englund: We will not go into more detail regarding the exact growth within the different product lines for our customer. And it also becomes very complex because, of course, Intuitive also has an exchange program where they exchange dV4s or [ dVXs ] to dV5 and so in certain geographies and in certain geographies, they do not. And that entire kind of dynamics is very difficult for us to get into. So we report this kind of overall general revenue impact that we think that it will have for 2026. And once again, we have limited visibility into exactly how this will play out. Ulrik Trattner: Yes, I understand. And second question before getting back into the queue, and that would be on the cash flow side. And you reiterated that there will be some growth and some profit expected, not that sort of your targeted level. Is there anything that suggests that the cash flow for 2026 should not follow, i.e., are there sort of investments needed on your end? Or do you need to beef up working capital? Or are we to expect roughly sort of cash flow growing in the same extent as profits? Anna Ahlberg: There are no structural changes when it comes to cash flow as it has looked before and going forward. No, we have no -- I mean, the investments we do is primarily in staff and in development personnel. I mentioned that we are investing now in a new production facility in Israel, but it's not -- I mean, it's not major amounts. Operator: The next question comes from Christian Lee from Pareto Securities. Christian Lee: Would it be possible to quantify the larger package order received from one of your robotics customers in Q4? And excluding this package, would license revenues still have shown year-on-year growth in Q4? Tom Englund: Christian, we would not actually want to give that detail away when -- about these package orders, they become lumpy. I think that the main point here is that the robotics market is developing rapidly. And there's more and more players that are coming to market or are about -- or are already in the market. And many of these players are also customers to us. And that drives the demand for simulation and training on these robotic platforms in general. And that is kind of an accelerating trend that it's a long-term trend, and it's also kind of a revolution within health care right now. So overall, that will drive the need for simulation from Surgical Science. And then it will be lumpy, both because of the packages, as you say, certain quarters will have revenues when customers buy a large amount of packages or license packages from us. And it will also be driven by how quickly these robotics players will get their market acceptance and our customers. So you should think of this as an inherently attractive market to be in, in the long term with some fluctuations quarter-to-quarter. Christian Lee: Okay. Understood. And my second question then is regarding the cancellation of the memorandum of understanding with Intuitive. Could you please elaborate on why the impact of this is having the magnitude of this -- magnitude if it relates solely to dV5? And could you also please elaborate on the key variables that determine whether the impact lands closer to SEK 60 million or SEK 90 million? Tom Englund: So the dV5 is obviously the flagship product of Intuitive, and they will continue to sell the other products, the dVX and Xi as well alongside the dV5. And the sales focus right now is, of course, on the dV5 very much for the markets where dV5 has been launched. And for the markets where dV5 has not been launched, Intuitive continues to sell dVX and Xi. So the drop here in revenue, the SEK 60 million to SEK 90 million has, of course, to do with the delta of being available in all the different dV5 units that are shipped versus just a subset of it. When it comes to the factors that determine kind of where you land on the SEK 60 million or the SEK 90 million, it is very much related to the attach rate, which has been the same mechanics as with the previous models when we have sold simulation exercises in the X and Xi, we have spoken a lot about the attach rate. And it's then difficult for us to understand exactly how the attach rate will be on the dV5 given that there are so many factors at play here. So in terms of the rate at which dV5 grows in the market and so on, I mean, you can look at the Intuitive reports, it's around 18% procedural growth, and they have -- they also state the numbers of dV5 that they ship and so on. But I think that, that's pretty stable. It also has to do with how quickly their organization can actually install and get these systems active. So the main factor from our perspective is the attach rate. Operator: The next question comes from Ulrik Trattner from DNB Carnegie. Ulrik Trattner: And then another focus area, medical simulation outside of robotics. You enjoyed a very strong growth in 2024. We have seen quite a big decline in 2025, and now you talk about 15% increase in projects end of the year versus sort of end of the year last year. So what is to be expected from sort of these numbers and then what to be expected in 2026? And given the fact that there is a big fluctuations between the years in terms of both revenue and projects, one would assume that these are short-cycle projects, and that would assume that it's short-cycle revenue as well. So you should have a little bit higher visibility, right? Tom Englund: Again. So regarding the growth here in the number of projects, the reason why we state this clearly in the report here about 15% is that it's a lead indicator for the simulator sales later on, right? So the development revenues, if we are successful with the development project, it will lead to simulator sales. And that simulator sales can either happen immediately where the customer buys a bulk orders of simulators can be spread out over several quarters or even several years. So the largest medical device order that we ever got, which we announced a few quarters back here, that will be a simulator sale that will go on for 3 to 4 years. So it's a lot dependent on kind of the size of the customer, the importance that our -- that the simulation that we sell into the importance of the product for that customer and how quickly they in turn can both educate and sell -- educate their organization and then sell their product in the market. So I think that the way you should look at it is that the more projects that we have, especially with big customers like Medtronic and Johnson & Johnson and Gore and so on, the higher the potential simulator sales should be over time. And it's, of course, very difficult then when you're a small P&L or a small revenue because then it gets lumpy, right, which is what we see here now. But then it's, of course, important to track the lead indicators, which is the number of returning customers and the growth in the number of development projects that you have. And I think that we can fairly say that now we have a quite healthy mix of the number of projects we have. We have a quite healthy mix towards larger players and larger potential projects and smaller players and quicker turnaround projects, both within development revenue and simulators. Ulrik Trattner: Okay. That's great. Is it possible for you to quantify how many of your sort of medical device customers that are currently utilizing your simulation in sort of a commercial product rather in development? Tom Englund: Yes, it's -- if you look back all years, I mean, it's going to be -- for all products, it's going to be somewhere around 30 or more, I would assume. Ulrik Trattner: And these, in general, should generate recurring revenue, right? Tom Englund: That's the idea. They are not all doing that today, but that's one part of the strategy and also one part of the profitability increase that we want to see in other parts than the license business and robotics. So that's something that we're working towards. You're absolutely right. Ulrik Trattner: Sorry for being a stickler ballpark, out of the 30 or so that are on the market, how many of those are essentially today recurring products? Tom Englund: A minority, a low percentage. Anna Ahlberg: And then just... Ulrik Trattner: Again, why would that be? Tom Englund: Because usually they buy a solution today that consists of both hardware and software, the entire product packaging, right? They want to develop a medical device and they want to make a simulation for that. So they bring a part of the hardware and we build a simulator around and also develop the software, and that's sort of sold in a package. In the future, where we want to go is we want to create the hardware as a platform on which you can sell multiple software modules on. And we can also then have a more continuous value delivery where we can charge on these on a recurring revenue basis. Right now, we have taken the first step where we sell more software onto the same platform, but it's still not on a recurring basis. It's on a perpetual basis. So that's then the next step in the strategy. Ulrik Trattner: So just I understand it correctly, the [indiscernible] that has been launched on to the market, they have essentially fulfilled their demand out there? Tom Englund: Sorry... Ulrik Trattner: In terms of installation -- in terms of devices, given that there are no sort of recurring revenue on these type of products of the [indiscernible] that has been launched, that implies that, I guess, they're used for training purposes, but that would assume that these products or sort of the number of devices placed have sort of fully supplied the market's demand and there is sort of... Tom Englund: Sorry, you can't really look at it like that. If you take Medtronic, which is one of our absolutely biggest customers and where we provide a simulator for one of their key critical products, they are going to have an increasing demand of simulation as the revenue for their product increases, right? So there's going to be more sales and education staff that needs to be trained. It's also going to be more countries that are onboarded onto this product that also need to be educated. And that's -- it's almost like it's a product SKU for a specific company, but the company is so big, so it becomes like a marketing itself, right? So you can think of it as a recurring business also to continue to sell the hardware and the solution for several years to come. It's not like they place one bulk order and then it's over with. That's the 4 years that I spoke about before. So... Ulrik Trattner: And then my second question would be on Intelligent Ultrasound. And just also going back to if I understood one of your comments correctly there, Anna, because I do note that the losses that IU brings is significantly lower here in the fourth quarter, whereas sales volumes are down sequentially as well from Q3. And did you talk about lower agency fees related to IU affect this result... Anna Ahlberg: Sorry if that was unclear. No, it's not related to IU. That was more a general comment that the sales costs can go up and down depending on what countries we sell to or what structure we have and how they are paid, if it's more a rebate or if it's sort of commission and that can affect the sales cost line, and that's what happened in this quarter. So no, it was not... Ulrik Trattner: Yes. Understood. And then the natural follow-up question would be, it looks like at least the losses are declining and it's becoming more manageable. Do you have any more levers to pull? Or is this more a game of hoping for volumes to increase in NHS funding coming back? Tom Englund: In U.K. specifically, I mean? Ulrik Trattner: I mean in IU specifically. Tom Englund: We have many more levers to pull. They are 3 of them, it's sales and sales efficiency and the way we sell and market the product. It's product related, how we develop and package the products. That's why I spoke about in the CEO message that in this quarter and in the coming quarters, we will start releasing the ultrasound simulation products that carry the combined technical base of both Intelligent Ultrasound and Surgical Science, and that can actually also drive profitability. And then, of course, we can work on production improvements and COGS improvements to drive profitability. So there are several different angles you can improve, and we are working on all of them. Ulrik Trattner: Perfect. And just sort of to be fully clear here, obviously, you don't want to guide, and I guess IU will not be disclosed as sort of separate EBIT contribution for 2026. But it would be fair to assume that given everything that you've done in terms of cost savings and the 3 points that you alluded to here that losses for IU would be lower compared to 2025, right? Anna Ahlberg: Yes, because they have gone down sort of sequentially as we have done these restructurings and benefiting from the cost savings there. So yes, since they have the full effect in Q4, that's correct. Tom Englund: Thank you. We have a question from the feed here from [ Austin Groves Family Office ]. Are you currently tracking with other major robotics players such as Medtronic or J&J to have similar penetration install rates as you do with Intuitive? In your discussions with non-Intuitive customers so far, are you competing with other customers for that business? What would you say is the main limiting factor holding that business back? And when, how will it be resolved? So are you currently tracking with other major robotics players such as Medtronic and J&J with penetration install rates? It's depending on the customers' requirements and the customers' wishes about how this customer wants to package the simulation, either as a mandatory piece, digital part of the full robotic experience or as an accessory that we sell on. So it depends a little bit from customer to customer. Some customers will have 100% attach rate of our simulation into their digital ecosystem and some customers will have a lower attach rate. It also depends a little bit on the different product models that these robotic companies have. We are -- we feel that we have a very high market share within robotic simulation for these robotic companies and that there is not that much other competition out there. And actually, frankly, it's not the competition holding us back. The main limiting factor holding us back is our capacity to create compelling simulations for our customers and tying this closely into the digital ecosystems of our customers. And the other limiting factor is how the robotic companies want to train the surgeons on the robotic consoles, meaning the integration of simulation into the training curriculum and training ecosystem of those robotic manufacturers and making sure that, that is smooth and easy from a surgeon's point of view. Those 2 things are holding us back. And then a third structural thing that is holding us back that we have addressed with this RobotiX Express is still that the training usually takes place in the operating room on the console itself. And that's a constraining factor, meaning because that console is also used for clinical procedures. And that we're solving them with our RobotiX Express, which is a generic robotic training that you can use outside of the operating room. So I hope that answers your question, Austin. Anna Ahlberg: And then we have one more written question in the feed. If there are any one-off effects from switching from subscription to license model with the dV5. It is fully and will continue to be a full subscription model? So that is not the difference than the difference is, as Tom discussed before, the attach rate for the dV5. So that is the change, so to speak. And for the older generation, there is no change because that was also before offered as an option. Tom Englund: So we have no further questions in the feed, and we have a few minutes left. Do we have any other questions, Anna? Anna Ahlberg: I don't think so. No. Tom Englund: Okay. But then thank you all for listening to this quarterly report, and I see you again soon. Take care. Bye-bye. Anna Ahlberg: Thank you. Bye-bye.
Operator: Good day, and thank you for standing by. Welcome to the Appian Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brian Denyeau from ICR. Please go ahead. Brian Denyeau: Good morning, and thank you for joining us. Today, we'll review Appian's fourth quarter 2025 financial results. With me are Matt Calkins, Chairman and Chief Executive Officer; and Serge Tanjga, Chief Financial Officer. After prepared remarks, we'll open the call for questions. During this call, we may make statements related to our business that are considered forward-looking. These include comments related to our financial results, trends and guidance for the first quarter and full year 2026, the benefits of our platform, industry and market trends, our go-to-market and growth strategy, our market opportunity and ability to expand our leadership position, our ability to maintain and upsell existing customers and our ability to acquire new customers. These statements reflect our views only as of today and don't represent our views as of any subsequent date. We won't update these statements as a result of new information unless required by law. Actual results may differ materially from expectations due to the risks and uncertainties described in our SEC filings. Additionally, non-GAAP financial measures will be discussed on this conference call. Reconciliations of GAAP to non-GAAP financial measures are provided in our earnings release. With that, I'd like to turn the call over to our CEO, Matt Calkins. Matt? Matthew Calkins: Thanks, Brian. Thanks, everyone, for joining us today. In the fourth quarter of 2025, Appian's cloud subscriptions revenue grew 18% to $117.0 million. Subscriptions revenue grew 19% to $162.3 million. Total revenue grew 22% to $202.9 million. Adjusted EBITDA was $19.7 million. For the full year, Appian's cloud subscriptions revenue grew 19% to $437.4 million. Subscriptions revenue grew 18% to $576.5 million. Total revenue grew 18% to $726.9 million, adjusted EBITDA was $76.8 million. 2025 was a successful year for Appian for several reasons. First, we executed our strategy to sell big deals to leading organizations. The number of customers that purchased over $1 million of software this year grew 50%, nearly doubling the value of our 7-figure transactions. I'll share 2 quick examples. A European pharmaceutical research organization purchased a 7-figure software deal to digitize its clinical trial site selection. Appian will accelerate its selection process with AI, improving patient selection efficiency and reducing trial costs. Separately, a North American aerospace manufacturer purchased a 7-figure software deal to automate a core manufacturing system and save the company nearly $60 million over the next 3 years. The second reason Appian had a successful 2025 is that our position within the U.S. public sector strengthened partly due to structural changes. We closed big deals as the new administration have emphasized efficiency and changed how it purchases and implements technology. For example, a U.S. military branch named Appian its cornerstone platform to modernize operations and increase efficiency. In Q4, it signed a 7-figure software deal to unify systems and deploy them to over 100,000 users. The federal government has shifted to partner more directly with software vendors and reduce its reliance on intermediaries. Appian stands to benefit as indicated by the enterprise agreement that the U.S. Army awarded us this quarter. The Army is already an 8-figure ARR customer. This new framework allows it to purchase $500 million in Appian software and services over the next 10 years. This agreement shows the Army's ambition and commitment to use Appian to modernize systems and transform operations with process and AI. The third reason Appian had a successful year is that we continue to increase our operational efficiency. We've now increased our go-to-market efficiency in 10 sequential quarters. You know this metric means a lot to me, I always mention it. Appian generated 11% adjusted EBITDA margin for the full year 2025 compared to just to negative 8% just 2 years before. We created $63 million in operating cash flow compared to a loss of $110 million 2 years ago. Credit these efficiency improvements to tighter resource allocation and sales, global diversification and back-office AI enhancements. We're creating an operating model that's built to drive further margin expansion going forward. Appian's strong financial performance puts us in a position to start consistently returning capital to shareholders. Today, we're announcing a $50 million stock buyback. Finally, I'll tell you the best thing about 2025. The best thing is that it's become common knowledge over the past 6 months that AI needs process, also known as workflow. Without a process framework, AI cannot add value to complex work streams or collaborations. Market analysts and researchers like Gartner and MIT published papers on the topic. Customers, prospects and partners have all confirmed the trend. Our competitors shifted their messaging, began talking about workflow and added rudimentary process technology. This trend validates Appian's long-standing position on the issue and recognizes the synergy between AI and process that we built our strategy around. I'll take a moment to explain why AI needs process. AI is probabilistic, which is to say it's slightly unpredictable. Most important work at the large organizations Appian targets requires total reliability. So AI needs a deterministic framework like our process layer. That deterministic layer provides direction and guardrails and certain functionality you wouldn't ask AI to write on its own. Code is becoming cheap, but mistakes aren't. So the more important to the work, the more essential is the deterministic layer. In the coming years, AI will do a lot of work and write a lot of software, but it's not going to do it alone. Where AI goes, process must also go. Our technology is an essential enabler of AI. Appian has been a process leader for more than 20 years. We were a pioneer in this market back when they called it business process management. We led providing BPM in the cloud. We led in building a process-centric suite. Our unitary platform provides workflows, data fabric, process mining and built-in security. We led again embedding AI in our processes. We've earned trust at the largest firms and are executing mission-critical processes to the highest standards. 2/3 of the world's top 10 life science firms, asset managers and non-Chinese banks are Appian customers as well as all 15 cabinet-level agencies and military branches in the U.S. government. These groups use our platform for complex mission-critical processes like customer onboarding, claims management, patient intake, regulatory compliance and procurement. Exponential growth in our AI traffic shows that our platform is becoming an AI vehicle for large organizations. AI use on our platform grew 14x year-over-year. AI use on our platform grew 14x year-over-year, and we are monetizing that growth. Customers must upgrade to Appian's AI license tier, which comes with an average price increase of 25%. A meaningful number of customers make this upgrade every quarter, including this quarter. Much of our revenue profit and pipeline growth in 2025 is a result of our synergy with AI. Most of the 7-figure software deals we booked this year were driven by a desire to access our advanced features like AI. Here are 3 examples. First, a leading pharmaceutical company deployed Appian AI into an existing application this quarter. The application tracks interactions between the company's sales team and health care practitioners to ensure compliance with international regulations. We're deploying an Appian product called Doc Center that uses AI to parse incoming e-mails, documents and other communications. Doc Center uploads data, pre-populates forms, triggers workflows and accelerates response times, in this case, by 88%. Next, a top advocacy organization representing over 100 million Americans and 7-figure ARR customer, named Appian an enterprise standard this year. It recognized the importance of deploying AI within an Appian process after evaluating various AI vendors. In Q4, it purchased a large upgrade to access our latest AI features. The group will deploy Appian AI agents to reconcile tens of thousands of invoice payments annually. Reconciliations used to take over an hour per invoice, now the organization expects to complete tie-outs in just minutes. Finally, a network of European banks signed a 7-figure software deal this quarter to access our latest AI features. The group already runs know your customer and loan overdraft processes on Appian. In Q4, they named our platform as an enterprise standard for modernizing core processes. The conglomerate will use Appian Doc Center to classify and extract data from dozens of documents to open cases for processing. The banks expect to save more than EUR 20 million over 3 years as they scale operations. Recent market moves show investors are concerned that AI poses an existential threat to software firms, including Appian. There are 2 main worries. First, the AI will do all the work that software used to do; and second, that AI will write all the applications. I'll address each point. First, Appian leads in the technology that AI cannot thrive without. It's becoming understood now just how much AI needs process. AI is probabilistic technology, not reliable enough for the highest value use cases. Unpredictability is an indelible part of AI's identity. Years of improvement will not make it otherwise, nor will enterprises ever decide to accept AI level unreliability. A deterministic layer is essential. Something to direct the work, something to detect and remediate the errors, something that can produce perfect outputs from imperfect efforts. Process and workflow is that technology. Long before AI, process orchestration was developed to best utilize that other unpredictable worker, the human being. As repeated studies attest, AI is not yet transformative in the enterprise. In PwC research last month, most CEOs report AI having no impact on revenue or cost. But impact is coming when AI is connected to valuable work streams, and Appian is leading the way. With the help of a process layer, AI will be a very productive worker indeed and very widely deployed, providing a framework so that AI can address the world's most important work. It's like selling pickaxes in a gold rush. Second, about AI writing code. We sell to our customers value and safety, not code. Approximately 80% of our revenue comes from highly-regulated industries and the government sector. Customers buy Appian for performance, precision and peace of mind. We sell compliance to regulations, reliable customer service and accurate decisions. We sell the reassurance of a community of practitioners and 24-hour expert support. AI-generated code cannot provide these things. Only with Appian's deterministic framework, can AI create applications and perform work to meet the most exacting requirements. This is the reason why no Appian buyer has ever suggested to me that they would vibe code a critical system. They know better. This current concern about AI-generated code reminds me of the open source scare years ago. Open source seemed to threaten the pricing power of the entire sector. But in the end, it proved that code isn't the center of value in enterprise software. The value comes from the community and the support and the corporate commitment to reliability. Since open source became a popular term in the late '90s, the global software industry has grown by a factor of over 5x. Appian has faced open source competitors in our market. They appealed best to low-end buyers and had no impact on our growth. I expect AI-generated code to be adopted in mistake tolerant and low-value use cases. To write enterprise code, AI needs a platform like ours that facilitates careful specification, developer collaboration, revision and the strategic reuse of preexisting assets. In conclusion, the more organizations use AI, the more they need process orchestration. Process mitigates AI's shortcomings. Together, AI and process can address the world's most critical jobs, but AI cannot do it alone. Before I end my segment, I'd like to welcome Dave Link to Appian's Board of Directors. Dave is an expert in scaling enterprise software companies and applying AI to complex globally distributed systems. He is the CEO of ScienceLogic, an AI-driven observability and IT operations platform. I'm excited to welcome him to our team. I also want to thank Jack Biddle for his exceptional contributions over the course of many years on the Appian Board. And with that, I'll hand the call to Serge. Srdjan Tanjga: Thanks, Matt. Before turning to our fourth quarter results, I want to cover some changes that we are making in our reporting in order to give investors better insights into our financial performance. First, we have reclassified certain IT, cybersecurity and facility expenses from our G&A expense line item into other line items in our P&L. There is no change to our total expenses, just which line item they are shown in. We believe this new presentation of our financial is more comparable to those of other software companies. Second, we are introducing a new metric, cloud net ARR expansion. This metric is calculated by taking the ARR of our cloud customers at the end of the prior year period and measures the ARR of those same customers at the end of the current quarter. We report cloud net ARR expansion in constant currency. We believe this metric gives investors a more timely insight into our business and is more comparable to how other software companies report expansion from existing customers. Going forward, we will no longer report cloud gross renewal rate and net revenue retention. Finally, we refine our definition of a customer. We now aggregate entities based on their ultimate parent company or an equivalent government entity, whereas previously we counted at a more granular level. As with our other changes, we believe this new methodology is more common practice. Please refer to the earnings call supplemental deck for further information on these changes. Now let me turn to our Q4 results. We had a strong quarter of new business driven by continued AI traction and ongoing momentum in our focus on the high end of the market. The standout performer was our commercial North America theater with the fastest new business growth in over 3 years. Cloud net new ACV bookings were approximately 76% of total net new software bookings in Q4 compared to 65% in the prior year. Q4 cloud net new ACV growth was the strongest we've seen in almost 3 years. Appian met or exceeded the guidance ranges we provided on our key metrics of cloud revenue, total revenue and adjusted EBITDA. Cloud subscription revenue was $117 million, an increase of 18% year-over-year. We achieved the high end of our guidance even as FX contributed approximately $1 million less than what was assumed in our guidance. On a constant currency basis, cloud subscription revenue increased 16% year-over-year. This quarter was more back-end loaded than normal in terms of new business, resulting in relatively little revenue contribution from new business in the quarter. Our constant currency cloud ARR growth, which represents the exit run rate was stable versus Q3. Total subscription revenue was $162.3 million, an increase of 19% year-over-year. On a constant currency basis, total subscription revenue grew 16% year-over-year. Professional services revenue was $40.6 million, up 36% compared to the fourth quarter of 2024. Total revenue was $202.9 million, an increase of 22% year-over-year. On a constant currency basis, total revenue grew 19% year-over-year. Our cloud net ARR expansion was 114% in Q4 compared to 113% a year ago and 112% in the prior quarter. The uptick was driven by a particularly strong quarter of upsells to existing customers in Q4. We ended the year with 140 customers with $1 million plus of ARR compared to 115 a year ago. Now let's turn to profitability. Non-GAAP gross margin was 73% compared to 77% from the year-ago period and 74% in the prior quarter. Our subscription non-GAAP gross profit margin was 86% compared to 88% in the year ago period and 86% in the prior quarter. Professional services non-GAAP gross margin was 23% compared to 27% in the year ago period and 31% in the prior quarter. Total non-GAAP operating expenses were $131.5 million, up from $109.8 million in the year ago period. Adjusted EBITDA was $19.7 million, ahead of our guidance of $10 million to $13 million and compared to adjusted EBITDA of $21.2 million in the year ago period. This outperformance relative to our guide was largely driven by greater-than-expected revenue. Non-GAAP net income was $11.1 million or $0.15 per diluted share compared to a non-GAAP net income of $13.2 million or $0.18 per diluted share for the fourth quarter of 2024. This is based on 74.9 million diluted shares outstanding for the fourth quarter of 2025 and 74.6 million diluted shares outstanding for the fourth quarter of 2024. Turning to our balance sheet. As of December 31, 2025, cash and cash equivalents and investments were $187.2 million compared to $159.9 million at the end of last year. For the fourth quarter, cash provided by operations was $1.1 million compared to $13.9 million for the same period last year. For the full year 2025, cash provided by operations was $62.9 million compared to $6.9 million in 2024. Turning to guidance. We are expecting to deliver another year of solid cloud subscription revenue growth and our third consecutive year of adjusted EBITDA margin expansion. Our focus is on consistent execution and capitalizing on the opportunity in front of us. Starting with the first quarter of 2026. Cloud subscription revenue is expected to be between $119 million and $121 million, representing year-over-year growth of 20% at the midpoint of the range. Total revenue is expected to be between $189 million and $193 million, representing year-over-year growth of 15% at the midpoint. Adjusted EBITDA for the first quarter of 2026 is expected to be between $19 million and $22 million. Non-GAAP earnings per share is expected to be between $0.16 and $0.20. This assumes 75.1 million fully diluted weighted average shares outstanding. For the full year 2026, our cloud subscription revenue is expected to be between $502 million and $510 million, representing year-over-year growth of 16% at the midpoint of the range. Total revenue is expected to be between $801 million and $817 million, representing year-over-year growth of 11% at the midpoint. Adjusted EBITDA is expected to range between $89 million and $99 million for an approximately 12% margin at the midpoint of the range. Non-GAAP earnings per share is expected to be between $0.82 and $0.96 or approximately 46% growth at the midpoint. This assumes 74.8 million fully diluted weighted average shares outstanding. Our guidance assumes the following. First, we anticipate our non-cloud subscription revenue to be roughly flat on a year-over-year basis in Q1 and in 2026 as our customers are increasingly opting for the cloud. Second, we expect professional services to grow in the teens in Q1 and high single digits for the full year. Third, total other income and interest expense will be approximately $3 million in Q1 and $12 million for the full year 2026. Fourth, our guidance assumes FX rates as of mid-February. Please note that we expect FX benefit to our reported revenue growth rates in Q1, but we expect FX to be roughly neutral to year-over-year growth for the rest of the year as we annualize the U.S. dollar depreciation from April of last year. Finally, as discussed previously, after 2 years of relatively flat OpEx, we are returning to a moderate pace of investment in 2026. We are investing in the growth of our sales org as well as the expansion of our engineering capacity in India. Despite these investments, we are forecasting 1 percentage point of adjusted EBITDA margin expansion in 2026. Before wrapping, let me also touch on our share repurchase announcement. As most of you know, we are very careful about dilution as evidenced by our stock-based compensation expense as a percent of revenue, which is less than half that of other software companies our size. As Matt mentioned, thanks to significant improvement in profitability over the last 2 years and becoming a meaningful cash flow generator, we are in a position to announce a $50 million share buyback. We expect this program will essentially offset the dilution from stock grants issued this year. We see this buyback authorization at the beginning of a consistent capital return policy for our shareholders. Our intention is to scale the size of our share repurchase program in line with the growth in our cash flow in the coming years. We will look to execute on this buyback during 2026. In closing, we are pleased with our Q4 results, in particular, our traction with AI and believe we are well positioned to deliver a successful 2026. We are excited about the opportunity ahead, and we'll continue to invest responsibly to maximize our long-term value. Before we move to Q&A, I'd like to invite you to our Investor Day in New York on May 14. We'll be sharing updates on our product and strategy, and you'll have the opportunity to hear directly from our customers. If you'd like to attend, please reach out to investors@appian.com. Now we'll turn the call over for questions. Operator? Operator: [Operator Instructions] And our first question comes from the line of Sanjit Singh of Morgan Stanley. Oscar Saavedra: This is Oscar Saavedra on for Sanjit. Yes. Congrats on the great quarter, guys. Nice to see the cloud net expansion uptick quarter-over-quarter. I was thinking maybe on the guide, it looks like Q1 guide is a bit of an acceleration from Q4. I imagine part of that is that expansion ticking up. But maybe can you help us understand a bit more the visibility and the confidence that you have given that acceleration? Srdjan Tanjga: Yes. So we're happy with how we wrapped up 2025, and we'll set up well for 2026 as evidenced by the full year growth rate of 16% for the year. Q1, I guess, 2 things I would say about it. Number one, it will benefit from strong new business that we had in Q4, which is why on a sequential basis is a robust guide. And then the other thing that I would call out is just that it is a quarter in which we'll still benefit from a meaningful FX tailwind. And that's clearly the primary difference between the full year guide and the Q1 guide. Operator: And our next question comes from the line of Raimo Lenschow of Barclays. Raimo Lenschow: Perfect. Congrats. That was a great Q4. I have 2 questions, one for Matt, one for Serge. Matt, if you think about -- I'm totally aligned with you with your vision around AI and agentic needed like a control layer. Like how do you think what gives you the right to be that? Because like, obviously, a lot of other people are kind of trying to eye for that because that kind of position will be very strategic as well. So talk a little bit about what Appian brings to the table that you can go to customers and say, like, I should be that layer. And then I have one follow-up for Serge. Matthew Calkins: Yes. Well, I want to say that we've been that layer for a long time. We've been that layer before large language models exploded onto the scene. We've been embedding AI actors, you call them agents, in our software, in our processes for about a decade doing jobs as digital workers because we've been a platform that enables and governs digital workers. So we're not a Johnny-come-lately to the idea of governing a digital worker or an AI agent. In fact, it's been our business, and we've been leading for a decade. So I think it's a natural for us to inherit this position as well. But I also want to say that because we have such a strong governance layer, such a unique ability to detect and remediate errors, such a monitoring layer and a self-improvement and an optimization layer, I think we're really uniquely equipped for this moment. I think there's some other vendors that went all in on agents and then realized they needed a governing layer, whereas we come into this market with a governing layer and are, therefore, really well equipped to give agents the structure they need in order to succeed. Raimo Lenschow: Okay. Perfect. And then, Serge, if you think about the slight increase in OpEx you talked about on the sales org, et cetera, how do you think about the evolution of sales capacity from here onwards? And I'm asking because it does feel like a whole new world is opening, and there's quite a few players in the software space that are now thinking about like we probably should think about sales capacity increases. Is this just one-off things? Or how do you think about that evolution here? Srdjan Tanjga: Thanks, Raimo. So I guess I'll start with a little bit of history. We've done a great job significantly improving our sales productivity and paybacks on our sales and marketing investment, really particularly last year. And that, frankly, gives us the right to grow our sales org because we want to do it in a financially responsible way. So that's point number one. Point number two is kind of like your point, which is the market is large and growing, and we are very underpenetrated versus the opportunity. So to us, this return to growth of the sales org is the beginning of a long-term trend. But it's important to do it consistently over time. What you don't want to do is overextend because it's a difficult operational task. What you want to do is bring in people, make sure they're successful, make sure that they reach their productivity and then do it again year after year. And that's fundamentally how you kind of put yourself in a position for multiyear growth. Operator: Our next question comes from the line of Steve Enders of Citi. Steven Enders: Okay. Great. I guess I just want to start on maybe the opportunity around AI. And I guess, given the purview that you have in some of these larger customers, just what have you seen so far from how their budgets or their purchase decisions are changing as they're looking to incorporate AI? And I guess maybe what does that mean? Or I guess, how do you kind of view the opportunity pipeline and given what that means for '26? Matthew Calkins: Yes. AI has been an unalloyed positive for us in our relations with our customers, maybe causing some consternation in the investing market. But in our sales situation, it's an entire positive. It gets us into higher-level conversations. It allows us to speak strategically to the top topic that's on executives' minds. We are more likely to win according to internal analyses when AI is a factor in the decision. So it's helped our TAM. It's helped our access. It's helped our win rate. We're benefiting in all dimensions from AI. Srdjan Tanjga: And Steve, if I can just add, just to give you a sense of how that's sort of playing out over time. Customers begin with proof of concepts. Then when they are ready for production use case, they need to upgrade to our advanced tier to have access to AI and production. And we talked about in the past about how the percentage of our customers that is on that tier is growing. And -- but plenty more that we can upgrade to advanced tier. Then what we're starting to see is some of those customers have already upgraded coming for the second or the third workload because they're happy with the performance of the first one. And that gives us incremental opportunities to grow revenue there. And then over time, we will have incremental tiers as more functionality comes online. So that's kind of the process of upselling AI and how it fits into a company's budget. Matthew Calkins: Yes. Let me follow on that. We've got this thesis, and you've heard it because I just talked about it, that AI belongs in a process and that within the deterministic framework of process orchestration, AI can really attach itself to valuable work and create new value. So we've detected that some of our solutions are ideal vehicles for demonstrating that thesis. And I mentioned in my prepared remarks, this solution called Doc Center, which is a pretty straightforward usage of our technology. Just ingest documents, launches workflows, uploads data, rapid turnaround, high accuracy. But it's just such a good demonstration that we are focused on driving this into dozens or scores of accounts as quickly as possible this year as we can because everybody who sees this knows our thesis is correct. And this is what I think we need to do in the market. We need to establish that our philosophy of making value out of AI is accurate. Every organization in the world right now is wondering how they can make use of AI. We're wondering whether AI can have a value proportional to its CapEx, and we have on our hands a demonstration of how to make that value. Just embed it within a process and it goes. And the results are tremendous and it's predictable and we can install it quickly. So where we see that we've got some of these winning demonstrations that establish how you could make value with AI, we're going to put the pedal down. Steven Enders: Okay. That's great to hear, and I appreciate the context there. Maybe on the Army enterprise agreement. I appreciate the color on the 8-figure customer there. But I guess kind of where do you see that spend potentially going? Or how do you kind of view, I guess, what incremental use cases or how you just kind of view that relationship developing moving forward with the enterprise agreement? Matthew Calkins: Yes. This is a threshold for us. This is an important moment in the growth of this organization. It represents a degree of confidence that an agency has not in the past shown in us. We've done a lot of great work, and we've done some big projects and delivered some wins, but we've never had a $500 million ELA like we do now with the Army. And that speaks volumes inside the Army. It allows us to speak to any part of the organization with great credibility, but it also allows us to go to other departments in the government and say, here's the department that knows us best. Here's evidence that -- of what they see in us. It also allows us to approach our partners and say like this is the kind of -- this is what we could succeed on together, and now we want you to help us somewhere else. So this is just a wonderful badge of seriousness, and we're going to wear it all around Washington. Really pleased with what that says. As for how we got it, I'd say a lot of the conversation is around modernizing legacy applications. And this is something I've spoken about on previous earnings calls, but I didn't get into it much this time. But I do want to mention that this topic is causing a lot of excitement amongst our customers and prospects. If I mentioned or demonstrate even better the technology that we have today to convert a legacy application into a modern Appian application, it typically stops the conversation cold. No matter what it is we were talking about, if there's a customer or prospect executive in the room, they want to stop everything and talk about legacy modernization. And we had conversations on that at the Army, who obviously has a number of legacy applications of their own, and that provided a lot of the momentum behind this award. Operator: Our next question comes from the line of Derrick Wood of TD Cowen. James Wood: Matt, I appreciate the thoughts on the landscape of AI versus software, given all the concerns out there. My question is when it comes to building software applications and processes for your customers, how are you guys using AI internally to accelerate that value delivery? And then when it comes to the LLM vendors, like what do you think the challenges they might have in trying to build their own software orchestration and governance layer up the stack? Matthew Calkins: Yes. Okay. So they are going to have some challenges, and it makes a world of sense for them to partner with us in order to complement the power of their model. Look, the whole industry is under pressure right now. In 2026, it's a time of testing, where AI has to demonstrate that it can create commensurate value to justify the CapEx. And I think it's the question on everybody's lips and every organization is wondering about it and the 56% of CEOs who reported no value in the PwC survey last month are wondering about it. Everyone is wondering where we will find the value. And of course, the answer is actually very simple. You just have to connect AI to the processes where the greatest value takes place. And that's a slightly complicated connection in order to pull off because AI needs role and responsibility and a constrained aperture functioning and checkups and revisions and learning and so on. It's just -- it needs what a process layer could have given it. And so I feel like this top question that looms over the economy in 2026 is a question that I won't say we have the answer to it, but I say we have a lot to say. We have a lot to say about this question. I'm excited about the ability to prove that answer in concert with the large language models. Of course, we're agnostic. We work with all and many of them. And for that matter, with the clients who are all desperate to find an answer to this question. They're all eager for value, but not wanting to take a risk and to move first and to run afoul of the many pitfalls in AI, the unreliability and the dangers that come with that. What was the first part of your question again? James Wood: Just how you're using AI internally to maybe help accelerate the value you deliver to customers? Matthew Calkins: Yes, that's right. Well, we're using it thoroughly, right? We're expecting major increases in all of our development capabilities this year because we're making a prolific use of AI. So I expect that to be excellent for our productivity and engineering. Also, we're using it in every deployment. So when our services teams are on site, creating new applications for our customers. They are invariably using AI, which is terrific for acceleration for optimization, for recommendations on improvements, just a marvelous way to get to the endpoint. And I want to clarify here that the endpoint is not a stack of AI written code. The endpoint is an Appian application, which provides the structure, the guardrails, the safety, the monitoring that AI alone wouldn't have provided. And also that Appian application, once you've used AI as the bridge to an Appian application, that application now has the flexibility, the ability to evolve over time to match new strategic needs or to cultivate greater efficiency or to leverage new technologies. It is a living vehicle instead of what you could call new legacy, right? You don't want to go from old legacy to new legacy. You want to move to a living vehicle that can adapt as your business evolves. James Wood: Great. And then for Serge, I mean, you guys had 36% growth in professional services, I think that was the highest in 8 years. Your on-prem business was quite strong as well. It doesn't sound like you expect that to continue in the upcoming year. Could you just give a little more color on what drove that outsized strength that seems to be a little more onetime? Srdjan Tanjga: Yes. Let me take them in order because they're different answers. So we've been very pleased with the demand we're seeing in our professional services business for -- especially in the back half of 2025. And it comes down to a couple of things. One is the world of AI because as Matt was just talking about, customers want to get the value but they're sensitive to get it at the levels of accuracy and performance that they are accustomed to. So when they choose our software, they usually also partner with us on implementation. Because we've done it before, we bring that implementation know-how, which is scarce in the market right now. And that helps us kind of sell both software and services when it comes to AI. And then the second piece is federal. Our success there and the change in how the government likes to deal with vendors has helped our professional services business on the federal side as well. And that really drove our business next year. And frankly, we're expecting it to continue driving that business next year with 9% growth rate. We did see an uplift in demand, and we're going to continue seeing growth there, but it's not going to be a step function as we have experienced here in the back half of 2025. And then on the on-prem side, we had a very strong Q4. Frankly, that was all federal. We credit to our teams when the shutdown ended, we were ready to go and we got the deals that we were going to get, frankly, even better than we would have expected had the shutdown not been there. So that's the story of the fourth quarter. But then as you look forward, I can tell you what we see quantitatively and qualitatively. On the quantitative side, we just see a bigger mix of cloud in the pipeline than has been the case historically. And then secondly, when we talk to our customers, even our on-prem customers, they are looking for incremental deployments in the cloud. So for example, one of the largest deals that we have in the pipeline in Q1, we'll see if we get it or not, is for a customer who did one of our largest on-prem deals last year. And that's not them moving their Appian workloads from on-prem to the cloud. That's incremental deployment in line with their own IT strategy and moving to the cloud, which is why the description or the forecast for the on-prem business is what it is. James Wood: Great. Congrats. Operator: Our next question comes from the line of Devin Au of KeyBanc Capital Markets. Devin Au: All right. First one I have, maybe for Serge. Could you maybe speak to the framework of kind of the '26 revenue guidance. I believe last year, given some leadership transition, some uncertainty around pub sec and changes around go-to-market, there could be some more conservatism being embedded in the initial guidance '25. Are you applying kind of similar framework here in '26? Or can you just speak to that a little bit more? Srdjan Tanjga: Yes. So how we forecast the business hasn't really changed internally, and there's no incremental conservatism or caution. From a macro environment, I think I can speak for the company, even though I wasn't here a year ago. It feels a lot less uncertain than it did a year ago back when [ DOGE ] was starting, and there was a lot of macro sort of headwinds or potential headwinds related to the international relations. So from that perspective, we feel like we have perhaps a better handle on the world out there than we did a year ago. The thing that I would say specifically, though, is I divide the guide into cloud and the rest of the business. As you can see, the cloud, it's just ratable. It's frankly a little bit easier to forecast, which is why the range there is narrower for the full year as a percent of total business, whereas then we have a broader range as a percent of the business for the rest of it just because as you've even seen last year, for different reasons, both on-prem and professional services can be lumpier. And that's why the range on the full year guide is as wide as it is. Devin Au: Got it. I appreciate the context there. And then just a quick follow-up on the strength that we're seeing from pub sec. You continue to see momentum there, which is encouraging, and it seems like Appian is really well positioned there. As you guys kind of return to sales capacity growth, could you just speak to like how are you thinking about the deployment of resources towards that vertical specifically and kind of how you guys are going to sustain and amplify the success there? Srdjan Tanjga: Yes. We are growing our capacity in the federal vertical, but we're growing it in other verticals as well. At the end of the day, I will just reiterate what I said, the size of our distribution is a limiting factor versus the size of the opportunity. And we don't want to try to address that in a big bang because then you run the risk of deteriorating execution. So we're going to hurry up slowly, and we're going to build sales capacity year in and year out. But certainly, that's the case in the federal space as well. Devin Au: Congrats on the strong results. Operator: And our next question comes from the line of Lucky Schreiner of D.A. Davidson. Lucky Schreiner: Great. I'll echo my congrats as well. I have a follow-up question on the guidance. Coming off a strong quarter, the cloud growth guide, there's a lot of deceleration baked into that throughout the year. So just I'm wondering, is that all FX related? The pipeline sounds strong. So is there maybe conservatism around deal timing or ramping of sales capacity? Just curious what's driving your outlook on specifically the cloud growth guide. Srdjan Tanjga: Yes. So cloud growth is 20% at the midpoint for Q1 and 16% for the year. And the majority of that really isn't anything about the underlying constant currency business. It's really about the fact that we still get one more FX bump in Q1 before it normalizes. Operator: Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: Hello, and welcome to the Euronext Full Year 2025 Results Conference Call. On today's call, we have Stéphane Boujnah, CEO and Chairman of the Managing Board; and Giorgio Modica, CFO. Please note, this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Stéphane Boujnah, to begin today's conference. Please go ahead, sir. Stéphane Boujnah: Good morning, everybody, and thank you for joining us for the Euronext Fourth Quarter and Full Year 2025 Results Call. I am Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext. And I will start with the highlights of this record year, and I will provide you with an update on our progress with the Innovate for Growth 2027 strategic plan. Then Giorgio Modica, the Euronext CFO, will cover the main business and financial highlights of the fourth quarter. I'm now on Slide 4, and I will start with the overview of the full year 2025 highlights. I'm extremely pleased to share that Euronext delivered double-digit growth in revenue, double-digit growth in EBITDA and double-digit growth in earnings per share. First, in '25, Euronext delivered another year of double-digit growth in underlying revenue and income that grew by 12.1% to more than EUR 1.8 billion. Our adjusted EBITDA margin increased by 0.8 points compared to '24 to 62.7%. It is worth noting that Q4 2025 was also the seventh consecutive quarter of double-digit top line growth. This remarkable performance proves the resilience of the diversified business mix that we have built over the past few years. Nonvolume-related revenue made up 59% of total revenue and income and posted a plus 10.9% increase compared to last year. This strong performance of nonvolume-related revenue was driven by sustainable growth in custody and settlement and the contribution of Admincontrol. But volume-related revenue also grew and it was up plus 13.9%, fueled by double-digit growth in fixed income and commodities trading and clearing. Euronext also continues to record robust volumes and revenue capture in cash equity trading and clearing, driven revenue up plus 11.5% year-on-year. When it comes to our cost base, our underlying expenses, including G&A, were at EUR 680.1 million, up plus 9.6% compared to 2024. The increase reflects our consistent growth in investments in innovation and in human capital and obviously, the impact of the acquisitions of Admincontrol and Athex Group in Greece that joined the group in 2025. Our adjusted EBITDA grew by 13.6% compared to last year, reaching EUR 1.1 billion. This was another year of double-digit growth in EBITDA. Adjusted net income was plus -- was EUR 736.5 million, up plus 7.9%. Adjusted EPS was EUR 7.27 per share, up plus 10.3%, another year of double-digit growth of the EPS. Net debt to last 12 months adjusted EBITDA was at 1.5x at the end of December 2025. This leverage is in line with our target range of 1 to 2x. So robust performance, robust balance sheet management. At the Annual General Meeting, we proposed a dividend for a total amount of EUR 321.5 million, and this represents an increase of almost plus 10% compared to last year. Let's move to Slide 5, which is a great illustration of how we delivered solid growth in all business segments. Securities and Services revenue increased by plus 6.9% compared to 2024, boosted by sustainable growth in custody and settlement. And this growth is continuing into 2026. We reached a new record level of EUR 7.9 trillion in assets under custody in January 2026. Capital Markets and Data Solutions underlying revenue increased by plus 12.1%, boosted by the acquisition of Admincontrol. Our volume-related revenue also grew at an equally fast pace with great performance, especially within fixed income, power trading and cash equity trading. Overall, we saw double-digit growth in almost every area in almost every segment of our businesses, even before the delivery of the key milestones of our Innovate for Growth 2027 strategic plan. In 2025, as you may have seen, we have started the implementation of our strategic plan with a very strong execution discipline. Over the course of the year, we have onboarded talents that will allow us to sustainably transform our growth profile. We have invested in the technology platforms that are required to deliver the objective of our strategy plan. So in May 2025, we completed the acquisition of Admincontrol, a European SaaS provider. Admincontrol is focused on European sovereignty, security, simplicity and local expertise. In January this year, just 7 months after the acquisition of Admincontrol, we expanded the offering of Admincontrol to France, and we have started to onboard the first clients in France. In September 2025, we successfully launched the first integrated ETF market in Europe to address strong demand from large clients and global clients in the Europe sector. This strategic initiative allows us to benefit from the rapid growth of this asset class across the value chain. But Euronext will accelerate the execution of the strategic plan in 2026. In March 2026, just a few weeks from now, we will expand our commodities business with the addition of power future. We already saw market confidence building ahead of the expansion in this new segment with significant volume growth across our trading, especially in intraday trading. Our CSD expansion project is also proceeding extremely well with significant support from clients. In December 2025, we announced partnerships with the leading issuing agents in Belgium, in France and in the Netherlands. These partnerships are absolutely essential to shift issuance and custody to the European CSD solution of Euronext. Thanks to those partnerships, the first issuers have already committed to transfer their issuance to Euronext Securities. And in September 2026, later this year, Euronext Securities will become the CSD of reference for 4 major European markets, France, Italy, Belgium and the Netherlands, both for equities and ETFs. By June 2026, we will offer our clients also a fully integrated, truly European repo solution. We have invested in growth, and we have maintained a very strong financial position and a very strong EBITDA margin. At the end of 2025, our cash position exceeded EUR 1.5 billion. Our leverage ratio was within our target range of 1.5x net debt to EBITDA. We secured refinancing until 2028 with a tender offer and partial early payment of the Euro 2026 bonds and the successful issuance of a EUR 600 million bonds under favorable conditions. In November 2025, we launched a share repurchase program of EUR 250 million, which we completed in January '26. In November 2025, we announced the successful outcome of the voluntary exchange offer for Athex Group, the Hellenic Exchange in Athens. This is a new milestone to proceed towards the consolidation of capital markets in Europe to build the backbone of the Savings and Investments Union for real. The new Board of Directors was appointed in January, and the integration has now truly started. We expect to deliver EUR 12 billion of annual cash synergies by the end of '28 through the migration of Greek trading to Optiq trading platforms and the harmonization of central functions, but also through the expansion of various top line initiatives. Athex Group delivered a very strong '25. We continue to see the dynamic growth in Greece of both Athex as a company and the Greek economy at large, with average daily volume within Athex -- with average daily trading volumes twice larger in January '26 compared to January '25 to 412 million of average daily volumes. And as I was very pleased to announce the opening of the support science and technology centre in Athens from 2026. This is an important initiative similar to the type of ambition we deployed back in the days in Porto when we started with the development of our technology center in Portugal in 2016. This new platform will develop in the upcoming months and years to support the expansion of the Euronext Group. I will now hand over to Giorgio for the business and financial review of the Q4 2025. Giorgio Modica: Thank you, Stéphane, and good morning, everyone. Let's now turn to the strong financial performance on the fourth quarter of 2025. I am now on Slide 9. This slide is an excellent demonstration on how well diversified our business is today. In the fourth quarter of 2025, our volume-related and nonvolume-related revenue both grew double-digits. Total revenue and income in Q4 2025 reached EUR 460.8 million, up 10.8% compared to last year. 60% of our revenue is today nonvolume-related. This part of our revenue covers 157% of underlying operating expenses, excluding D&A. Let's take a closer look at the key drivers behind this performance, beginning with nonvolume-related revenue and income on Slide 10. Starting with Security Services. Revenue was at EUR 83.9 million, marking a solid 8.1% increase compared to the Q4 2024. Custody and settlement revenue reached EUR 76.7 million, a 9.6% increase compared to the fourth quarter of 2024. This strong performance was driven by continued growth in assets under custody, which reached EUR 7.6 trillion in December 2025. This sustained growth was also supported by a resilient settlement activity and double-digit growth of value-added services. Other post trade revenue declined 6.3% compared to the fourth quarter of 2024 to EUR 7.2 million. This follows the migration of Italian markets to a harmonized clearing framework. Net treasury income was down 19.4% compared to Q4 2024. This decrease reflects lower average collateral posted to the CCP, one-off interest adjustments, and the migration of Italian markets for a more efficient clearing framework as of the end of June 2025. Turning to Capital Market and Data Solutions on Slide 11. Revenue reached EUR 178.2 million, reflecting a 15.8% increase compared to Q4 2024. Primary market generated EUR 48.1 million of revenue, up 6.2% compared to the same quarter last year. The performance is supported by dynamic listing activity, Euronext's growing ETF business, and the contribution of Athex. Euronext sustained its leading position for equity listing with 16 new listings in the fourth quarter of 2025. Advanced Data Solution revenue grew to EUR 67 million, up 8.1% compared to the fourth quarter of 2024. This strong performance reflects growing client demand for diversified datasets and increased interest from retail clients. It also reflects the catch-up in audit and compliance fees. I would like to take this opportunity to remind you that our data revenue is mostly coming from the monetization of raw proprietary data and analytics based on those data. Client interaction on Euronext technology creates a unique order book data. This data is unique to Euronext. It is used in real time to make trading decisions and it is time-critical and mandated for regulatory compliance such as best execution, surveillance and reporting. This data cannot be replaced by AI. This is an important message. Corporate and Investor Solutions and Technology Services reported EUR 63 million of revenues -- of underlying revenue in the Q4 2025, up 35.2%. This outstanding performance reflects the integration of Admincontrol, continued expansion of Euronext colocation services, and the contribution of the Athex Group. In this part of our business, we see an increasing interest for clients who seek secure and sovereign European solutions. Moving to our volume-related activities now on Slide 12. Revenue from FICC markets reached EUR 82.6 million, marking a 9% increase compared to Q4 2024. Fixed income trading and clearing grew by 11% to EUR 46.3 million, driven by strong volumes. MTS Cash average daily volume traded was up 26.3% year-on-year to EUR 49.8 billion. MTS repo term adjusted average daily trading volume reached EUR 531.3 billion, up 2.9%. These results are also supported by the expansion of the dealer-to-client segment and international growth. Commodity trading and clearing revenue increased by 12.8% to EUR 28.8 million in the fourth quarter of 2025. This reflects a strong performance of power trading supported by continued double-digit growth, as Stéphane said, in intraday volumes. FX trading revenue reached EUR 7.4 million, down 12.7% compared to the fourth quarter of 2024, reflecting lower volatility and the negative currency impact from the U.S. dollar. Like-for-like at constant currencies, revenue decreased only by 4.7% despite the 9.3% decrease in volumes. Continuing with our volume-related revenue on Slide 13. Equity market revenue saw double-digit growth with 12.8% increase compared to the fourth quarter of 2024, reaching EUR 101.6 million. Cash equity trading and clearing revenue grew by 15.7% compared to the fourth quarter of 2024, reaching EUR 89.4 million. This growth reflects a 15% increase in average daily volume traded on Euronext market to EUR 12 billion. This quarter, Euronext reached average revenue capture on cash trading of 0.52 basis points. Euronext market share on cash equity averaged 64.2%. I would like to highlight that those business KPIs do not include the Athex Group. In addition, this performance is also supported by a EUR 3.7 million contribution from the Athex Group. As Stéphane mentioned, the volumes of the Greek market continue to show a very strong dynamic. Athex Group volume will be included in our monthly statistics starting from next month. Lastly, financial derivative trading and clearing revenue was at EUR 12.3 million, a 5% decline compared to the same quarter last year. This decrease mostly reflects the continued low volatility environment from these asset class. Moving on with the EBITDA bridge on Slide 15. Euronext reported EBITDA for the quarter grew 8.1% to EUR 260.8 million, thanks both to organic and external growth. In particular, in the fourth quarter of 2025, we reported EUR 26.6 million of additional revenue and EUR 12.7 million of additional cost at constant perimeter. In addition, the acquisition of Admincontrol and the Athex Group contributed EUR 19.6 million of additional revenue and EUR 10.9 million of additional costs. I would like to share with you some consideration on the revenues and costs from acquisitions. With respect to revenues, I would like to highlight that the growth of our EBITDA was impacted by EUR 4.4 million of non-underlying revenue from Admincontrol. As a part of the purchase price allocation of Admincontrol finalized during Q4 2025, we adjusted the value of the fair revenue with a noncash and one-off impact in the P&L. This resulted into a reduction of EUR 4.4 million in reported revenue this quarter, and we expect an additional EUR 2.6 million reduction until mid-May 2026. No further impact is expected beyond 12 months after the closing of the acquisition. I would like to stress that these IFRS 3 adjustments do not affect cash or cash flow. With respect to the cost, it is important to note that the cost of the Athex Group for the last 5 weeks of 2025 do not represent the run rate for 2026. While at Admincontrol, we've been investing to scale the business across Europe in line with our acquisition ambitions. In total, non-underlying revenue expenses, excluding D&A accounted for EUR 14.2 million. Euronext adjusted EBITDA for the quarter grew 8.9% to EUR 275 million with an adjusted margin of 59.7%, down 1 point compared to the same quarter last year. Moving to net income on Slide 16. Adjusted net income this quarter reached EUR 179.6 million. We have already commented on EBITDA growth in the previous slide. The result from equity investment increased EUR 0.8 million Euronext received EUR 10.9 million of results from equity investments in the fourth quarter of 2025, reflecting mostly the dividend from Sicovam. Depreciation and amortization increased EUR 4.6 million in the fourth quarter of 2025, a 9.3% more than in the same quarter last year. This increase is mostly explained by the inclusion of the PPA related to Admincontrol from this quarter. Net financing expenses decreased EUR 10.8 million. The variation reflects decreasing interest rate and the completion of the financing program for the 2025 and 2026 maturities. No more refinancing will be needed until the end of the strategic plan in 2027. Income tax increased EUR 1.3 million. This translated into a stable effective tax rate of 26.7% for the quarter compared to 26.6% in the fourth quarter of 2024. Share of non-controlling interest increased to EUR 3.5 million as a result of the strong performance of MTS and Nord Pool. As a result, the reported net income share of the parent company shareholders reached EUR 144.7 million. Moreover, adjusted EPS was at EUR 1.77 per share this quarter compared to EUR 1.66 per share in the same quarter last year. Reported EPS was at EUR 1.42 per share. Now I move to the next slide for the outlook of cost for 2026. In 2025, Euronext reported underlying expenses, excluding D&A in line with the revised guidance of EUR 660 million. This is EUR 10 million less than the initial guidelines of EUR 670 million, thanks to our continued cost discipline. In addition, Admincontrol and Athex contributed for EUR 20 million of operating expenses in 2025, bringing the total underlying expense, excluding D&A, for 2025 to EUR 680 million. In 2026, we expect the total underlying expenses, excluding D&A, to be around EUR 770 million. We expect 2026 underlying expenses, excluding D&A, to be stable at around EUR 720 million compared to the fourth quarter 2025 annualized expenses, excluding the contribution from Athex Group. In addition, we expect around EUR 35 million of operating expenses from the Athex Group, and we plan to invest around EUR 15 million of underlying expenses to deliver strategic growth projects. I continue with cash flow generation, and I move now to Slide 18. In the fourth quarter of 2025, Euronext reported a net cash flow from operating activity of EUR 85.5 million compared to EUR 175 million in the fourth quarter of 2024. This decrease mostly reflects the negative impact of working capital from Euronext clearing and Nord Pool CCP activities in the fourth quarter of 2025. Excluding this impact from working capital, net cash flow from operating activity accounted from -- for 60.3% of EBITDA in the fourth quarter of 2025. In November 2025, we took advantage of the positive condition to anticipate the refinancing until 2028. We successfully issued EUR 600 million new bonds rated A- with a maturity of 3 years. In parallel, we performed a tender offer on our existing EUR 600 million bond maturing in May 2026. As a result of this transaction, only EUR 385.5 million of our existing 2026 bonds remain outstanding and will be redeemed at maturity. Net debt to adjusted EBITDA ratio was at 1.5x at the end of the quarter in the middle of our targeted range. This is despite the completion of the majority of our EUR 250 million share repurchase program still in the fourth quarter of 2025. And with this, I conclude my presentation, and I give the floor back to Stéphane. Stéphane Boujnah: Thank you, Giorgio. As you've seen, we demonstrated in 2025 that we are able to deliver record results and invest in the future of our company. You can see in the presentation of Giorgio that we are delivering and we are going to continue to deliver strong top line growth, strong EBITDA growth, strong EBITDA margin, strong free cash flow generation, strong EPS and dividend distribution, strong balance sheet and strong liquidity position and a strong start of the year, both in volume-related businesses where we can share the information every day with all of you, but also a strong start of the year in the delivery of key projects to transform Euronext. In 2026, we will accelerate the delivery of all of our strategic initiatives, supported by, as I said, very favorable market conditions that you can observe every day and a solid financial position. In January, we have welcomed the world's largest IPO of a defense company in history and all markets, and we do see a real momentum in the aerospace and defense sector. And the first weeks of '26 are very promising, as I said earlier, when it comes to volume-related revenues. Our vision of a united competitive European capital market has become more relevant than ever and is being endorsed now at the European level more than ever before. This is why we welcome the proposals of the European Commission to speed up the creation of a true Savings and Investment Union. For the first time for many years, there is a sort of parallel development of the Euronext corporate project and the European policymaking agenda. And this is all good news for Euronext for the years to come. Thank you for your attention. We are now ready to take your questions. Operator: [Operator Instructions] The first question comes from Michael Werner of UBS. Michael Werner: Congrats on the results. I have 2 questions, please. First, thank you for the updates on the issuer activity within the CSD opportunity. I'm just wondering if you can offer an update as to where you sit with the custodians. I know you guys were signing up and looking to sign up custodians. And I was just wondering if there's any update on progress there or any other kind of guideposts that you can provide. And then, second, just a real quick question. In terms of Athex, I believe you acquired 75% of the business through the tender. With regards to the remaining 25% of the shares, I was just curious as to what your strategy there was. Thank you. Stéphane Boujnah: So I will take the question on the developments of Athex as a listed company. And Pierre Davoust, who is the head of our CSD expansion program will answer the question about the strategy update of the onboarding of custodians. On Athex, we own now close to 76% of the shares in the company. The objective is to take the company private to accelerate the integration. We are pursuing 2 parallel tracks. One track would be to organize a new offer and squeeze or -- and organize a technical squeeze out of minority shareholders when we pass over 90% of the ownership of the company. And the second track is to proceed towards a merger of Athex within the Euronext group. But in both cases, the objective is to delist the company, and we are just looking at the 2 options. As for the custodians, Pierre Davoust will answer your question within the limit of what we can share without disclosing segment numbers. Pierre Davoust: Good morning, and thank you for the question. Let me first highlight the importance of the breakthrough that we announced on issuance. We all know that CSDs are very sticky business, and what's most difficult is to generate first movers. And what we shared with you earlier today is that now we have issuers who have decided to be the first movers and to switch from where they are today to Euronext Securities. So it's a breakthrough in the dynamic of the project because now all other issuers will be able to follow these first movers. And today, we have the first listing on Euronext Amsterdam, where the shares of the new listed company will be issued in Euronext Securities. Let me now move to the custodian side of the market. So where we are with custodians is that we're working now with the largest settlement agents and custodians for them to be ready to offer the model to their clients, starting in September 2026. They are very engaged in building the clients' heavy lifting project that will allow them to load their own clients, whether it's trading firms by themselves [indiscernible] Euronext Securities, starting September 2026, when Euronext Securities will be appointed as the CSD of reference for Euronext Paris, Euronext Amsterdam, Euronext Brussels across equities and ETFs. Operator: The next question comes from Benjamin Goy from Deutsche Bank. Benjamin Goy: Maybe, I mean, you can shed a bit more light on your cost guidance because annualizing Q4 historically was typically too conservative for you. Maybe explain why this is different in '26. And then, Stéphane, I think after your titanic comments on data, I don't ask on M&A here, but given you have that Admincontrol and wondering about more software deals as the multiples come down here, will you have more appetite? Stéphane Boujnah: Okay. I'll take the question on data and Admincontrol. Admincontrol is a SaaS provider. Nothing in what they do is affected by the current noise and impact of the AI debate. Clearly, the core of the debate is around undifferentiated or derivative data distributors or aggregators that are being replaced by AI and through SaaS developers of codes that can be replaced by AI solutions. So we don't see any impact. As I said in an earlier conversation, there is a huge difference -- Giorgio made the point very eloquently, I believe. There is a huge difference between data businesses that do process information that already exists because the fundamental underlying assumption behind any AI is that it processes very efficiently things that already exist. But the data we produce are data that do not exist, and we create them. The data we produce are the output of the matching of a bid and ask. And until the bid and ask are matched on our platform in a very demanding latency environment, these data do not exist, which is very, very, very different from what AI does, which is to process better than human beings things that already exist. So that's why what used to be perceived as raw data or robust or primitive data, it happens to be primary data, which cannot be replaced by AI. So for the moment, we do not see for sure in our data business and for sure in our SaaS business, any of the threats that affect some of our peers. And as you know, in the past, we did not buy data because we just felt that we could not justify the valuations that were in the markets. So on many occasions, we did bid for data assets at the valuation that we felt was reasonable in the surrounding circumstances at that time, and we lost those options because other people had the more bullish view of those assets. Clearly, the valuation multiples of Euronext over the past few years have been lower than the valuation multiples of the other peers -- of peers who were more exposed to the data trend. For years, I was told Euronext is missing the data revolution. Data is the new oil. You are missing the data boat. As I said earlier, all of us are finding out that maybe we missed the data boat, that maybe this data boat was a Titanic boat, that we missed the Titanic boat. So this is what it is again. Companies that were engaged in the data theme over the past few years had valuation multiples higher than Euronext. We are just at the moment of truth where this theme is being dislocated and we are back to the fundamentals of business, which is generating real top line growth, generating real EBITDA, generating real free cash flow generation, generating real balance sheet position, generating real sustained growth, and we are delivering numbers even if we are not part of the data/new oil revolution. On the cost guidance, Giorgio? Giorgio Modica: Yes. I wanted as well, Stéphane, to complement your question on data, especially on the SaaS business. What I wanted to highlight is the following. It is true that AI can help to develop faster SaaS solutions, but our clients are actually searching for something else, something which is safe, secure and is stored in Europe and is completely safe. And this is something that cannot be developed off the shelf by AI. This is absolutely fundamental. So if AI might be an interruption to the lower end of the market, then still there is a very relevant market for the one who really consider valuable their information. The other element that I wanted to add is today, in many of our SaaS software, AI is actually an opportunity because our clients are adding to strengthen the value proposition, adding an AI layer on top of our existing solution. Now moving to cost, I wanted to make a few comments. The first comment is that I believe that you should really take into consideration how this beginning of the year is starting, which is quite exceptional. If I look at the volumes year-to-date, we are 17% up on our largest trading business, which is the equity one, 17%, 1-7. Stéphane mentioned that if we look at the volumes in Greece, we moved from around 220 million, 230 million per day to in excess of 400 million, so we are with a growth of 100%. Our derivative franchise is trading 10% up with respect to the average of last year. And if I look even at our fixed income business, we are above last year average. So when it comes to revenue generation, we are really in a very strong position, and we have already delivered more than 50% of the first quarter. This is something that I believe should be really considered. Then coming to your question, why are we annualizing Q4 costs? First, as you can understand, this is not exactly how it works. Our target comes from a bottom-up assessment and then we try to make it palatable using easier KPIs. So what you need to consider is that the cost base that we have today does not include all the revenue streams. And Stéphane alluded to some of those -- power derivatives, the clearing expansion, and those activities prove that our cost base is largely fixed, but it's not completely and entirely fixed. There are as well some costs coming from sales -- cost of sales that we include among our OpEx that you should consider as well. This is one consideration. The second consideration is that I believe you have not missed that we did not include inflation in the target for 2026. But even in the Euronext countries, we have some inflation that we need to offset through cost discipline. Then I take the opportunity to take a few comments as well on the additional elements for the cost of 2026. So EUR 35 million is today the budget of Athex, and we started working with the team, with Camille, with the rest to clearly deliver and do as much as we can. But as you can understand, those are very early days into the integration. And finally, EUR 15 million what I wanted to highlight is that first, we have a strong financial position, 1.5x net debt to EBITDA. Second, last year, we have delivered to shareholders EUR 700 million in total if you include the 2 share buybacks plus the dividend. And what we're envisaging is to invest EUR 15 million because we see an unprecedented environment to deliver further growth and this represents only a week of cash flow of Euronext. So if this is not the right time to do it, then my question is when is the right time to invest for growth? Our ambition is to maximize EBITDA in 2027. This is the end of the plan, and this is what we are working to do. Operator: The next question comes from Grace Dargan of Barclays. Grace Dargan: So the first one, maybe on medium-term targets. I mean, since the CMD, you've made really good progress. I mean you're highlighting another quarter of double-digit growth. You've obviously got Athex. But you haven't revisited your medium-term targets. So I just really like to hear your thoughts on what you might think are more realistic revenue and EBITDA CAGRs now? And then, secondly, just on a slightly different theme around digitalization and tokenization of markets. I mean, it hasn't been a big feature of your plans. So I just wanted to ask whether your thinking on this theme has evolved or changed at all, and is there a risk of you perhaps being left behind if you don't prioritize investment in this area? Stéphane Boujnah: Okay, thank you for your questions, and let me be very clear. We have announced in November '24 a set of initiatives and -- with a target to deliver by the end of '27 top line growth CAGR of above 5% compared to where the situation was in December '23. We are committed to deliver above 5% CAGR growth on EBITDA by the end of '27 as well. When you look at the numbers that we have achieved so far, you can see that in terms of delivering financial performance, we are already within those targets or close to those targets. So the ambition is to deliver above 5%, and as I said in November '24, above is as important in the phrase as 5%. So there is no cap to the ambition, and we want to deliver significantly above 5% on top line expansion and significantly above 5% on EBITDA expansion, and that's what we are working toward. Now the question as to whether or not there will be a revised guidance is hard to predict true, because the plan is not only financial performance. The financial performance of the company in terms of top line and in terms of EBITDA is a blended financial concept. What matters as much as financial performance is the transformation of the organization and the transformation of the organization to build a machine that will generate resilient growth and resilient profitability requires the delivery of some industrial projects that are heavy-lifting transformation projects. One of them will be delivered in a few weeks' time when we become a player in power derivatives. We were not a player in power derivatives. We were a player in spot electricity markets. We are going to disrupt the market environment and the market structure by becoming a challenger of some incumbents and to -- and by creating a new business. This is an industrial project, which is as important as delivering the financial targets. In June, we'll be a player of repo clearing in asset classes where we were not present before. We will disrupt the market structure and what the other incumbents are doing for years. This is a project which is as important as delivering on the target numbers that were part of the November '24 guidance. In September '26, we are going to deliver the new CSD platform that will offer to custodians, issuers, all the market participants, a solution integrated within Euronext Securities that will be fit for the future and that will be more competitive than the incumbent solutions. This is a very important project, and there are many -- there is a lot of hard work of heavy-lifting operational and commercial work to be done to transform the organization. So for me, the plan will be over, or the plan will deserve to be updated, or guidance will -- time will come for changing the guidance only when, number one, we have delivered significantly above 5% on those 2 metrics, CAGR growth since '23 for top line and CAGR growth since '23 for EBITDA and when we have delivered the transformation of the organization. When it comes to tokenization of assets, you have to distinguish the guidance and the projects that we launch and the internal developments within the company. There are many things we do that we don't share with investors because we believe that the downside of creating expectations is bigger than the flexibility of pivoting, innovating, and inventing new things. So it's not because we don't do growth by press release, it's not because we don't follow themes, or it's not because we don't feed those discussions with you or PowerPoints with buzzwords. It's not because we don't put -- it's not because I don't show up with a black T-shirt with the PowerPoint presentations entitled change of paradigm. It's not because we don't position ourselves in that way that we do not do the hard meticulous work of trying to assess where is the right legitimate role for Euronext. So we are exploring several initiatives in the tokenization world. We are really entering into a phase now where blockchain that exists for almost 15 years and what was for years just a land of solid, profitable use cases for crypto players is now becoming available through the tokenization trend across the financial food chain. And we are going to be part of that, and we are working on it. When will we come out with a plan and when will we create expectation in this domain is related to the moment where we'll be confident enough that we will deliver. And -- because the best asset of Euronext with my lips is credibility. We always, always, always, for the past 10 years, under-promise, over-deliver. For the past 10 years, everyone is telling us, yes, you are too shy, but we always over-deliver. So on tokenization, we will apply the same credibility things. We will not do growth by press release. We will not proclaim intents. We will deliver real projects, we will make them happen for real, and we will make money out of them to address the needs of our clients and the requirements of our shareholders. Operator: The next question comes from Thomas Mills from Jefferies. Thomas Mills: I just had 3 questions, please. Firstly, on revenues, it's clear that volumes are off to a strong start for the year, well ahead of consensus on the cash equity side. Volumes at Athex are positively booming. Giorgio, am I right in thinking consensus does not yet fully reflect the incorporation of Athex? So that could be a positive on the revenue side as people revise estimates. Then on the Savings and Investment Union, Euronext is extremely well-positioned to benefit from this and particularly from a shift to a single supervisor model. I saw last week there's a new sense of urgency around making progress on that by June, and if it doesn't happen on an EU-27 basis, it can proceed via enhanced cooperation with a minimum of 9 states. Stéphane, can we get your take on how you're seeing things as likely to develop there? And then finally, Stéphane, it's clear from recent and not-so-recent interviews that you're itching to get a decent-sized deal done before the end of your tenure. Is there a point though where if that's not forthcoming, you determine that it's time to up the ante on share buybacks? The U.S. capital market exchanges are now the most favored subsector across all of diversified financials. And the fact that your multiple is increasingly lagging makes little sense. I think this is your Euronext's time to shine. So just intrigued to hear your thoughts on that. Stéphane Boujnah: Okay. I will answer your question on Savings and Investment Union for real, your question on basically the share buyback and capital allocation in M&A, and Giorgio will answer your questions on volumes as part of the consensus. On the Savings and Investment Union, things are very simple. For the first time, we have a massive acceleration of the momentum. The Capital Markets Union was invented 10 years ago by Jonathan Hill when he was the U.K. commissioner and when there was a total coherence and consistency between what was good for Europe and what was good for London, which at that time was the largest financial center of the European Union. The U.K. left the European Union. London has become now the largest financial center of the United Kingdom. And the project was relatively a slow-motion project for almost 10 years. With this new Commission, with Mrs. Maria Luis Albuquerque, who is the former Minister of Finance of Portugal, in charge, the level of ambition and the level of speed has changed big time. A very robust paper was produced in December by the Commission, so we have a framework. One of the main ambitions -- and I don't want to go into all the details, but one of the main ambitions, because you mentioned it is the single supervision. There will be a single supervision one way or the other, in one form or the other. That's now quite clear that there is a consensus to believe that the sort of fragmented supervision, fragmented interpretation of rules, similar rules that are different because when the rules are similar, they are different, is not helping to create speed and scale. So there is a consensus to say, okay, for the ones who want to remain very local, let it be. They have the right to remain very local. And so the ones who have a pan-European ambition, they need to have a single rule-of-law-driven, integration-focused, efficiency-driven interface with the right supervisors at the European level. When will it happen? How wide will it be? It's being discussed. And as you rightly pointing out, the sort of ultimate signal that resignation and low and slow motion is not accepted is the clear determination of leaders of countries that, by the way, happen to be large finance makers, like Italy, France, Germany, Spain, Netherlands to get aligned to say, okay, if it is too slow at '27, we'll make it work among the countries that represent most of the finance industry in Europe. So we are extremely excited because it's going to accelerate and simplify the development of Euronext. There will be a transition period. Things are not going to -- we need to produce a lot of bottom-up ideas with partners to bridge the gap between where we are today and where we will be in a few years' time. But this is going to make the life of Euronext and the prospects of growth of Euronext much, much more exciting. When it comes to share buyback and valuations, we are industrialists, we are shopkeepers, we are merchants. And we try to grow the top line to be disciplined in execution of our integration projects, to be disciplined in cost management, not to miss innovation, heavy-lifting transition projects to maximize the EBITDA margin, to create capital, to allocate capital in projects that provide a return for shareholders which is above the WACC of the company. We are not in the business of valuing Euronext vis-a-vis peers or vis-a-vis other sectors or vis-a-vis. This is your job. This is the job of our investors. We just make the company a cash machine and a growing and robust machine and a relevant machine to clients by increasing the competition by proposing new fit-for-the-future solutions. Whether other projects are more profitable than ours, it's not up to us to make a view. Whether data is the new oil, I don't know. I mean, for years I told everyone, we don't want to overpay data assets. And when everyone was telling me you are missing the data revolution, okay. We missed it and we are where we are today. So my job is not to compare the performance of Euronext vis-a-vis the performance of our peers. What I can tell you, though, is very clear. Share buyback is an output of a capital allocation set of decisions. The way we see things is extremely clear. Just like M&A is a tool, it's not an objective. What we want to do is to continue building a resilient, solid, robust, relevant, fit-for-the-future organization with a superior financial performance when it comes to top line expansion and to cost management with the right flexibility to jump on innovative trends and in order to do that to create resilience of the performance of the company and to diversify the top line of the company to allocate capital wherever we believe that we are legitimate owners of assets. Last year was a clinically pure example of what I'm saying. We started to invest in cash to buy Admincontrol to diversify our top line. Then we expanded our infrastructure business with the acquisition of Athex and then we did it in shares. And then we found out that we didn't need the cash available, and we created a share buyback. So share buyback will be an output of the way we will deploy our cash in the course of '26. Over to you, Giorgio, for volumes. Giorgio Modica: Thank you very much, Stéphane. So one thing, it's difficult for me to comment as to whether the consensus is right or wrong or complete. But what I can assure you that we're -- we have been giving you and we will give you all the elements that you need to make sure that the consensus gets right. It's always difficult to do the first consolidation of a new acquisition, but what you have now is the following. We've provided you a Q4 excluding the Athex Group, which means that you can extrapolate line by line what is the contribution of Athex. So you have 5 weeks of Athex consolidation. You have the volumes and the average market cap that you can use as a driver to derive what Q1 would look like. And if I look at where things are today, what I can share with you, as we said, that the volumes are roughly speaking, if you look at the -- or you can do differently; you can take the yearly P&L and make an assumption of a monthly contribution and then adjust. But you have several ways, and we can help you at -- with Judith and Investor Relations to have a fair sense of the level of revenues that is legitimate to anticipate based on those values. The element that is important for you is that, on average, in 2025, Athex traded slightly more than 200 million per day and now we are in excess of 400 million. Last year, on average, the market cap was around EUR 130 billion, and now we are in excess of EUR 150 billion. And then my take is that the consensus does not fully incorporate the full potential of Athex, because this growth that is partially linked as well to the developed market status of the Greek market was very difficult to anticipate. So yes, I believe that there is upside there. Operator: The next question comes from Enrico Bolzoni from JPMorgan. Enrico Bolzoni: Hi, can you hear me? Stéphane Boujnah: Yes, we can. Enrico Bolzoni: I have a couple, please. So one on your CSD ambitions. It's been a few months now that you've clearly been working at this project. Migration is expected to occur later this year. Can you -- would you be able to give us an update in terms of what proportion of, for example, settlement that is currently happening on third-party CSDs you think reasonably to internalize already by the end of the year? And perhaps what is your expectation for 2027 in terms of volumes? And then my second question relates to the market integration package that was released by the European Commission last year -- quite ambitious with various proposals. I would like to hear your thoughts on 2 in particular. So one, the Commission said that basically the tape, so the consolidated tape needs to be improved, so increase the transparency, the amount of information provided. So that's one. And the other one is that they want to interlink basically various CSDs across all the exchanges that are, let's say, systemically important like definitely you are. So I wanted to hear your thoughts on whether you think that these measures have come with the risk of increasing transparency for competition and perhaps being price deflationary. Stéphane Boujnah: So I'll answer your second question and Pierre Davoust will answer your first question on CSD ambitions, bearing in mind that we do not disclose specific operational numbers or specific financial numbers by per segment at this stage. So we'll provide you roughly correct answer to your question. On the Commission's package, among the issues that are being debated and where there is no consensus, there is clearly this consolidated tape review. I mean, clearly, member states are not supporting it for one very simple reason, which is consolidated tape season one is not even finished. It has actually not even started. So the commission or, sorry, ESMA has selected a provider. They are working on building what will be a consolidated tape a European way. So some member states, many member states actually are saying, whoa, whoa, whoa, before we start to undo and reshuffle things. And as we are still at the level of PowerPoint projects, maybe let's see how the market dynamics develop around CTP. So we do not anticipate any progress or any changes on the consolidated tape beyond what is on the table and what has been decided in the previous round. When it comes to CSD's interconnectivity, it's a very broad concept that when you move to making it happen for real, gets to extreme complexity. And that's why as of now, we believe that the prospects of the full, that deciding just universal peace and love interconnectivity is not going to be a trend that will affect our plan at least for the years to come. So maybe Pierre Davoust can be a bit more specific when he answers your question about CSD ambition, but you should not consider that those 2 debatable items are going to have a negative impact on the top line. Actually, we do not see any justification to revise or blend in the guidance in any way whatsoever because of those 2 debates. Pierre Davoust: I will address your question on the European expansion project. So as mentioned by Stéphane, we don't intend to give a precise guidance on the proportion of settlement volumes or the revenues coming from settlement volumes that will come through the project. What I can tell you is that, one, we believe we have a very strong value proposition for market participants both on pricing and on the simplicity of the model that we offer, especially with the perspective of the T+1 migration that will make it even more important for market participants to dispose over a simplified settlement infrastructure. Two, I want to insist on the fact that the progress we've shared with you on issuers is not only a positive development for other issuers to move, but it's making our value proposition towards market participants even more attractive. Every time we move issuers from where they are today to your Euronext Securities, we make the value proposition of Euronext Securities or market participants more attractive because the number of issuers, the market cap of issuers that is directly accessible in Euronext Securities at an even cheaper price is increasing. So you should consider that the breakthrough announced on the issuer migration is making our value proposition stronger on the settlement and on the custody, and this makes us confident that we'll deliver success on the project. Operator: Our next question comes from Hubert Lam from Bank of America. Hubert Lam: I've got 2 questions. Again, sorry, on the question on the CSD expansion, particularly on the custody side. I know it's still early stages, but can you talk about the feedback you've received from custodians in your discussion on the CSD project? Are they open to the project? And how did they view your value proposition? Second question is on M&A. Do you see more M&A opportunities out there either in the volume type of businesses or maybe there's more opportunity now in the non-volume types of businesses, just given where maybe valuations have gone down to? Stéphane Boujnah: So let me take the M&A question, which is a very open-ended question, and Pierre will be more specific on the interactions with custodians and what it means needs for the delivery of the project. As I said, I'm sorry for repeating, but your question was very open-ended. M&A is not an objective, but it is a tool. The objective is growth, performance -- to growth and performance, so profitability and resilient growth and resilient performance. We are going to use M&A as a tool to accelerate the diversification of the top line of the group. And clearly in an environment where interest rates have increased, private equity owners are more under pressure, not all of them, but not everyone is under pressure to exit, but with quarters after quarters, more and more PE players under pressure of their LPs to return capital and to consider exits, we are in a market that is slightly changing. Clearly, things have to be nuanced because very large Godzilla funds are not under pressure and can sustain holding for a while. But we are seeing changes in the market. We are seeing also contamination in the private markets of what is happening in public markets in the field of data. I mean as I said a few years ago, the reason why we didn't buy data assets is that we did not believe that it was the right thing to do to pay 30, 35, 40x earnings for these data assets. Now, some of those assets, not all of them have a strong residual value because they are embedded in the workflow of clients and they have some form of pricing power. And they have -- they are AI-proofed. Others are not. Clearly, in the field of post-trade, in the field of data, in the field of energy, in the field of commodities, in the field of value-added services to our CSD business, we believe that there might be opportunities and partners who would be more willing to consider an exit than before. The reason -- M&A is a consenting other game. For M&A, you need a willing buyer and we are a willing buyer, and we are a buyer with strong cash position, et cetera. But you need also a willing seller. And in parallel to diversification, as I've described it, we have always the fear of consolidation of equity markets in Europe, which is probably the business that is the most profitable within all our businesses because that's where we create more synergies in terms of plugging more volumes to a very powerful and efficient infrastructure. So for the infrastructure part of our business, which is all about volumes, we are open house and whoever wants to connect the local market to a pan-European ambition to fix the problems or the shortfalls of the local market which is subscale when it comes to equity and to be part of a pan-European single integrated liquidity pool, single integrated order book, single integrated technology platform, we are open. Now these deals happen when we have a willing seller. In the case of Greece, we started the year '25 without any clue about the fact that over the summer we'd be discussing with the Greek system the acquisition of Athex. So I do not know when and how other sellers will be available. So we will remain very disciplined. We are not going to burn cash. We will miss more opportunities than others, but we will make much fewer mistakes than others as well because we have this steel rule of not deploying capital if the return on capital employed is not above the WACC of the company between year 3 and 5. And if we find deals that help us to diversify the top line or to grow the infrastructure business within this financial discipline framework, we'll do those deals. And if we don't find, then we'll do a share buyback. That's as simple as that. Pierre Davoust, on the custodians? Pierre Davoust: Yes. So maybe 3 points on the custodians. First, custodians for decades have seen a European CSD landscape which is, A, fragmented, and, B, non-competitive. When we come with a value proposition where we tell them we'll increase the competition in the CSD landscape in Europe and we offer you the ability to overcome the fragmentation and to consolidate, we receive positive feedback. They are telling us eventually someone is doing the job of getting rid of the fragmentation and bringing competition in Europe. Then to be more specific, second point, we've spent hours and hours and hours with all large custodians to make sure that the service we deliver is fit for their needs. And the feedback we get is that the service we will deliver by September 2026 in Euronext Securities matches the needs of large custodians. And this is why -- and that's my third point, this is why now we have some of the largest custodians in the world who are actually doing developments in their platforms, in their operating models, to become able to offer the service to their clients by September. And the reason they do it is that they believe there is value. The proof is in the pudding. They would not invest in their platforms; they will not invest in the change of their operating models to accommodate for a model if they thought that the model would not bring value to them and to their clients. Operator: The next question comes from Andrew Lowe from Citi. Andrew Lowe: You've been very clear that your data cannot be replaced by AI. I was wondering if you could provide a bit more detail on what exactly the sort of mix of data is and how the clients are using it. Who the client end users of this data are, the share of data revenue that's linked to headcount? And then finally, how much of the growth in your data revenues has been driven by pricing versus volume over time? Stéphane Boujnah: Okay. So within the same limitations of not disclosing specific numbers or specific metrics by segment, I'll leave the floor to Nicolas Rivard, who is the head of this business and who will tell you how, why, and more specifically, all that are different and how the pricing positioning is being deployed. Nicolas Rivard: Thank you for your question. So in term of replicability of the data, I think Stéphane answered previously this question. Our data is coming from our technology, our order book and is fundamentally unique. And so if you ask the first question, which is, can the data be replaced by AI building this data, the answer is no. The second point of your question is then who are the users that can be replaced. So you need to understand that we are agnostic of who is using the data. We are agnostic of the tools using the data. We have a commercial model which is basically linked to display usages and non-display usages. Whether the tool is from one vendor or another, for us, is irrelevant, and the commercial model is resilient to this type of usage. And we have made sure of that. Then, to answer a bit more precisely on the users, the users are, you would imagine, all the investment communities, traders, investors, asset managers, so you can name them, retail investors, which is a growing part of our business. With regard to pricing and volume, we don't share the details with regard to -- which I can tell you that both are positively oriented, both in terms of volume and pricing within the framework of which we can share. So now in term of non-real-time versus real-time, what is -- we are growing the business in term of non-real-time. This is an important development for us. It has been very successful over the last years across the group. We did not only the acquisition of -- the expansion of Euronext and diversification, we have been able to build data around those new asset classes. But what you need to understand is that even those new businesses, even those new data projects are built on proprietary data. So it's not as if we take public data and we build analytics on it. We take our own proprietary data and we build analytics on it. So once again, to the comments of Stéphane before, this is data which is not replicable. So in both cases, we are very confident that the data is unique. Maybe one clarification on the price. You can roughly estimate that this is linked to inflation, so if you want to build a model which is a bit more precise, you take inflation as the value. Stéphane Boujnah: [indiscernible] Operator: The next question comes from Arnaud Giblat from BNP Paribas. Arnaud Giblat: I've got 2 quick questions, please. Firstly, on -- back to Euronext Securities. You mentioned that you had some issuers that were moving. As far as I'm aware, it's Euronext and Exor who have moved so far their issuance to Italy. Are there any others? Could you name them, please? And my second question is on the EUR 15 million of underlying expenses to deliver your strategic growth projects in 2026. You made the parallel during your comments that, that was 1 week's worth of cash flow. And that, I mean, confused me a bit. I thought the incremental EUR 15 million of OpEx were there to stay. So it was part of your recurring OpEx base. And the parallel does suggest to me that it's a one-time expense in 2026. So which one is it? Could you clarify that for me, please? And maybe if you could itemize it as well, that'd be interesting, just so I can draw parallels between the OpEx and the prospective revenue growth attached. Stéphane Boujnah: Okay. So Pierre Davoust is going to clarify the Euronext Securities developments and to be sure -- I don't know whether we are authorized by them to mention who they are, but if we are, he will share that with will do. If we are not, he will not. And then that's just wish words, that you don't want to expect a relationship issue. And then Giorgio will clarify the question, your question on cost. Pierre Davoust: So to take your question on the issuers, what we mean when we say that a couple of issuers have decided to move to Euronext Italy, we mean beyond the ones who were already announced, i.e., beyond Euronext, beyond Stellantis, beyond Exor. So this morning we published a press release announcing that a company called SWI Capital listed on Euronext Amsterdam and will issue the shares or has issued the shares in Euronext Securities. So that's one new listing where EUR 1.6 billion market cap, we have 2 issuance of shares happens in Euronext Securities, and that's public. We made the press release this morning. In addition to this company, we have a number of issuers who are already listed today on Euronext Markets who have confirmed to us that they want to move their shares. So we still have to execute the migration, but we have their confirmation, their commitment to move their shares, their existing shares, from where they are today to Euronext Securities. So this is all on top of what was already known, i.e., your Euronext, Stellantis, and Exor. Stéphane Boujnah: Giorgio? Giorgio Modica: Yes, absolutely. And sorry for being potentially misleading. My point was to highlight the fact that it's a very, very small proportion. I could say it's 2% of our cost. One week of cash flow is just to say that it's a very, very small amount related to the possibility to invest. So usually even very, very minor changes in our cost base trigger very detailed question that I believe that do not really serve the purpose. So my intention was not really to define whether it was one-off or recurring was more to say it's a very minor investment. Then with respect whether it's one-off or recurring, this is going to be recurring because we want to build a new capacity to deliver new projects. And this includes the delivery of existing Euronext projects together with the development of new ideas. And then Stéphane named a few. So again, the objective of my comment was to highlight how small and is this pocket for investment that we're giving to ourselves. Stéphane Boujnah: Although, I'm celebrating with you my 40th conversation because we speak for 10 years now 4 times a year, and this is my 40th, 4-0, quarterly result announcement. And for the past 10 years, you have demonstrated a very meticulous interest for Euronext with the consistent level of skepticism. So what I'm trying to say and what Giorgio is trying to say is the following. The focus on cost is absolutely legitimate. Maybe, maybe it makes sense to have this discussion on cost with the starting point, which is a 62.7% EBITDA margin. So we are talking about a very marginal expansion of cost in a year where we invest a lot on things you've seen and on things you don't see, because there was a question from a young lady about the tokenization ambitions. So we are not going to disclose any specific guidance or we are not going to create any specific expectations on tokenization until we believe it's the right time to do it. But believe me, we spend time, money, and on this new technological development. So we do that starting from 62.7% EBITDA margin, which I believe without comparing with our peers -- this is your job to benchmark us against our peers -- is not bad compared to the peers which have a higher valuation multiples. And we are doing those cost developments in an environment where we want to deliver new projects. And compared to our peers, we don't have a bad track record of delivering above expectations that we have created. So that's why it's absolutely fair and legitimate to discuss all cost-based development. And I fully understand that, as it is one of the few guidance we provide on a yearly basis, it's absolutely legitimate to discuss it. I'm just trying to put things in perspective about the fact that it's small and it's on the basis of a company that is extremely profitable and it's growing and that has consistently had an EBITDA expansion above the top line expansion, in both cases, double digit. And actually, for next year -- for last year, we had a single-digit cost base expansion. So things might be different, but when you pile up acquisitions and when you neutralize the impact of acquisitions, when you focus on really what is the real new money spent, you get something which, in my view, is much less problematic than what can be perceived sometimes. Operator: Next question comes from Tobias Lukesch from Kepler Cheuvreux. Tobias Lukesch: Also 2 questions from my side, please. Stéphane, I have to touch on costs again. I mean that was very explicit, thank you. But just to get a feeling a bit, I mean, last year you talked about the investments and also FTE investments. I was just wondering, is that really now more into systems? You mentioned projects like tokenization, but it's like if you were to split costs and what might come, it's like how much would be to really increase revenue generation potentially also via AI applications? How much could be on AI cost-saving side? And also in terms of the spending horizon, I mean, are we talking more about Q1, H1? Or is it more a linear approach you're taking that might even go into next year? And then secondly, on the MTS business, maybe you can just remind us, like, of the geographic split of the assets and revenues you're generating there and how this is, like potentially shifting towards some other countries' contributions you see this year, maybe in the medium term would be very helpful. Stéphane Boujnah: Can you -- sorry, can you repeat your second question because I got lost with the second question. Can you repeat it? Tobias Lukesch: Sure. Stéphane Boujnah: The first one was very clear. Tobias Lukesch: Yes. On the MTS question, the question around did you get geographic split of the assets, of the revenues attached to that and how this is moving into additional countries, additional European countries and how you do see the development in '26 and potentially also going into '27 to further grow that business? Stéphane Boujnah: Okay. So I'll take the question -- both questions. So on MTS, the performance of MTS is impressive. It's a business that has grown extensively, since we acquired it as part of the Borsa Italiana acquisition. Since then, the growth of MTS was a combination of organic growth in relation to the core business of MTS, which is Italian govies, and the development of the efforts we have done together with the MTS management and the Euronext management to pitch and convince the European Union to organize the secondary trading of next-generation EU bonds within MTS. We are expanding businesses in other jurisdictions. We have constructive dialogues with countries that are already part of the MTS program and solutions but not necessarily with the full incentives to deploy them. And each debt management office takes things at the level of priority and gets to the right level of concerns about liquidity of their debt at a different pace. So recently, we have announced that we are becoming a player of a scale with the Greek debt. It was announced a few weeks ago, I think just before Christmas. We are working in the same directions with all the other European players. I'm not in a position to make any announcement. And the discussions are very different. The perception of MTS as a solution is different everywhere. So we remain very active from a marketing point of view. I'm personally involved in many of those discussions because many of those discussions take place both at the level of the debt management office and at the level of the Minister of Finance, and we'll see. We'll announce the outcome when they are positive. For the moment, it's still work in progress. I mean, because countries don't change easily the way they manage liquidity or the other. Talking about where do we spend the money, I'm going to suggest -- to offer you a framework to be roughly correct rather than precisely wrong. So the way you have to look at the cost that we deploy is that if you want to deliver something for real, you need to have in your organization people who know what they are talking about. Then you need to have systems that are flexible, robust, reliable and fit for the future. And then you need to make supervisors neutral about those projects and you need to have clients enthusiastic. To make supervisors neutral and to appease them, that's relatively easy and not extremely expensive. But to make clients enthusiastic about the new solutions that you're offering, you need to talk to them and you need to have salespeople or business development people creating intimacy to anticipate their needs and to manage competitors. So you recruit people for developing new systems and new ideas and inventing new solutions that are not necessarily with skills that are necessarily available someday in your nation. You recruit new people to do sales and to do business development, and in the middle, you build new platforms, which is a combination of technology developments, which may need people, but also with some CapEx. So that's how we deploy the money because at the end of the day, these are the 3 areas. So it all ends up in headcounts, but headcounts of a different nature if they are here to invent new things and fill skill gaps in your organization, headcounts to deploy or develop new technologies, headcounts to sell stuff and to be time to market ahead of the competitors. So I have some difficulties to describe you the Rubik's Cube between these 3 categories of people. Then why I'm using the Rubik's Cube metaphor is that clearly the allocation of these teams is very different if we talk about power trading -- or power derivatives, sorry, if we talk about repo clearing, if we talk about CSD expansion, the allocation [indiscernible] so the breakdown in my view would be very artificial even if I were comfortable disclosing those numbers that are really granular management accounting numbers. Operator: The last question comes from Ian White from Autonomous. Ian White: Two from my side, please. Firstly, we're hearing a lot of political support now for the idea of a single European stock exchange. From your perspective, are you open to innovative structures or partnership to achieve that? Or in your mind, is it simply that the Euronext itself is the consolidator? That's question one. And question two, can you talk a little bit about the competitive outlook in Italian government debt markets? In recent months, 2 competitors have announced settlement offerings in Italian government debt. What makes you sanguine on the risks to your next market share, please? Stéphane Boujnah: So on the second question, I'll give the floor to Giorgio Modica, who is familiar with the recent dynamic of the Italian debt market, and he will provide you his perspective. And maybe also Pierre Davoust can complement because it's more a question on settlement than on the fundamental underlying debt market. So both Giorgio and Pierre can elaborate. On the first question, let me be very crystal clear. Yes, leaders in Europe want to have a single pan-European stock exchange. But the reality of the drivers of these goals are very different. There was a quote from Chancellor Merz in particular that was very vocal and Chancellor Merz, as a person is very knowledgeable when it comes to finance because of his personal background. And clearly, he tried to say -- he tried to highlight, if I may say so the sort of anomaly between the size of the German GDP, the anomaly between the dynamism and the strength of German technology players on the one hand, and the fact that in Germany, the equity market, for all sorts of historical reasons, is relatively small. And the GDP of Germany is about EUR 4.3 trillion approximately, and the total aggregate market capitalization of Frankfurt Exchange is approximately EUR 2 trillion. The Euronext single liquidity pool of the book is about EUR 6.8 trillion. It's more than 3 times larger than the Frankfurt exchange. So Chancellor Merz was addressing a sort of specific situation in Germany and that has again nothing to do with the quality of Deutsche Boerse, which is a great company, an amazing company. The transformation that has been implemented by Theodor Weimer over the past years has been amazing. And this is a great company. But when it comes to equity -- to equity only, it's true that the exchange part of Deutsche Boerse is much, much smaller than it used to be and much, much smaller than the equity part within Euronext. So we do not have the problems within Euronext countries that other countries have, because since we have EUR 12 billion of average daily volumes, and since we have EUR 6.8 trillion of aggregate market capitalizations on Euronext and since we have approximately 25% of the equity market -- of the equities traded on Euronext, we have built a liquid market. And again, it's not a judgmental comment. The valuation multiples of our peers are stronger because they have less equity trading. But there is a tension between policymakers who do want a large equity market and corporates who operate those markets who believe that they create more value by walking away from equity. And that's okay. That's what happened in the U.K. where the London Stock Exchange became a smaller part much more than it used to be of the London Stock Exchange Group, just like the Frankfurt Exchange is a much smaller part of Deutsche Boerse, especially, that's fine. They have bigger, better valuation because of those choices. But it's true that from a policymaker point of view, there is an aspiration to have stronger exchanges as what we've built within Euronext. What does it mean in practice? One thing is clear. Liquidity cannot be fragmented. Liquidity must be consolidated. In any business, in any trading venture, what everyone is looking for is to consolidate liquidity because that's -- with consolidation of liquidity, you have to create the best spreads. Therefore, you create the most value for your clients because you create an environment that produces better prices. So any idea that would be, let's create a new platform out of the blue, which eventually will have no issuers, no investors, no research, is a bad idea. So what makes sense is to consolidate liquidity. I do believe -- I do believe that Euronext is in advance in this ambition because our purpose was to build a consolidated equity market, and I do believe that we have to invent ways to work together to consolidate equity markets around what already exists, rather than to fragment liquidity. So I believe that it's the right ambition, but it's the right ambition with consolidation of liquidity, not fragmentation of liquidity. Pierre? Pierre Davoust: Yes. So I will address the question on the Italian settlement. So indeed, our competitors have made steps to provide direct settlement services on Italian debt. What I want to highlight is, one, this is not new. This is not new. We are the issuer of CSD. Euronext Securities Milan is the issuer CSD for Italian bodies. And Euroclear Bank, Clearstream Banking Luxembourg, all those custodians are all connected to Euronext Securities Milan to perform settlement on Italian ventures. Our competitors are, in fact, our clients for this particular business, and they already do and perform settlement activity. With what they've announced, they are taking an extra step, bringing their clients to directly settle with them, trades cleared at LCH SA. Will that allow them to win more settlements over some of our other clients who are today channeling settlements through Euronext Securities Milan? Maybe. But it's more a stretch for some of our clients than for Euronext Securities Milan itself. Third point, settlement in govies business is a very small part of the business, because a big part of the business is custody, and that stays with us because we're the issuer of CSD. And last point, I think you need to realize that these steps are taking place in a context which is a total range of settlement, which is about creating fixed income value chain. And Euroclear and Clearstream have announced that they will partner with NCH SA, and we are working in Euronext across the value chain with MTS with Euronext Clearing and Euronext Securities to develop and scale a value proposition and fixed income across Europe. And we believe we have very strong selling points for clients to use the Euronext value chain across MTS, Euronext Clearing, and Euronext Securities Milan on Italian bodies and on non-Italian bodies. Operator: There are no more questions at this time. I will now hand the call back to our speakers for their closing remarks. Stéphane Boujnah: Thank you very much for your time. I wish you a very good day. And if you have any questions, please do not hesitate to reach out to the dream team when it comes to Investor Relations with Judith and all our colleagues. Thank you very much. Have a good day.
Operator: Hello, and welcome to the Euronext Full Year 2025 Results Conference Call. On today's call, we have Stéphane Boujnah, CEO and Chairman of the Managing Board; and Giorgio Modica, CFO. Please note, this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Stéphane Boujnah, to begin today's conference. Please go ahead, sir. Stéphane Boujnah: Good morning, everybody, and thank you for joining us for the Euronext Fourth Quarter and Full Year 2025 Results Call. I am Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext. And I will start with the highlights of this record year, and I will provide you with an update on our progress with the Innovate for Growth 2027 strategic plan. Then Giorgio Modica, the Euronext CFO, will cover the main business and financial highlights of the fourth quarter. I'm now on Slide 4, and I will start with the overview of the full year 2025 highlights. I'm extremely pleased to share that Euronext delivered double-digit growth in revenue, double-digit growth in EBITDA and double-digit growth in earnings per share. First, in '25, Euronext delivered another year of double-digit growth in underlying revenue and income that grew by 12.1% to more than EUR 1.8 billion. Our adjusted EBITDA margin increased by 0.8 points compared to '24 to 62.7%. It is worth noting that Q4 2025 was also the seventh consecutive quarter of double-digit top line growth. This remarkable performance proves the resilience of the diversified business mix that we have built over the past few years. Nonvolume-related revenue made up 59% of total revenue and income and posted a plus 10.9% increase compared to last year. This strong performance of nonvolume-related revenue was driven by sustainable growth in custody and settlement and the contribution of Admincontrol. But volume-related revenue also grew and it was up plus 13.9%, fueled by double-digit growth in fixed income and commodities trading and clearing. Euronext also continues to record robust volumes and revenue capture in cash equity trading and clearing, driven revenue up plus 11.5% year-on-year. When it comes to our cost base, our underlying expenses, including G&A, were at EUR 680.1 million, up plus 9.6% compared to 2024. The increase reflects our consistent growth in investments in innovation and in human capital and obviously, the impact of the acquisitions of Admincontrol and Athex Group in Greece that joined the group in 2025. Our adjusted EBITDA grew by 13.6% compared to last year, reaching EUR 1.1 billion. This was another year of double-digit growth in EBITDA. Adjusted net income was plus -- was EUR 736.5 million, up plus 7.9%. Adjusted EPS was EUR 7.27 per share, up plus 10.3%, another year of double-digit growth of the EPS. Net debt to last 12 months adjusted EBITDA was at 1.5x at the end of December 2025. This leverage is in line with our target range of 1 to 2x. So robust performance, robust balance sheet management. At the Annual General Meeting, we proposed a dividend for a total amount of EUR 321.5 million, and this represents an increase of almost plus 10% compared to last year. Let's move to Slide 5, which is a great illustration of how we delivered solid growth in all business segments. Securities and Services revenue increased by plus 6.9% compared to 2024, boosted by sustainable growth in custody and settlement. And this growth is continuing into 2026. We reached a new record level of EUR 7.9 trillion in assets under custody in January 2026. Capital Markets and Data Solutions underlying revenue increased by plus 12.1%, boosted by the acquisition of Admincontrol. Our volume-related revenue also grew at an equally fast pace with great performance, especially within fixed income, power trading and cash equity trading. Overall, we saw double-digit growth in almost every area in almost every segment of our businesses, even before the delivery of the key milestones of our Innovate for Growth 2027 strategic plan. In 2025, as you may have seen, we have started the implementation of our strategic plan with a very strong execution discipline. Over the course of the year, we have onboarded talents that will allow us to sustainably transform our growth profile. We have invested in the technology platforms that are required to deliver the objective of our strategy plan. So in May 2025, we completed the acquisition of Admincontrol, a European SaaS provider. Admincontrol is focused on European sovereignty, security, simplicity and local expertise. In January this year, just 7 months after the acquisition of Admincontrol, we expanded the offering of Admincontrol to France, and we have started to onboard the first clients in France. In September 2025, we successfully launched the first integrated ETF market in Europe to address strong demand from large clients and global clients in the Europe sector. This strategic initiative allows us to benefit from the rapid growth of this asset class across the value chain. But Euronext will accelerate the execution of the strategic plan in 2026. In March 2026, just a few weeks from now, we will expand our commodities business with the addition of power future. We already saw market confidence building ahead of the expansion in this new segment with significant volume growth across our trading, especially in intraday trading. Our CSD expansion project is also proceeding extremely well with significant support from clients. In December 2025, we announced partnerships with the leading issuing agents in Belgium, in France and in the Netherlands. These partnerships are absolutely essential to shift issuance and custody to the European CSD solution of Euronext. Thanks to those partnerships, the first issuers have already committed to transfer their issuance to Euronext Securities. And in September 2026, later this year, Euronext Securities will become the CSD of reference for 4 major European markets, France, Italy, Belgium and the Netherlands, both for equities and ETFs. By June 2026, we will offer our clients also a fully integrated, truly European repo solution. We have invested in growth, and we have maintained a very strong financial position and a very strong EBITDA margin. At the end of 2025, our cash position exceeded EUR 1.5 billion. Our leverage ratio was within our target range of 1.5x net debt to EBITDA. We secured refinancing until 2028 with a tender offer and partial early payment of the Euro 2026 bonds and the successful issuance of a EUR 600 million bonds under favorable conditions. In November 2025, we launched a share repurchase program of EUR 250 million, which we completed in January '26. In November 2025, we announced the successful outcome of the voluntary exchange offer for Athex Group, the Hellenic Exchange in Athens. This is a new milestone to proceed towards the consolidation of capital markets in Europe to build the backbone of the Savings and Investments Union for real. The new Board of Directors was appointed in January, and the integration has now truly started. We expect to deliver EUR 12 billion of annual cash synergies by the end of '28 through the migration of Greek trading to Optiq trading platforms and the harmonization of central functions, but also through the expansion of various top line initiatives. Athex Group delivered a very strong '25. We continue to see the dynamic growth in Greece of both Athex as a company and the Greek economy at large, with average daily volume within Athex -- with average daily trading volumes twice larger in January '26 compared to January '25 to 412 million of average daily volumes. And as I was very pleased to announce the opening of the support science and technology centre in Athens from 2026. This is an important initiative similar to the type of ambition we deployed back in the days in Porto when we started with the development of our technology center in Portugal in 2016. This new platform will develop in the upcoming months and years to support the expansion of the Euronext Group. I will now hand over to Giorgio for the business and financial review of the Q4 2025. Giorgio Modica: Thank you, Stéphane, and good morning, everyone. Let's now turn to the strong financial performance on the fourth quarter of 2025. I am now on Slide 9. This slide is an excellent demonstration on how well diversified our business is today. In the fourth quarter of 2025, our volume-related and nonvolume-related revenue both grew double-digits. Total revenue and income in Q4 2025 reached EUR 460.8 million, up 10.8% compared to last year. 60% of our revenue is today nonvolume-related. This part of our revenue covers 157% of underlying operating expenses, excluding D&A. Let's take a closer look at the key drivers behind this performance, beginning with nonvolume-related revenue and income on Slide 10. Starting with Security Services. Revenue was at EUR 83.9 million, marking a solid 8.1% increase compared to the Q4 2024. Custody and settlement revenue reached EUR 76.7 million, a 9.6% increase compared to the fourth quarter of 2024. This strong performance was driven by continued growth in assets under custody, which reached EUR 7.6 trillion in December 2025. This sustained growth was also supported by a resilient settlement activity and double-digit growth of value-added services. Other post trade revenue declined 6.3% compared to the fourth quarter of 2024 to EUR 7.2 million. This follows the migration of Italian markets to a harmonized clearing framework. Net treasury income was down 19.4% compared to Q4 2024. This decrease reflects lower average collateral posted to the CCP, one-off interest adjustments, and the migration of Italian markets for a more efficient clearing framework as of the end of June 2025. Turning to Capital Market and Data Solutions on Slide 11. Revenue reached EUR 178.2 million, reflecting a 15.8% increase compared to Q4 2024. Primary market generated EUR 48.1 million of revenue, up 6.2% compared to the same quarter last year. The performance is supported by dynamic listing activity, Euronext's growing ETF business, and the contribution of Athex. Euronext sustained its leading position for equity listing with 16 new listings in the fourth quarter of 2025. Advanced Data Solution revenue grew to EUR 67 million, up 8.1% compared to the fourth quarter of 2024. This strong performance reflects growing client demand for diversified datasets and increased interest from retail clients. It also reflects the catch-up in audit and compliance fees. I would like to take this opportunity to remind you that our data revenue is mostly coming from the monetization of raw proprietary data and analytics based on those data. Client interaction on Euronext technology creates a unique order book data. This data is unique to Euronext. It is used in real time to make trading decisions and it is time-critical and mandated for regulatory compliance such as best execution, surveillance and reporting. This data cannot be replaced by AI. This is an important message. Corporate and Investor Solutions and Technology Services reported EUR 63 million of revenues -- of underlying revenue in the Q4 2025, up 35.2%. This outstanding performance reflects the integration of Admincontrol, continued expansion of Euronext colocation services, and the contribution of the Athex Group. In this part of our business, we see an increasing interest for clients who seek secure and sovereign European solutions. Moving to our volume-related activities now on Slide 12. Revenue from FICC markets reached EUR 82.6 million, marking a 9% increase compared to Q4 2024. Fixed income trading and clearing grew by 11% to EUR 46.3 million, driven by strong volumes. MTS Cash average daily volume traded was up 26.3% year-on-year to EUR 49.8 billion. MTS repo term adjusted average daily trading volume reached EUR 531.3 billion, up 2.9%. These results are also supported by the expansion of the dealer-to-client segment and international growth. Commodity trading and clearing revenue increased by 12.8% to EUR 28.8 million in the fourth quarter of 2025. This reflects a strong performance of power trading supported by continued double-digit growth, as Stéphane said, in intraday volumes. FX trading revenue reached EUR 7.4 million, down 12.7% compared to the fourth quarter of 2024, reflecting lower volatility and the negative currency impact from the U.S. dollar. Like-for-like at constant currencies, revenue decreased only by 4.7% despite the 9.3% decrease in volumes. Continuing with our volume-related revenue on Slide 13. Equity market revenue saw double-digit growth with 12.8% increase compared to the fourth quarter of 2024, reaching EUR 101.6 million. Cash equity trading and clearing revenue grew by 15.7% compared to the fourth quarter of 2024, reaching EUR 89.4 million. This growth reflects a 15% increase in average daily volume traded on Euronext market to EUR 12 billion. This quarter, Euronext reached average revenue capture on cash trading of 0.52 basis points. Euronext market share on cash equity averaged 64.2%. I would like to highlight that those business KPIs do not include the Athex Group. In addition, this performance is also supported by a EUR 3.7 million contribution from the Athex Group. As Stéphane mentioned, the volumes of the Greek market continue to show a very strong dynamic. Athex Group volume will be included in our monthly statistics starting from next month. Lastly, financial derivative trading and clearing revenue was at EUR 12.3 million, a 5% decline compared to the same quarter last year. This decrease mostly reflects the continued low volatility environment from these asset class. Moving on with the EBITDA bridge on Slide 15. Euronext reported EBITDA for the quarter grew 8.1% to EUR 260.8 million, thanks both to organic and external growth. In particular, in the fourth quarter of 2025, we reported EUR 26.6 million of additional revenue and EUR 12.7 million of additional cost at constant perimeter. In addition, the acquisition of Admincontrol and the Athex Group contributed EUR 19.6 million of additional revenue and EUR 10.9 million of additional costs. I would like to share with you some consideration on the revenues and costs from acquisitions. With respect to revenues, I would like to highlight that the growth of our EBITDA was impacted by EUR 4.4 million of non-underlying revenue from Admincontrol. As a part of the purchase price allocation of Admincontrol finalized during Q4 2025, we adjusted the value of the fair revenue with a noncash and one-off impact in the P&L. This resulted into a reduction of EUR 4.4 million in reported revenue this quarter, and we expect an additional EUR 2.6 million reduction until mid-May 2026. No further impact is expected beyond 12 months after the closing of the acquisition. I would like to stress that these IFRS 3 adjustments do not affect cash or cash flow. With respect to the cost, it is important to note that the cost of the Athex Group for the last 5 weeks of 2025 do not represent the run rate for 2026. While at Admincontrol, we've been investing to scale the business across Europe in line with our acquisition ambitions. In total, non-underlying revenue expenses, excluding D&A accounted for EUR 14.2 million. Euronext adjusted EBITDA for the quarter grew 8.9% to EUR 275 million with an adjusted margin of 59.7%, down 1 point compared to the same quarter last year. Moving to net income on Slide 16. Adjusted net income this quarter reached EUR 179.6 million. We have already commented on EBITDA growth in the previous slide. The result from equity investment increased EUR 0.8 million Euronext received EUR 10.9 million of results from equity investments in the fourth quarter of 2025, reflecting mostly the dividend from Sicovam. Depreciation and amortization increased EUR 4.6 million in the fourth quarter of 2025, a 9.3% more than in the same quarter last year. This increase is mostly explained by the inclusion of the PPA related to Admincontrol from this quarter. Net financing expenses decreased EUR 10.8 million. The variation reflects decreasing interest rate and the completion of the financing program for the 2025 and 2026 maturities. No more refinancing will be needed until the end of the strategic plan in 2027. Income tax increased EUR 1.3 million. This translated into a stable effective tax rate of 26.7% for the quarter compared to 26.6% in the fourth quarter of 2024. Share of non-controlling interest increased to EUR 3.5 million as a result of the strong performance of MTS and Nord Pool. As a result, the reported net income share of the parent company shareholders reached EUR 144.7 million. Moreover, adjusted EPS was at EUR 1.77 per share this quarter compared to EUR 1.66 per share in the same quarter last year. Reported EPS was at EUR 1.42 per share. Now I move to the next slide for the outlook of cost for 2026. In 2025, Euronext reported underlying expenses, excluding D&A in line with the revised guidance of EUR 660 million. This is EUR 10 million less than the initial guidelines of EUR 670 million, thanks to our continued cost discipline. In addition, Admincontrol and Athex contributed for EUR 20 million of operating expenses in 2025, bringing the total underlying expense, excluding D&A, for 2025 to EUR 680 million. In 2026, we expect the total underlying expenses, excluding D&A, to be around EUR 770 million. We expect 2026 underlying expenses, excluding D&A, to be stable at around EUR 720 million compared to the fourth quarter 2025 annualized expenses, excluding the contribution from Athex Group. In addition, we expect around EUR 35 million of operating expenses from the Athex Group, and we plan to invest around EUR 15 million of underlying expenses to deliver strategic growth projects. I continue with cash flow generation, and I move now to Slide 18. In the fourth quarter of 2025, Euronext reported a net cash flow from operating activity of EUR 85.5 million compared to EUR 175 million in the fourth quarter of 2024. This decrease mostly reflects the negative impact of working capital from Euronext clearing and Nord Pool CCP activities in the fourth quarter of 2025. Excluding this impact from working capital, net cash flow from operating activity accounted from -- for 60.3% of EBITDA in the fourth quarter of 2025. In November 2025, we took advantage of the positive condition to anticipate the refinancing until 2028. We successfully issued EUR 600 million new bonds rated A- with a maturity of 3 years. In parallel, we performed a tender offer on our existing EUR 600 million bond maturing in May 2026. As a result of this transaction, only EUR 385.5 million of our existing 2026 bonds remain outstanding and will be redeemed at maturity. Net debt to adjusted EBITDA ratio was at 1.5x at the end of the quarter in the middle of our targeted range. This is despite the completion of the majority of our EUR 250 million share repurchase program still in the fourth quarter of 2025. And with this, I conclude my presentation, and I give the floor back to Stéphane. Stéphane Boujnah: Thank you, Giorgio. As you've seen, we demonstrated in 2025 that we are able to deliver record results and invest in the future of our company. You can see in the presentation of Giorgio that we are delivering and we are going to continue to deliver strong top line growth, strong EBITDA growth, strong EBITDA margin, strong free cash flow generation, strong EPS and dividend distribution, strong balance sheet and strong liquidity position and a strong start of the year, both in volume-related businesses where we can share the information every day with all of you, but also a strong start of the year in the delivery of key projects to transform Euronext. In 2026, we will accelerate the delivery of all of our strategic initiatives, supported by, as I said, very favorable market conditions that you can observe every day and a solid financial position. In January, we have welcomed the world's largest IPO of a defense company in history and all markets, and we do see a real momentum in the aerospace and defense sector. And the first weeks of '26 are very promising, as I said earlier, when it comes to volume-related revenues. Our vision of a united competitive European capital market has become more relevant than ever and is being endorsed now at the European level more than ever before. This is why we welcome the proposals of the European Commission to speed up the creation of a true Savings and Investment Union. For the first time for many years, there is a sort of parallel development of the Euronext corporate project and the European policymaking agenda. And this is all good news for Euronext for the years to come. Thank you for your attention. We are now ready to take your questions. Operator: [Operator Instructions] The first question comes from Michael Werner of UBS. Michael Werner: Congrats on the results. I have 2 questions, please. First, thank you for the updates on the issuer activity within the CSD opportunity. I'm just wondering if you can offer an update as to where you sit with the custodians. I know you guys were signing up and looking to sign up custodians. And I was just wondering if there's any update on progress there or any other kind of guideposts that you can provide. And then, second, just a real quick question. In terms of Athex, I believe you acquired 75% of the business through the tender. With regards to the remaining 25% of the shares, I was just curious as to what your strategy there was. Thank you. Stéphane Boujnah: So I will take the question on the developments of Athex as a listed company. And Pierre Davoust, who is the head of our CSD expansion program will answer the question about the strategy update of the onboarding of custodians. On Athex, we own now close to 76% of the shares in the company. The objective is to take the company private to accelerate the integration. We are pursuing 2 parallel tracks. One track would be to organize a new offer and squeeze or -- and organize a technical squeeze out of minority shareholders when we pass over 90% of the ownership of the company. And the second track is to proceed towards a merger of Athex within the Euronext group. But in both cases, the objective is to delist the company, and we are just looking at the 2 options. As for the custodians, Pierre Davoust will answer your question within the limit of what we can share without disclosing segment numbers. Pierre Davoust: Good morning, and thank you for the question. Let me first highlight the importance of the breakthrough that we announced on issuance. We all know that CSDs are very sticky business, and what's most difficult is to generate first movers. And what we shared with you earlier today is that now we have issuers who have decided to be the first movers and to switch from where they are today to Euronext Securities. So it's a breakthrough in the dynamic of the project because now all other issuers will be able to follow these first movers. And today, we have the first listing on Euronext Amsterdam, where the shares of the new listed company will be issued in Euronext Securities. Let me now move to the custodian side of the market. So where we are with custodians is that we're working now with the largest settlement agents and custodians for them to be ready to offer the model to their clients, starting in September 2026. They are very engaged in building the clients' heavy lifting project that will allow them to load their own clients, whether it's trading firms by themselves [indiscernible] Euronext Securities, starting September 2026, when Euronext Securities will be appointed as the CSD of reference for Euronext Paris, Euronext Amsterdam, Euronext Brussels across equities and ETFs. Operator: The next question comes from Benjamin Goy from Deutsche Bank. Benjamin Goy: Maybe, I mean, you can shed a bit more light on your cost guidance because annualizing Q4 historically was typically too conservative for you. Maybe explain why this is different in '26. And then, Stéphane, I think after your titanic comments on data, I don't ask on M&A here, but given you have that Admincontrol and wondering about more software deals as the multiples come down here, will you have more appetite? Stéphane Boujnah: Okay. I'll take the question on data and Admincontrol. Admincontrol is a SaaS provider. Nothing in what they do is affected by the current noise and impact of the AI debate. Clearly, the core of the debate is around undifferentiated or derivative data distributors or aggregators that are being replaced by AI and through SaaS developers of codes that can be replaced by AI solutions. So we don't see any impact. As I said in an earlier conversation, there is a huge difference -- Giorgio made the point very eloquently, I believe. There is a huge difference between data businesses that do process information that already exists because the fundamental underlying assumption behind any AI is that it processes very efficiently things that already exist. But the data we produce are data that do not exist, and we create them. The data we produce are the output of the matching of a bid and ask. And until the bid and ask are matched on our platform in a very demanding latency environment, these data do not exist, which is very, very, very different from what AI does, which is to process better than human beings things that already exist. So that's why what used to be perceived as raw data or robust or primitive data, it happens to be primary data, which cannot be replaced by AI. So for the moment, we do not see for sure in our data business and for sure in our SaaS business, any of the threats that affect some of our peers. And as you know, in the past, we did not buy data because we just felt that we could not justify the valuations that were in the markets. So on many occasions, we did bid for data assets at the valuation that we felt was reasonable in the surrounding circumstances at that time, and we lost those options because other people had the more bullish view of those assets. Clearly, the valuation multiples of Euronext over the past few years have been lower than the valuation multiples of the other peers -- of peers who were more exposed to the data trend. For years, I was told Euronext is missing the data revolution. Data is the new oil. You are missing the data boat. As I said earlier, all of us are finding out that maybe we missed the data boat, that maybe this data boat was a Titanic boat, that we missed the Titanic boat. So this is what it is again. Companies that were engaged in the data theme over the past few years had valuation multiples higher than Euronext. We are just at the moment of truth where this theme is being dislocated and we are back to the fundamentals of business, which is generating real top line growth, generating real EBITDA, generating real free cash flow generation, generating real balance sheet position, generating real sustained growth, and we are delivering numbers even if we are not part of the data/new oil revolution. On the cost guidance, Giorgio? Giorgio Modica: Yes. I wanted as well, Stéphane, to complement your question on data, especially on the SaaS business. What I wanted to highlight is the following. It is true that AI can help to develop faster SaaS solutions, but our clients are actually searching for something else, something which is safe, secure and is stored in Europe and is completely safe. And this is something that cannot be developed off the shelf by AI. This is absolutely fundamental. So if AI might be an interruption to the lower end of the market, then still there is a very relevant market for the one who really consider valuable their information. The other element that I wanted to add is today, in many of our SaaS software, AI is actually an opportunity because our clients are adding to strengthen the value proposition, adding an AI layer on top of our existing solution. Now moving to cost, I wanted to make a few comments. The first comment is that I believe that you should really take into consideration how this beginning of the year is starting, which is quite exceptional. If I look at the volumes year-to-date, we are 17% up on our largest trading business, which is the equity one, 17%, 1-7. Stéphane mentioned that if we look at the volumes in Greece, we moved from around 220 million, 230 million per day to in excess of 400 million, so we are with a growth of 100%. Our derivative franchise is trading 10% up with respect to the average of last year. And if I look even at our fixed income business, we are above last year average. So when it comes to revenue generation, we are really in a very strong position, and we have already delivered more than 50% of the first quarter. This is something that I believe should be really considered. Then coming to your question, why are we annualizing Q4 costs? First, as you can understand, this is not exactly how it works. Our target comes from a bottom-up assessment and then we try to make it palatable using easier KPIs. So what you need to consider is that the cost base that we have today does not include all the revenue streams. And Stéphane alluded to some of those -- power derivatives, the clearing expansion, and those activities prove that our cost base is largely fixed, but it's not completely and entirely fixed. There are as well some costs coming from sales -- cost of sales that we include among our OpEx that you should consider as well. This is one consideration. The second consideration is that I believe you have not missed that we did not include inflation in the target for 2026. But even in the Euronext countries, we have some inflation that we need to offset through cost discipline. Then I take the opportunity to take a few comments as well on the additional elements for the cost of 2026. So EUR 35 million is today the budget of Athex, and we started working with the team, with Camille, with the rest to clearly deliver and do as much as we can. But as you can understand, those are very early days into the integration. And finally, EUR 15 million what I wanted to highlight is that first, we have a strong financial position, 1.5x net debt to EBITDA. Second, last year, we have delivered to shareholders EUR 700 million in total if you include the 2 share buybacks plus the dividend. And what we're envisaging is to invest EUR 15 million because we see an unprecedented environment to deliver further growth and this represents only a week of cash flow of Euronext. So if this is not the right time to do it, then my question is when is the right time to invest for growth? Our ambition is to maximize EBITDA in 2027. This is the end of the plan, and this is what we are working to do. Operator: The next question comes from Grace Dargan of Barclays. Grace Dargan: So the first one, maybe on medium-term targets. I mean, since the CMD, you've made really good progress. I mean you're highlighting another quarter of double-digit growth. You've obviously got Athex. But you haven't revisited your medium-term targets. So I just really like to hear your thoughts on what you might think are more realistic revenue and EBITDA CAGRs now? And then, secondly, just on a slightly different theme around digitalization and tokenization of markets. I mean, it hasn't been a big feature of your plans. So I just wanted to ask whether your thinking on this theme has evolved or changed at all, and is there a risk of you perhaps being left behind if you don't prioritize investment in this area? Stéphane Boujnah: Okay, thank you for your questions, and let me be very clear. We have announced in November '24 a set of initiatives and -- with a target to deliver by the end of '27 top line growth CAGR of above 5% compared to where the situation was in December '23. We are committed to deliver above 5% CAGR growth on EBITDA by the end of '27 as well. When you look at the numbers that we have achieved so far, you can see that in terms of delivering financial performance, we are already within those targets or close to those targets. So the ambition is to deliver above 5%, and as I said in November '24, above is as important in the phrase as 5%. So there is no cap to the ambition, and we want to deliver significantly above 5% on top line expansion and significantly above 5% on EBITDA expansion, and that's what we are working toward. Now the question as to whether or not there will be a revised guidance is hard to predict true, because the plan is not only financial performance. The financial performance of the company in terms of top line and in terms of EBITDA is a blended financial concept. What matters as much as financial performance is the transformation of the organization and the transformation of the organization to build a machine that will generate resilient growth and resilient profitability requires the delivery of some industrial projects that are heavy-lifting transformation projects. One of them will be delivered in a few weeks' time when we become a player in power derivatives. We were not a player in power derivatives. We were a player in spot electricity markets. We are going to disrupt the market environment and the market structure by becoming a challenger of some incumbents and to -- and by creating a new business. This is an industrial project, which is as important as delivering the financial targets. In June, we'll be a player of repo clearing in asset classes where we were not present before. We will disrupt the market structure and what the other incumbents are doing for years. This is a project which is as important as delivering on the target numbers that were part of the November '24 guidance. In September '26, we are going to deliver the new CSD platform that will offer to custodians, issuers, all the market participants, a solution integrated within Euronext Securities that will be fit for the future and that will be more competitive than the incumbent solutions. This is a very important project, and there are many -- there is a lot of hard work of heavy-lifting operational and commercial work to be done to transform the organization. So for me, the plan will be over, or the plan will deserve to be updated, or guidance will -- time will come for changing the guidance only when, number one, we have delivered significantly above 5% on those 2 metrics, CAGR growth since '23 for top line and CAGR growth since '23 for EBITDA and when we have delivered the transformation of the organization. When it comes to tokenization of assets, you have to distinguish the guidance and the projects that we launch and the internal developments within the company. There are many things we do that we don't share with investors because we believe that the downside of creating expectations is bigger than the flexibility of pivoting, innovating, and inventing new things. So it's not because we don't do growth by press release, it's not because we don't follow themes, or it's not because we don't feed those discussions with you or PowerPoints with buzzwords. It's not because we don't put -- it's not because I don't show up with a black T-shirt with the PowerPoint presentations entitled change of paradigm. It's not because we don't position ourselves in that way that we do not do the hard meticulous work of trying to assess where is the right legitimate role for Euronext. So we are exploring several initiatives in the tokenization world. We are really entering into a phase now where blockchain that exists for almost 15 years and what was for years just a land of solid, profitable use cases for crypto players is now becoming available through the tokenization trend across the financial food chain. And we are going to be part of that, and we are working on it. When will we come out with a plan and when will we create expectation in this domain is related to the moment where we'll be confident enough that we will deliver. And -- because the best asset of Euronext with my lips is credibility. We always, always, always, for the past 10 years, under-promise, over-deliver. For the past 10 years, everyone is telling us, yes, you are too shy, but we always over-deliver. So on tokenization, we will apply the same credibility things. We will not do growth by press release. We will not proclaim intents. We will deliver real projects, we will make them happen for real, and we will make money out of them to address the needs of our clients and the requirements of our shareholders. Operator: The next question comes from Thomas Mills from Jefferies. Thomas Mills: I just had 3 questions, please. Firstly, on revenues, it's clear that volumes are off to a strong start for the year, well ahead of consensus on the cash equity side. Volumes at Athex are positively booming. Giorgio, am I right in thinking consensus does not yet fully reflect the incorporation of Athex? So that could be a positive on the revenue side as people revise estimates. Then on the Savings and Investment Union, Euronext is extremely well-positioned to benefit from this and particularly from a shift to a single supervisor model. I saw last week there's a new sense of urgency around making progress on that by June, and if it doesn't happen on an EU-27 basis, it can proceed via enhanced cooperation with a minimum of 9 states. Stéphane, can we get your take on how you're seeing things as likely to develop there? And then finally, Stéphane, it's clear from recent and not-so-recent interviews that you're itching to get a decent-sized deal done before the end of your tenure. Is there a point though where if that's not forthcoming, you determine that it's time to up the ante on share buybacks? The U.S. capital market exchanges are now the most favored subsector across all of diversified financials. And the fact that your multiple is increasingly lagging makes little sense. I think this is your Euronext's time to shine. So just intrigued to hear your thoughts on that. Stéphane Boujnah: Okay. I will answer your question on Savings and Investment Union for real, your question on basically the share buyback and capital allocation in M&A, and Giorgio will answer your questions on volumes as part of the consensus. On the Savings and Investment Union, things are very simple. For the first time, we have a massive acceleration of the momentum. The Capital Markets Union was invented 10 years ago by Jonathan Hill when he was the U.K. commissioner and when there was a total coherence and consistency between what was good for Europe and what was good for London, which at that time was the largest financial center of the European Union. The U.K. left the European Union. London has become now the largest financial center of the United Kingdom. And the project was relatively a slow-motion project for almost 10 years. With this new Commission, with Mrs. Maria Luis Albuquerque, who is the former Minister of Finance of Portugal, in charge, the level of ambition and the level of speed has changed big time. A very robust paper was produced in December by the Commission, so we have a framework. One of the main ambitions -- and I don't want to go into all the details, but one of the main ambitions, because you mentioned it is the single supervision. There will be a single supervision one way or the other, in one form or the other. That's now quite clear that there is a consensus to believe that the sort of fragmented supervision, fragmented interpretation of rules, similar rules that are different because when the rules are similar, they are different, is not helping to create speed and scale. So there is a consensus to say, okay, for the ones who want to remain very local, let it be. They have the right to remain very local. And so the ones who have a pan-European ambition, they need to have a single rule-of-law-driven, integration-focused, efficiency-driven interface with the right supervisors at the European level. When will it happen? How wide will it be? It's being discussed. And as you rightly pointing out, the sort of ultimate signal that resignation and low and slow motion is not accepted is the clear determination of leaders of countries that, by the way, happen to be large finance makers, like Italy, France, Germany, Spain, Netherlands to get aligned to say, okay, if it is too slow at '27, we'll make it work among the countries that represent most of the finance industry in Europe. So we are extremely excited because it's going to accelerate and simplify the development of Euronext. There will be a transition period. Things are not going to -- we need to produce a lot of bottom-up ideas with partners to bridge the gap between where we are today and where we will be in a few years' time. But this is going to make the life of Euronext and the prospects of growth of Euronext much, much more exciting. When it comes to share buyback and valuations, we are industrialists, we are shopkeepers, we are merchants. And we try to grow the top line to be disciplined in execution of our integration projects, to be disciplined in cost management, not to miss innovation, heavy-lifting transition projects to maximize the EBITDA margin, to create capital, to allocate capital in projects that provide a return for shareholders which is above the WACC of the company. We are not in the business of valuing Euronext vis-a-vis peers or vis-a-vis other sectors or vis-a-vis. This is your job. This is the job of our investors. We just make the company a cash machine and a growing and robust machine and a relevant machine to clients by increasing the competition by proposing new fit-for-the-future solutions. Whether other projects are more profitable than ours, it's not up to us to make a view. Whether data is the new oil, I don't know. I mean, for years I told everyone, we don't want to overpay data assets. And when everyone was telling me you are missing the data revolution, okay. We missed it and we are where we are today. So my job is not to compare the performance of Euronext vis-a-vis the performance of our peers. What I can tell you, though, is very clear. Share buyback is an output of a capital allocation set of decisions. The way we see things is extremely clear. Just like M&A is a tool, it's not an objective. What we want to do is to continue building a resilient, solid, robust, relevant, fit-for-the-future organization with a superior financial performance when it comes to top line expansion and to cost management with the right flexibility to jump on innovative trends and in order to do that to create resilience of the performance of the company and to diversify the top line of the company to allocate capital wherever we believe that we are legitimate owners of assets. Last year was a clinically pure example of what I'm saying. We started to invest in cash to buy Admincontrol to diversify our top line. Then we expanded our infrastructure business with the acquisition of Athex and then we did it in shares. And then we found out that we didn't need the cash available, and we created a share buyback. So share buyback will be an output of the way we will deploy our cash in the course of '26. Over to you, Giorgio, for volumes. Giorgio Modica: Thank you very much, Stéphane. So one thing, it's difficult for me to comment as to whether the consensus is right or wrong or complete. But what I can assure you that we're -- we have been giving you and we will give you all the elements that you need to make sure that the consensus gets right. It's always difficult to do the first consolidation of a new acquisition, but what you have now is the following. We've provided you a Q4 excluding the Athex Group, which means that you can extrapolate line by line what is the contribution of Athex. So you have 5 weeks of Athex consolidation. You have the volumes and the average market cap that you can use as a driver to derive what Q1 would look like. And if I look at where things are today, what I can share with you, as we said, that the volumes are roughly speaking, if you look at the -- or you can do differently; you can take the yearly P&L and make an assumption of a monthly contribution and then adjust. But you have several ways, and we can help you at -- with Judith and Investor Relations to have a fair sense of the level of revenues that is legitimate to anticipate based on those values. The element that is important for you is that, on average, in 2025, Athex traded slightly more than 200 million per day and now we are in excess of 400 million. Last year, on average, the market cap was around EUR 130 billion, and now we are in excess of EUR 150 billion. And then my take is that the consensus does not fully incorporate the full potential of Athex, because this growth that is partially linked as well to the developed market status of the Greek market was very difficult to anticipate. So yes, I believe that there is upside there. Operator: The next question comes from Enrico Bolzoni from JPMorgan. Enrico Bolzoni: Hi, can you hear me? Stéphane Boujnah: Yes, we can. Enrico Bolzoni: I have a couple, please. So one on your CSD ambitions. It's been a few months now that you've clearly been working at this project. Migration is expected to occur later this year. Can you -- would you be able to give us an update in terms of what proportion of, for example, settlement that is currently happening on third-party CSDs you think reasonably to internalize already by the end of the year? And perhaps what is your expectation for 2027 in terms of volumes? And then my second question relates to the market integration package that was released by the European Commission last year -- quite ambitious with various proposals. I would like to hear your thoughts on 2 in particular. So one, the Commission said that basically the tape, so the consolidated tape needs to be improved, so increase the transparency, the amount of information provided. So that's one. And the other one is that they want to interlink basically various CSDs across all the exchanges that are, let's say, systemically important like definitely you are. So I wanted to hear your thoughts on whether you think that these measures have come with the risk of increasing transparency for competition and perhaps being price deflationary. Stéphane Boujnah: So I'll answer your second question and Pierre Davoust will answer your first question on CSD ambitions, bearing in mind that we do not disclose specific operational numbers or specific financial numbers by per segment at this stage. So we'll provide you roughly correct answer to your question. On the Commission's package, among the issues that are being debated and where there is no consensus, there is clearly this consolidated tape review. I mean, clearly, member states are not supporting it for one very simple reason, which is consolidated tape season one is not even finished. It has actually not even started. So the commission or, sorry, ESMA has selected a provider. They are working on building what will be a consolidated tape a European way. So some member states, many member states actually are saying, whoa, whoa, whoa, before we start to undo and reshuffle things. And as we are still at the level of PowerPoint projects, maybe let's see how the market dynamics develop around CTP. So we do not anticipate any progress or any changes on the consolidated tape beyond what is on the table and what has been decided in the previous round. When it comes to CSD's interconnectivity, it's a very broad concept that when you move to making it happen for real, gets to extreme complexity. And that's why as of now, we believe that the prospects of the full, that deciding just universal peace and love interconnectivity is not going to be a trend that will affect our plan at least for the years to come. So maybe Pierre Davoust can be a bit more specific when he answers your question about CSD ambition, but you should not consider that those 2 debatable items are going to have a negative impact on the top line. Actually, we do not see any justification to revise or blend in the guidance in any way whatsoever because of those 2 debates. Pierre Davoust: I will address your question on the European expansion project. So as mentioned by Stéphane, we don't intend to give a precise guidance on the proportion of settlement volumes or the revenues coming from settlement volumes that will come through the project. What I can tell you is that, one, we believe we have a very strong value proposition for market participants both on pricing and on the simplicity of the model that we offer, especially with the perspective of the T+1 migration that will make it even more important for market participants to dispose over a simplified settlement infrastructure. Two, I want to insist on the fact that the progress we've shared with you on issuers is not only a positive development for other issuers to move, but it's making our value proposition towards market participants even more attractive. Every time we move issuers from where they are today to your Euronext Securities, we make the value proposition of Euronext Securities or market participants more attractive because the number of issuers, the market cap of issuers that is directly accessible in Euronext Securities at an even cheaper price is increasing. So you should consider that the breakthrough announced on the issuer migration is making our value proposition stronger on the settlement and on the custody, and this makes us confident that we'll deliver success on the project. Operator: Our next question comes from Hubert Lam from Bank of America. Hubert Lam: I've got 2 questions. Again, sorry, on the question on the CSD expansion, particularly on the custody side. I know it's still early stages, but can you talk about the feedback you've received from custodians in your discussion on the CSD project? Are they open to the project? And how did they view your value proposition? Second question is on M&A. Do you see more M&A opportunities out there either in the volume type of businesses or maybe there's more opportunity now in the non-volume types of businesses, just given where maybe valuations have gone down to? Stéphane Boujnah: So let me take the M&A question, which is a very open-ended question, and Pierre will be more specific on the interactions with custodians and what it means needs for the delivery of the project. As I said, I'm sorry for repeating, but your question was very open-ended. M&A is not an objective, but it is a tool. The objective is growth, performance -- to growth and performance, so profitability and resilient growth and resilient performance. We are going to use M&A as a tool to accelerate the diversification of the top line of the group. And clearly in an environment where interest rates have increased, private equity owners are more under pressure, not all of them, but not everyone is under pressure to exit, but with quarters after quarters, more and more PE players under pressure of their LPs to return capital and to consider exits, we are in a market that is slightly changing. Clearly, things have to be nuanced because very large Godzilla funds are not under pressure and can sustain holding for a while. But we are seeing changes in the market. We are seeing also contamination in the private markets of what is happening in public markets in the field of data. I mean as I said a few years ago, the reason why we didn't buy data assets is that we did not believe that it was the right thing to do to pay 30, 35, 40x earnings for these data assets. Now, some of those assets, not all of them have a strong residual value because they are embedded in the workflow of clients and they have some form of pricing power. And they have -- they are AI-proofed. Others are not. Clearly, in the field of post-trade, in the field of data, in the field of energy, in the field of commodities, in the field of value-added services to our CSD business, we believe that there might be opportunities and partners who would be more willing to consider an exit than before. The reason -- M&A is a consenting other game. For M&A, you need a willing buyer and we are a willing buyer, and we are a buyer with strong cash position, et cetera. But you need also a willing seller. And in parallel to diversification, as I've described it, we have always the fear of consolidation of equity markets in Europe, which is probably the business that is the most profitable within all our businesses because that's where we create more synergies in terms of plugging more volumes to a very powerful and efficient infrastructure. So for the infrastructure part of our business, which is all about volumes, we are open house and whoever wants to connect the local market to a pan-European ambition to fix the problems or the shortfalls of the local market which is subscale when it comes to equity and to be part of a pan-European single integrated liquidity pool, single integrated order book, single integrated technology platform, we are open. Now these deals happen when we have a willing seller. In the case of Greece, we started the year '25 without any clue about the fact that over the summer we'd be discussing with the Greek system the acquisition of Athex. So I do not know when and how other sellers will be available. So we will remain very disciplined. We are not going to burn cash. We will miss more opportunities than others, but we will make much fewer mistakes than others as well because we have this steel rule of not deploying capital if the return on capital employed is not above the WACC of the company between year 3 and 5. And if we find deals that help us to diversify the top line or to grow the infrastructure business within this financial discipline framework, we'll do those deals. And if we don't find, then we'll do a share buyback. That's as simple as that. Pierre Davoust, on the custodians? Pierre Davoust: Yes. So maybe 3 points on the custodians. First, custodians for decades have seen a European CSD landscape which is, A, fragmented, and, B, non-competitive. When we come with a value proposition where we tell them we'll increase the competition in the CSD landscape in Europe and we offer you the ability to overcome the fragmentation and to consolidate, we receive positive feedback. They are telling us eventually someone is doing the job of getting rid of the fragmentation and bringing competition in Europe. Then to be more specific, second point, we've spent hours and hours and hours with all large custodians to make sure that the service we deliver is fit for their needs. And the feedback we get is that the service we will deliver by September 2026 in Euronext Securities matches the needs of large custodians. And this is why -- and that's my third point, this is why now we have some of the largest custodians in the world who are actually doing developments in their platforms, in their operating models, to become able to offer the service to their clients by September. And the reason they do it is that they believe there is value. The proof is in the pudding. They would not invest in their platforms; they will not invest in the change of their operating models to accommodate for a model if they thought that the model would not bring value to them and to their clients. Operator: The next question comes from Andrew Lowe from Citi. Andrew Lowe: You've been very clear that your data cannot be replaced by AI. I was wondering if you could provide a bit more detail on what exactly the sort of mix of data is and how the clients are using it. Who the client end users of this data are, the share of data revenue that's linked to headcount? And then finally, how much of the growth in your data revenues has been driven by pricing versus volume over time? Stéphane Boujnah: Okay. So within the same limitations of not disclosing specific numbers or specific metrics by segment, I'll leave the floor to Nicolas Rivard, who is the head of this business and who will tell you how, why, and more specifically, all that are different and how the pricing positioning is being deployed. Nicolas Rivard: Thank you for your question. So in term of replicability of the data, I think Stéphane answered previously this question. Our data is coming from our technology, our order book and is fundamentally unique. And so if you ask the first question, which is, can the data be replaced by AI building this data, the answer is no. The second point of your question is then who are the users that can be replaced. So you need to understand that we are agnostic of who is using the data. We are agnostic of the tools using the data. We have a commercial model which is basically linked to display usages and non-display usages. Whether the tool is from one vendor or another, for us, is irrelevant, and the commercial model is resilient to this type of usage. And we have made sure of that. Then, to answer a bit more precisely on the users, the users are, you would imagine, all the investment communities, traders, investors, asset managers, so you can name them, retail investors, which is a growing part of our business. With regard to pricing and volume, we don't share the details with regard to -- which I can tell you that both are positively oriented, both in terms of volume and pricing within the framework of which we can share. So now in term of non-real-time versus real-time, what is -- we are growing the business in term of non-real-time. This is an important development for us. It has been very successful over the last years across the group. We did not only the acquisition of -- the expansion of Euronext and diversification, we have been able to build data around those new asset classes. But what you need to understand is that even those new businesses, even those new data projects are built on proprietary data. So it's not as if we take public data and we build analytics on it. We take our own proprietary data and we build analytics on it. So once again, to the comments of Stéphane before, this is data which is not replicable. So in both cases, we are very confident that the data is unique. Maybe one clarification on the price. You can roughly estimate that this is linked to inflation, so if you want to build a model which is a bit more precise, you take inflation as the value. Stéphane Boujnah: [indiscernible] Operator: The next question comes from Arnaud Giblat from BNP Paribas. Arnaud Giblat: I've got 2 quick questions, please. Firstly, on -- back to Euronext Securities. You mentioned that you had some issuers that were moving. As far as I'm aware, it's Euronext and Exor who have moved so far their issuance to Italy. Are there any others? Could you name them, please? And my second question is on the EUR 15 million of underlying expenses to deliver your strategic growth projects in 2026. You made the parallel during your comments that, that was 1 week's worth of cash flow. And that, I mean, confused me a bit. I thought the incremental EUR 15 million of OpEx were there to stay. So it was part of your recurring OpEx base. And the parallel does suggest to me that it's a one-time expense in 2026. So which one is it? Could you clarify that for me, please? And maybe if you could itemize it as well, that'd be interesting, just so I can draw parallels between the OpEx and the prospective revenue growth attached. Stéphane Boujnah: Okay. So Pierre Davoust is going to clarify the Euronext Securities developments and to be sure -- I don't know whether we are authorized by them to mention who they are, but if we are, he will share that with will do. If we are not, he will not. And then that's just wish words, that you don't want to expect a relationship issue. And then Giorgio will clarify the question, your question on cost. Pierre Davoust: So to take your question on the issuers, what we mean when we say that a couple of issuers have decided to move to Euronext Italy, we mean beyond the ones who were already announced, i.e., beyond Euronext, beyond Stellantis, beyond Exor. So this morning we published a press release announcing that a company called SWI Capital listed on Euronext Amsterdam and will issue the shares or has issued the shares in Euronext Securities. So that's one new listing where EUR 1.6 billion market cap, we have 2 issuance of shares happens in Euronext Securities, and that's public. We made the press release this morning. In addition to this company, we have a number of issuers who are already listed today on Euronext Markets who have confirmed to us that they want to move their shares. So we still have to execute the migration, but we have their confirmation, their commitment to move their shares, their existing shares, from where they are today to Euronext Securities. So this is all on top of what was already known, i.e., your Euronext, Stellantis, and Exor. Stéphane Boujnah: Giorgio? Giorgio Modica: Yes, absolutely. And sorry for being potentially misleading. My point was to highlight the fact that it's a very, very small proportion. I could say it's 2% of our cost. One week of cash flow is just to say that it's a very, very small amount related to the possibility to invest. So usually even very, very minor changes in our cost base trigger very detailed question that I believe that do not really serve the purpose. So my intention was not really to define whether it was one-off or recurring was more to say it's a very minor investment. Then with respect whether it's one-off or recurring, this is going to be recurring because we want to build a new capacity to deliver new projects. And this includes the delivery of existing Euronext projects together with the development of new ideas. And then Stéphane named a few. So again, the objective of my comment was to highlight how small and is this pocket for investment that we're giving to ourselves. Stéphane Boujnah: Although, I'm celebrating with you my 40th conversation because we speak for 10 years now 4 times a year, and this is my 40th, 4-0, quarterly result announcement. And for the past 10 years, you have demonstrated a very meticulous interest for Euronext with the consistent level of skepticism. So what I'm trying to say and what Giorgio is trying to say is the following. The focus on cost is absolutely legitimate. Maybe, maybe it makes sense to have this discussion on cost with the starting point, which is a 62.7% EBITDA margin. So we are talking about a very marginal expansion of cost in a year where we invest a lot on things you've seen and on things you don't see, because there was a question from a young lady about the tokenization ambitions. So we are not going to disclose any specific guidance or we are not going to create any specific expectations on tokenization until we believe it's the right time to do it. But believe me, we spend time, money, and on this new technological development. So we do that starting from 62.7% EBITDA margin, which I believe without comparing with our peers -- this is your job to benchmark us against our peers -- is not bad compared to the peers which have a higher valuation multiples. And we are doing those cost developments in an environment where we want to deliver new projects. And compared to our peers, we don't have a bad track record of delivering above expectations that we have created. So that's why it's absolutely fair and legitimate to discuss all cost-based development. And I fully understand that, as it is one of the few guidance we provide on a yearly basis, it's absolutely legitimate to discuss it. I'm just trying to put things in perspective about the fact that it's small and it's on the basis of a company that is extremely profitable and it's growing and that has consistently had an EBITDA expansion above the top line expansion, in both cases, double digit. And actually, for next year -- for last year, we had a single-digit cost base expansion. So things might be different, but when you pile up acquisitions and when you neutralize the impact of acquisitions, when you focus on really what is the real new money spent, you get something which, in my view, is much less problematic than what can be perceived sometimes. Operator: Next question comes from Tobias Lukesch from Kepler Cheuvreux. Tobias Lukesch: Also 2 questions from my side, please. Stéphane, I have to touch on costs again. I mean that was very explicit, thank you. But just to get a feeling a bit, I mean, last year you talked about the investments and also FTE investments. I was just wondering, is that really now more into systems? You mentioned projects like tokenization, but it's like if you were to split costs and what might come, it's like how much would be to really increase revenue generation potentially also via AI applications? How much could be on AI cost-saving side? And also in terms of the spending horizon, I mean, are we talking more about Q1, H1? Or is it more a linear approach you're taking that might even go into next year? And then secondly, on the MTS business, maybe you can just remind us, like, of the geographic split of the assets and revenues you're generating there and how this is, like potentially shifting towards some other countries' contributions you see this year, maybe in the medium term would be very helpful. Stéphane Boujnah: Can you -- sorry, can you repeat your second question because I got lost with the second question. Can you repeat it? Tobias Lukesch: Sure. Stéphane Boujnah: The first one was very clear. Tobias Lukesch: Yes. On the MTS question, the question around did you get geographic split of the assets, of the revenues attached to that and how this is moving into additional countries, additional European countries and how you do see the development in '26 and potentially also going into '27 to further grow that business? Stéphane Boujnah: Okay. So I'll take the question -- both questions. So on MTS, the performance of MTS is impressive. It's a business that has grown extensively, since we acquired it as part of the Borsa Italiana acquisition. Since then, the growth of MTS was a combination of organic growth in relation to the core business of MTS, which is Italian govies, and the development of the efforts we have done together with the MTS management and the Euronext management to pitch and convince the European Union to organize the secondary trading of next-generation EU bonds within MTS. We are expanding businesses in other jurisdictions. We have constructive dialogues with countries that are already part of the MTS program and solutions but not necessarily with the full incentives to deploy them. And each debt management office takes things at the level of priority and gets to the right level of concerns about liquidity of their debt at a different pace. So recently, we have announced that we are becoming a player of a scale with the Greek debt. It was announced a few weeks ago, I think just before Christmas. We are working in the same directions with all the other European players. I'm not in a position to make any announcement. And the discussions are very different. The perception of MTS as a solution is different everywhere. So we remain very active from a marketing point of view. I'm personally involved in many of those discussions because many of those discussions take place both at the level of the debt management office and at the level of the Minister of Finance, and we'll see. We'll announce the outcome when they are positive. For the moment, it's still work in progress. I mean, because countries don't change easily the way they manage liquidity or the other. Talking about where do we spend the money, I'm going to suggest -- to offer you a framework to be roughly correct rather than precisely wrong. So the way you have to look at the cost that we deploy is that if you want to deliver something for real, you need to have in your organization people who know what they are talking about. Then you need to have systems that are flexible, robust, reliable and fit for the future. And then you need to make supervisors neutral about those projects and you need to have clients enthusiastic. To make supervisors neutral and to appease them, that's relatively easy and not extremely expensive. But to make clients enthusiastic about the new solutions that you're offering, you need to talk to them and you need to have salespeople or business development people creating intimacy to anticipate their needs and to manage competitors. So you recruit people for developing new systems and new ideas and inventing new solutions that are not necessarily with skills that are necessarily available someday in your nation. You recruit new people to do sales and to do business development, and in the middle, you build new platforms, which is a combination of technology developments, which may need people, but also with some CapEx. So that's how we deploy the money because at the end of the day, these are the 3 areas. So it all ends up in headcounts, but headcounts of a different nature if they are here to invent new things and fill skill gaps in your organization, headcounts to deploy or develop new technologies, headcounts to sell stuff and to be time to market ahead of the competitors. So I have some difficulties to describe you the Rubik's Cube between these 3 categories of people. Then why I'm using the Rubik's Cube metaphor is that clearly the allocation of these teams is very different if we talk about power trading -- or power derivatives, sorry, if we talk about repo clearing, if we talk about CSD expansion, the allocation [indiscernible] so the breakdown in my view would be very artificial even if I were comfortable disclosing those numbers that are really granular management accounting numbers. Operator: The last question comes from Ian White from Autonomous. Ian White: Two from my side, please. Firstly, we're hearing a lot of political support now for the idea of a single European stock exchange. From your perspective, are you open to innovative structures or partnership to achieve that? Or in your mind, is it simply that the Euronext itself is the consolidator? That's question one. And question two, can you talk a little bit about the competitive outlook in Italian government debt markets? In recent months, 2 competitors have announced settlement offerings in Italian government debt. What makes you sanguine on the risks to your next market share, please? Stéphane Boujnah: So on the second question, I'll give the floor to Giorgio Modica, who is familiar with the recent dynamic of the Italian debt market, and he will provide you his perspective. And maybe also Pierre Davoust can complement because it's more a question on settlement than on the fundamental underlying debt market. So both Giorgio and Pierre can elaborate. On the first question, let me be very crystal clear. Yes, leaders in Europe want to have a single pan-European stock exchange. But the reality of the drivers of these goals are very different. There was a quote from Chancellor Merz in particular that was very vocal and Chancellor Merz, as a person is very knowledgeable when it comes to finance because of his personal background. And clearly, he tried to say -- he tried to highlight, if I may say so the sort of anomaly between the size of the German GDP, the anomaly between the dynamism and the strength of German technology players on the one hand, and the fact that in Germany, the equity market, for all sorts of historical reasons, is relatively small. And the GDP of Germany is about EUR 4.3 trillion approximately, and the total aggregate market capitalization of Frankfurt Exchange is approximately EUR 2 trillion. The Euronext single liquidity pool of the book is about EUR 6.8 trillion. It's more than 3 times larger than the Frankfurt exchange. So Chancellor Merz was addressing a sort of specific situation in Germany and that has again nothing to do with the quality of Deutsche Boerse, which is a great company, an amazing company. The transformation that has been implemented by Theodor Weimer over the past years has been amazing. And this is a great company. But when it comes to equity -- to equity only, it's true that the exchange part of Deutsche Boerse is much, much smaller than it used to be and much, much smaller than the equity part within Euronext. So we do not have the problems within Euronext countries that other countries have, because since we have EUR 12 billion of average daily volumes, and since we have EUR 6.8 trillion of aggregate market capitalizations on Euronext and since we have approximately 25% of the equity market -- of the equities traded on Euronext, we have built a liquid market. And again, it's not a judgmental comment. The valuation multiples of our peers are stronger because they have less equity trading. But there is a tension between policymakers who do want a large equity market and corporates who operate those markets who believe that they create more value by walking away from equity. And that's okay. That's what happened in the U.K. where the London Stock Exchange became a smaller part much more than it used to be of the London Stock Exchange Group, just like the Frankfurt Exchange is a much smaller part of Deutsche Boerse, especially, that's fine. They have bigger, better valuation because of those choices. But it's true that from a policymaker point of view, there is an aspiration to have stronger exchanges as what we've built within Euronext. What does it mean in practice? One thing is clear. Liquidity cannot be fragmented. Liquidity must be consolidated. In any business, in any trading venture, what everyone is looking for is to consolidate liquidity because that's -- with consolidation of liquidity, you have to create the best spreads. Therefore, you create the most value for your clients because you create an environment that produces better prices. So any idea that would be, let's create a new platform out of the blue, which eventually will have no issuers, no investors, no research, is a bad idea. So what makes sense is to consolidate liquidity. I do believe -- I do believe that Euronext is in advance in this ambition because our purpose was to build a consolidated equity market, and I do believe that we have to invent ways to work together to consolidate equity markets around what already exists, rather than to fragment liquidity. So I believe that it's the right ambition, but it's the right ambition with consolidation of liquidity, not fragmentation of liquidity. Pierre? Pierre Davoust: Yes. So I will address the question on the Italian settlement. So indeed, our competitors have made steps to provide direct settlement services on Italian debt. What I want to highlight is, one, this is not new. This is not new. We are the issuer of CSD. Euronext Securities Milan is the issuer CSD for Italian bodies. And Euroclear Bank, Clearstream Banking Luxembourg, all those custodians are all connected to Euronext Securities Milan to perform settlement on Italian ventures. Our competitors are, in fact, our clients for this particular business, and they already do and perform settlement activity. With what they've announced, they are taking an extra step, bringing their clients to directly settle with them, trades cleared at LCH SA. Will that allow them to win more settlements over some of our other clients who are today channeling settlements through Euronext Securities Milan? Maybe. But it's more a stretch for some of our clients than for Euronext Securities Milan itself. Third point, settlement in govies business is a very small part of the business, because a big part of the business is custody, and that stays with us because we're the issuer of CSD. And last point, I think you need to realize that these steps are taking place in a context which is a total range of settlement, which is about creating fixed income value chain. And Euroclear and Clearstream have announced that they will partner with NCH SA, and we are working in Euronext across the value chain with MTS with Euronext Clearing and Euronext Securities to develop and scale a value proposition and fixed income across Europe. And we believe we have very strong selling points for clients to use the Euronext value chain across MTS, Euronext Clearing, and Euronext Securities Milan on Italian bodies and on non-Italian bodies. Operator: There are no more questions at this time. I will now hand the call back to our speakers for their closing remarks. Stéphane Boujnah: Thank you very much for your time. I wish you a very good day. And if you have any questions, please do not hesitate to reach out to the dream team when it comes to Investor Relations with Judith and all our colleagues. Thank you very much. Have a good day.
Operator: Good morning. Chris Doyle: I am Chris Doyle, Vice President of Investor Relations and FP&A. Welcome to our earnings call for 2025. Before we begin this morning's call, I would like to remind you that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to various risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed. Please refer to the page titled “Forward-Looking Information” in our earnings material for more detail. Presentation materials for today's call were posted this morning on the Investors section of Visteon Corporation’s website. You can download them at investors.visteon.com if you have not already done so. Joining us today are Sachin S. Lawande, President and Chief Executive Officer, and Jerome J. Rouquet, Senior Vice President and Chief Financial Officer. We scheduled the call for one hour, and we will open the lines for questions after Sachin’s and Jerome’s prepared remarks. Please limit your participation to one question and one follow-up. Thank you again for joining us. I will now turn the call over to Sachin. Sachin S. Lawande: Thank you, Chris, and good morning, everyone. Overall, we delivered a strong performance in 2025, several industry challenges. Net sales for the year were $3,768 million, coming in largely as we expected at the beginning of the year. From a product perspective, displays will stand out with sales growing approximately 20% year over year, reflecting strong customer demand for larger and advanced displays as well as our execution capabilities. Growth over market was muted in 2025 because of two well understood factors we have discussed throughout the year. First, battery management systems continued to be a headwind as EV demand in the US was softer than originally anticipated. And second, in China, our results were impacted by ongoing shift in market dynamics, including the continued loss of share by global OEMs. These two factors negatively impacted GOM by about seven percentage points. From a profitability standpoint, 2025 was a record year, Adjusted EBITDA reached $492,000,000 or 13.1% of sales, representing the highest level in the company's history. We also generated very strong adjusted free cash flow reflecting disciplined execution and continued focus on cost and capital efficiency. New business activity was another highlight of the year. We delivered a record $7,400,000,000 of new business wins, surpassing our prior peak. Finally, a strong balance sheet and cash generation continue to provide significant flexibility. During the year, we deployed more than $120,000,000 towards M&A and shareholder returns while maintaining a strong net cash position. Turning to page three. Chris Doyle: We Sachin S. Lawande: Before I go deeper into our 2025 results, I want to take a step back and briefly update you on the strategic work underway to build Visteon Corporation’s next phase of growth. While the majority of the benefits will come later, some of these initiatives are expected to show results in 2026. We are diversifying our customer base by expanding our presence with specification automakers, have historically been underrepresented at Visteon. In 2025, we secured another $500,000,000 of new business with Toyota. Building on the momentum from prior year, and launched new products with Toyota, Mahindra, Tata, and Maruti Suzuki We expect revenue from these OEMs to begin growing in 2026 and to ramp steadily over the next several years making them an important driver of our future growth. At the same time, software defined vehicles are now extending into other parts of the broader mobility ecosystem particularly commercial vehicles and two wheelers. While we have served these adjacent markets in the past, the changes driven by this trends are making them significantly more attractive growth opportunities while also helping us diversify our exposure. In 2025, nearly 15% of our new business wins came from two wheeler and commercial vehicle manufacturers. Compared to about 4% of our sales today. A particularly important milestone was winning the largest digital program in the two wheeler industry, approximately $400,000,000 in lifetime revenue with Honda. Launches for this program are scheduled to begin in 2027. Our manufacturing footprint and cost structure have long been a competitive advantage for Visteon, To further strengthen this advantage, we have increased vertical integration in manufacturing, to simplify the supply chain and capture incremental value. In 2025, we accelerated the insourcing of the molding of metal brackets used for large displays using an advanced lightweight textile molding process. We are the only tier one supplier that has this capability in house in the industry. We have also increased our optical bonding capacity in various plants, Finally, we began manufacturing automotive cameras to complement our in house surround vision software enabling a complete end to end solution. More broadly, investing in the business remains a top capital allocation priority. In 2025, we deployed approximately $180,000,000 across CapEx and M&A to support new program launches technology development, and vertical integration initiatives. Advancing our technology portfolio and aligning it closely with market trends is a key element of our strategic priorities. Today, I would like to highlight two emerging product trends in particular, advanced displays based on OLED technology, and AI in the cockpit. In 2025, nearly 50% of our new business wins were for displays, surpassing 2024 record levels and positioning this product for sustainable revenue growth. Importantly, we secured significant OLED display wins with luxury OEMs, in establishing Visteon's leadership in this segment of the auto market. While TFT displays will represent the bulk of the automotive market for displays, OLED displays will have greater share in the luxury vehicles. AI technology is advancing at an extraordinary pace Newer AI models deliver significantly higher intelligence, with far fewer parameters, enabling AI to move from the cloud to device based architectures, an essential shift for automotive applications. We are addressing this opportunity through two complementary offerings. First is our high performance compute hardware which provides the processing headroom and architectural required to run AI workloads in the vehicle. Early in 2025, we secured a win with Cherry in China and more recently, follow on business with Geely as they expand this architecture into the Lincoln co brand building on our Zika win in 2024. These are the most advanced cockpit systems in the industry, and are scheduled to launch in the 2026 reflecting both the pace of innovation our ability to execute alongside our customers. Second is Cognito AI, our in house AI based smart assistant for the cockpit. Over the past year, we expanded Cognito AI to support multimodal AI, combining large language models with vision models, allowing the system to interpret visual information such as road signs and symbols, alongside voice interaction, to deliver more contextual and intelligent driver experiences. Following CES, we have seen growing customer interest and deeper technical collaboration Together, our high performance compute systems and Cognito AI positions Visteon at the forefront of bringing AI into the automotive cockpit. Turning to page four. This slide provides more color on a original sales performance for the year. In the Americas, our sales were impacted by lower customer vehicle production, and by the steep drop in production of EVs at GM and Celanus. DMS sales took a further step down in Q4 after the expiration of the EV tax credit and resulted in a full year headwind of about 8% to our 2025 Americas sales. Offsetting these headwinds were a strong growth in digital clusters, displays, and infotainment programs at Ford, VW, Toyota, and Nissan on vehicles such as the Bronco, Tarok, Camry, and the Murano. With a strong performance in cockpit electronics, we were able to deliver a 5% growth of our market in this region despite the significant reduction in BMS sales. Europe was a standout market for us despite lower customer vehicle production, and the cybersecurity related disruption at JLR, one of our larger customers in the region. Our strong performance was driven by the ramp up of newly launched products, mostly large displays in digital clusters, with Audi, Ford, and Renault delivering an outstanding 11 growth over market in this region. We also benefited from our recently acquired engineering services businesses, which is an important strategic capability we are building starting in Europe. In rest of Asia, our sales were essentially flat as our growth in India and Southeast Asia were offset by declines with some customers in Japan. Our market outperformance in the region was driven by two wheeler programs with Honda, Royal Enfield, and TVS. We also benefited from a recently launched digital cluster program with Mitsubishi that is going on multiple car lines. Finally, as expected, sales in China declined year over year resulting in a significant headwind to our overall growth over market performance. The underperformance in China was largely driven by continued market share loss among global OEMs, and to a lesser extent, by vehicle mix and our product transition at Geely. Encouragingly, we delivered sequential sales growth in the fourth quarter supported by new product launches, including a new cockpit domain controller with Geely. Overall, we delivered 2% growth over market globally despite EV headwinds in the US and the ongoing challenges in China. This performance reflects the strength and diversification our product and customer portfolio, which has enhanced our ability to navigate market volatility. The strategic initiatives outlined earlier are expected to further strengthen the resilience of the business. Turning to page five. Our 2025 operational performance reflected strong execution and global reach, with new products launched on 86 vehicle models across 19 vehicle manufacturers. These launches were well distributed geographically underscoring balanced growth across all major regions. From a product perspective, approximately one third of the launches were for large displays and SmartCore programs, aligned with the industry's accelerating shift towards software defined vehicles. The launch mix also showed increasing momentum in hybrid vehicles, which performed particularly well in 2025 as well as in commercial vehicles and two wheelers. Several key fourth quarter launches are highlighted on this page, In China, we launched a new digital cluster on the refreshed Toyota Corolla and Corolla Cross models. The Corolla has been a long standing success for Toyota in the Chinese market, and the updated versions offered with both ICE and hybrid powertrains introduce enhanced smart features designed to reinforce Toyota's position this highly competitive segment. We also launched a center information display on the Mazda CX-5 SUV a key element of Mazda's return to growth plan for 2026. This launch supports both ICE and hybrid variants of the wake in the China market. In addition, we introduced a SmartCore system with Zeeker, further strengthening our position with Chinese OEMs adopting more advanced corporate architectures. In India, we introduced a fully integrated SmartCore based corporate system on Mahindra’s XUV 7XO featuring three twelve inch displays. The centralized compute system offers state of the art SDV capabilities including surround view, telematics, streaming media, OTA, ADAS visualization, besides advanced infotainment capabilities. Other fourth quarter launches included instrument clusters with Ford in North America, and Tata in India. In summary, we delivered strong operational performance in 2025, launching a high number of new products, aligned with key industry growth drivers, including the shift to software defined vehicles, increasing adoption of large displays, and rising demand for hybrid vehicles that sets us up for continued growth. Turning to page six. We delivered a record $7,400,000,000 of new business wins in 2025, 20% higher than 2024. This performance is particularly impressive given the slower OEM port activity during the year, especially in Europe and the US, as automakers adjusted to shifting market dynamics around electrification, and increased competition from Chinese OEMs. Displays and SmartCore performed exceptionally well, reflecting the continued acceleration of the software defined vehicle trend across the industry. Together, they accounted for approximately three quarters of our total wins. We also continued to build momentum in high performance compute system for the cockpit securing a second customer, Cherry, in China. We also secured significant wins in large format digital clusters to support the growth of ADAS and the increasing need to present safety critical information directly in the driver's line of sight. Turning now to the fourth quarter, we secured approximately $1,700,000,000 of new business wins and finishing the year on a strong note. A key highlight was a center information display program for a large full size ICE pickup in North America. Serving both commercial and retail customers. This is a flagship high volume platform and underscores how OEMs continue to prioritize the cockpit as a critical area of differentiation even in pickups and trucks. We also won an integrated and infotainment system on a high volume global SUV and truck platform for a Japanese OEM, where we displaced an incumbent supplier. This win highlights our ability to deliver integrated cockpit system sets scale and compete effectively on both technology and cost, In China, we secured a driver display program for an entry level sedan with Toyota, and expanded our high performance compute system on the Lincoln co vehicle at Geely. Overall, the breadth of our cockpit product portfolio continues to create meaningful growth opportunities for the company. The product and regional diversity of our new business wins positions us well to navigate industry challenges and drive continued growth. Turning to page seven. Let me close with a look at how we are thinking about 2026 and how it sets the path for our next stage of growth. For 2026, we expect sales to be in the range of 3.6 to five to $3,825,000,000. Starting on the left hand side of the slide, there are two specific headwinds we anticipate to impact 2026 both of which we expect will be largely behind us as we move into 2027. First, US EV production is expected to be lower following the reset in demand. As a result, we are assuming that BMS volume in the Americas will decline by nearly 50% year over year. Second, Ford discontinued several vehicle models in 2025 where we had content, and there are no successful programs for those vehicles. In addition, we expect net pricing, foreign exchange, and other commercial items represent roughly a 2% headwind which is broadly in line with normal pricing dynamics. Jerome will walk through these items in more detail. Offsetting these pressures, the right hand side of the slide highlights the building blocks of our next stage of growth, which begin to take shape in 2026. In China, we expect sales to grow modestly, lower customer vehicle production. We have two high performance compute SmartCore programs launching with domestic Chinese OEMs along with cockpit domain controller and display programs with German OEMs launching in the second half of the year. While we have been conservative in our estimates, there is potential upside if the upper segment of the vehicle market performs well as indicated by January market trends. Our strategic initiatives also begin to contribute in 2026. We have multiple program launches during the year, including several with Toyota, continued growth in India, and further expansion in two wheeler and commercial vehicles. These launches reflect the strategic work we discussed earlier, and help set the foundation for sustainable growth. The final bar on the slide represents the net impact of program activity across the remainder of our customer portfolio. This includes new program launches and production ramps across a broader customer base such as the panoramic display and cluster with Audi, digital clusters on multiple Renault vehicles, and new displays with Nissan and Mercedes that more than offset normal program roll offs. It should be noted that it excludes the specific headwinds and the strategic growth drivers we have already discussed. Separately, the supply of memory chips is tight throughout the industry, and we are working closely with suppliers to mitigate the gaps and develop alternative drop in replacements. While the situation is still evolving, we expect that we will be able to cover customer demand applying similar playbook as with prior semiconductor shortages. Overall, 2026 represents an important year. While sales are impacted by temporary headwinds, the second half of the year begins to reflect the progress we have made in executing our growth strategy. That positions us for a return to top line growth as we move into 2027 and 2028. With that, I will turn the call over to Jerome. Thank you, Sachin. Before getting into the details of the quarter and our outlook, Jerome J. Rouquet: I want to briefly step back and look at our financial performance over the past few years as it provides important context for how we have managed the business through a dynamic environment. Over this period, we have grown sales by more than 800,000,000, or 28%, despite our customer production declining by 13%. We have more than doubled adjusted EBITDA, and extended margins by over 500 basis points. Importantly, this margin progression has been steady and consistent, reflecting disciplined execution across pricing, cost structure, and operational performance. We have also generated strong cash flows. Adjusted free cash flow totaled 1,000,000,000 over this period, with an average conversion rate of approximately 42% driven by EBITDA growth and the sustained focus on working capital discipline and capital efficiency. While not shown on this slide, our return on invested capital remains in the high teens, well above our cost of capital and above our peer group, reflecting the quality of returns we are generating from our investment investments in the business. Taken together, these results demonstrate our ability to expand margins and generate cash even as volumes, mix, and regional dynamics have shifted. Turning to page 10. Sales for the fourth quarter were $948,000,000 coming in above our expectations, primarily driven by customer recoveries related to program shortfalls. In the quarter, sales benefited by 30,000,000 related to a customer claim on an EV program in the US. Of which a portion was used to settle supplier obligations. From a product perspective, displays continue to be the main growth driver year over year, while battery management systems were down following the expiration of the EV tax credit in the US. We also experienced several discrete headwinds in the quarter, including the Novelis fire impacting Ford and the cyber attack at GLR, both of which were known headwinds going into the quarter. There was no impact on the volumes, related to the potential Nexperia supply risk we referenced on the last call. Adjusted EBITDA for the quarter was 110,000,000 representing a margin of 11.6% and came in slightly above the midpoint of our guidance. One time items in the quarter represented a modest headwind as elevated warranty expense and some costs associated with resourcing away from the Nexperia more than offset the EBITDA benefit from the customer claim I mentioned previously. When excluding these onetime items, adjusted EBITDA margins approximately 12.5% on a normalized basis, reflecting continued commercial discipline and underlying cost performance. Adjusted free cash flow was strong, coming in at 77,000,000 supported by robust EBITDA levels and continued discipline in working capital management and capital efficiency. During the quarter, we returned capital to shareholders through $50,000,000 of share repurchases and 7,000,000 through our quarterly dividend, which we initiated in the third quarter. Our net cash position was 472,000,000 at the end of the quarter. Turning to Page 11. For the full year, sales were $3,768,000,000 down $98,000,000 or 3% year over year. Customer production was down 1% for the year, while currency was neutral. Pricing was a headwind of 4%. This includes our normal annual price reductions of 2% which are consistent with historical levels as well as lower customer recoveries. The reduction in recoveries reflects the unwind of prior year semiconductor inflation. Sachin S. Lawande: Revenue, offsetting headwinds from lower BMS volumes, In 2025, we delivered another record year for both our lower sales in China, and normal program roll offs. through disciplined cost execution. adjusted EBITDA dollars and margins. Pricing and lower customer recoveries were offset We delivered end to end product cost improvements including supplier cost reductions and vertical integration initiatives and drove productivity gains across engineering and SG&A. Throughout the year, we actively managed our cost structure in line with market conditions, enabling us to improve margins while continuing to invest in strategic growth initiatives. For the full year, the net impact from favorable one timers including elevated one time commercial recoveries was just under 30,000,000. Excluding these items, normalized adjusted EBITDA margins are in the mid 12% range for the full year. Before moving on to cash flow, I want to highlight our voluntary decision to change the methodology used to calculate our valuation allowance on US deferred tax assets. While there are two methodologies available that are acceptable under US GAAP, the methodology we will be using going forward enhances transparency and reduces complexity while also aligning with industry norms. We have reflected this accounting change in our US GAAP tax expense for the past three years in the 10-K. This change impacts the presentation of US GAAP taxes but does not affect cash taxes or underlying economics of the business. Additional details are included in the 10-Ks. Turning to Page 12. In 2025, we generated $292,000,000 of adjusted free cash flow reflecting continued strength in the underlying earnings profile of the business. Trade working capital was a source of cash for the year, driven by lower sales and inventory reductions. Cash taxes increased year over year due to increased profitability, the timing of tax payments and some level of discrete items. Interest was a net positive as income generated on our cash balances more than offset interest payments on debt. Other changes primarily reflect ongoing pension contributions and timing of cash flows. Capital expenditures were $133,000,000 for the year, or 3.5% of sales, illustrating the capital discipline of the company. This included continued investments in vertical integration as well as the purchase of land in India in the fourth quarter to support growth in this market. Taken together, our conversion ratio from EBITDA to adjusted free cash flow was nearly 60%. In total, we deployed approximately 275,000,000 of capital. This included both organic and inorganic investments, the return of approximately $72,000,000 of cash to shareholders through share repurchases and the initiation of a quarterly dividend. During the fourth quarter, we completed 100,000,000 pension derisking by transferring pension related assets and liabilities to an insurance company. This transaction had a noncash impact to net income of negative 7,000,000. Also in the fourth quarter, S&P upgraded Visteon to BA1, reflecting expanded margins strong free cash flow generation, a conservative financial policy, and sustainable demand for advanced cockpit technologies. Turning to page 13. Turning to our 2026 outlook. Starting with sales, we expect revenue in the range of $3,625,000,000 to 3,825,000,000.000 As Sachin discussed, we begin to see the benefits of our strategic growth initiatives in 2026 with more meaningful acceleration into 2027 and beyond laying the foundation for sustainable annual top line growth beginning in 2027. At the same time, 2026 includes several discrete headwinds, including lower BMS sales and the discontinuations of certain programs at Ford, with both items largely behind us as we go into 2027. Our outlook is primarily based on the January S&P forecast. Customer weighted production is expected to be down in the low single digits. Against this backdrop, we expect Visteon growth of a market to be in the low single digits, This is below our long term expectations due to the discrete headwinds in 2026 that positions us for stronger growth going forward as those headwinds roll off and our strategic initiatives accelerate. Before moving to EBITDA, let me provide some additional perspective on the commercial dynamics embedded in our outlook. Recognizing that this remains a dynamic area. There are several items that reduce sales year over year including normal annual pricing to customers, lower customer recoveries related to semiconductor and supply chain disruptions from prior years, as well as the non recurrence of certain commercial recoveries recognized in 2025. Partially offsetting these declines, we expect recoveries related to more recent semiconductor dynamics, including memory related costs. We also anticipate a modest tailwind from currency. On a net basis, we expect these various items items to represent approximately a 2% headwind to sales year over year. Adjusted EBITDA is expected to be between 455 to 495,000,000. At the midpoint of guidance, margins are 12.8%. As we have highlighted previously, our 2025 results included a net benefit of just under 30,000,000 above our normal run rate. Of that amount, we expect about only 10,000,000 to repeat in 2026, resulting in a 20,000,000 year over year headwind. Excluding this factor, we expect adjusted EBITDA dollars to be roughly flat year over year despite lower sales reflecting the underlying strength of the business and our continued operational focus. Compared to normalized margins of 12.5% in 2025, our guidance incorporates a 30 basis point improvement. Included in our guidance are ongoing benefits from cost discipline, emerging savings from vertical integration, and product costing initiatives. These are offset by increased investments in the business to support product development, including in AI and vertical integration. This outlook also incorporates an increase in memory cost with a year over year cost increase, representing approximately 2% of sales. We are in active discussions with our customers to pass along these costs and we have incorporated in our guidance a modest amount of potential timing mismatch between cost incurred and customer recoveries. These discussions are ongoing, and given their sensitive nature, we will not be providing additional details at this time. Turning to cash flow, we expect adjusted free cash flow of approximately $170,000,000 to $210,000,000 representing a conversion rate of approximately 40% at the midpoint. We currently anticipate working capital will be a slight use of cash as we increase inventory levels. Capital expenditures are expected to be approximately $150,000,000 or about 4% of sales, which includes the build out of a second manufacturing facility in India, as well as support of upcoming program launches, and continued investments in vertical integration. Overall, our 26 guidance reflects a business executing with discipline, maintaining margin expansion on a normalized basis, generating strong cash flow, and continuing to invest in the growth initiatives that support the next phase of our top line growth. As usual, we are not providing formal quarterly guidance, but I did want to share some directional insight before moving on. We expect first quarter sales to be the lowest of the year reflecting the industry production profile for 2026. Continued depressed BMS volumes and launches that are weighted towards the back half of the year. From a profitability standpoint, Q1 EBITDA will be negatively impacted by lower volumes as well as higher memory cost. Recognizing that not all customer recoveries agreements will be finalized by the end of the first quarter. Turning to page 14. In 2026, we expect to have more than half $1,000,000,000 of cash available to deploy. This amount represents a combination of cash on hand and cash that we expect to generate during the year. We will continue to be guided by the same disciplined capital allocation framework, prioritizing investment in the business while returning excess capital to shareholders. Starting with investments in the business, this remains our top priority. As discussed earlier, we expect to allocate approximately 150,000,000 to capital expenditures in 2026 positioning the business for future growth and supporting vertical integration initiatives. In addition to CapEx, we continue to see meaningful opportunities for M&A Our focus remains on expanding capabilities through engineering services, while also selectively evaluating opportunities to enhance our technology portfolio. While the ultimate level of investment will depend on how the transactions progress during the year, M&A deployment could be up to two times our annual CapEx investment levels. As always, we will remain disciplined and prioritize strategic fit and financial returns. Even after funding these growth investments, we expect to maintain significant capacity to return capital to shareholders. First, we are increasing our quarterly dividend to $0.375 per share, representing an increase of 36%. This reflects our confidence in the durability of our cash flow and equates to approximately 40,000,000 on an annual basis. In addition, we intend to remain active in share repurchases. At a minimum, we will offset dilution with the intent to be more opportunistic depending on market conditions and the pace of M&A activity. At the end of 2025, we had 75,000,000 remaining under our existing authorization, and we expect to revisit this level as the year progresses. To round out the cash flow picture, we have a modest amortization requirement on our debt facility, representing 18,000,000 of cash outflow in 2026. Taken together, our capital allocation plan for 2026 reflects a balanced and flexible approach continuing to invest in growth, returning capital to shareholders, and maintaining balance sheet strength as the business continues to transition and scale. Turning to page 15. Before we conclude, want to highlight our upcoming investor day, which will be held on June 25 in New York City. We look forward to sharing more detail on our long term outlook including how the strategic initiatives we have discussed today translate into growth and value creation over the coming years. We hope many of you will be able to join us. Thank you for your time today, I would like now to open the call for your questions. Operator: At this time, if you would like to ask an audio question, please press star then the number one on your telephone keypad. Again, that is star and the number one. Your first question is from the line of Luke L. Junk with Baird. Good morning. Thanks for taking my questions. Maybe Sachin S. Lawande: just to start with, Sachin, hoping we could just Jerome J. Rouquet: dig into the DRAM exposure a little bit more relative to the product portfolio, maybe just to scale that 2% impact to guidance both across portfolio and then kind of what that represents from a cost standpoint? And then maybe qualitatively, if you could also just speak to supply the supplier side of this and your ability to get in front of this, and I am just curious from a timing standpoint, you know, were you working on this relative relatively earlier versus when this became more known in financial markets? Sachin S. Lawande: Sure. Sure. So in in terms of Sachin S. Lawande: the use of memory, look, as you can imagine, we use memory chips in virtually all of our products. And we use different types of memories. You know, they they have DRAM for sure, but different types of DRAMs, but also flash memory. Now the the memory supply and and and that landscape looks different than the the logic chips that that we have had issues with in in the past. As you probably know, almost 90 plus percent of the market is is made up of essentially three suppliers, including Samsung, Kynix, and and Micron. And we we work with with all of them, and and we have a long standing relationship with with these suppliers and and a very strategic one. We we started to work with them towards the end of of last year As you might know, the the memory industry typically plans for a about a 10% growth in demand each year. But towards the second half, I would say more in the third quarter of last year, the demand signals from the rest of the industry, not automotive, but consumer electronics, data centers, etcetera, indicated that the demand in 2026 was going to be closer to about 50% and not the traditional 10% or so, thereabouts that industry was accustomed to. So the the main fallout of all of that is that the supply is gonna be tight everybody in all industries. Right? And automotive will also have the same situation. So what what we are doing in response to that and we started on this journey last year itself and I believe earlier than than many the industry, we started to work with our suppliers to secure the capacity for the full year. So that is something that, we have already made a lot of progress with. And we should be I would say, in a better position than most to be able to get those capacity reservations secured. Now even with that, where we see gaps, we are developing alternate pin to pin compatible drop in replacements. Similar to what we did with the logic chip shortages. And also evaluating new suppliers There are some new suppliers not many, but some that are emerging mostly in China. And we started engaging with them late last year and have already secured some supply from from these emerging suppliers. So net net, if I look at our full year demand for this year, should largely be able to cover customer demand There may be some timing impacts that we have to manage. Even that, I think as we work with our suppliers, we should be able to largely mitigate. Now on the cost side, as as Jerome mentioned, we have a increase in cost in this this memory chips on account of our, you know, historical relationship with the suppliers and the early engagement that we have, I believe we will be in a in a good position to have a a a good cost despite the increase, which we will expect to recover from our customers similar to, you know, the last semiconductor prices. So now to to to answer your other question about specifically how much is it, we we would rather not provide any breakdown of our materials mainly for competitive reasons. The increase that as Jerome mentioned represents about two of our sales probably as much as we can share for now. Luke L. Junk: Got it. I really appreciate color there, Sachin. For my follow-up, just want to dig in to the kind of the weighting of revenue this year. So very much appreciate the comment about first quarter sales and the impacts there. Just want to think about weighting the first half versus the second half this year as well, given the impacts from Ford and BMS are seem pretty immediate stepping into the year versus your launch cadence picking up into the back half? And then maybe if we could just walk at a high level into 2027 as well as some of these transient have not seemed like they should drop out and that launch cadence maybe should more fully read through. Thank you. Jerome J. Rouquet: Hey. Good morning, Luke. I will I will start, and then I will hand over to Sachin for '27. So, for '26, we have a as we had anticipated, we have a second half, which is going to be slightly better. Than the first half of the year, and that is really, due to the, launches that we have, that are, more back loaded. Towards the the end of the year. And and we have got that in China, We have got that with our key strategic initiatives. Including Toyota, that will really ramp up in Q3 and in some cases for Toyota in Q4. So overall, we have got about a 3% improvement in the second half versus the first half. When IHS was, I I think, close to 2%. So we are doing slightly better than than than the market in the in the second half versus the first half. Related to Q1, we do think that Q1 will be, the lowest, quarter of the year. Jerome J. Rouquet: On on Jerome J. Rouquet: the back of two things. The first one is the fact that IHS as well is guiding towards a decline year over year of about three to 4%. So we will have this reflected, in our sales. And we do see as well at this point pretty low level of BMS sales as we are going into, into the the the first quarter. So, that will obviously impact our Q1 sales, which will be, as I said, the lowest of the the year. Sachin S. Lawande: Thanks. Thanks, Jerome. Before I get into the 2027 topic, I would like to just briefly touch upon our performance in 2025 and our our two for '26. Because I think the dynamics there have a significant bearing on how we think about 2027. and the other was BMS. Combined, So if you think about 2025, we have we had two major headwinds. One was China, represented about seven percentage points of headwinds And we were able to offset that through new product launches, mainly in North America and Europe, twenty five. those And if you were to do exclude headwinds and the one timers, that represents about seven percentage points of growth over market. Now when you look at 2026, especially in the walk that we have provided for our sales, we have BMS again as a headwind. Perhaps we might be a little more conservative than the the for sure, S&P four's outlook. But nonetheless, we have BMS, and we have the discontinued vehicles at four. That we mentioned earlier. But China is no longer headwind. Now offsetting these are all two new product launches mainly in Europe and in Asia, particularly in China, However, most of the high value launches are in the 2026 to about five percentage points. Now as we go into 2027, although we will not provide specific financial targets on this call here today, By the way, we will do that in much fulsome treatment in our investor day in in June. What I can say is that we expect a top line sales growth since the headwinds both China and BMS, would largely be behind us. Well as this discontinued vehicles topic. And the growth that we will have from the new product launches, especially high performance compute systems in China, as well as displays and other products and the products we are making in the adjacent markets and our strategic initiatives should bring us back to our mid to high single digit growth over market in 2027 and and drive top line growth. So I hope that gives a much sort of broader context on current performance as well as what we expect in 2027. Luke L. Junk: Yep. Thank you very much. I will leave it there. Operator: Thank you. Your next question is from the line of Shreyas Patil with Wolfe Capital. Shreyas Patil: Thanks a lot for taking my question. Maybe just a quick clarification on your Shreyas Patil: commentary around memory. So just is your memory exposure equivalent to 2% of revenues? Or are you expecting an increase in memory costs? That is equal to 2%? Of of sales. Yeah. What what Sachin S. Lawande: what we have mentioned, the 2% is specifically regarding the increase. In the cost that we anticipate this year. Shreyas Patil: Okay. Thank you. And then maybe, you know, looking at the bridge the revenue bridge that you provided earlier, you are pointing to your traditional customers driving about two points of top line Shreyas Patil: line Shreyas Patil: line growth. That is about $75,000,000 Just curious what you are seeing in terms of launch activity broadly this year amongst those OEMs from some of the other suppliers that have reported, it does seem like '26 is a somewhat lighter year. For launch activity, particularly in North America and Europe. Is that similar to what you are seeing? And would that be a contributing positive if you are thinking about 2027? Sachin S. Lawande: Yeah. So so, Shreyas, I think we are seeing a little bit of a different perspective than some of our other peers perhaps. We have a significant amount of launch activity in Europe related to displays As you might remember, we have fun a high level of of displaced business A lot of it has come from Europe, in the past couple of years. And that is turning into revenue especially in the 20 launches in China. And so what has happened in China is after sort of a reset with with many of our international OEMs, not just the domestic OEMs. They have been launching new vehicles to compete in that you know, highly competitive market. And this seems to be the year, again, second half, this seems to be the year that they are introducing new vehicles And I think the timing also might actually work out very well if you have seen even the early numbers from from January in China, the market seems to be tilting in favor of more higher priced vehicles with all of the changes with respect to policies and pricing, etcetera, that have happened in that market. And we think, you know, that might actually help our mobile customers, but also our our our domestic customers like Geely. They have some high performance compute launches that we discussed earlier. With domestic OEMs, and they go into the more premium flagship vehicle models. So I I we do see a very healthy launch activity this year. Shreyas Patil: And and Sachin S. Lawande: me, that that is really signals again this STV trend now. Complemented by this AI trend. Starting to really drive some momentum. Shreyas Patil: Okay. Great. And maybe just one last one on the M&A pipeline you mentioned, I think it is about $300,000,000 or so. Maybe you could just unpack the how the what is kind of in that in that pipeline are are the the size of the companies that you are looking at And maybe the you know, how should we think about the the timeline for when you could you could execute on those deals? Thank you. Jerome J. Rouquet: Yeah. Let let me start, and I will hand over to Sachin as well. So we have not really given a number. The the chart may indicate that it could be as as much as twice the the amount of CapEx we have for '26. But we will see how it goes. We are quite ambitious in 2026 given the pipeline that we have And the criterias that we have got in mind for M&A remain the same as the ones that we have talked about in the past. The first one is that we want to have M&A that are bolt on by design, and that by that, we mean we want to look at fairly small acquisitions so that we can tuck them in our existing business pretty quickly. The the second criteria is that we want to have technology slash capability accretive. To what we are doing today, augmenting essentially the platform that we have from a software standpoint. And that includes as well engineering services. And as you know, we have already done two acquisitions and we are, considering as well further And then the third criteria that we have always considered as well is the fact that we want to have as much as possible these businesses being margin accretive from day one. So that we do not get a return that is going to be, in five or or even ten years. So kind of the three criterias that we have selected, in the past and that we are still continuing to apply as we look at, this pipeline of acquisition. 2026. And maybe just to add to what Jerome has said, you know, without Sachin S. Lawande: necessarily getting into any specifics about sizes of the companies, etcetera, that we are looking at. One thing to keep in mind, Shreyas, is if you look at our journey, of integrating more and more of the ECUs, we have gone from integrating the cluster and the IBI into CDC, not the HPC integrates even more ECUs including body control, gateways, plus additional rear seat entertainment, passenger side, entertainment as well. And now with the regulations in ADAS, in particular, in in Europe, is also expected to follow-up in in in China. We see that ADAS is gonna be more of a table stakes almost features and and something that we can look forward to in in integration in in a one of our future products. So we continue to look for opportunities where we can bring in those technology elements in house that can can allow us to take cost out and integrate more of the content in in our systems. So that should give you some sense of the kind of the companies we are looking at, none of which are a big transactions. As as Jerome mentioned, we prefer to focus on technology capabilities so that we can then integrate it in a better manner. With in our systems. Shreyas Patil: Okay. Thanks. Operator: Your next question is from the line Lupitae Macaulay with TD Cowen. Lupitae Macaulay: Great. Thanks. Good morning, everyone. Lupitae Macaulay: A first question, just going back to Slide seven and the revenue bridge. On the 2% headwinds from discontinued vehicles, I am curious whether you have content in some of the competing vehicles to to the the vehicles that are being discontinued and and whether it is an assumption for some pickup of revenue there? Or are you kind of more assuming that, that headwind does not get recovered or recouped by other competing vehicles might have content on. Yeah. I think yes. The answer is yes. We do we have Sachin S. Lawande: content in that sort of a very broad cross section of vehicles at that OEM. But at least as yet, we are not necessarily seeing the benefit Now that does not mean it may not happen. It could. Still early in the year. And we do not have full visibility into the OEM's plans. Given the the fairly significant you know, volume of vehicles that those represented, we do expect that they would try to fill that hole with some other vehicles, which in if that were to happen, then we would, I guess, benefit from it. Operator: So Sachin S. Lawande: we have we are not seeing that as yet, we have not included that in our outlook. If it does happen, then it might provide some tailwind. Jerome J. Rouquet: And I would add, Sachin, that we have used broadly IHS, in fact, for Jerome J. Rouquet: this discontinued vehicle, but as well just for overall Ford volume going into '26. Lupitae Macaulay: That is very, very helpful. And just as a second question, Lupitae Macaulay: strong bookings in 2025, that is great to see. Sachin, I was hoping Lupitae Macaulay: you had a target to share for bookings in 2026. And then if you kind of look at the last few years average booking, it does seem to support maybe a mid to high single digit revenue growth algorithm for the company in the medium term. I I think I heard you say, Sachin, to an earlier question that you may even Jerome J. Rouquet: get to that level as early as next year. Just hoping you kind of talk a little bit about Lupitae Macaulay: the implications of bookings for the company's growth in the medium term. Sachin S. Lawande: Yeah. Very good question. And if you think about, you know, the 2025 performance in particular, the things I would like to highlight. One are displays, which we did really well across the board, if you look at our displacements, they have were spread over Europe, North America, and and also Asia. And and those programs typically have a shorter lead time in terms of development and launch. Than the cochlear electronics programs. Those fundamentally with more software it takes longer to launch those those systems. So that is one factor. The other thing is that about 15% of our wins were on you know, two wheelers and commercial vehicles. And two wheelers in particular also have fairly short time to to to market. So that that is really the reason where why we feel that the infection of, you know, these wins turning into revenue and contributing to our growth of our market. Will be fairly earlier than than traditional, you know, and and or historical sort of averages in terms of time. And in terms of just outlook, for for this year, in particular, for new business wins, the pipeline of of new opportunities is pretty robust. I am I am very happy to see that given this environment where a lot of the customers that we have, especially outside of China, still in some sort of form or the other in terms of trying to get their portfolio adjusted. We still see a very robust pipeline. Again, thereby displaced, but also more for the domain controllers. And and a a emerge opportunity, which is very exciting. Is this AI dedicated ECUs for AI to bring AI into cockpits without necessarily re architecting the whole vehicle. This is starting in China. And and we are very excited and optimistic about it. And has the potential to come across, you know, into other regions fairly quickly. Lupitae Macaulay: That is very helpful. Thank you. Operator: Your next question is from the line of Tom Narayan with RBC Capital Markets. Tanaseo: Hi. This is Tanaseo on for Tom. Thanks taking the question. So on the last call, I think you guys mentioned a roughly 20% volume reduction for BMS in 2026. And it looks like that number has since jumped up to 50% So it sounds like you guys are still anticipating BMS to show some recovery in 2027. But is there anything you can give us on your longer term planning around BMS? And where you think it could get up to maybe as a percentage of revenue? Sachin S. Lawande: Absolutely. So let let me give you this the way we think about BMS. So especially in the US, first of all, I would start by saying that it is very difficult to forecast what EVs will do this year in particular first full year without all the incentives, But we can look at Q4 for as as one data point, not necessarily sufficient, but at least that is what we have in front of us. So even with the pull ahead that occurred, due to the expiry of the the incentive, we we saw a a Sachin S. Lawande: market Sachin S. Lawande: Penetration of about just over 5% of EVs in in the US in Q4. Now as as we think about 2026, we do believe it will start very soft in the sense that Q1 is probably going to be the low point of EV sales in in the US for continuing from the effects of the pull ahead in in last last year. And then Q2 onwards slowly recover. Now the question is to what level? Now what we have assumed in our outlook is very conservative number. We have assumed a roughly 3% penetration of EVs with our customers. I mentioned Q4 was over 5%. For the full year, it was over seven So it it feels like our 3% is fairly conservative. S&P has a 30% lower 2026 than 2025. And and if you look at you know, our numbers, it is closer to 50% drop year over year. So there could be some some upside if if if we are found to be too conservative here, but given everything, we felt it would be prudent to be a little bit more on the conservative side. Now if you about 2027 and going forward, the improvements that we see in in the cost of EVs and and continuing focus on those wire customers, in particular GM, we believe that the market should recover modestly from the lows of 2026 We will we will we will wait for a little longer to exactly what that could look like, but we believe it could be a very modest improvement and and a steady growth from there. Tanaseo: Okay. Gotcha. Thank you. I guess on a on a slightly higher level, it looks like you guys have pretty strong growth over market in Europe in 2025. I was wondering if you could give us a sense of whether you see any opportunities to capture additional business wins, especially from the Chinese domestic export into Europe? Sachin S. Lawande: Yes. And and we we do see a lot of positives from the Chinese OEMs activity in Europe not just with them directly, but also with European OEMs who are responding to the competitive threat by essentially uplifting the capabilities in the cockpits. Now we also have been able to win business in Europe, the Chinese OEMs, and we expect to able to do more of that as as we go forward. So to us, you know, Europe represents a a a interesting data point where the growth of of the Chinese OEMs sales actually helps the business in terms of driving more content in the cockpit. So we expect to see the dynamic not just limited to Europe, but in other regions there you see higher activity of of the China OEMs. Shreyas Patil: And to your point, we we do anticipate Europe to also Sachin S. Lawande: contribute more in terms of new business opportunities this year as well. Tanaseo: Okay. Great. Thank you. Operator: Your next question is from Joe Spak with UBS. Thanks. Joe Spak: I guess I wanted to go back to better understand some of the Joe Spak: memory commentary. And I know you are going to be you are you are talking about being limited here in what you are going to say. But in the overall bridge, you are talking about recoveries, pricing, FX being a 2% year over year headwind. Now you have the old recoveries, right, that is that is you know, probably lower year over year as you sort of indicated from the original semiconductor challenges, Price is sort of minus two. FX looks like it is probably a positive. So I I guess to get to that overall minus two, and I and if I take in the context your you know, the increase is about 2% of sales. It looks like you are assuming very little in terms of actual recoveries on memory. Is that is that about right? And and maybe just a comment on you know, sourcing here because it sounds like you are doing a lot of work I know a lot of the automakers are doing work as well, and there is some directed by. So you know, who who is really responsible for for for what? Yeah. Let me take the first question. Jerome J. Rouquet: Joe, good morning. So the buckets that you described are the right ones. We have got in this 2% annual pricing We have got, what I would call the legacy or the reduction in recoveries related to the prior chip shortage that are coming down. And then we have got on a positive side, recoveries for the the new memory tensions that are going on as well as some modest, effects. Maybe just to be very clear on the memory, we are we have baked in our assumptions that we will be recovering the majority of of these costs And, when I said the majority is that we are fully intending to recover everything, but there will be some level of timing that we have accounted for between the cost incurred and the the customer recoveries. And we will, as I mentioned, we will see that Q1 and that is probably going to be as well a shearing effect all the way to till the end of the year on that topic. But these are the four full buckets, and we are absolutely intending to recover the memory cost increases through our customer Sachin S. Lawande: And to your other question, Joe, you know, the OEMs activities are more related to understanding the situation and engaging with the suppliers. I do not believe that that they have direct sourcing, at least not with us. So in in our case, we we do virtually all of the sourcing of memories directly ourselves. Joe Spak: Okay. Joe Spak: But I I guess on if if the guidance also sort of assumes that you know, you you are re re recovering it all just with some timing mismatches. Then it mean, it is also you know, rough numbers. Is that fair to sort of say that is like a 20 to 30 basis point hit to your margins this year? Jerome J. Rouquet: We we have not given any specific. It is embedded in this 2%, so I would take that 2% as kind of the the essential piece of the work As I said, in fact, if you decompose maybe these buckets, if you think about it, annual pricing as well as say, legacy semiconductor recoveries will be fully offset by the efficiencies that we are generating in the business. Will be offsetting the memory cost increases to the majority will have some level of leakage, but nothing major. And then you have in that bucket as well, as I said, the the effects. Which is a pretty small number. Overall, when when we look at our business, and that is pretty valid in fact for the last two years, and it will be still valid as well for twenty six. The dilution of, recoveries has an impact of about 0.5 percentage points on the on on recoveries. So on on EBITDA. Sorry. So that that is kind of the the dilution that you see, over the years. Coming from that buck. Good. Okay. Maybe just one quick one just to to follow-up on the Joe Spak: the capital deployment and the M&A. And I know those are gradiated bars, you said the M&A could be you know, twice the CapEx or $300,000,000 or if I look at M&A to buyback, that is like a two to one ratio And if you add up, you know, CapEx, the the dividend, the debt, like, it looks like there is about you know, 300,000,000 total left there. So I guess I am just I am just wondering, like, if Operator: if Joe Spak: and I know there is ranges here, but if the M&A outlay goes up to that 300,000,000, does that mean there there is little left for for buyback? Jerome J. Rouquet: Yeah. These the slide shows, in fact, that buyback would be in the $100 plus million. Right. Our priority is going to be really focusing on, obviously, investing in the in the business with the CapEx. As well as focusing on these acquisitions. Obviously, the excess is going to go to dividend and as well share buybacks, but we do want to remain opportunistic in terms of the buyback. So that is really the key point as well. And we will, we will update you as we go, throughout the year. Operator: Okay. Joe Spak: Thank you. Shreyas Patil: Thank you. Jerome J. Rouquet: Thank you. This concludes our earnings call for the fourth quarter. Lupitae Macaulay: And full year of 2025. Jerome J. Rouquet: Thank you for participating in today's call and your ongoing interest in Visteon. Lupitae Macaulay: Thank you. Operator: This concludes Visteon Corporation’s fourth quarter 2025 result earnings call. 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 Triple Flag Precious Metals Corp. Fourth Quarter 2025 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 1 on your telephone keypad. If you would like to withdraw your question, press star followed by the number 1 again. I would now like to turn the conference over to Sheldon Vanderkooy, CEO. You may begin. Sheldon Vanderkooy: Thank you, Desiree. Sheldon Vanderkooy: Good morning, everyone, and thank you for joining us to discuss Triple Flag Precious Metals Corp.’s fourth quarter and full-year 2025 results. Today, I am joined by our Chief Financial Officer, Eban Bari, and Chief Operating Officer, James Dendle. Triple Flag Precious Metals Corp. had an outstanding year in 2025 and is extremely well positioned in 2026. We finished the year strong in Q4, resulting in record performance for full-year 2025. We achieved record production of 113,000 GEOs. This was in the upper half of our guidance range and is the ninth consecutive year-over-year increase. Higher production and higher gold prices translated into record cash flow. Cash flow per share was $1.54 per share, a 45% increase from 2024. The model is working as it is intended, directly translating higher gold prices into rising cash flow per share. We continue to benefit from rising prices in 2026. In Q4, the average gold price was $4,135 an ounce, well below current spot prices of just under $5,000 per ounce. Moving ahead to 2026, our guidance range is 95,000 to 105,000 GEOs, which reflects the well understood mine sequencing at Northparks. It also reflects the planned step-down in the Cerro Lindo stream rate following a successful delivery of 19,500,000 ounces of silver since we acquired the stream in 2016. That was Triple Flag Precious Metals Corp.’s first investment. We continue to see a long life ahead for Cerro Lindo with strong exploration potential as well as exposure to the silver price going forward. Our portfolio has significant embedded growth. Our 2030 outlook is that production in 2030 will grow to between 140,000 to 150,000 GEOs. This is approximately a 45% growth from the midpoint of our 2026 guidance. It is driven by multiple assets advancing through construction, permitting, and study stages, including Arcata, Kone, Eskay Creek, Era Dorado, and Goldfield. Importantly, it is not dependent on any one large project. Looking beyond 2030, we have meaningful GEO growth potential from a number of large-scale assets located in the best jurisdictions: Australia, the United States, and Canada. First, Hope Bay is located in Northern Canada and Agnico has stated that it is progressing towards a construction decision, which is expected in May 2026. Second, Centerra released a positive PEA on Kemess, targeting potential production in 2031. Kemess is located in British Columbia. Third is the Arthur project in Nevada; AngloGold is expected to imminently release a pre-feasibility study, which I am quite eager to see. Last and most significantly is our flagship asset, Northparks, located in Australia and which is clearly positioned as a significant growth asset for Triple Flag Precious Metals Corp. I want to congratulate Laurie Conway and the Evolution team for all the success they have had at Northparks since they acquired Northparks. It is truly impressive. A week ago, Evolution released a significant update on Northparks, which has three related catalysts for Triple Flag Precious Metals Corp. First, Evolution approved the development of the E22 block cave. E22 has very attractive gold grades for Triple Flag Precious Metals Corp., and block cave development is the value-maximizing approach for both Evolution and Triple Flag Precious Metals Corp. Second, Evolution has announced that it is studying expanding Northparks from the current 7,600,000 tons per annum to 10,000,000 tons per annum or potentially more. There is tremendous demand for copper and Northparks is a very large resource, so the potential value creation of an expansion is clear. This could be very beneficial to the Triple Flag Precious Metals Corp. stream. And last, Evolution has identified a very attractive gold-only deposit on the property named E44. We had constructive discussions with Laurie and Kieran and their team, and together we came to an agreement that will allow for the development of E44, which was previously not included in Evolution’s life-of-mine plan at Northparks. As part of that agreement, Triple Flag Precious Metals Corp. will receive guaranteed minimum deliveries from E44 starting in 2030. Northparks is a byproduct stream, so the potential to also benefit from primary gold deposits is a fantastic bonus for Triple Flag Precious Metals Corp. and its shareholders. Although these factors together clearly position Northparks as a growth asset for Triple Flag Precious Metals Corp. for the next decade to come. I would also like to touch on our capital deployment in 2025. Triple Flag Precious Metals Corp. invested over $350,000,000 in value-accretive deals. This included the Arcata restart and ramp-up in Peru, the Arthur Oxide project in Nevada, the Johnson Camp Mine that is ramping up in Arizona, and the Minera Florida producing mine in Chile. These transactions provide current and growing cash flow or, in the case of Arthur, represent exposure to a premier development project with a clear path to production and further exploration upside. Importantly, all of these assets are also located in mining-friendly jurisdictions. Sheldon Vanderkooy: Overall, Triple Flag Precious Metals Corp. is exceptionally well positioned to deliver long-term and organic value for our shareholders from a diversified portfolio of producing and development assets across premier mining jurisdictions. I will now turn it over to Eban to discuss our financial results for 2025. Operator: Thank you, Sheldon. Eban Bari: As you can see on this slide, 2025 was a record year across all financial metrics, driven by strong GEOs and record precious metals prices. As Sheldon noted, these record prices have since been broken by new records, with spot gold and silver well above even the Q4 average. Operating cash flow per share, the single most important metric we focus on as management, increased 45% to $1.54 per share. This metric best reflects the underlying operating performance of our core streaming and royalty business. This strong cash flow generation continued to support all of our capital allocation priorities given our high-margin business, including shareholder returns and external growth opportunities. On shareholder returns, we paid out nearly $46,000,000 in dividends to shareholders in 2025, which reflected a progressive 5% dividend increase in the middle of the year, our fourth consecutive increase since our IPO. In addition to our dividend, we were active and accretive on our share buyback during the year. In 2025, we bought back $9,000,000 US of our shares in the open market at approximately $17.39 per share. We expect to remain active on our NCIB opportunistically going forward. On the external growth front, as Sheldon mentioned, we reinvested over $350,000,000 into new streams and royalties in 2025. Arcata, Arthur, Johnson Camp Mine, and Minera Florida all provide either immediate or near- to medium-term cash flow, significant exploration potential, and exposure to premier mining jurisdictions with strong operators. I am pleased to highlight that even with this level of capital deployment, and as a result of our strong cash flow generation, Triple Flag Precious Metals Corp. is debt-free at year-end with more than $70,000,000 in cash, and $1,000,000,000 available on our credit facility. We remain well positioned to deploying capital into transactions that are accretive, fit with our strategy, and deliver value throughout a cycle. Moving forward to 2026 guidance, as Sheldon noted, expect GEOs of between 95,000 and 105,000 ounces for the year. We expect these GEOs to be all derived from gold and silver and reflect a conservative gold-to-silver price ratio of 72 for the whole year, with a lower ratio assumed in the first half. Depletion is expected to be between $65,000,000 and $75,000,000, slightly lower than 2025, reflecting the sales mix we expect in 2026. G&A costs are expected to be between $30,000,000 and $32,000,000, consistent with our actual expenses in 2025 that reflect the impact of Triple Flag Precious Metals Corp.’s strong share price increase throughout the year on share-based compensation expense. Finally, our Australian cash tax rate for Australian royalties will be approximately 25%, consistent with prior year actual. I will now pass it on to James to discuss our asset portfolio. Operator: Thank you, Eban. James Dendle: Triple Flag Precious Metals Corp. has achieved a consistent track record delivering long-term GEOs growth since our first full year of operation in 2017. Beyond the guidance we have set for 2026, we see further organic growth to 140,000 to 150,000 GEOs in 2030. Cosmos Chiu: Midpoint to midpoint, this represents annual growth of 45% from 2026 guidance, which I will discuss further on the following slide. Our long-term organic growth outlook of 100,000 to 150,000 GEOs in 2030 is robust and reflects the achievement of several de-risking milestones delivered by our operators over the past twelve months. We are seeing meaningful progress across the portfolio, supported not only by a constructive commodity price environment, but also by favorable permitting regimes across the jurisdictions to which we have exposure. Arcata, Kone, Eskay Creek, Eredorado, Goldfield, South Railroad, and Delamar are a few examples of the many assets in our portfolio that are advancing rapidly towards production or steady-state ramp-up over the medium term. Touching on only a few of them, we were exceptionally pleased to see in 2025 the Eskay Creek project in British Columbia receive full permits in less than one year after submission, Aura Minerals receive a construction license for Era Dorado within one year of its acquisition, and Centerra’s renewed focus on the Goldfield project as a straightforward heap leach operation in Nevada. Beyond 2030, our portfolio is expected to deliver further GEOs growth from Arthur, Kemess, Hope Bay, as well as the growth initiatives at Northparks, which I will discuss in the following slides. Beyond 2030, Arthur, Kemess, Hope Bay, and Northparks represent world-class, long-life assets located in the most stable and established mining jurisdictions. They provide substantial growth potential beyond our 2030 outlook and demonstrate the quality of Triple Flag Precious Metals Corp.’s portfolio. At Arthur, we see the imminent release of a pre-feasibility study by AngloGold as an important catalyst in providing greater insights on the potential of this district-scale system, starting with the Merlin and Silicon deposits as straightforward oxide open pit projects. Arthur will be a cornerstone asset for Triple Flag Precious Metals Corp. in the 2030s. Operator: Akimas, Cosmos Chiu: Triple Flag Precious Metals Corp. holds a 100% silver stream. The January 2026 preliminary economic assessment supports a large-scale copper-gold-silver operation reaching production by 2031, leveraging existing brownfield infrastructure and permits from the previous mining operation. Notably, the PEA mine plan only represents 47% of the total indicated and inferred resources, providing potential upside for future ounces to be included in subsequent economic studies. A PFS at Kemess is expected in 2027. At Hope Bay, our 1% NSR royalty covers a scale gold system on an asset operated by Agnico Eagle, the premier Canadian Arctic underground miner. In their year-end results from last week, Agnico noted that annual gold production is expected to be 400,000 to 425,000 ounces with a potential construction decision in May 2026 and a potential restart in 2030. I will go into more detail on Northparks on the next page. Northparks is Triple Flag Precious Metals Corp.’s largest asset. It is an established high-quality copper-gold operation in Australia operated by Evolution Mining. Numerous growth projects have recently been approved that Sheldon referred to, which unlock the value in this world-class copper-gold endowment. Currently, the E48 sublevel cave is ramping up and supports near-term gold production growth. Over the medium term, the E22 ore body will be advanced as a block cave, a large, low-cost operation with initial production by 2030. During this time frame, the E44 gold-dominant deposit will also be advanced to production. This is an ore body not previously included in Evolution’s life-of-mine plans. Minimum guaranteed deliveries will commence in 2030 for a period of seven years, with potential for meaningful life extensions beyond this initial period. Finally, and perhaps most importantly, is the potential for mill expansion to at least 10,000,000 tons per annum, which is currently being studied over the next year. We believe that this potential expansion is the optimal path forward to unlock the value from not only the 550 million tonnes of current measured and indicated resources, but other prospective and underexplored targets that could materially add to the expected production profile with the improved scale and processing optionality. These growth projects demonstrate that Northparks is not a static asset. It is a dynamic, world-class mining operation with lots of embedded optionality that will drive value for decades to come. I will now pass back to Sheldon for closing remarks. Sheldon Vanderkooy: Thank you, James. After delivering record performance in 2025, Triple Flag Precious Metals Corp. is in an exceptionally strong position as we look ahead to 2026 and beyond. We have a clear and de-risked pathway to robust growth, 140,000 to 150,000 GEOs in 2030. Our project pipeline progressed very well in 2025 and now in 2026. Beyond 2030, Triple Flag Precious Metals Corp. shareholders can expect significant additional GEO growth from long-life, district-scale assets, including at Northparks, Arthur, Kemess, and Hope Bay, all from projects with clear line of sight to production, a top-tier operator, and located in Australia, Canada, or the United States. Northparks is our cornerstone asset and is clearly positioned as a growth asset over the next decade. On the deal front, we deployed over $350,000,000 in 2025 across multiple accretive transactions, demonstrating our ability to source and execute on high-quality opportunities that deliver compounding per-share growth from good assets, good regions, and good operators. Our balance sheet remains pristine. We exited 2025 debt-free and with over $1,000,000,000 in total liquidity, providing us with substantial financial flexibility to continue pursuing accretive growth opportunities as well as to allocate capital to progressively growing returns to shareholders. That concludes our prepared remarks. Operator, please open the floor to questions. Operator: 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 1 on your telephone keypad to raise your hand and join the queue. If you are called upon to ask your question and are listening on speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press 1 to join the queue. Our first question comes from the line of Cosmos Chiu with CIBC. Your line is open. Cosmos Chiu: Thanks, Sheldon, Eban, and James. Maybe my first question is at Northparks. Great to see that you are investing more money into Northparks at the E44 deposit. Joshua Mark Wolfson: I guess my question is, are there more opportunities like that in terms of, you know, something similar to E44, gold-rich? Something that would not be in the mine plan unless there is a partner coming in and helping to put up some of the CapEx. And then maybe if you can also talk about the geological setting because it must be a very, you know, clear variety of different geological settings here. If there are copper-rich deposits and gold-rich deposits, I am just trying to figure out where some of these gold-rich deposits came from. Sheldon Vanderkooy: Yeah. Thanks, Cosmos. This is Sheldon. I will start and then pass it over to James. So historically, the Northparks property, you know, had gold deposits, kind of shallow surface gold deposits. It was very interesting. Now, of course, when we came in and did the stream, we really did the stream as a byproduct stream, you know, which works. We get about 60% of the gold revenue that Evolution gets from Northparks. So that works if the primary revenue is the copper. But if it is gold-only, we had to come to the table with Laurie and the team and work something out. But this is really exciting for us because the idea of getting, you know, a gold-only deposit there and us also having access to that was really key. There is nothing else right now on the horizon, but is there potential there? Well, I will let James speak to that. But there have been, you know, gold-dominant deposits on that property in the past. Joshua Mark Wolfson: Yeah. And Cosmos, it is James. Cosmos Chiu: As Sheldon noted, the first mining at Northparks is actually, as you probably remember, the mid-1990s as a gold project, and it was actually first explored with shallow ore for gold mineralization. So there is a history there, but it very clearly transitions to a copper deposit for the last, you know, twenty-five years or so. Operator: So Joshua Mark Wolfson: you think about it geologically, yes, that Cosmos Chiu: gold is clearly associated with copper. And it is a very prospective region. And I think what we are seeing with Evolution is exactly what we hoped when they acquired the asset. They think very expansively and very creatively about how to maximize value from operations. I think that has been a big part of their success with assets like Ernest Henry. And they are applying the same approach to Northparks, which is to say, you know, there is a lot of resource. Let us look at expanding capacity. And then with that expanded capacity, what else can we do with it, which has caused them to really look at the gold deposits in a way that was not done in the past? And the short answer is, you know, E44 is the most known. Joshua Mark Wolfson: Mhmm. But there are a large number of targets across the property Cosmos Chiu: that are sort of known from some of the historical work but have not been tested and defined in a systematic manner, which I think really speaks to the opportunity to find more of this type of mineralization, which with the expanded mill capacity, Evolution can take advantage of. Joshua Mark Wolfson: Great. That is great to hear, James. And then maybe my next question is, you know, taking a step back here. In the royalties and streaming industry, we have now seen recently Operator: some Joshua Mark Wolfson: billion-dollar deals or even multibillion-dollar deals. I know, Sheldon, you mentioned that you deployed about $300,000,000 last year. But in terms of these billion-dollar deals, multibillion-dollar deals, is that something that Triple Flag Precious Metals Corp. could be interested in, could be competitive in? Or, you know, is that slightly too large for you at this point in time? Sheldon Vanderkooy: Hi, Cosmos. We have always said that our sweet spot is really in the $200,000,000 to $500,000,000 range, and I do not think that that changes. And when you look back, you know, Triple Flag Precious Metals Corp. actually is coming up on our tenth anniversary. Over the last ten years, the vast majority of the capital deployment in the sector has been in that strike zone. So I feel really good about that. You know, there was a large deal done earlier this week, and $4,300,000,000 is too big for Triple Flag Precious Metals Corp. I think that is okay. But there is plenty out there I think that we can grow and deploy on. And, again, relative to our size, I think we definitely have an ability to grow because when you look at the size of Triple Flag Precious Metals Corp. and $350,000,000 of deployment, that is meaningful. So if we do a $400,000,000 deal, that moves the needle for Triple Flag Precious Metals Corp., and I think that will do very well by our shareholders. Joshua Mark Wolfson: Great. And then maybe one last question. As you talk about the different growth opportunities within your portfolio, I guess one asset you did not mention was Pumpkin Hollow. I know there is a bit of history behind it. But now it seems like Pumpkin Hollow has a new owner, Kintera, and they seem to have, you know, be able to raise a lot of capital. So, you know, Pumpkin Hollow, once again, is this something that we should start talking about? Is there something that we should start getting excited about? Or is it still too early at this point in time? Sheldon Vanderkooy: Yeah. So we retain a royalty on the Pumpkin Hollow open pit. And that actually, I think, looks like a really nice royalty because that is copper in the United States, and we are a royalty and we are on title, and that has survived all the processes that went on there. So I am quite keen to see what Kintera is doing there, and that represents some very nice copper exposure from the United States for Triple Flag Precious Metals Corp. shareholders. Triple Flag Precious Metals Corp. will not be investing any more money in Pumpkin Hollow. I can say that clearly. Joshua Mark Wolfson: Great. Again, Sheldon, James, and Eban. Those are all the questions I have. Thank you. Thanks, guys. Operator: Our next Operator: question comes from the line of Tanya M. Jakusconek with Scotiabank. Your line is open. Operator: Oh, great. Good morning, everybody. Can you hear me? Sheldon Vanderkooy: I can. Hi, Tanya. Operator: Oh, good morning. Hello. I have a couple of questions if I could. Start with a very easy one. Can you know, I know that you use a very different ratio. I just, you know, just kind of want to assume, like, a flat gold price, flat silver price, etcetera. Can you give us just an idea how the year is going to look like from a quarterly perspective? You know, we have some step-downs. We have other things happening. So I am just trying to understand how should we think first half, second half, etcetera. Sheldon Vanderkooy: Yes. Hi, Tanya. We give our annual guidance. We are not breaking it down by the quarters. And you have kind of correctly identified the one factor, which is the Cerro Lindo step-down will occur sometime in the second quarter, I believe, but I cannot give any more quarterly guidance over and above that. Operator: Okay. Operator: What about the capital returns? I think those are, you know, you focus on the dividend and you like the fact that you progressively increased that dividend. How should we be thinking about it for midyear? Sheldon Vanderkooy: Yes. I think nothing has changed on our philosophy on capital allocation. So as you cited, we have a progressive, increasing dividend. We have increased it every year since being public. I see no reason why we would change that. I think it goes over very well with shareholders. So that is the dividend. And then, you know, we are looking to deploy capital into accretive opportunities for shareholders. It is really that simple. Operator: Okay. And in terms of the opportunities, I think you mentioned that $200,000,000 to $500,000,000 range being your sweet spot and seeing some bigger deals. So I have a couple of questions on this front. The first thing is I have noticed two people shopping in their own closet. It is Osisko and Wheaton. Are there any other things to do in shopping in your own closet? Any other opportunities on assets you own? Sheldon Vanderkooy: That is an analogy I have not heard before. I like it. You know, I guess that we just posit it all the time. Operator: By the way, Sheldon. Sheldon Vanderkooy: You know what? It is natural when you have a relationship with a party or you already have a position in a property that those are the things you look to. And, you know, with Northparks, that was obviously a natural for us. And would we look here for other opportunities like that? Yeah. Perhaps. But these things are never done till they are done, and I do not want to start front-running anything. But, you know, we try to engage closely with all of our partners. Operator: And in terms of opportunities that are out there, would you say most of them now are focused on asset builds, or are there royalty portfolios still available? We saw one last night as well. Any color on opportunities that are out there? Sheldon Vanderkooy: You know, it is going to be the same answers as has been received by, I think, everyone for the last little while. There is a variety. You know, there are third-party assets that are coming up for sale. There are people looking for financing for various things, you know, and that can be development or that could be other reasons. I would not say there is any one big thematic out there, and it is kind of our job just to look at the opportunity set and try to generate some of our opportunity set as well. So I would not say there is any one sort of theme that I am seeing out there. The opportunity set looks pretty robust to me, and I think we have seen, you know, not just ourselves, but other people deploy. You know, I think that bodes well for the sector as a whole. Operator: Okay. And then we have seen some very big silver opportunities. Are there any smaller ones that fit that $200,000,000 to $500,000,000 range that you are seeing out there? Sheldon Vanderkooy: Yeah. And, again, I would not consider $200,000,000 to $500,000,000 to be small for a company of Triple Flag Precious Metals Corp.’s size. That would be quite meaningful. There is still a variety of opportunities. There are also gold opportunities out there. You know, I think our focus is always probably gold first, silver second. But, you know, we like precious metals. If it is a good silver asset or a good gold asset, we really want to be on good assets with good operators. Operator: Yeah. I take it. When I meant the smaller silver opportunities, that was relative to the $4,300,000,000. So it was a relative— Sheldon Vanderkooy: Yeah. Most things are small relative to $4,300,000,000. Operator: Yeah. Sheldon Vanderkooy: Okay. Operator: Alright. No worries. I will leave the room for someone else to ask questions. Thank you for taking my questions. Joshua Mark Wolfson: Thanks, Tanya. Operator: Next question comes from the line of Brian MacArthur with Raymond James. Your line is open. Joshua Mark Wolfson: Good morning, and thank you for taking my question. Sheldon Vanderkooy: Could you just give us an update on ATO and maybe if you assumed any contribution this year, and then as you go out to 2030, what you are thinking, i.e., expansion or baseline? If you just give us an update on that, that would be great. Thank you. Yeah. Hi, Brian. It is Sheldon. I will answer that one. Look, ATO is in litigation. We have been quite upfront with the market on that. We feel very confident in our position. And, you know, that process is going to the court, so I cannot say too much. But what I will say, and I think this is really pertinent, I am glad you asked the question. We took it out of our 2026 guidance, and we took it out of the 2030 figure as well. So that does not reflect our confidence in our position, but rather we just want to remove it as a potential distraction for investors to have to get a handle on. So when you look at those figures we put out for 2026 and for 2030, there is zero contribution from ATO in there, and ATO is only upside, not downside, relative to those figures. Joshua Mark Wolfson: Great. Thanks very much, Sheldon. Very clear. Thanks, Brian. Operator: That concludes the question-and-answer session. I would like to turn the call back over to our CEO, Sheldon Vanderkooy. Sheldon Vanderkooy: Thank you very much. Really appreciated speaking with everyone, and looking forward to a great 2026. Bye. Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining in. You may now disconnect.
Operator: Good morning, and welcome to MTY Food Group 2025 Fourth Quarter and Year-End Results Earnings Conference Call. [Operator Instructions] Listeners are reminded that portions of today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties. that could cause actual results to differ materially from those projected in forward-looking statements. For more information on MTY Food Group's risks and uncertainties related to these forward-looking statements, please refer to the company's annual information form dated February 19, 2026, which is posted on SEDAR+. The company's press release, MD&A and financial statements were issued earlier this morning and are available on its website and on SEDAR+. All figures presented on today's call are in Canadian dollars, unless otherwise stated. This morning's call is being recorded on Thursday, February 19, 2026, at 8:30 a.m. Eastern Time. I would now like to turn the call over to Mr. Eric Lefebvre, Chief Executive Officer of MTY Food Group. Please go ahead, sir. Eric Lefebvre: Thank you, and good morning, everyone. This morning, we released our 2025 Q4 and fiscal year-end results, which you can find posted on our website. While macro conditions remain challenging throughout 2025, Q4 showed continued strengthening in many of our core metrics. We are encouraged by the acceleration in positive net unit growth, deepening of our development pipeline, robust free cash flow generation and lower leverage, which grants us greater financial flexibility. After many years of strategic focus, MTY's store network is now in its healthiest position in over a decade. Building off last quarter's positive momentum, Q4 experienced a net addition of 19 locations, which pushed us into positive territory on an annual basis for the first time since 2013. This has been achieved through a combination of strengthening of our partnerships with existing franchisees, selectively investing where we see the strongest returns and developing more tools to energize and monitor our business. Excluding normal seasonal weakness expected in Q1, we believe that we're in a good position for this positive momentum to continue into 2026. Turning to same-store sales growth. The macroeconomic backdrop remained challenging as consumers and business owners faced a variety of shocks throughout 2025. In Q4, our same-store sales declined by 1.7% overall, with Canada flat and the U.S. down 2.8%. Results were generally similar by restaurant type within each region. To counteract these pressures, MTY must continue investing for the long term in both the guests and the franchisee experience. Our priorities remain enhancing consumer engagement and decision-making through data science, fueling our omnichannel experience, which has significant white space in Canada and reinforcing all our brands through continuous improvements and innovation. Moving to profitability this quarter. Franchise operations segment profit reported a 53% improvement in Q4, which was primarily due to gift card breakage income, which Renee will address in a moment. Net of this impact, franchise operations in Canada remained flat, while the U.S. had a decline, which aligns with their corresponding same-store sales results that I mentioned earlier. During 2025, our free cash flows per share net of lease payments reached $5.68. The last 2 years have been the 2 best in our history, showcasing the resilience of our model and cash flow profile across business cycles. As such, we also raised our quarterly dividend by 12% last month to $0.37 per share. Before I pass the line to Renee, I would like to comment on the strategic review that was recently initiated by the Board of Directors. We cannot provide a specific time line or assurance that any transaction will result. I can confirm that the process is ongoing and active. For the purpose of today's call, I cannot comment on the process, but I can assure you that we will provide an update or make announcements as appropriate or as required by law. In parallel, MTY continues to be run as business as usual with the same discipline and long-term focus that's defined the company since our founding. With that, I'll turn it over to Renee to discuss the financials. Renee? Renée St-Onge: Thank you, Eric, and good morning, everyone. Normalized adjusted EBITDA came in at $87.7 million for the fourth quarter, up 48% year-over-year compared to the same period last year. This increase was primarily due to a onetime $29.5 million increase in gift card breakage income related to unredeemed gift card balances related to an acquisition we made several years ago. At the time, we took a conservative approach to the unused portion of the gift cards for that brand pending the accumulation of sufficient reliable redemption data. Based on the clear pattern that can be derived from this additional decade of usage data, we are catching up on the estimates of the portion of the gift cards that will not be redeemed. Moving forward, we expect the usage to remain consistent. As mentioned by Eric, this gift card breakage fee also positively impacted our franchise operations segment profit and normalized adjusted EBITDA. Net of this impact, franchise operations segment profit in Canada were flat, while the U.S. decreased by 12% Canada franchising revenue saw an increase of 1% due to higher recurring revenue streams from the increase in system sales generated by this segment, while the U.S. was impacted by a decrease to recurring revenue streams as a result of lower system sales. On the expense side, franchise operating costs in Canada were in line with the same period last year, while the U.S. and international were up $2.5 million. The increase were primarily due to higher wages as a result of normal inflation as well as IT licensing costs and expenses related to our gift card program. We continue to add higher quality new stores and capture efficiencies from our ongoing initiatives. We expect franchisee EBITDA growth to outpace same-store sales growth. Segment profit and normalized adjusted EBITDA for the Corporate Store segment came in at $7.9 million, up 23% or $1.5 million from last year. Margins improved to 7% compared to 5% in the same period last year. We remain confident in our ability to drive improvements in corporate store over time, which should result in margins moving towards the high single digits. Food Processing Distribution and Retail segment delivered revenue growth of 27%, driven by a shift in our retail model from a licensing agreement to vendor on record for some of our products. Our profit margins remained stable between the 2 periods at 11%. We believe meaningful opportunities exist within the retail channel for top line and margin expansion as we continue to build scale and strengthen our presence in underpenetrated markets. We reported $32.1 million in net income attributable to owners or $1.40 per diluted share, an increase of more than $87 million from the prior period. The improvement was primarily due to a onetime impairment loss recorded last year in relation to Papa Murphy's as well as the gift card breakage recorded this year. As Eric mentioned earlier, our asset-light and well-diversified business model continues to generate strong free cash flows. This performance provides us with significant optionality to reduce debt, invest for the future and return capital to shareholders. In the fourth quarter, cash flow from operations were $46.2 million compared to $43.7 million in the same period last year. Free cash flow net of lease repayments was $37.6 million, up 38% compared to $27.4 million in the same period last year. We ended the quarter with net debt of approximately $580 million. Considering our strong free cash flow generating ability, our debt-to-EBITDA of approximately 2x is at a level that gives us the opportunity to take advantage of the options we possess to deliver enhanced shareholder value. And with that, I'd like to thank you for your time and turn it back to Eric for closing remarks. Eric Lefebvre: Thank you, Renee. During the last 2 years, we focused on strengthening the core fundamentals of the business and laying the groundwork for improved performance as market conditions evolve. We've made significant strides, but our job is not done. There continues to be many opportunities to enhance shareholder value, we're pursuing them with both vigor and discipline. While near-term volatility in consumer sentiment remains, we believe MTY is well positioned to navigate this environment due to the strength of our people, the breadth of our portfolio and proven resilience of our business model. With that, let's open the line for questions. Operator? Operator: [Operator Instructions] The next question comes from the line of Derek Lessard with TD Cowen. Derek Lessard: Eric, nice to see the positive store growth, the net new growth there. Again, in the quarter, you reported another 19 net new openings, and you noted a strong development pipeline. So I was curious if you can maybe talk about which of the banners that you're seeing interest and/or the greatest strength in. Eric Lefebvre: Yes. Thank you, Derek. Yes, there's a few brands. Obviously, we -- not all our brands have the same strength. But for now, I mean, Cold Stone and Wetzel's remain our champions for the number of store openings and the growth we see in these 2 brands. But there is strength in other areas of our portfolio. I can name, for example, Taco Time in Canada, where we have a very strong development pipeline, very achievable and ambitious targets for this year and next year. Thai Express is another example where we finished the year strong, and we have ambitious targets for '26. So it's more than just Cold Stone and Wetzel's, but they remain the 2 champions. Derek Lessard: Okay. That's great color. And just maybe on the -- I noticed on the digital sales -- there was one -- I guess it was Papa Murphy's that dragged down your results. So the first question is -- the first question on Papa Murphy's is sort of when do you expect some stabilization in that banner. But then -- and as a follow-up, you also -- excluding that decline, digital sales in the U.S. were up actually 6%. So curious on some of the initiatives or platform improvements that you have going on that are driving that strong performance. Eric Lefebvre: Yes. Well, for Papa Murphy's, it's a pretty important brand for us. Obviously, in terms of sales, it's our #1 brand, and it's got a heavy component of digital sales. So if there's a decline in sales for Papa Murphy's, it automatically impacts the ratio for the entire business. That being said, Papa Murphy's had a reasonable Q4. It was not great, but it was -- sequentially, it was better than in some previous quarters. So stabilization is it's hard to know exactly when that's going to happen because we have good periods and then sometimes there's periods that are a little bit more challenging that follow. So we are in that volatile environment where we do a lot of things. We're trying a lot of things. We're trying hard to make the business work and to improve sales on a sustainable basis for this brand. But it remains challenging. Pizza is super competitive, as you know. A lot of our competitors have very aggressive promotions. And promotions, to be honest, that are hard for us to match. We need our franchisees to have a chance to turn profitability. And if you give the product away, it makes it difficult for them to achieve that. And even for our corporate stores that we own in the chain, we have skin in the game for Papa Murphy's. So obviously, if our franchisees feel the pain, we feel it as well. So I mean, we're working hard. We have a number of technologies that are being deployed. First leg of some new tools is going to kick in probably late March, early April. And we hope that's going to help us drive better business, help us communicate with our customers more effectively, hopefully acquire customers as well. So these new technologies are coming live soon, and Papa Murphy's will go first. and then other brands will be able to follow with these. And the second part of your question was regarding low-hanging fruits that we might have. And you can look at brands, for example, like Wetzel's Pretzels, where we're just only beginning with loyalty. We're just only beginning with digital. It represents almost nothing in our portfolio -- in our current sales. So we do see an opportunity there. And as mentioned in previous calls, we're lagging in Canada in terms of technology. We're almost there now with the cleaning up and preparing our data and making sure that we accumulate reliable and usable data. And we're almost there now with being able to deploy these tools. So we're pretty bullish on the potential of these technologies on the business. It took a little bit longer than expected for us to get there, but we're just there now. Operator: The next question comes from Bea Fabrero with Scotiabank. Bea Fabrero: For your U.S. market, do you expect same-store sales to turn around this year given the tax refunds and potential rate cuts? Eric Lefebvre: Well, yes, the U.S. market is -- it's volatile. I would say we had a good beginning of the year with some of our brands and more challenging for some others. I can't necessarily comment on refunds and rate cuts because I don't want to speculate on the impact and timing of these things. But obviously, they would help. They can't be negative for us. So if these things come, it's going to help. We're lapping a certain number of things this year. There was the -- in Q1, there was the tax abatement in Canada that we're lapping now that doesn't exist this year, obviously. So any help we can get from our regulators and our government is going to help for sure. Bea Fabrero: And another one on your franchisee profitability, have you seen any headwinds across the industry? Like how are your franchisees faring? Eric Lefebvre: Yes. Yes, there's -- our industry, by definition, always faces headwinds. There's always something. I mean it's the nature of our business. It's a competitive business and consumers right now are feeling the pinch, especially the lower-income consumers. But as far as franchisee profitability, there's pressure coming from costs and commodities, especially on the protein side. But from the data we accumulate, our franchisees' profitability is stable or improving for most of our brands. So I mean, we're taking many actions on a day-to-day basis to try to help that, whether it's purchasing, distribution, any different types of products or services they need in their locations. And that we also need in our corporate stores. So we're trying to take action. We're trying to measure it better and better also to be able to take action quicker as we might see symptoms coming in. And I think with more data and more granularity in our business, I think we're able to take more informed decisions and faster. Operator: The next question comes from Ryland Conrad with RBC Capital Markets. Ryland Conrad: Just to maybe start off on CapEx, obviously, a lot lower this year. So could you just share some high-level expectations on CapEx for 2026? And related to that, I know the focus has been on delevering recently, but how are you thinking about your free cash flow priorities evolving as this year progresses? Eric Lefebvre: Yes. Well, for CapEx, I think the year 2025 is the new normal. We do expect to have limited CapEx. There's always going to be some for our restaurants or for our plants. We have projects that have good ROIs, but we shouldn't see the massive CapEx that we saw in '23 and '24. I think that '25 is expected to be the new normal. As far as free cash flow opportunities, obviously, I can't comment on what we expect to do with our cash flows as there is a number of different things that are in the air at the moment. But we want to increase our optionality, paying down our debt seems to be the sensible choice now because that opens all the doors for us, and it makes all possibilities open for MTY going forward. So I won't comment on that further. Ryland Conrad: Okay. And then just on same-store sales, still seeing that bifurcation between Canada and the U.S. So could you speak a bit to what you're seeing there in terms of traffic and average check and just how those dynamics might be differing between the 2 markets? Eric Lefebvre: Yes. It's interesting to see that in the U.S., we're doing better with QSR and our casual dining is struggling a little bit, and we tend to see similar trends with our peers. It's a little bit more complicated to generate the traffic and also improve the basket size in our U.S. casual dining business. In Canada, we're seeing the opposite where not all of our casual dining brands are thriving at the moment. But on average, we're doing really good with most of our brands. And then QSR is struggling a little bit more and predominantly where we have mall-based locations in Canada, it seems that it's a little bit more of a challenge. So it's hard to understand exactly where each market is going, but we're trying to correct course on brands that are challenging and double down on the brands that are thriving at the moment. Ryland Conrad: Okay. And then just on Papa Murphy's again. I know last quarter, you unpacked quite a few of the initiatives underway there, including the loyalty program revamp. Could you just provide a bit of a progress update there and just whether you've seen greater engagement with that banner? Eric Lefebvre: Yes. Yes, we did -- the loyalty push that we did enabled us to gain a lot of new members to our loyalty program. And then in turn, that enables us to communicate with these customers more effectively and try to incentivize them and increase frequency with these new customers that we gained. The proof is in the pudding, though, we'll see in the coming months. It takes a little bit of time to be able to measure the impact of all these initiatives. We can measure a certain number of customers joining our loyalty program. We can measure a certain number of things, but it's the test of time that will tell whether that was successful or not. Certainly, an interesting push for us and trying to make the brand as relevant as possible to as many different types of consumers and generations of consumers as possible is critical for Papa Murphy's. So it's not going to be only one thing that matters. It's a collection of many different initiatives that we're pushing right now and that we will be pushing in the coming months that will matter. Operator: The next question comes from Michael Glen with Raymond James. Michael Glen: Eric, I'm just hoping maybe you can speak to what was the underlying motivation to pursue a strategic review at this point in time? And then are you able to indicate when the strategic review did actually begin? I know we saw the newspaper article about it, but had the review already been ongoing at that time? Eric Lefebvre: Yes. Unfortunately, Michael, I can't answer those questions. I apologize. Michael Glen: Okay. And then can you -- are you able to -- are you precluded or you're restricted from pursuing a normal -- the share repurchase program while the strategic review is ongoing? Eric Lefebvre: Yes, I can't answer that question either. Michael Glen: Okay. Then across the banners, you spoke about Papa Murphy's and Cold Stone. When we look across the U.S. banners, how should we think about -- when we're thinking about the consolidated margin you're reporting, how do we think about the variance of the profitability across the banners? Eric Lefebvre: Yes. Well, the first thing I'll say is that all our banners are profitable over a long period of time. There is some ups and downs depending on certain items. But the goal for us is to make all our brands profitable. And it's not necessarily all the big brands that are more profitable than the smaller brands. But in general, we're trying to achieve similar profit margins with all our brands. And whether a brand has 50 stores or 1,500 stores shouldn't preclude it from achieving profitability and having ambitious targets. So we're trying to achieve the same thing. There are exceptions to that. Obviously, some brands are a little bit harder to manage than others, depending on how spread out some geographies are and maybe some heavy lifting temporary for certain things, for example, for retraining our franchisees or major initiatives that require a lot of our people to be on the field to retrain or implement something. But over a long period of time, all our brands should have similar margins and similar profitability metrics. Michael Glen: Okay. And how do you -- across the QSR segment, there's been quite a large push in the U.S. towards more value offerings hitting menus. Are you seeing that impact in terms of the traffic at your stores? Eric Lefebvre: For some brands, yes. I mentioned Papa Murphy's earlier. As you know, pizza is a super competitive space and our peers are heavily discounting their products. So obviously, there's an impact. What we're seeing, and maybe I'll exclude the snack brands for that, where typically, we don't need to discount these products as much. But for most of the other brands, you do need to give your customers an entry point where they'll feel value. You might try to direct them to something else, but you do need to have that entry point for people to be able to compare. And if they need something to be more cost effective, you need to be able to offer it to the customers. So it's a fine line between over-discounting our product and offering an entry point that will be relevant in the market and also trying to create a habit to come to our stores and avoiding creating a habit of going to our competitors because the win back is always more expensive than the maintenance of a customer. Michael Glen: Okay. And then just finally, in the notes, and maybe you can actually disclose the number, but in the notes, there's -- the catch-up on the card breakage is indicated at something like $29.5 million. Is that the figure that we should use to come to -- like should we be -- is it fair to exclude that number from the EBITDA to get a sense as to what the impact was in the quarter? Eric Lefebvre: Yes. That number is -- should be excluded from the baseline. The breakage income is more or less -- other than that onetime adjustment, the breakage income would be more or less in line with previous years and is not expected to vary significantly in future years either. So that number can be used, yes. Operator: [Operator Instructions] We have reached the end of the question-and-answer session. This concludes today's conference, and you may now disconnect your lines at this time. Thank you all for your participation.
Operator: Greetings, everyone, and welcome to the Kaiser Aluminum Corporation Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando, Investor Relations. Thank you. You may begin. Kimberly Orlando: Thank you. Hello, everyone, and welcome to Kaiser Aluminum's Fourth Quarter and Full Year 2025 Earnings Conference Call. If you have not seen a copy of our earnings release, please visit the Investor Relations page of our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me on the call today are Chairman, President and Chief Executive Officer, Keith Harvey; and Executive Vice President and Chief Financial Officer, Neal West. Before we begin, I'd like to refer you to the first 4 slides of our presentation and remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management's current expectations. For a summary of specific risk factors that could cause results to differ materially from the forward-looking statements, please refer to the company's earnings release and reports filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the full year ended December 31, 2024. The company undertakes no duty to update any forward-looking statements to conform the statements to actual results or changes in the company's expectations. In addition, we have included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation. Reconciliations of certain forward-looking non-GAAP financial measures to comparable GAAP financial measures are not provided because certain items required for such reconciliations are outside of our control, and/or cannot be reasonably predicted or provided without unreasonable efforts. Any reference to EBITDA and our discussion today means adjusted EBITDA, which excludes nonrun rate items for which we have provided reconciliations in the appendix. Further, Slide 5 contains definitions of terms and measures that will be commonly used throughout today's presentation. At the conclusion of the company's presentation, we will open the call for questions. I would now like to turn the call over to Keith Harvey. Keith? Keith Harvey: Thanks, Kim, and good morning, everyone. Thank you for joining us. I'll begin on Slide 7. I'm pleased to report that our fourth quarter results continue to build on the momentum we've established throughout the year. This marks our fifth consecutive quarter of performance ahead of our internal expectations and we exceeded the full year outlook we provided in October. Start-up costs moderated versus the prior 2 quarters, while metal pricing remained a tailwind. For the full year, we delivered more than 25% EBITDA growth with margins above 21% and second half margins improving to nearly 24%, driven by our packaging investment that enhanced our mix along with modest operational progress in multiple areas of the business. Overall, we achieved record EBITDA in 2025 and established a solid foundation for continued growth as we move into 2026. We are positioned to harvest the returns from our recent investments, continue strengthening margins and generate free cash flow as we execute efficiently across the portfolio. With that, I'll turn the call over to Neil to review the quarter and full year financial results. I'll then return to discuss our end market trends, our 2026 outlook and the strategic priorities that will guide us in the years ahead. Neal West: Thank you, Keith, and good morning, everyone. I'll now turn to Slide 9 for an overview of our shipments and conversion revenue. Our full year total net sales were $3.4 billion after adjusting for the hedge cost of alloy metal of $1.9 billion, our conversion revenue for the year was $1.5 billion, relatively consistent with 2024. Our total shipments were GBP 1.1 billion, down GBP 64 million or 5% from 2024. Looking at each of our end markets in detail. Aerospace and high-strength conversion revenue totaled $457 million, down $73 million or approximately 14% and primarily due to a 16% decrease in shipments attributed to the commercial aerospace OEM destocking of plate products and the impact of the planned Phase 7 investment, which occurred in the second half of the year. Commercial aerospace OEM destocking began to ease exiting the fourth quarter of 2025. Across our other aerospace high-strength applications that includes the business threat defense and space end markets demand has remained strong. Packaging conversion revenue for the year totaled $544 million, up $54 million or approximately 11%, driven by our planned transition to coated products as we finalize commissioning of the new coating line. While shipments declined by 32 million pounds during this transition, reflecting a slower ramp-up of the coating line than originally anticipated, the shift is generating higher conversion revenue per pound, supported by the strong underlying market demand. General engineering conversion revenue for the year totaled $331 million up $14 million or approximately 4% year-over-year on a 6% increase in shipments. Tariff-driven reshoring activity and KaiserSelect quality attributes continue to create a favorable demand backdrop, supporting both volumes and pricing. And finally, automotive conversion revenue for the year totaled $122 million, up 2% year-over-year and a 6% decrease in shipments primarily due to persistently high interest rates and tariff-related customer uncertainty affecting the automotive industry on a whole. However, improved pricing and product mix helped offset the lower shipments. Additional details on conversion of revenue and shipments by end market application can be found in the appendix of this presentation. Now moving to Slide 10. And Reported operating income for 2025 was $189 million after adjusting for non-run rate income of approximately $1 million, our 2025 adjusted operating income was $188 million, up $63 million from 2024. In addition, 2025 operating income included a $6 million increase in depreciation expense associated with the Trentwood rolling mill Phase V expansion project and the commissioning of the new coating line at Work. An effective tax rate for the full year was 25% comparable to 2024. For the full year 2026, we expect our effective tax rate before discrete items to be in the mid-20% range including the impacts related to the new tax bill recently signed into law. Additionally, we anticipate that the 2026 cash tax payments for federal and state foreign taxes will be in the $5 million to $7 million range. Reported net income from 2025 was $113 million or $6.77 per net income per diluted share compared to net income of $66 million or $4.02 net income per diluted share in the prior year. After adjusting for net pretax nonrun rate income of approximately $15 million primarily related to legacy land sales and insurance settlements associated with prior year claims. Adjusted net income for the year was $100 million or $6.03 adjusted net income per diluted share. This compares to adjusted net income of $60 million or $3.67 adjusted net income per diluted share in 2024. Now turning to Slide 11. Adjusted EBITDA for the year was $310 million, up approximately $69 million from 2024. Adjusted EBITDA as a percentage of conversion revenue improved to 21.3% and approximately 470 basis points above our 2024 margin of 16.6%. In 2025, we also incurred approximately $47 million of nonrecurring operating and other related costs, primarily associated with our new coating line start-up at Work and planned Trentwood outage which were more than offset by the impact of metal lag gain from rising metal prices. The improvement in adjusted EBITDA, even with the 5% year-over-year decline in shipments reflects resilient underlying fundamentals across our business and our end markets, along with a richer mix of value-added products. Now turning to a discussion of our balance sheet and cash flow. At the end of December 31, 2025, total cash of approximately $7 million and approximately $540 million of net borrowing availability in our revolving credit facility resulted in a strong liquidity position of $547 million. As a reminder, the October extension of our $575 million revolving credit facility further demonstrates the strength of our balance sheet and the continued confidence our lenders have in our long-term strategy. The extended facility is set to mature in October 2030. Additionally, in November, we completed a $500 million offering of senior notes due in 2034 with favorable terms. We used the proceeds along with revolver borrowings and available cash to redeem our 2028 notes effectively completing a planned refinancing that extends our long-term debt maturity profile and supports our long-term financial flexibility. Our senior notes interest costs are fixed at $54 million annually, and as of the year-end, our net debt leverage ratio was 3.4x, an improvement from the 4.3x at December 31, 2024. Our full year 2025 capital expenditures came in at $137 million, following the completion of our major growth projects at Warwick and Trentwood. It is important to note that, that $168 million usage of working capital during 2025 was a direct impact to rising metal prices through the year. For 2026, we expect capital expenditures to be in the range of $120 million to $130 million, with free cash flow anticipated to be in a range of $120 million to $140 million subject to metal price movement and resulting impact in working capital. As a reminder, we define free cash flow as cash flow from operations less capital expenditures. Additionally, in 2025, we returned approximately $51 million to our shareholders through dividend payments, marking our 19th consecutive year of dividend payments to our shareholders. On January 13, we announced that our Board of Directors declared a quarterly dividend of $0.77 per common share, reflecting our ongoing commitment to disciplined capital allocation and delivering long-term value to our stockholders. With that, I'll turn the call back over to Keith to discuss our outlook. Keith? Keith Harvey: Thanks, Neil. Let me now turn to our outlook and priorities as we move into 2026 on Slide 13. In 2026, Kaiser will celebrate its 80th anniversary, a milestone that speaks to the resilience of our operations and the durability of our long-standing customer relationships. Fittingly, our outlook reflects what we expect will be record years for both conversion revenue and EBITDA. I'll begin with aerospace and high-strength products. We expect shipments to increase in the range of 10% to 15% in 2026 with conversion revenue expected up approximately 5% to 10%. This implies conversion revenue per pound, consistent with our first half 2025 run rate as last year's second half benefited from a richer aerospace extrusion mix as we upgraded plate line at Trentwood. The Phase 7 install was executed seamlessly and timed well to support the demand growth we expect in 2026 and beyond. Commercial aircraft production continues to recover with increasing build rates at our OEM partners. We are well positioned to support that growth with the additional plate capacity from Trentwood. As we've discussed previously, destocking at commercial OEMs has continued to temper near-term sell-through of plate products. However, we expect this to largely dissipate as we exit the year, if not earlier. We will continue to update you throughout 2026 on supply chain conditions. Importantly, I'm very encouraged by the momentum building in one of our premier markets, momentum that should benefit results in 2026 and continue to build through the end of the decade. Defense and business jet demand remains consistent, and we continue to benefit from new opportunities across space and specialty platforms. Now moving to packaging. Packaging demand and fundamentals continue to improve, supported by our long-term contracts that provide excellent visibility. Importantly, we completed our final contract commitment at this facility during the fourth quarter of 2025. For 2026, we are targeting shipment growth of 5% to 10% and conversion revenue growth of 15% to 20%. Our fourth coating line at Work is fully commissioned, qualified and progressing towards full production. This investment shifts our mix toward higher coated volumes now at approximately 75% and growing and supports the margin uplift we've targeted. The progress at Warwick reflects a multiyear journey that began with a strategic decision to acquire the facility in 2021. In 2026, we expect to see a step change in financial and customer satisfaction performance in this business. As we previously stated, while profitability will improve meaningfully in 2026, the line will not yet be operating at its optimal rate. We plan to operate at approximately 80% utilization as we continue to fine-tune quality and reliability. Customer service remains a core tenet of Kaiser's values and a key differentiator in all our markets. Now turning to general engineering. We expect another year of growth, supported by improving GDP and strengthening demand in the semiconductor market. Shipments and conversion revenue are expected to grow approximately 3% to 5% year-over-year, with the potential for even stronger growth depending on the strength of the North American economy as inventory levels at most customers remain at multiyear lows. Our businesses are well positioned to respond quickly as these markets continue to improve. Now turning to automotive. Automotive opportunities continue to expand. Even as we remain highly selective in the products and services we provide to this market. The shift towards more internal combustion engine vehicles in the light truck and SUV category are driving demand for several of our products at a faster pace than previously anticipated. To support this expected multiyear demand outlook we will be retooling select facilities and adding incremental capacity. While shipments and conversion revenue in 2026 are expected to decline approximately 5% to 10% year-over-year. This primarily reflects planned outages, most notably at our Bellwood facility associated with retooling rather than underlying demand. These actions position us to support higher demand and higher returns as market conditions evolve. Now turning to Slide 14 and our summary outlook. With our two major growth investments now behind us, 2026 will mark a shift toward harvesting returns through margin expansion. With the execution risk of large-scale projects largely behind us, we are proactively intensifying our focus on reducing both manufacturing and operating costs to drive additional operating leverage and maximize the return on these investments. These actions are expected to also strengthen cash flow, continue reducing our debt leverage ratios and improve our customer service standards. As we look ahead, we are establishing an initial outlook for 2026 of 5% to 10% conversion revenue improvement year-over-year, with resulting EBITDA growth of 5% to 15%, setting the stage for another record EBITDA performance year for the company. While metal pricing was a meaningful contributor to our performance in 2025. Our expectations for 2026 are driven primarily by operational execution with metal assumptions aligned with current future curves. In closing, we entered 2026 with a strong foundation, clear visibility into our end markets, and the assets firmly in place to deliver meaningful improvement in profitability and cash generation. We look forward to updating you on our progress throughout the year. With that, I will now open the call to any questions you may have. Operator? Operator: [Operator Instructions]. The first question comes from Bill Peterson with JPMorgan. William Peterson: Really nice results for the year. My first question is on the 2026 outlook at a higher level. So I think it looks like the aerospace conversion revenues below shipments, while packaging conversion revenues above shipments. Is there anything to call out on mix. If you think about Aero, for example, commercial business jet or defense, or is this more just more high strength in non-aero. And then on packaging, similar to, is this a pricing statement or a mix towards more coated products? Just any sort of color for the difference between the shipments and conversion revenue outlooks. Keith Harvey: Sure. Bill. Let me hit Aero first. We called out some specifics because, as you recall, we had an outage at Trentwood mainly through the third quarter. So if you looked at the 2 halves of the year, our shipments in the second half were actually down 25% from the first half of the year. That was mainly plate-related. And you saw a pretty higher number there because extrusions generally carry a higher price than the plate. We expect to come back rapidly on the plate in this year. So that -- the numbers we're reflecting there says we're back to having that full plate capacity -- and so you'll see that in the numbers. The prices have remained very strong and consistent. Of course, the majority of that is backed up by long-term agreements in place. And so as we've noted, as the industry continues to improve, continue to get improved shipments output by our customers, we should see those numbers pop up. From a mix perspective, what you will also see out of our flat roll shipments, Bill, we're starting to see activity again on the semiconductor side. So as you know, we put that capacity in that can service both aero and general engineering. I'm really encouraged by the activity at the beginning of the year on semiconductor. So I think after maybe a 2-year hiatus there, we're going to start to see some good activity through the balance of the year that should really support that increased capacity at Trentwood. As I move over to the packaging side and look at our business, I really think we're positioned for a very strong year. The -- we're in our seventh month of increasing output from our roll code for the new investment that we made. So we're beginning to see the better through throughput that was expected. We're beginning to get all the qualifications behind us. We're ramping up speeds. And so the opportunities there continue to exist, quite frankly, beyond what we have. We are working with some of our converters to try to get their performance up improved as I think the opportunities there exceed even all of our capacities there together. So as we also mentioned in our notes, we're really pleased to complete the final contract, multiyear contractual opportunity for the new capacity. So what you're going to begin seeing and what you have seen is that the mix shift has begun in earnest, you'll start seeing some improved pricing on that side as a result of those investments and the contractual commitments that were made. And so we're really positioned there. We talked about bringing that an additional 300 to 400 basis points impact on the total company. We're beginning to already see that, and they were a major influence into what happened for us even at the end of the year. So a lot of expectations for that for 2026. Food market, the food packaging side is very strong. It's even stronger than beverage. And as you know, we're a major player there. So we see full output. The surprise to me, and I'll just continue if I can. The surprise to me is the automotive opportunity that we highlighted in our comments with the move back toward the internal combustion engines, man, we're seeing demand on trucks and SUVs. So we made a decision to make an investment that we really hadn't contemplated in the last 12 months, but we'll be making that decision to increase our capacity through some of our highly specialty products and that all services trucks and SUVs. So that's going to be a unexpected focus for continued growth for us in that category. William Peterson: Can I pick up on that last point. This auto opportunity it sounds like it's capacity expansion, but if not, I'm just trying to get a sense, we'll just take away from other markets, how much capacity growth does this imply when will this -- I guess, when would we be ready to sort of support this effort? And maybe taking a step back some more to my question on the guidance. You're looking for this year to be down following a pretty rich, I guess, mix last year. Anything to call out from the market environment or platforms that you're on or things like that within the 2026 guidance? Keith Harvey: Yes. No. The only difference, we don't expect any price deterioration there in any of the markets, Bill. The only change that was going to be highlighted probably on the aero side was a slight adjustment as you bring back more plate as opposed to extrusion on the era. On the automotive piece that I was just referring to, we're actually -- these are actually fairly high-margin products for us. They're all specialty products. They are actually products that Kaiser has 10 or close to 100% supply position. And as the markets turn back to stronger growth on planned on trucks, especially around ICE vehicles. We're the only play. So there's going to be an outage at a couple of outages that we'll take through the year to prepare for that. So you may be -- actually, that may impact some of the shipments this year. but certainly preparing us for 2027 strength, continued strength, and we see these as multiyear. We don't think that the change, the shift that's gone to is just a single year temporary slope. We see this focus on ICE vehicles for trucks to be multiyear. That's what our customers are telling us. So we're going to ramp up the investment. And I would expect to see -- we'll highlight it more in April. But our automotive component here on very specialized products has the opportunity to increase substantially within the next 12 to 18 months. William Peterson: Okay. Maybe pick it up again on this. So CapEx guidance looks to be a little higher than expected. Is a lot of this driven by this auto opportunity? Or maybe you could parse out the CapEx guide maybe in the context, I guess, Phase 7, I think, came a bit under budget. Just any sort of context on the CapEx guidance? Keith Harvey: Yes. Actually, we were expecting to be probably somewhere between $10 million, $12 million this year. And that change in range for us is purely that automotive opportunity. Our customers would take it today. They're actually utilizing some steel products because they don't have the availability of the aluminum products in the quantities that they need. So we've updated that opportunity, and that's the reason that's probably a slightly higher CapEx than you may have expected. William Peterson: Great. Maybe just my last one. Obviously, you mentioned earlier that you're not expecting any changes, I guess, to sort of Midwest premiums and things like that. I assume that also may be similar around where scrap spreads are. But given the high prices that were -- or cost, I guess, for your customers given where aluminum pricing is today, are you hearing any evidence of demand destruction or what areas would you be concerned with? And then maybe secondarily, we're hearing more about derivative tariffs any potential impact to your business? I realize it's early days on that second point. Keith Harvey: Yes. No, it's fascinating what's going on. I can tell you this, Bill, this is a way to look at '25 and '26 for Kaiser. No question, we had some significant tailwinds. We had some significant higher operating costs as we put in these capacities. We don't expect those to extend into 2026. So you're going to see a recovery on those costs that were out in '26 versus -- excuse me, '25 versus '26. Our outlook also has the expectation that you won't necessarily -- you won't see that tailwind reoccur in 2026. Now it may we're still seeing favorable higher prices than expected in Q1. But our outlook did not assume that to continue throughout the year. And so that gain that we're talking about here is purely operational gain based on the investments we've made, the cost and the efficiency gains we expect to make in our operations. So any continued higher price tailwinds are going to be a tailwind above what we're talking about on this call. So it could conceivably go higher than what we -- that's why we gave the initial outlook the way we did. I have to tell you, as you ask the question and I look at it constantly, Bill. We've seen absolutely no demand destruction in any of our product lines. We're seeing the general market, the general business start out very strong. We see continued bookings shipments going through the months. I'm more encouraged than I had been on the general engineering with GDP. So I'm feeling better about that side of our business. Our packaging business, as I talked about, we can sell every pound we can make Food business is up to the high single digits year-over-year growth. And then when I look at what's going on, I know the market corrected felt like while this 232 tariffs were going to fall off. All indications that we're getting are that what they're considering is more downstream type products and not removing the tariffs, but perhaps loosening tariffs but addressing the full end product versus just the raw material. And at this point, we really don't see those tariffs coming off. And even if we did, we've commented, we're neutral to positive, slightly positive there. And we've said all along, while we appreciate and enjoy the tariffs -- excuse me, some of the tailwinds we get from metal pricing we should stay at any point if we saw a rapid decline, those could turn into headwinds. And so we'll call those out, and that's why we remain super uber focused on operational gains in our business, which we've highlighted here in our comments this morning. Operator: There are no questions in queue at this time. I would like to turn the call back to Mr. Keith Harvey for closing comments. Keith Harvey: All right. Well, thank you for joining us today. We're off to a strong start to the year, and we're excited for our 2026 prospects, and I look forward to sharing details on our continued progress in April. Have a good day. Operator: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.
Operator: Welcome to Group ADP 2025 Full Year Results Presentation. [Operator Instructions] Now, I will hand the conference over to Cecile Combeau, Head of Investor Relations, to begin today's conference. Please go ahead. Cecile Combeau: Thank you, and good morning, everyone. Thank you for joining us for our 2025 full year results presentation. I am here with Philippe Pascal, our Chairman and CEO; and Christelle de Robillard, Executive VP for Finance, Strategy and Development, who will first go through prepared remarks for about 20 minutes before the Q&A session, for which we will aim for 40-minute duration. Before we start, and as usual, I remind you that certain information to be discussed today during this call is forward-looking and is subject to risks and uncertainties that could cause actual revenue and results to differ materially. For these, I refer you to the disclaimer statement included in our press release and on Slide 46 of our presentation. I will now leave the floor to our Chairman and CEO, Philippe Pascal. Philippe Pascal: Thank you, Cecile, and good morning, ladies and gentlemen. Thank you for joining us to discuss our 2025 full year results. Let me first turn to Slide 3 for our key highlights. 2025 has been a strong year for the group and a key step in preparing our next strategic cycle. When I took office as Chairman and CEO a year ago, I set clear priorities: reinforcing our economic model in Paris through an economic regulation contract; deliver the best possible quality of service and accelerate the rollout of the Extime model; secure the contribution of our international activities; and support all this with more agile and engaged corporate culture. With the new management team, we made solid progress on each of these priorities. We launched a very successful employee shareholder plan and modernized our compensation structure at ADP SA level. We improved quality of service day after day, started the Connect France partnership with Air France in June, and announced the renaming of Paris-Charles de Gaulle's infrastructure by 2027. We delivered key projects, our international assets and resumed dividend payment from TAV. And of course, we submitted our proposal for 8 years' Economic Regulation Agreement, now awaiting the regulator's first opinion. These achievements are combined with a strong operating performance in 2025 with all of our financial targets met, allowing the Board to propose a dividend of EUR 3 per share to the next general meeting after our dividend policy. About our financial performance on Slide 4. Revenue reached EUR 6.7 billion, up nearly 9%. This reflects strong [ project ] traffic during the year and the continued development of our service businesses, included the scope effect from the acquisition of P/S and Paris Experience Group at the end of 2024. EBITDA also showed solid growth, up 12%. This performance comes from higher revenue and from disciplined cost execution, leading to further margin expansion. Finally, net result came at EUR 382 million. It was affected by FX noncash item and tax impact in 2025, but remains 12% compared with 2024. Let me now move to Slide 5 about our employee-related achievements, which are a key driver of long-term value creation. Our employee shareholding operation was a clear success with 3 out of 4 employees subscribing. Employee ownership now represents almost 2% of the company's capital, showing strong internal alignment and confidence in the group's trajectory. It also creates collective incentive by sharing future value creation. Just a few weeks ago, we also reached an agreement with trade unions to modernize our compensation framework and employee status. The goal is to build a more consistent, financially sustainable and performance-driven model. The impact of this reform is already reflected in our 2026 outlook. This measure will support our long-term cost trajectory, the same that was underlying our cost discipline, Economic Regulation Agreement proposal. A quick word now on Slide 6 about the simplification and renaming plan for Paris-Charles de Gaulle Airport announced at the end of 2025. Our objective is simple: make the passenger journey clearer and smoother, especially for connecting travelers. In March 2027, when the CDG Express high-speed link opens, all terminals will adapt a single numbering system, and boarding area will be renamed using specific letters. This will bring Paris back in line with the best standards of major international hubs. This renaming is a visible step, but it is only one of the main projects we will continue to roll out to reinforce the attractiveness of Paris hub and other initiatives such as the ones included in our Connect France partnership with Air France. On Slide 7 now, still on the performance of our Paris assets, we continue to support it with several infrastructure projects delivered in 2025. First, the refurbishment of Runway 1 at Paris-Charles de Gaulle, which now meets best-in-class industry standards. Second, the commissioning of our geothermal plant for Paris-Charles de Gaulle Airport, a key milestone in our decarbonization road map. Third, the restructuring and extension of airside area at Paris-Orly, unlocking additional aircraft capacity and improving operational fluidity. And finally, the upgrade of baggage handling system in [ Terminal 2E ] and 2C at Charles de Gaulle, enhancing reliability. This project illustrates our ongoing efforts to maintain the high-performing and reliant Paris hub. Finally, let me turn to Slide 8 and highlight the key achievements in our international assets. We delivered several major infrastructure projects in 2025, including the expansion of Antalya Airport in Turkey and the expansion of Delhi Airport in India. Both platforms are now ready to support further traffic growth and to capture more retail potential, thanks to new commercial areas. Both Antalya and GMR Airport secured refinancing operation. At the same time, TAV Airports successfully negotiated a 5-year concession extension for Tbilisi airport, which is a highly contributive asset. And on the back of solid performance and deleveraging, TAV announced it will resume dividend payments this year, TRY 3.61 per share, or roughly EUR 10 million for ADP SA, to be paid in 2026. Overall, 2025 has been a year of strong execution and reinforced our foundation for the next strategic cycle. I will now hand over to Christelle, who will take you through the 2025 financial performance in detail. Christelle Robillard: Thank you, Philippe, and good morning, everyone. Let's jump to Slide 10 and dive into our 2025 results. In 2025, we delivered continued solid traffic growth overall with different trends across our platforms. In Paris, traffic grew by 3.4%, fully in line with our annual assumption. Growth was driven by international passengers, while domestic traffic continued to decline. Looking at the group, TAV Airports delivered a solid 6% traffic increase, supported by its international assets. GMR Airports showed 3% growth, reflecting a resilient underlying profile despite some challenges during the year. AIG, specifically Amman Airport, recorded 11% growth even in a tense geographical context. Overall, these trends confirm the strength of our portfolio and the resilience of our geographically diversified model. Now, turning to retail trends on Slide 11. Extime standard packs stand at EUR 31.7 in 2025, up 3.6% compared to 2023, but down 1.2% compared to 2024. After an outstanding first quarter, we saw a downturn in Q2, driven by several factors. First, a number of ADP-specific elements, which were largely anticipated: works in Terminal 2EK, the full year impact of the reopening of Terminal 2AC and the reallocation of some airlines there, but also a negative comparison base compared to 2024 due to lower advertising and the end of Olympic merchandise sales. In addition to these internal factors, broader external trends also weighed on performance. First, the slowdown in the luxury sector, but also significantly less attractive FX conditions since Q2 with stronger euro, while pricing strategy from luxury brands do not compensate for this effect. Despite these headwinds, we remain confident in the strength of Extime model. Underlying trends in most activities continue to support our long-term strategy. Moving to Slide 12 about consolidated revenues. As said earlier, it reached EUR 6.7 billion, up 9% this year, reflecting a solid momentum across all our main segments. In Aviation, the revenue increase was primarily driven by the continued growth in international flows, as well as the 4.5% airport fees increase implemented in 2025. In Retail and Services, despite the headwinds I just explained, contribution to revenue growth was strong, benefiting from the international traffic growth and positive scope effect from recent acquisitions, which serve the development of our model. Abroad, TAV Airports' international assets and services companies were the biggest driver, while growth in Turkey was more moderate due to macroeconomics. AIG showed a remarkable rebound, showing resilience despite the geopolitical context. Moving to Slide 13 to focus on our EBITDA. For 2025, EBITDA is up more than 12%, driven by revenue growth and good cost control. Excluding the integration of P/S and PEG, EBITDA is up 11.3%, above our EBITDA guidance of at least 7%. This strong performance reflects several factors: tight cost discipline in itself at ADP SA and retail subsidiaries, as well as at TAV. Parisian infrastructure is now fully open, which provides some operational leverage. We also benefited from positive base effects linked to Olympics-related expenses, which disappeared in 2025, and also the postponement of Exit/Entry System deployment to late 2025 and with a progressive rollout. 2026 OpEx are expected to increase due to this EES deployment. Slide 14 now to look at our net income standing at EUR 382 million, up EUR 40 million. This figure reflects strong EBITDA growth, as well as the base effect from the 2024 accounting impact linked to the GIL and GAL merger. However, they are largely offset by other effects worth reminding: in D&A, the negative base effect from last year impairment reversal at AIG; in taxes, the exceptional tax surplus on large corporations in France for EUR 92 million; and as was the case in H1, all through the P&L, we recorded impact from the abnormal variations in FX rates in 2025, affecting notably the contribution of TAV and GMR Airports for a total net loss of EUR 130 million at the net income level. Overall, this all resulted in a net income attributable to the group of EUR 382 million. The cash position of the group is nevertheless solid, as apart from the tax impact, these negative impacts are mainly noncash ones. So turning to the group debt on Slide 15. You can see net debt stood at EUR 8.6 billion at the end of 2025. Net debt-to-EBITDA ratio is improving to 3.7x EBITDA, in line with our 2025 target of 3.5x to 4x EBITDA. This deleveraging has been driven by the strong EBITDA growth, as well as the disciplined CapEx execution, both in Paris and at group level. Moving to Slide 16 to conclude this financial part, I will focus on the regulated activities. As you can see on the left part, regulated ROCE for 2025 stands at 4.3%, up 0.3 points compared to 2024. The strong growth from traffic and increase in airport charges was notably offset by the higher tax rate applicable in France for 2025. Let's look now at the right side of the slide, which summarizes the situation regarding 2026 tariffs. Our initial proposal, which included a 1.5% increase, was rejected in December, mainly due to divergencies on analytical accounting rules used to allocate costs and assets to the regulated perimeter. We then submitted a second proposal with flat tariffs on average. This proposal was also rejected on February 10, which means that airport charges will remain at 2025 levels from April 1, 2026. This is already reflected in our 2026 financial guidance, which Philippe will comment in just a moment. Now, importantly, the regulator explicitly stated in their decision that the ERA is the right framework to address structural topics such as allocation keys and that our envisaged timing remains valid. Our priority is to work through the regulatory process constructively, while protecting the interest of the company and its shareholders. With that, I will now hand it back to Philippe, who will now comment on our outlook and our strategic priorities. Philippe Pascal: Thank you, Christelle. Let's now turn to the financial outlook for 2026. Our 2026 guidance is built with discipline with 3 factors explaining the calibrated EBITDA outlook: flat regulated tariff in Paris; higher-than-usual staff cost increase linked to the reform in wage structure at ADP SA level; retail revenue dynamic in a still challenging context and continuing works in Terminal 2E Hall K. All in all, we expect EBITDA growth to be driven by international assets, TAV in particular, to reach above EUR 2.35 billion EBITDA at group level. We will continue to invest to prepare the future around EUR 1.45 billion at group level, on which, around EUR 1 billion at ADP SA with a gradual increase compared to actual 2025 CapEx, in line with the program set out in our proposed Economic Regulation Agreement. Our dividend policy remains unchanged, 60% payout with a floor of EUR 3 per share. Our proposal for Economic Regulation Agreement for '27-'34 will be negotiated over the course of 2026. Slide 20 shows the key parameters of our proposal, which are designed to secure a fair remuneration of the investments included in our plan. Slide 20 shows the timeline for the elaboration of this new Economic Regulation Agreement. And I want to highlight that despite the non-validation of the 2026 tariff, the process is fully on track. We are fully committed to deliver a good agreement, ensuring fair remuneration of investment. We have the support of airlines. We can see on the slide that we started the year with a positive constructive vote from airlines, both on the duration and on the industrial plans, which confirm the quality of our proposal and their support. We also have the support of the French State, which asked the regulator to issue a nonbinding opinion on our proposal, which is then expected by April 11. We anticipate that the regulator will make some negative comments on allocation key because the analytical accounting keys underlying our proposal are similar to those used for the 2026 projected tariff. We work through the process constructively, and the Economic Regulation Agreement is an appropriate framework to address such structural topic. And during the rest of 2026, we will continue negotiation with the State and hold the second round of user consultation in September. The objective remains unchanged: to obtain the binding approval of the ART in Q4 2026, followed by the signature of the Economic Regulation Agreement so that it comes into force on January 1, 2027. Overall, the timeline is progressing as planned with no deviation versus the schedule we shared in December. Moving to Slide 21, which illustrates how 2026 will be a year dedicated to preparing our next strategic plan for '27 -- 2027 and 2030. We will focus on 4 main pillars. First, economic regulation elaboration. With the negotiation of the new Economic Regulation Agreement, its signature will bring clarity and long-term [ visible ] on the financial trajectory of our regulated activities. Second, cultural transformation, continuing to build a more agile and performance-driven organization, while strengthening the employee engagement. Third, corporate social responsibility, ensuring our road map stays aligned with long-term environmental and climate ambition and accelerating our commitments. And fourth, the portfolio review, focusing on nonregulated activities to refine our strategic priority and management focus and to optimize our portfolio for long-term value creation. Together, these 4 pillars will shape the foundation of the group's next strategy ambition. With that, let's open the line for Q&A. Thank you. Operator: [Operator Instructions] The next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: The first one on this allocation of cost between regulated and nonregulated. [ ART ] concluded that there's a differential of 50 to 100 basis points on your returns due to the different views on cost allocation. Could you give us a bit more details? What are the arguments on your side that you believe the way you approach cost allocation is the correct one? Do you see reasonable chances to convince them to drop this claim going forward? And secondly, considering a more conservative view from ART in terms of your actual regulated returns, at least from my side, it seems that CapEx and a multiyear regulatory framework are the only things that could avoid cutting your tariffs in 2027. So in this sense, what is the minimum level of WACC that you're willing to accept in order to deploy this CapEx plan that you presented for ERA going forward? Philippe Pascal: So thank you for your question. So perhaps just to have a view about the debate with the regulator, there are 2 main areas of misalignment in the view of the regulators, the WACC and the allocation key, as you say. Perhaps to start on the regulated WACC, main takeaway from last week's decision is that the regulator clearly stated that the WACC will be higher in case of multiyear agreements. And we will have more insight when this -- issue their nonbinding opinion of the economic regulation proposal, which is expected in -- by April. So it's not possible to give you a minimum of WACC. The key element is to have a global balance and a fair remuneration at the end of the day for our Economic Regulation Agreement, but also if we don't have an Economic Regulation Agreement. We are very confident that Economic Regulation Agreement, it's a good vehicle to find a very fair remuneration for us due to the fact that the head of ART said clearly that we can discuss about that through this process, and the fact that in the methodology of the French regulator, we can have a higher WACC when we have a multiyear agreement. So, in line with this element, we are convinced that in the process, we can find a good balance. On allocation keys, in fact, the regulator estimates that we should implement analytical accounting correction that could increase the ROCE, the regulated ROCE by around 0.5 to 1 point. Among the pushbacks from the regulator on allocation keys, the most material are the space allocation key to allocate costs between scope regulated to share space in our terminals, in the boarding area, near the shops and so on. The key related to access to allocate the cost related to our airport shuttle system -- airport shuttle is a key element also -- we will resume discussion with airline and work through the regulatory process constructively, while protecting the interest of the company and its shareholders. That is very important for us and very clear. It's the fact that the French State, the decision of the government is to have a dual-till system with a regulated scope and a nonregulated scope. So we can obviously discuss about the cost allocation key if we respect this dual-till system. So we have -- obviously, we have to find the good rules and the good [ team ]. We have to work with the airlines. We have to work with the French regulator, and this work is on track with both airlines and the regulator. But at the end of the day, you have to respect the dual-till system. And I know that for the French State, it's vital because it's at the end of the French State, not at the end of the regulators. So globally, to answer your question, in fact, we have this key question of WACC and of allocation key, but we are very confident that the Economic Regulation Agreement and the process to elaborate this agreement, it's a good process to success, and we are confident to do that. It's the reason why we are not so worried about the decision of 2026 tariff. Operator: The next question comes from Tobias Fromme from Bernstein. Tobias Fromme: I'm trying to understand your traffic growth guidance in a little bit more detail. On Slide 7, you elaborate on the 2026 investment projects. What's the estimated impact of those projects on traffic growth, especially looking at sort of the runway renovation at CDG and capacity extension at Orly. If you will sort of not have to implement those projects, would the sort of guidance be very similar? Like, can you effectively shift the impact a little bit by having more aircraft flying into CDG, for instance? And then, on retail, when I look specifically at the different quarters, the performance of the businesses in the different quarters, I see that duty free has obviously gotten a lot worse over the quarters, about 8% Q1, Q2, flat in Q3, and then minus 2% in Q4. Is that the trajectory we should keep in mind for 2026 as well? And have you maybe seen anything on duty free in the first 2 months -- first 1.5 months of 2026? And that's it. Christelle Robillard: Thank you for your question. So regarding the first one in terms of traffic, so as you've seen, we've posted a guidance of traffic expected growth between 1.5% to 2.5% in Paris, mostly driven by international. Just to remind you that it's totally in line with the assumption taken in the Economic Regulation Agreement, and there have been no change since then. So globally, we expect in 2026 to see similar trends as in 2025, continued dynamic growth of international traffic with Middle East and Asia notably, as other destinations have already more than recovered, but also a steady and lower growth for the Schengen area traffic, where traffic is now [ mature ] and above 2019 levels, and finally, French domestic traffic to remain structurally lower. Regarding your specific question between CDG and Orly, indeed, the traffic in 2026 will be affected by temporary airside works at Orly that will constrain operations from April to December 2026. There will be, to be very precise, 2 work phases impact operation: April to early August, works on some taxiway; and from mid-August to early December, works on the runway itself. Some airlines can have chosen to proactively adjust their programs, reducing flights, transferring some activity to CDG and to reshape schedule. Some indeed chose to frontload reduction early in the season to smooth operational adjustments. But crucially, what you have to have in mind is that airlines will keep their early slots. And so, these cuts are just tactical, not structural. And all these elements of traffic in Orly are fully embedded in our 2026 traffic assumption. Regarding your second question in terms of retail performance, so indeed, the performance was quite different quarter-by-quarter. There was more an outstanding performance in Q1, and then a gradual decrease. Clearly, that began when the euro appreciated a lot. So, as you understand, our performance has been impacted by all those FX tailwinds. Regarding 2026, our assumption is broadly a stable FX rate with no reversal of the 2025 currency impact. There was also this trend regarding the slowdown on luxury categories, which have also affected once again due to this sensitive FX competitiveness. So this is something on which we will pay attention for sure. But our assumption takes into account, as I said, a broadly stable FX. You saw that we posted a hypothesis above EUR 32 in 2026. We have some levers to drive this [indiscernible] in 2026 and the [indiscernible] strength, the traffic mix improvement, so all this should contribute to stabilize our retail performance. Operator: [Operator Instructions] The next question comes from Dario Maglione from BNP Paribas. Dario Maglione: Two questions around the long-term regulatory agreement. I'm quite intrigued. You mentioned that you have support by the airlines for this agreement. Can you elaborate? And then, second question on this OpEx allocation and projection on regulated revenue. To what extent you're trying to find a compromise with ART or actually try to bring on board what ART said and just implement it? Philippe Pascal: Thank you for your first question about the support of airlines. In the formal process of the negotiation of an Economic Regulation Agreement, the starting point is the publication of the proposal in December. And the first step is a dedicated vote in a specific committee that we -- all the main airlines and representative organizations of airlines. So we executed this first step at the end of January in 2 elements. The first element, it's a specific for duration, and we obtained the full support of the main part of the airlines. And the second vote, it's about the proposal. That is clear. It's the fact that we have a favorable vote, positive vote due to the fact that all the airlines, and in particular, the main airlines in Paris support the industrial plan, the fact that we can develop and we have to develop the platform in Paris-Orly, but mainly in Paris-Charles de Gaulle. We have to develop the hub of SkyTeam. And we manage well this process because it's the industrial process. It's the result of a strong discussion with airlines and also the consultation of our main stakeholders during the consultation in 2025. So our proposal, it's a result of the first informal consultation and negotiation with the airlines. So -- but the good success is the fact that officially, when you consult the airlines, all the airlines adopt this project with a favorable vote. It's a good thing to try to convince the French regulator that it's a good Economic Regulation Agreement and well balanced. That is -- for your second question about the allocation keys, the ART requested an analytical accounting adjustment, but we have just said, it's to increase the [indiscernible]. The main pushback related to space allocation key, as I say, it's the number of square meter in the regulated and in the nonregulated scope, and also the key related to access. These topics require structural formalized work with airline, which are resuming immediately. So we work a lot, and the ERA is precisely the appropriate framework to solve this technical point. We have -- with the French regulator, we have a discussion, regular discussion, technical discussion, professional discussion. The regulator demonstrates a good understanding of airport infrastructure constraints. But we do not prejudge decision, but the tone is forward-looking. And ART confirmed that the ERA is the right avenue to [ track ] long-term topics. So, for the moment, we have a positive discussion. In fact, we are a little bit surprised about the decision of -- in December that is not in line with all the work that we executed with airlines and also with the regulators. So, a little bit surprised, but it's not the same tone before than after the decision, perhaps due to some claims about some airlines. But all in all, we have to continue the discussion and remind that the question of cost allocation key, it's also the question of the dual-till system. So it's not just the regulator, but it's also the French State. And we are very confident about that because our industrial project is vital for the development of the airport sector in France. So it's -- we have the full support of the French State. Operator: The next question comes from Jose Arroyas from Santander. José Arroyas: I wanted to ask you about your plans to review the company's portfolio. I think this is also something you talked about in December. But what do you exactly mean by a strategic review of nonregulated assets? Are you looking to sell some of the assets you already own partially or fully? Or are you looking to buy more of the assets you own? And if it is the latter, what type of businesses would you be considering adding? Christelle Robillard: Thank you for your question. So indeed, we announced in mid-December last time that we were going to conduct a portfolio review. So this is, of course, still our expectation. So the 2026 portfolio review will cover all nonregulated activities with the aim of clarifying long-term value drivers and the strategic role of each asset. We assess indeed every asset based on long-term value creation, strategic relevance and capital efficiency. At the end of the day, this review is not designed to trigger a major disposal. Having said that, we apply a clear discipline to cost allocation. We consider both disposal or acquisition only when they reinforce our long-term industrial and financial profile. So this is the way we will conduct this work. Thank you. Operator: The next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: Could I kindly ask on the OpEx side? You talked about the new compensation structure reform. Could you give a bit more detail on the actual wage increases in '26 and then the long-term savings associated with this new compensation structure? And maybe on this topic, could you talk, for ADP SA, the other OpEx components, what type of inflationary pressure would you expect in '26 versus '25? And the second one, if I may, coming back to the allowed return, I think ART proposed a 5.3%, 5.4% WACC for Toulouse and Marseille airports. And I know these are different assets with different considerations. But I'm just trying to take a step back if, at the end of the day, ART believes today, you're earning somewhere between 4.5% to 5.5% regulated return, you're not too far away from this 5.3%, 5.4% WACC. So what I'm trying to think conceptually, in my eyes, from here to grow your tariff, effectively, it's all underpinned by your regulated asset base growth or by your CapEx because if the WACC indeed ends up being 5.3%, there doesn't seem to be a lot of tariff increase. So could you help us a bit -- am I missing something? Are you still confident in a healthy tariff increase above the inflation levels in France over the next years? And what are the arguments in that regard? Christelle Robillard: So I'll comment on your first question regarding the staff cost reform. So, as you have understood during the presentation, this is a comprehensive renovation of ADP SA remuneration structure for both nonexecutive and executive, aimed at making salary progression more predictable, more individualized and structurally more sustainable. As mentioned, this reform will generate a significant impact in 2026 as we implement salary increases to compensate for the withdrawal of certain future benefits, especially the automaticity of salary increases. This will create a onetime larger step-up compared to our usual staff cost trajectory. In practical terms, the 2026 wage increase will be roughly twice the normal annual run rate. But clearly, all this impact is fully included in our 2026 guidance for recurring EBITDA above EUR 2.350 billion. Clearly, this will -- the aim of this reform is to rebalance the compensation structure and to make it more sustainable over the long-term period. So it will also help secure the assumption we took in the Economic Regulation Agreement of wage inflation at CPI plus 0.6 points. Regarding other OpEx evolution assumptions, so on your question about the inflation, we are expecting some classical inflation hypothesis, so between -- I would say, close to 1.5%. So, no specific element on that. Maybe just keep in mind that our OpEx base will be impacted, but like usual -- as usual, on consumable, by the trends with our level of activity and sales; on external services, as I mentioned in my presentation, by the deployment of Exit/Entry System, which was postponed in 2025; and on staff expenses, by this wage reform. And maybe just worth to say that, as you saw also, there was no significant move on the tax front. Philippe Pascal: So about the WACC, so what is clear for us is the fact that it's not possible to sign an Economic Regulation Agreement if we don't have a fair remuneration. The fair remuneration, we have 2 aspects of the fair remuneration. It's a level of WACC, but it's also the fact that we have to assume a pure convergence between the regulated ROCE and the regulated WACC. So about the regulated WACC, in fact, we can compare the situation of ADP with the situation of a regional airport. It's, as you say, not really the same airport, the same risk. That is a key element. the specificity of ADP, the fact that we propose an Economic Regulation Agreement for 8 years with EUR 8 billion. When you compare with Toulouse, it's not comparable because we have just a CapEx plan for EUR 130 million for 5 years, and we propose in ADP EUR 8 billion for 8 years. So globally, in terms of risk, we have a higher risk in ADP compared to the regional airport. And we are very optimistic for this real environmental economic view and the fact that, in the methodology of the French regulator, we have in line -- the fact that we have to assume a part of risk. We are globally confident at the methodology of the regulator that is -- it seems the level of regulated WACC is higher in case of this multiyear agreement, higher so probably in the high part of the range, perhaps a little bit higher. We have to assume that. So, in terms of CapEx program, for me, the question of the level of CapEx, it's not in line with the level of WACC. We have to -- we need a fair remuneration for a low CapEx program or high CapEx program. It's the same thing. So in fact, if we don't have an Economic Regulation Agreement, mechanically, we -- it's not possible to deliver an industrial project as we plan. But we are globally confident due to the fact that it's vital to launch this plan and to compete with our main competitors like Istanbul, [indiscernible] and so on. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. The next question comes from Nicolas Mora from Morgan Stanley. Nicolas Mora: Just wanted to come back on the cost allocation and just the support of airlines. Obviously, they are on board on the industrial plan. I don't think anybody questions that. From the ART documents, they're not really on board on the cost allocation. I mean, they're talking about north of EUR 200 million of cost they would like to be put into the unregulated perimeter. They would like a cut in RAB. So is there for you a point where you just walk away because you just can't -- just basically can't [indiscernible] a 3-digit number of costs being switched into the unregulated perimeter? That's the first question. Then on -- if we can come back on the results and just on the retail, just in '25, can you explain a bit why the operating leverage is so good? I mean, the step-up in EBITDA is quite impressive versus the revenue rise. Just wanted to know if there were any special elements there or what you're doing to actually squeeze a little bit more from the revenue? And thinking about retail in '26, just a confirmation. So we're going to start the year with tough comps, still some FX headwinds, still some construction headwind. So the year is pretty dramatically back-end loaded in terms of improvement in performance and spend per pax. And last one, sorry, on '26 guidance. Can you help us understand what you've put for TAV in your EUR 2.350 billion EBITDA kind of minimum guidance? Are you at the midpoint? Are you at the low point, the high point? Because TAV range is quite wide. Just trying to understand what you've got in there for TAV and imply what you've got for Paris Airport. Philippe Pascal: So thank you, Nicolas. So about your first question and the fact that we have to discuss with the airlines about the cost allocation key, in fact, we have the support of the airlines to execute the industrial project but also to execute this project through an Economic Regulation Agreement. It's support in principle, but we have to discuss about the details. We have to discuss about the global economic balance. So it includes the cost allocation key. It includes also the level of WACC. It includes the level of CapEx, of OpEx and so on. So -- but in principle, it's a result of first discussion that is appreciated from the airlines. In terms of cost allocation key, we discuss a lot with the airlines. We execute all the guidelines of the French regulator. And it's quite a surprise for us to have a negative decision of the French regulator due to the we take account for all the elements that the French regulator wants to study. So, after that, in terms of cost allocation key, as I say, it's a global balance with all the other factors, first. And the second point, specifically for the allocation key, the question is perhaps to discuss about the key in terms of square meter for the regulated scope or not. But it's also the fact that we have some red line, and the red line is to assume the fact that the decision of the French State is the dual-till system of ADP. So, that is the red line, and it's red line for ADP, but it's mainly a red line for the French State. For the other question, Christelle? Christelle Robillard: Yes. So regarding your second question in terms of retail performance, so indeed, Retail and Services outperformed despite the SPP headwinds we just mentioned in our presentation. So this solid growth was attributable to 2 main elements. First, a solid cost discipline. This was the case at all the group level, as you can see, because we outperformed on every segment, but this was particularly the case on the retail segment. We also had a cautious stock management and purchasing policy. So this is the first reason. And the second reason is the Extime model, which clearly continues to drive higher-margin categories such as beauty. Maybe just to mention one figure, interesting figure, on Beauty, we made a plus 6% performance compared to a minus 2.6% on the national market. So it shows the robustness of our strategy and model. So this performance is partly structural, as you can understand. Extime has clearly raised the operational and commercial productivity of our retail ecosystem despite the FX and luxury cycle headwinds that remain in the near term. More generally, once again, when you look at our 2025 financial performance, we were well above our guided at least plus 7% EBITDA, but with strong double-digit increase all across our segments, both in aviation, retail and international. Maybe concerning your third question, the assumption we are taking in our EBITDA guidance for TAV, so the guidance we take at the group level above EUR 2.350 billion is totally in line with the EBITDA guidance disclosed by TAV, which is guiding for EUR 590 million -- for a range between, sorry, EUR 590 million and EUR 650 million EBITDA in 2026. That means EUR 30 million to EUR 90 million EBITDA growth. So this is the underlying assumption for TAV. And bear in mind that the rest of the performance of the group will be impacted by flat regulated tariff in Paris, by the higher-than-usual staff cost increase that I mentioned previously, and this retail revenue dynamics in a still challenging context and the continuing works in Terminal 2E Hall K. Thank you. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Cecile Combeau: Yes. No more questions this time indeed. And so, it's time to close today's call. Thank you, everyone, for having logged into this conference. The next planned quarterly publication will be on April 28 with the 2026 first quarter [ review ]. And in the meantime, of course, feel free to get in touch with Eliott or myself in the Investor Relations team for any follow-up questions. Enjoy the rest of the day. Thank you. Operator: Thank you for your participation. You may now disconnect.
Penny Himlok: Thank you. Good morning, everyone, and thanks for joining us this morning. On behalf of Kumba's executive team, a very warm welcome to those of you here in the room with us and to everyone joining us on the line. I'm Penny Himlok, Head of Investor Relations, and I'm pleased to be joined by our CEO, Mpumi Zikalala; and our CFO, Xolani Mbambo, who will take you through our annual results shortly. Before we get started, just a quick safety note. As you know, safety is our first study. There are no safety drills today. So, if you do hear an alarm, please follow the instructions and calmly make your way back through the exit through which you entered and please meet in the front where safety Marshalls will give you further instructions. [Operator Instructions] And of course, please take and note the disclaimer, especially with going the forward-looking statements. Turning to today's agenda. We'd like to -- we'll be keeping to the usual flow. Mpumi and Xolani will walk you through our performance for the year, and then we'll open the floor for Q&A's. We also have members of our executive team today with us, and they will be available to address any questions at the end. Thank you. I'll now hand over to Mpumi. Nompumelelo Zikalala: Thank you, Penny. Good morning, everyone. It's great to see all of you again. And as Penny said, thank you for joining us this morning. 2025 was another year marked by macro volatility with geopolitical tension and trade policy uncertainty that have become, as you all know, for now at least, the new norm. Our priority has again been to limit the impact of that volatility by focusing on operational excellence to be as competitive as possible, whilst we market our product to fully realize the full value of its quality. The business reset in 2024 laid a firm foundation and disciplined execution in 2025, resulted in consistent output and reduced costs despite an increase in waste mining and thus bringing back the mining fleet that we previously parked. We also made steady progress on our UHDMS technology project, a key investment that unlocks more value from our resource base, optimizes rail capacity and strengthens our position in the premium high-grade iron ore market. I'm pleased to say that logistics performance has certainly remained stable. I know that, that question keeps coming up. There's still more work to do, but we are seeing real progress as a result of the collaboration between the National Logistics Crisis Committee, the Ore User's Forum, which Kumba is part of, Transnet and indeed our government. As we move into 2026, I believe we remain well positioned to deliver long-term value for all our stakeholders. Now moving into the results. Let me begin, as I always do, with safety, which, as you know, by now, is our first value. This year, we achieved 9 consecutive fatality 3 years of production at Sishen and as of last week Friday, 3 years at Kolomela. These are important milestones and a testament to the dedication and vigilance of our workforce shift after shift. But success can bring the risk of complacency. So, we know that we still have more work to do, particularly as the UHDMS project changes our risk profile with an increasing number of service partners, particularly at Sishen Mine. While our total recordable injury frequency rate of 0.95 remains well below the ICMM industry average of 2.29 for 2024, we must remain fully focused on our first value, which, as I said, is safety. And we made good progress embedding Kumba's safe way of work through constructive collaboration with our service partners and the implementation of our fatal risk management program, which is a program that encourages our teams to know what it is that can cause them significant harm in a simple and focused manner. On the health and wellness front, we have now passed 9 years with no significant health incidents, and this reflects the high standard of care we apply to occupational health and the safeguards we put in place across all our operations. Turning to our business overview. We benefited from a more cost-efficient base and delivered on our sales, production, as well as our cost guidance. Production was driven by strong growth from Kolomela, whilst improved rail performance helped us with slight improvement in our sales. Higher iron ore prices, lower operating expenses and a stronger exchange rate contributed to a 14% increase in our adjusted EBITDA. In addition, return on capital employed improved by 5 percentage points to 46%, reflecting more efficient use of our capital to generate earnings. On the back of the solid financial performance, we declared a final cash dividend of ZAR 5 billion. And in addition to this, ZAR 1.6 billion will go to our empowerment owners, which include the Sishen Iron Ore Company Community Development Trust and as you know, our frontline employees. This brings the total full year dividend to ZAR 10.3 billion to Kumba shareholders, and this number excludes the ZAR 3.3 billion that's the dividend towards our empowerment owners. We have a strong track record of delivering stakeholder value, and we delivered again bringing ZAR 58 billion of enduring stakeholder value, and this covers the whole range of our stakeholders. With that, moving on to sustainability. Our purpose remains for us to reimagine mining to improve people's lives. And through our sustainable mine plan, we've done exactly that. Water is a vital resource. And although we operate in a water scarce region, both of our mines are water positive, and we share this excess water that we intercept with our local communities, as well as other local businesses as well. We supplied over 16.5 billion liters of water to our communities, providing drinking water to around 200,000 people in our local communities. We also reduced our freshwater withdrawals by 4% to below 7 billion liters, contributing to an overall 19% reduction from our 2015 baseline. We've created over 800 employment opportunities outside of our mines. You know that we need to drive for efficiencies within our own mines. But when you look at the number of 800 jobs, this brings us to a cumulative number of jobs supported outside of our mines since 2018 when we started measuring this to well over 42,000 jobs. In 2024, Kumba became the first African iron ore miner to achieve the IRMA 75 standard and IRMA stands for the Initiative for Responsible Mining Assurance. And as we've said before, not everyone from the mining industry subjects themselves to this level of assurance. You do it because you want to do it. Well, I'm pleased to say that during 2025, both operations maintained IRMA 75, solidifying our position as a supplier of responsibly mined iron ore. Tomorrow, together with the rest of the Anglo American Group, we will be updating the market on our sustainability strategy. I've got to say that over the years, we have made significant progress. And we also, however, recognize that a lot has changed, both within our business as well as broader stakeholder expectations. I am very proud of the work we have done over the years and the milestones that we've achieved and look forward to sharing more details just around our refreshed strategy with you tomorrow. Now moving on to stakeholder value creation. We continue to deliver meaningful impact to our various stakeholders, as I said, through the ZAR 58 billion in shared value. We contributed ZAR 7.4 billion to the national fiscus through income taxes and mineral royalties, helping our government provide essential services and infrastructure to our fellow South Africans. Closer to home, 84% of our employees are from our mine communities, and this is in the Northern Cape province, a province that we call home, and their salaries and benefits, which they get directly benefit the local communities. We also support the local economy by ensuring resilient local supply chains. We spent ZAR 19 billion on BEE suppliers, of which ZAR 3.5 billion was with our local host community suppliers. And here, we focus significantly more on youth and women-owned businesses. For the community more broadly, we invested ZAR 485 million in direct social investment, focusing on the areas that matters the most, and that's health, education, as well as community development. Now I will take you through our operational performance. As I said earlier, it was a solid operating performance. Waste mining rose 6% with both operations gaining momentum over the year. Production was up 1% compared to 2024 and in line with our guidance of delivering between 35 million and 37 million tonnes. We took advantage of improved grade performance to reduce stocks at the mine and return our Saldanha Bay port stocks to more optimum levels of 1.8 million tonnes. And for those who followed us for some time, you know we haven't been at these levels for quite some time. The increased volumes also supported a 2% increase in sales to 37 million tonnes at the top end of our guidance. Next, looking at production in a bit more detail. The overall focus for 2025 was getting the basics right, which for us is operational excellence and cost discipline. While waste mining was at the lower end of guidance, we importantly gained operational momentum through the year, with a 6% step-up in the second half, if you just compare H1 and H2. Waste volumes are driven by Kolomela's 30% increase, while Sishen was hampered by asset reliability challenges and only increased by 2%. As we move through 2026, we continue ramping up waste mining and we will need to invest further in our mining equipment to improve asset reliability, as well as operational efficiencies, and Xolani will touch a little bit on this a little bit later in the presentation. Looking at production, Sishen was marginally lower as a result of the planned drawdown of high levels of finished stock and plant maintenance that we did in preparation for the UHDMS main tie-in that will take place in the second half of this year. This was offset by a 7% increase from Kolomela, in line with our flexible approach to production. Cost discipline remained an important focus, and we realized over ZAR 600 million in cost savings during the year, bringing our cumulative savings since we started our reconfiguration back in 2024 to now ZAR 5.1 billion. And this important work just around the drive for cost efficiencies will continue. Now turning to Transnet's logistics performance. Ore railed to the port rose by 6%, and this was despite the 4 derailments that took place during the year. And I should tell you that the rate that we are seeing outside of the derailments should tell you that, that's actually increasing. Rail performance improved to 84% of contracted volumes, which together with improved equipment availability at Saldanha Bay Port resulted in a 2% increase in our sales. It's encouraging to see the improvement in Transnet's rail performance, and this is a direct result of the joint collaboration between Transnet and the Ore User's Forum. And as you know, Kumba is very much part of the OUF or the Ore User's Forum. The Ore Corridor Restoration program and the mutual cooperation agreement have enabled edge and maintenance to be done more timelessly and also efficiently. The planned 10-day annual maintenance shut, as well as a 26-day shut to refurbish stacker reclaimer #3 in the second half of the year were all completed successfully. The recovery of the logistics network is key to unlocking value, and we are certainly moving in the right direction. However, as we've said before, there's definitely still more work that needs to be done to restore the network to previous performance levels, and this will take some time. In terms of private sector partnerships, also called PSPs, the Ore User's Forum submitted a follow-up response to the request for information in November. As you may remember, we gave our initial response in May, and this was a follow-up response requested by government. So, they played back what they had from all the submissions in May and asked people to comment on that document, and that's what we submitted in November. As we consider the way forward, our key principles for participating in the PSP are essentially as follows. Number one, government needs to retain ownership of the assets with a private consortium using, maintaining and operating the OEC. Secondly, and here, I must add, Kumba is first and foremost, a mining company. We do not have the skills to manage a logistics system. And therefore, we need to partner with the concessionaire who can deliver the right services for us, as well as other users of the line for the benefit of not just Kumba, but clearly for the benefit of other users and ultimately, the country as a whole. Number three, for the concession to work, this should cover the full integrated system. It's the rail, the port as well as freight. And this should be over an extended period to unlock Kumba's life of mine ambitions. And then last but definitely not least, and very importantly, we would want to secure a viable commercial pathway, including the syndication of capital with partners. We certainly look forward to the release of the commercial request for proposal, which is the next phase, simply because this will be a key milestone in the PSP process for the OEC or the Ore Export Corridor. Notably, we've commenced with the work to renegotiate the Sishen logistics contract, which expires at the end of 2027. We aim to substantially conclude the renegotiations by the beginning of next year, which will be well ahead of the expiry of the Sishen contract. And now it's my great pleasure to hand over to Xolani to take us through the financials. Xolani, it's certainly great to have you on board. And I don't feel like Xolani is new anymore because he's certainly already adding value. And I'm sure that this marks the first of many presentations that we'll be doing together. Thank you. Please give him a hand. Xolani Mbambo: I'm not sure if Bothwell will be pleased when he hears this, because it appears that the numbers we put into the market are positive. And I only joined in January, and I'm graving the credit. So, thank you, Mpumi, for the kind words. It's really a privilege to be here today and for you to be listening to me to present these results. Last year, I had the opportunity to spend time with the Kumba leadership team when they were launching the culture. This gave me meaningful insight into the organization. I got to understand our people, the culture and the values that actually drive us as an organization. I've also been fortunate to visit both our Sishen and Kolomela operations. Seeing the dedication of our teams on the ground has been invaluable and has reinforced my confidence in the strength of this business. So, there is no turning back as Mpumi. So, now let's take a look at the market environment. As Mpumi mentioned, the period under review reflects a complex global operating environment, I'm sure you know of that. It's one that's characterized by elevated geopolitical risks and evolving trade dynamics. This has placed pressure on regional economic conditions, resulting in shifting demands for steel and iron ore products. So, if you look at the 3 regions where we send our product, in Europe, their GDP growth was 1.6% with crude steel output falling by 2%. And that was on the back of weak demand. However, the implementation of import tariffs, CBAM and CBAM is expected to fuel recovery in steel prices in the region. China achieved its GDP growth target of 5% for 2025, although steel output fell by 4.6%. This is because property remained sluggish and infrastructure investment declined. The bright spot was industrial production up 6%, and this is linked to exports, which remained robust. If you look at Asia, their GDP grew by 3.8% and steel output rose 3.2%. Growth was driven by urbanization, infrastructure, manufacturing in countries such as India, Vietnam and Indonesia. So, on the next slide, we look at the iron ore supply and demand impact on prices and premium. Following a strong start to the year, Chinese steel mill profitability came under pressure, as raw material input prices increased. We certainly got a lot of questions in our sessions this morning on that. Additional output from Australia and Brazil resulted in lump premium dropping to record lows. I'm told that we've now put [Technical Difficulty] from Brazil and Australia. Despite the tariff uncertainty and market volatility last year, our high-quality product attracted a quality premium of $10 per ton. Price increases in the latter part of the year yielded positive timing effects and marketing premium of $1 per tonne, a sharp reversal from negative $7 per tonne that we achieved in 2024. This is all good work that's been done by the marketing team. I can see them in front of us here, and I'm hoping they will continue to deliver on that as we focus on production going forward. Consequently, our average realized iron ore price at $95 per tonne was 12% above the benchmark price. What's important is that this is ahead of what our peers have achieved in the market, and it really enforces our strategy of focusing on premium product. So, let's look at the financials in terms of what all of this means. Kumba delivered a resilient set of results. I've discussed our average realized prices on previous slide, which contributed to this uplift in our earnings. If you look at our costs, particularly on C1, they reflect the stronger rand-dollar exchange rate. We delivered solid EBITDA, and I'll talk about this in more detail later. The headline earnings per share increased by 18% to ZAR 45.97, translating into dividends that offer shareholder value, real shareholder value. If you take a look at EBITDA, we achieved ZAR 31.9 billion, which was underpinned by revenue growth, lower costs, as well as positive stock movement. This was partly offset by a stronger rand, cost inflation and lower shipping revenue. We also received a boost from other operating income for logistics underperformance, which we reported on at interim last year. I'm sure you'll recall that number over ZAR 900 million. In total, EBITDA rose by 14%, giving our EBITDA margin a positive uplift of 46%, to 46%, I wish it was 46%. Last year, we were at 41%. What's even more encouraging for me is that our EBITDA cash conversion of 102% reinforced the quality of these earnings that we've achieved. So, not only do you see EBITDA, which in some instances can be removed from cash, we actually converted it to cash for every rand of EBITDA we generated, we generated cash of over ZAR 1, which is excellent. Now let's take a closer look at our C1 unit costs. Our C1 unit cost increased to $40 per tonne, and that's really a function of a stronger rand. In the absence of that, we would be retaining the similar level. In fact, at a constant rate of $18.60, which is what we guided on to the dollar, our C1 cost would be $38 per tonne, coming in just below the guidance of $39 per tonne. So, the strengthening rand isn't helping in this instance. Benefit from positive WIP stock movements and deferred stripping costs were outweighed by stronger rand and inflationary cost increases, as you can see in the chart. We continue to focus on cost optimization to preserve and grow our margins. Now let's move on to our unit costs at the mine level. If you look at Sishen, their cash unit costs remained broadly flat at ZAR 530 per tonne, and that's within the guidance that we provided last year. Sishen's cost inflation increase was offset by lower contractor mining volumes, capitalized deferred stripping costs and positive WIP stock movement. For 2026, we are guiding slightly higher unit cost of between ZAR 530 and ZAR 560 per tonne to reflect lower production later in the year when we actually implement our UHDMS main tie-in. Kolomela's cash unit cost, on the other hand, improved by 7% to ZAR 374 per tonne, and it outperformed the guidance that we gave to the market, which is excellent. Performance was on the back of deferred stripping cost capitalization, positive stock movement and production volume uplift. I'm pleased to say that cost inflation was more than offset by our cost optimization at Kolomela. So, they did a splendid job there. For 2026, we are keeping the unit cost guidance at between ZAR 430 and ZAR 460 per tonne. Now let's turn to our cash breakeven price. As mentioned, our breakeven price reflects our all-in costs. So, when you look at, this is all-in cost -- and this includes sustaining capital net of premium and above plus 62 index. This is where I expect my colleagues on the project side to reduce the CapEx and still deliver the same and then the marketing guys to pump the premium and make sure that they reinforce our exposure to premium product. And as long as we continue to do that, of course, in conjunction with the cost reduction going forward and driving efficiencies, we will maintain that breakeven price at an acceptable level. And all it means for us is at what level as a business should the iron ore price drop before things start to fall apart. So, the lower the price, the higher the -- what I call the safety margin. Improved breakeven price was underpinned by market premium and lower freight costs. Our goal remains to enhance margins by improving breakeven price through cost reduction and improving product premium. I'm saying that product premium improvement. Now let's move on to CapEx. If you look at our capital expenditure for 2025, it was ZAR 10.4 billion. And the key driver for that was ZAR 1.7 billion, which we spent on our UHDMS project. CapEx for this project will be phased in line with implementation sequence, and Mpumi will talk about that later in her closing slides. Our stay-in business, which is key for sustaining our business operationally going forward was flat, and it was in line with our guidance. Again, that's a reflection of our discipline. If you look at our deferred waste stripping, which was mainly driven by higher stripping ratio at Kapstevel, it was relatively high in Kolomela. Over the past months, our teams have undertaken a thorough review of our operating environment, the growth pipeline and the long-term strategic positioning of this business. So, what has emerged is that our mine optimization has given us cost efficiencies and the team that I found have delivered on that. I can't claim it at the moment. As we ramp up activities, we need to drive further cost improvements. These improvements must come through operational efficiency and better supply management. We wanted to fully capture these opportunities. We also want to ensure that we remain competitive and well positioned for the next phase of growth. And for me, competition means we far from the market. Australians are closer to the market. We need to be consciously aware of our cost position all the time. To achieve this, we are stepping up our capital investment program. This will help improve productivity and strengthen our long-term value creation. So, as a result of all of this, our CapEx guidance for this year is between ZAR 13.2 billion and ZAR 14.2 billion. Expansion CapEx is largely driven by our UHDMS, which we've mentioned several times now, is an exciting project, and the balance is on the exploration and technical studies. All of this is for growth. We are refocusing this business on growth. Between ZAR 3 billion and ZAR 3.2 billion has been allocated for this year. We are investing in work to support our future pipeline of life extension projects. And again, Mpumi will talk about this in her closing presentation. The total stay-in business CapEx is between ZAR 6.6 billion and ZAR 7 billion. About 2/3 of that relates to safety, capital spares, plant and infrastructure project or upgrades. Approximately 1/3 is allocated to heavy mobile equipment, which we are recapitalizing. In fact, our equipment in some of our equipment are beyond life and therefore, the agent needs to be replaced and that replacement will result in cost efficiencies going forward, as well as operational efficiency. So, it's quite key that we do that. And as an example, some of our trucks in many cases, are now close to 120,000 hours of operations. And typically, we normally replace at 80,000 hours. And that makes them less cost efficient to operate. The deferred stripping CapEx is expected to be between ZAR 3.6 billion and ZAR 4 billion. That's critical for us to continue to ensure that we open-up enough surfaces going forward for us to continue mining. This is due to mining higher stripping ratio in some instances as well, particularly at Sishen as we access the sections that have got a higher mining stripping ratio. In the medium term, CapEx will remain at similar levels. As you know, our UHDMS CapEx will peak this year and will then continue to reduce until the project is completed in 2029. Our baseline stay-in business, which is run of the mill business as usual, will be approximately ZAR 5 billion per annum on average in the medium term. Heavy mobile equipment, replacement CapEx is about ZAR 2.5 billion per annum on average going forward. Lastly, deferred stripping CapEx will remain at around ZAR 4 billion per annum on average. Now let's look at how we've allocated our capital. Our disciplined approach to capital allocation remains unchanged as a principle. Sustaining CapEx, value-accretive expansion projects and sustainable returns to shareholders remains our priority. For the year under review, we generated cash of ZAR 17.2 billion after paying for sustaining capital. That's a good achievement. ZAR 12.2 billion was used to pay base dividends to our shareholders. That was before allocating ZAR 4.8 billion to discretionary capital. This was largely focused on the UHDMS project together with additional dividends that would have been carried over from 2024 paid in 2025. Our dividend policy remains unchanged, and that's between 50% and 75% of headline earnings that we generate. It's very important that we understand that. We delivered ZAR 12 billion of attributable free cash flow. This has underpinned our Board's decision to declare a dividend of ZAR 15.43 per share for the second half of last year. Together with ZAR 16.60 per share that was declared at interim, our total dividend is ZAR 32.3 per share. And this means 70% payout of our headline earnings for the year. And this is at a yield of 9%, which remains a respectable yield. Maintaining a resilient and efficient balance sheet, especially in this volatile environment is extremely essential. And before I hand back to Mpumi, let me take you through my key focus area as I joined the organization. So, my priorities are very clear. First is to strengthen on cost efficiency. Good discipline over the past 2 years has delivered over ZAR 5 billion in cost optimization across 2024 and 2025, which Mpumi touched on earlier. It's important to continue that focus moving forward. And I will apply a fresh perspective on the ways in which we can be more efficient, and I cannot do it alone. I will do it with the support of the team. Second, is to enhance capital discipline. Cash flow performance need to be a critical focus for this business and every rand spend needs to be strongly challenged. In that context, we clearly have important investment programs in key phases. And these are notably our UHDMS project and HME program. So, going forward, there will be an increased capital intensity in this business. So, it's quite key that we focus on that spend. There will be strong discipline and tight governance on all decisions to ensure that money is well spent. Lastly, we remain committed to paying dividends through the cycle and maintaining our strong policy as it is. A payout of 50% to 75% as a dividend policy is quite strong. On that note, I'd like to thank you for listening to me. And now back to you Mpumi. Nompumelelo Zikalala: Thank you, Xolani. It's certainly great to have you on board. You've certainly hit the ground running, and it doesn't feel like you've only been here for a couple of weeks. And I'm looking forward to us working this journey together with the rest of our Kumba team. And then back to the room, ladies and gentlemen, before we wrap up, I would like to spend a few minutes running through how we see the picture of iron ore going forward and then make some specific comments around Kumba's future and our next steps to creating value. Turning first to the iron ore market. Our long-term view on global steel demand remains positive. Structural forces including economic development, population growth and the global shift to cleaner technologies will continue to shape and support demand over time. At the same time, the steel industry is becoming more fragmented and multipolar. While Chinese demand is expected to moderate, rising demand from India and other developing regions will more than offset this. And importantly, there's simply just isn't enough scrap in the system to meet this growing requirement. That reinforces strong fundamentals for iron ore as the primary source of iron units. If we focus on lump ore, which, as you know, is our core market, we are seeing interesting dynamics. The lump premium has been under pressure due to margin compression and increased supply. But as this excess supply works its way through the system and profitability improves, we anticipate much tighter markets emerging. The data already shows how lump supply is nearing its peak with most new volumes coming only from costly replacement projects in Australia. With 2/3 of our portfolio in lump, Kumba is well positioned for the shift that we see. Additionally, our product properties are well suited for blast furnace applications. As seen on the chart on the right, our products combined alumina and silica is within the ideal blast furnace zone. And this is the sweet spot that steelmakers operators aim for. Steelmakers blend different ores to reach this zone and many mainstream ores fall outside of this zone. And as a result, our ores are used strategically to optimize these blends. So, this is beneficial for our customers. We also serve a diversified customer base. Our premium lump goes into traditional markets where steelmakers prioritize high-grade ores, while our standard products are sold largely into China where demand is more price elastic. Across the range, our products consistently offer higher iron ore content, supporting stronger blast furnace performance. And with our UHDMS technology set to triple our premium grade supply, we gained the scale and flexibility to support this growing market demand for higher quality iron ore. This is where our product, quality, our technology, as well as our long-term strategy converge. And it is a key differentiator for Kumba as the industry evolves. Now let me give you an update on the progress made on our UHDMS project. We've received quite a few questions around the project. So, 2025 has been an important and productive year for our UHDMS project at Sishen. We've now completed 37% of the overall project, with 90% of the engineering work behind us. For those who may remember, previously, we paused the project because we are not happy with where we were from an engineering design perspective. So, it's pleasing to be sitting in this position at this point of the project. All major procurement has been completed. And because we are following a modular build approach, our Jig plant will continue running during the main tie-in, which will take place later on in the year. I know people have been asking when exactly. It's in the second half of the year, in August to be specific. And during this time, we will use stockpiled material to support consistent sales as we execute the main tie-in. And that's where when we talk about guidance, you'll see the differentiator, but we've essentially said that our sales guidance will remain going forward. On capital, we remain on track to complete the project within our overall capital budget. And as a reminder, we are phasing our investment in line with the execution of the project, which follows a modular approach. Our total capital spend on the project will be ZAR 11.2 billion and in line with the overall project progress, we've invested ZAR 4 billion to date. The construction of our first coarse and fines modules has progressed steadily. In parallel, the new coarse and fines modular substations has been completed. The bulk of the construction was actually done offsite, and we then moved the constructed modular substations to the site. And these are in the process of being connected to the first modules. The construction of the first modules has been slightly slower, but this has allowed us to learn the lessons, and we will apply these into subsequent modules. We anticipated this and planned for the modular approach simply because we knew that constructing within an existing plant was going to allow us to land. So, it's great to see these lessons coming through. These lessons will also position us well as we move into the main tie-in later this year. We are on track for the main tie-in with critical milestones achieved. And what's good for us is that a portion of the work originally planned to take place during the tie-in was actually brought forward for execution ahead of the main tie-in in order to derisk the scope of the main shut where possible. So, we wanted to limit the amount of work that we'll do in the second half of this year. Our UHDMS project certainly remains one of the most exciting projects in our pipeline. The technology not only enables us to increase the volume of premium grade products, it also allows us to use low-grade material more effectively, cutting waste and improving our overall cost efficiencies. And I've spoken about this before to say we are reducing our cutoff grade from 48% to 40%. And the economics around the project speak for themselves. EBITDA margins above 50% and an IRR of over 30% means that payback from full production is just 3 years. But for me, what matters most is the long-term benefit. UHDMS gives Sishen meaningful life extension and strategic flexibility for years to come, fundamentally delivering long-term sustainable value for all our stakeholders. Next, I would like to talk about the strength of our mineral endowment. Now quite a few of you have been asking us about the future of our business. And now I'm delighted to share some exciting news around this because you've been asking us to share a little bit more. Right now, we have approximately 764 million tonnes of exclusive mineral resources, and that's a powerful foundation. 471 million tonnes of that is already confirmed from our 2024 resource cycle. And we've added another 293 million tonnes, 2/3 at Sishen and 1/3 at Kolomela, which really shows that our exploration program is doing exactly what it's meant to do. We are not slowing down. Our exploration teams are actively expanding our understanding of the ore body and building options for the future. As I've said before, the Northern Cape province is a very interesting province when it comes to iron ore. At the same time, our mine planning engineers are enhancing pit designs to optimize the extraction of the ore body. Our ore reserves now stand at around 802 million tonnes. And since 2022, we've added 175 million tonnes before depletion. Now that's a big step forward and speaks to the long-term resilience of our business. We've just added another year to both Sishen and Kolomela's life, taking their life of mine to 2041. Our ambition is to, however, increase life of mine, and we are working towards a value-accretive pathway to improve or increase or extend Kumba's life of mine. I've already spoken about our UHDMS project at Sishen, which is exciting. I'd like to zoom into Kolomela. Here, we are building on a strong foundation. We are making real progress on 2 important resource areas. Firstly, Ploegfontein, already part of our resource base is moving through further studies and additional drilling to further increase our confidence around this great resource. I'm also pleased to announce that Heuningkranz has now also been added as a new resource area and it's progressing along the same track to convert its resources into reserves. Both areas make smart use of Kolomela's existing infrastructure, which will keep capital cost down and speed up future development timelines. So, in summary, our asset base is stronger today. We're investing in the right work, the studies, the technology, the exploration, as well as the increase in our asset base through the recapitalization of our HME fleet, which Xolani spoke about earlier. All of this is aimed at unlocking high-quality iron ore tonnes, improving margins and extending the life of our mines. And key to this is that it needs to be value accretive. And we are doing this in a disciplined way that ensures long-term value for all our shareholders. And that then brings me to our full year guidance. For 2026, we expect total production of between 31 million and 33 million tonnes, reflecting the main tie-in of the UHDMS project. As you recall, we guided the same number last year, so this hasn't changed. This is linked to 22 million tonnes from Sishen and 10 million tonnes from Kolomela. We have also maintained our sales guidance of between 35 million and 37 million tonnes, as we plan to supplement production with finished stock. Our C1 unit cost guidance is $45 per tonne and remains unchanged in real terms. The move from $40 to $45 per tonne is purely an exchange rate translation effect. Previously, our guidance was based on an exchange rate of ZAR 18.60 to the dollar and using a stronger exchange rate of ZAR 16 to the dollar naturally lifts the dollar reported cost. As you've heard from Xolani, capital expenditure is expected to be between ZAR 13.2 billion and ZAR 14.2 billion for the full year. Now before moving to Q&A, I would like to remind you, as I always do, of our value proposition. As we look ahead, the message is simple. While the macro backdrop will remain uncertain, we are clear on what matters most and executing well on what we can control. My priorities and my team's priorities for 2026 are very clear. Firstly, to continue lifting and improving on operational excellence because you can never stop on that, as well as driving cost efficiencies, Xolani spoke about this and the great execution on both our UHDMS project, as well as HME investment. Secondly, working towards logistics stability and optimizing risk-adjusted returns with long-term logistics capacity through the right partnerships. And last but definitely not least, understanding and advancing our potential value-accretive pipeline of life extension options, and I've spoken about them. And these will all be aimed at meeting market demand. Now across all of these initiatives, we will keep really tight control of capital and a strong focus on cash flow performance. That stands to ultimately benefit all of our stakeholders with Kumba in the best shape it can be to deliver results today, tomorrow and beyond. I'm exceptionally grateful that we have strong teams, and these are across all the various areas of our business. We also have a very supportive Board and committed partners across our stakeholder base to achieve this. And of course, we have the privilege of working with world-class assets. And that gives me absolute confidence in our ability to deliver sustainable value for all our stakeholders. With that, I will now hand over back to Penny, who will lead the Q&A session. Penny Himlok: Thank you, Mpumi. We'll now open for questions firstly in the room. I see already a hand up. And then we'll move to the questions on the webcast line and the conference call. Thanks. I see Tim has his hand up. Unknown Analyst: Congratulations on the results. I thought the received pricing was very good and operationally very solid, so well done. I'm just interested in -- I've got 2 quick questions. The first one, just on your resource and your reserve increase and resource change or your reserve and resource change. Just wonder if there's a change to the life of mine stripping ratio, just how you see the pit shell, how we should think about stripping over the course of life out to 2041. And then you've sort of indicated that you see potential for life beyond and you've declared this big resource. Perhaps you could just speak about the process of the sort of the ore body and what that means in terms of what it would take to convert that resource into reserve? Do we need higher prices? Or is it just a drilling issue? And then lastly, just a quick one. Kolomela, the cost was a really good cost result, but a bit of a step-up in costs for this year. If you could just give us a bit more color, that would be appreciated. Nompumelelo Zikalala: Thanks, Tim. Do you want us to answer, Tim or do you want us to take a few more questions, Penny? Penny Himlok: I think we should as Tim has asked quite a few questions, let's address those. Nompumelelo Zikalala: Okay. Thank you and it seems we will not remember all the questions. Tim, starting with the first question, and I'm going to ask our Executive Head of Technical and Strategy, Gerrie, to add to this. So, in our guidance slide, you would have seen that we talk about both this year's strip ratio, as well as the life of mine strip ratio, which essentially caters for the endowment that's already been converted into reserves, and that forms part of our life of mine plans. So, when we guide on those figures, that's already, I guess, built in. And as we've said before, clearly, Sishen's strip ratio reduces if you just look at this year and the future years. And if you look at Kolomela, it's fairly flat. I mean it's a slight difference. I'm going to ask Gerrie to talk a little bit just about the phasing and to also talk about the process that will now follow for both Ploegfontein as well as Heuningkranz, just the move from resources to reserves. Thanks, Tim. Gerrie Nortje: Yes, thank you, Mpumi. Tim, some really good questions, as always. Look, I think, firstly, just on the strip ratio after 2041. Of course, we can't guide on that at this point in time. We've only declared resource. we have not yet declared a reserve and as such, it's not included in the life of mine plan yet. So, maybe I'll start with the approach that we follow in terms of how we optimize our business. So, you will see in the resource reserve statement that we apply a 0.7 revenue factor for reserves. The reason we do that is to ensure that we always have a healthy margin throughout the life of mine. Now of course, you can follow different approaches and will impact the margin. What we have changed fundamentally last year as part of the business reconfiguration is to take a cost approach. So, not to only respond to prices, but to make sure that we target the right cost position. Now if we look at the current guidance and the cost position, essentially, if you look at CBEP, we are attempting to remain within those ranges over the life of mine and even when we extend the life to maintain a similar cost position. So, our objective is to remain below the $70 per tonne. And as such, when we optimize the mine, enhance the life, we target that, and that's why we then derive the revenue factor, which will then obviously declare the reserves. Now, Ploegfontein and Heuningkranz has been in the portfolio for a number of years. Ploegfontein previously declared as a resource, Heuningkranz only declared now. The reason we declared it now is we do meet the requirements from an RRPEEE perspective, and we are comfortable that it meets the requirements to declare resource. Now it forms a really important part of the life extension of our business. What we are doing at the moment is improving the geological confidence and the study work. As soon as we get to a pre-feasibility level and the geological confidence at the required levels, we can then declare a reserve. Now typically, it takes us about 2 to 3 years to work through the study phases. It could be a bit longer, but we have time if you consider by when we have to respond to extend the life of mine. So, immediate focus now is to drill additional holes at both Ploegfontein and Heuningkranz, as well as other areas of Sishen to complete the studies, put it through the different stage gates and then, of course, declare a reserve. At that point, we will then be able to update the life of mine and we'll also then guide on the life of mine strip ratio. But we are attempting to remain at similar levels over the life of mine in terms of strip ratio. And of course, it will give us optionality of extending the life quite significantly. Now if we just look at Heuningkranz quickly, I'll just say one more thing for me. So, Heuningkranz is about 20 kilometers away from Kolomela. Ploegfontein is located on the Kolomela mining reserve, as well as Heuningkranz actually. So, we don't anticipate massive capital investment to unlock the resources and reserves in time. Reason for that being we can leverage the Kolomela infrastructure and the hub to essentially mine those areas. So, that's why we really like this. Secondly, if we look at the cutoff grade that we've applied for Heuningkranz, 61% Fe, the bulk of that will essentially be DSO. So, we will not require extensive beneficiation. Again, lots of benefits in terms of tailings requirements, as well as beneficiation requirements. So, it is essentially part of our strategy to extend the life without increasing the cost and making sure that the margins can potentially increase. So, I added quite a bit there, Tim, but... Nompumelelo Zikalala: Yes. So, Tim, as you can see, we're very sensitive not just to the excitement around the resource, but essentially how we'll ensure that whatever it is that we look at will be value accretive. And then coming back to Kolomela cost. Thanks, Xolani. Xolani Mbambo: Yes, if you look at the performance of Kolomela in 2025, there was a benefit of uplift in volume in terms of the tonnage. They actually overperformed, and that would then be a function of a lower cost per tonne. The expectation going forward is that the volumes will normalize, of course, at a similar fixed cost. And the other thing that we're addressing now through our colleagues is, if you look at the drilling machines, they're quite old. And therefore, the cost of maintaining those and operating them is becoming a challenge. And that's one of the reasons why we've now have got that replacement program going forward, which will assist in ensuring that those machines are replaced and therefore, start running efficiently, both from operational perspective, as well as from cost perspective. So that's what guided our view going forward. Nompumelelo Zikalala: Yes. And Tim, to close off on this, we actually spoke about this during the period of the reconfiguration that -- so, you would have seen a higher differential between what we said around the strip pressure for the year and the life of mine strip ratio. So, we spoke about the fact that we would see an increase in terms of the stripping that we need to do at Kolomela, still very much part of the plan that we've spoken about before, which is linked to Kapstevel South. So, we still remain on track. Penny Himlok: Brian? Nompumelelo Zikalala: Brian? Brian Morgan: It's Brian Morgan, RMB Morgan Stanley. Just a question -- 2 questions, actually. So, on the HME replacement that you've spoken about, can you just tell us, is it the '26, '27 story? Does it begin to roll off later on? Or is this a new normal? I think in the past, we've seen these sort of cycles and they last for 2 or 3 years and then they roll off. Just if you could just give us a bit of color on that. And then, just on the rail contract, I think I've asked this before, but I'm still not sure in the answer. If we're aligned third-party access onto the rail and you've got the PSP on the maintenance and everything like that, who would you be contracting with? Who are you negotiating your new rail contract with? Nompumelelo Zikalala: Thanks, Brian. Two interesting questions. I'll take the first one just for the HME replacement. Firstly, I think our teams have done a good job. So, if you consider that effect, I'll use a trucks example, and I'll talk about drills as well, Xolani spoke about that. Typically, other miners would do their replacement at around 80,000 hours, but our teams had a look at saying, could we actually extend the hours on a truck without spending significantly more because as you can imagine, it's more of an OpEx issue. But you get into a space where it becomes more expensive to run the fleet and your efficiency start reducing. So, we've stretched it, and that's why Xolani spoke about the fact that some of our trucks are now sitting at close to 120,000 hours. But clearly, we are not just opening the pockets from a capital perspective. We are still following a logical approach to say, how do we do condition monitoring, what do we replace, et cetera. Now if I use the example of drills that Xolani spoke about from a Kolomela perspective, this one is a simple one. The drills are there, the spares are obsolete, so you can no longer get them. So, what does that mean? It means that you can't maintain that fleet. And with the replacement, we are trying to do a like-for-like, which will help us with the balance of our spares that we essentially keep. So, we're following, I guess, a logical approach that ultimately says that as you replace the fleet at the right time, you get a swing in between the OpEx, which would have started going up and your CapEx clearly because you do the investment and that essentially then drops your OpEx on a go-forward basis. And then the second thing that you get is just around productivity of the fleet itself. So, what's the timing, which is your question? So, you would have seen that we guided for next year, but we essentially gave you guidance for the medium term, which is typically 3 years. And we will continue doing further optimization work. But as you can imagine, it's not as if the entire fleet is sitting with the same number of hours because we typically would have bought the fleet at different intervals. So, we'll definitely keep you updated on that part. The key is, we are following a very logical approach with regards to the replacement of the kit, and we essentially think about the life cycle cost and balancing both OpEx and CapEx. Let me just check if Xolani or Gerrie you want to add anything? Xolani Mbambo: No, go ahead, yeah. Nompumelelo Zikalala: And then on the rail contract, it's an interesting one, Brian, because as you say, there are multiple things that are taking shape. So, the reforms are taking place. And this is where you see the doors being opened around PSPs, and we are tracking that through Vempi, who heads up the space exceptionally well for us. The work around PSPs with us being clear that when we talk about PSPs, we don't necessarily want to be a concessionaire because people started saying, do you want to be a rail company? And we said, no, no, no. We just want to partner with the right people. And then secondly, what's also taking place within the reform space is exactly what you've spoken about, the train operating companies. So, we're keeping track in terms of what's happening in that space because ultimately, this is all about, I guess, the liberalization of this space. But it's just that the multiple things are taking place at the same time. At the same time, we've still got a contract. So, the other elements are maturing, but they are not yet finished. So, it is just right that we continue with the renegotiation of our contract. For us, what's been pleasing is that in engaging with Transnet, they also want to go through the renegotiation because if you think about them, they are also thinking about the fact that they want security. Clearly, the different things are happening at different timelines, but we are moving them in parallel and making sure that we are very much mindful of what's happening in the various spaces. The key, however, is that as various things taking place at the right time for the right reasons. It's just that we need to make sure that we remain on track just in terms of the various monitorings. Vempi, do you want to add anything, go for it. Unknown Executive: Good morning. Hi, Brian. Nompumelelo Zikalala: Head of Logistics. Thanks, Vempi. Unknown Executive: Brian, just a quick comment. I think there's 2 things that you need to understand. The first one is, we always thought that the PSP work will happen before the contract renegotiation takes place. We've now seen that, that is slowing down a little bit, which means that we need to renegotiate the contract now before it expires at the end of 2027. So, that's the first thing. The second thing is the regulatory reform that's happening at the moment means that we are going to renegotiate the contract with Transnet from a freight rail and a port perspective. So, our new contract is likely going to be with freight rail and ports, but it's going to exclude the infrastructure manager because Transnet is now being split up in the infrastructure manager and also the rail and port operations. What we are considering at the moment is to see whether we can move closer to TRIM, which is the infrastructure manager because the infrastructure management is going to be the critical part that takes us back from the levels that we are seeing at the moment to the design capacity that we all want to see in a couple of years' time. So, although we're contracting or potentially going to contract with Transnet freight rail and port terminals, we're also keeping the options open through the network statement to see what options there are to apply directly from slots or for slots directly from TRIM. Nompumelelo Zikalala: So, we'll stay close to all the various aspects that are moving, Brian, yes. Penny Himlok: Okay. I don't see any more hands in the room. If there are no further hands, I'll go to Chorus Call. The first question is from Shashi from Citi. He's asked, how much of the operating cost benefit can we expect from the mining fleet recapitalization program? That would be for you, Xolani. Xolani Mbambo: Yes. That's a very good question. So essentially, what we -- the way the process is going to run is that as the, as the equipment gets replaced or just before it gets replaced, there will be a business case for each of the equipment in terms of what it does on the maintenance cost in relation to its replacement. And that will start coming along as we actually execute on implementation. So -- and also because we're going to be dynamic around a choice whether we stretch some of the machines so that we've got the staggering. It's not a question of having a view at this point in time in terms of how it's going to shape the maintenance cost going forward. But certainly, as we run through the business plan, it's one of the things that I'll be looking at in terms of if you execute on a particular replacement of, let's say, the truck what are the maintenance cost of the existing truck that is being replaced and what then happens on the business plan to make sure that those savings are actually captured. And if you don't see that coming through our EBITDA going forward, then I'll be here to be challenged on it. So, we don't have a -- I wouldn't say here and say I actually do have a view of what that looks like, but I certainly will have a view as each equipment piece gets replaced. Penny Himlok: Thanks, Xolani. Nompumelelo Zikalala: Do you want to add... Gerrie Nortje: I'll just add one more thing. So, remember, there is a bit of a lag. Now of course, there's a clear cost benefit in the recapitalizing fleet. If you consider the capital required to essentially continuously replace components versus a new equipment, you have a number of years where you don't spend anything on components. So, there's a huge cost benefit. The fleet is quite large. So, it does take a bit of time to get through it. And when you start getting through it and the lag starts coming through, the cost benefit will be clear. And I think the cost benefit will be in both the CapEx as well as the OpEx. But I think just be mindful that the fleet is large. It takes time and it's got a bit of a lag, but when it comes through, it will be clear. Penny Himlok: Thanks, Gerrie. Well, maybe we should give Timo a chance. There's a question on CMRG that's also come through. That's from Anton Nolo. He's asked, how much of an impact is the dispute between the major miners and CMRG going to have in the iron ore price and the lump premium? Unknown Executive: Thank you. I was feeling a bit left out, so I'm happy to get a question. How much about the impact on the iron ore price from the CMR dispute? Well, when you talk about the dispute, I think you're referring to BSP's dispute with CMR. I should add that we are engaged in discussions with CMR. We have been for much of 2025. They are not easy discussions. They have accelerated late in 2025. They have intensified, but they are very constructive discussions, I must say. There is a bit of a shift in the power balance between buyers and sellers in the iron ore market, given that CMR represents probably 2/3 to 3/4 of overall iron ore imports into China. So, they are forced to be reckoned with. It's too early to speculate what the outcome of our discussion with CMR is going to be. We continue those discussions. In fact, Ibrahim and myself, we're on our way to Beijing next week. We were there in January. We've got our next meeting lined up for March also. So, we are in those discussions. They are in a very positive spirit being conducted, and they span many elements, the use of index. I mean, many elements are included in those discussions. So, it's too early to speculate where we're going to land with CMR. Impact on the lump premium specifically, I really don't expect much of an impact on the lump premium at all from the CMR discussions. The lump premium that you've seen for the past year, a lot of people focus on the low lump premium that we've seen recently. But keep in mind that for the year as a whole, the lump premium was pretty much in line with what it was in 2024. We've started seeing a recovery in the lump premium. It's got nothing to do with CMR. It's got to do with the fact that the lump premium was really low, mills have started using more lump. The share of lump in that burden has gone up by about 1 percentage point already. I think we would have seen a stronger recovery in the lump premium had it not been for the very strong metallurgical coal prices. So, the lump premium is on its way back, I believe, to a level of $0.15 to $0.20 per dmtu where it has been. But keep in mind, the lump premium tends to be extremely variable. So, we are starting from a low base now back to that $0.15 to $0.20 level. Longer-term, we continue to be very positive on the lump premium. And the slide that we showed indicates that we think we are nearing peak supply in lump and that from a couple of years out, we're going to see a steady reduction in the availability of lump, coupled with a continued increase in the use of lump in blast furnaces, I think that's a very, very positive picture for the lump premium. Penny Himlok: Thanks, Timo. And we have a question from Andrew Snowden from [indiscernible]. He's asked, and this would possibly be for you, Xolani, to speak about the impact on cash flow from potential working capital release in 2026 as we draw down inventory. Can we give any color on this by way of guidance? Andrew likes to ask for more information and we will have a chat with Andrew when we're down in Cape Town, but maybe we can just give him some highlights. Xolani Mbambo: Yes. Look, it's a tricky one. So, essentially, you'd have seen an uplift in our volumes on the stock side, both from WIP and to an extent from last year, you'd have seen finished goods or the saleable tonnes in terms of the mix more on the port than what we'd have seen in the prior year. And of course, all of those will wash through the income statement. And what will then happen is unless we stick to the mine plan that calls for more, we should see no impact in working capital in terms of the stock movement. But if at the moment to deviate from that, then of course, you'll see a negative effect on your income statement, as well as on your cash flow in terms of the movement. So, it's a function of us making sure that as we mine, we stick to the mine plan, so that the flow of WIP movement remains constant in terms of the cash flows. That's how I can give as a guidance in terms of what you're looking for. But on the one on one, we can perhaps go a bit more detail to understand specifically what is it that you'd be looking for on that cash flow. Penny Himlok: Thanks, Xolani. We've got a question from Katekar from Investec Bank. She's asked about the UHDMS tie-in in August, if it's been fully derisked? And if not, what are some of the aspects that could still surprise? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, I guess a couple of things around the tie-in. One is the planning of the actual tie-in has been completed. And that's fundamental because we wanted to conclude the planning and also do assurance on the plan because you typically have our own team, and we bring in additional experts to say, is there anything else that we should think about? But we're in a good place. The second thing is we spoke about where we are with regards to the procurement and also the selection of the company that will be leading the tie-in. The good thing is that we are not taking one of the companies that are working on the modules and asking them to work on the tie-in. We're going with a separate company because we don't want them juggling balls between what they are doing on the modules and what they are doing on the tie-in. We want them fully dedicated to the tie-in. We've already onboarded them, a solid company. We've had to pay slightly more, but it's okay because we want the right skills to come in and execute the tie-in. The third thing is that, our teams looked at the scope of the tie-in and looked at work that they could do -- that they could essentially do upfront, and we supported that. They started this work in 2025, and it will continue, because we want to execute as much as we can before the main tie-in because with the main tie-in, clearly, you stop everything. But if you can try and do some of the work upfront, it just reduces the level of complexity, clearly, not completely, but we've aimed at doing our best around this. And then I mean, last but definitely not least, we are also thinking about, I guess, all the various aspects around the tie-in, not just looking at work that will be happening within the project, but also the interface just around work that will be done by our own other Kumba team, so our stay-in business capital team because we want to do opportunistic maintenance. If the plant stops for a couple of months, it makes sense to try and do as much maintenance as possible because the plant is there and it's available. So, the interface of the various pieces of work has been well thought through. We've brought in a plan who's looking at all the various interfaces and how all the aspects will integrate. So, I guess that go. In terms of just front-end loading, think about it like this, it's February. We are already talking in detail on the tie-in. We will assure this plan at the end of March, rolling into the beginning of April because we want to land as much as possible. So, we're not leaving it and saying, let's just conclude the plan in June or July. No, it's a major one for us. I guess then what are the risks? I'm a realist when it comes to projects because sometimes there are some unknowns that may take place. So, how have we thought about dealing with these risks? We've thought about the level of stock that we have ahead of the tie-in. And I know people used to ask us why are you carrying these volumes of stock, so 7.5 million tonnes last year. Well, it's there not just for us to meet our production guidance this year, but it's also saying if for whatever reason something happens and the tie-in takes slightly longer, we could just continue selling out of stock. The other thing that we've also thought about is that during the tie-in, the only section that will be on full stock is the dense medium separation processes linked to our coarse and fines DMS. But the rest of Sishen actually has a jig plant. That jig plant will continue running and Kolomela will continue running as well. And that's to cater for any other eventualities that may take place, either with the tie-in itself or the commissioning phase or the ramp-up post the tie-in. So, we've had lots of thinking around this. And Gerrie, I'll check if you want to add anything? Gerrie Nortje: One thing, Katekar, so, I think Mpumi covered the front-end loading piece. What we've also done as part of the main shut is we've gone with the P90 schedule. So, we have built in contingency allowance for any sort of delays or slippages. Can it be longer than that? Yes, it's possible, probably not likely, but it's possible. And I think Mpumi covered the contingency plans that we have in place. Maybe last comment, we also have Kolomela mine, and we always consider how we can use Kolomela mine to further derisk in the event that we have to. So, essentially, again, looking at this from a portfolio point of view. So, both production as well as stockpiles, as well as additional processing capacity like the Ultra DMS at Kolomela, for example. Nompumelelo Zikalala: Maybe Gerrie, let me just add one more. So, the P50 schedule said 75 days. The P90 schedule said over 100 days. We have planned for the longer schedule. So, typically, you would go for the shortest ever possible schedule. We are saying, let's plan for the longer schedule, which assists us with derisking any eventualities that may take place. What's good is that, as I've said, we've selected the contractor that will work on this. Their days because clearly, they've got the plan, which we've then integrated into our broader plan has a shorter duration. But still, we've planned on the P90 schedule. So, Gerrie and I normally have this discussion. We talk about both sides of the risk. So, either it may take longer, but it may also take a shorter period because we may be closer to the P50 and closer to the dates that have come through from our contractors. But we are taking a very, I guess, I mean, I've never seen our teams looking at this level of detail hour-by-hour, what will be done where in which section of the plant and who will be doing it. And that's the right to do -- the right way to do it, yes. Penny Himlok: Thanks, Mpumi. Thank you. Back to our favorite topic, Transnet. We've got a question from Thobela Bixa from Nedbank. He's asked, rail to port has been up 6%, but sales only up 2%. Is there a bottleneck at the port? So that's the operational question, and we have a strategic question on logistics after this. Nompumelelo Zikalala: Yes. So, Thobela, maybe let me just take this one. So, when we spoke about the independent technical assessment, we looked at everything. We looked at rail and we looked at the port. And in as much as there's work that needs to be done on the rail side, there's also work that needs to be done on the port side. And the approach to the ore corridor restoration program takes a holistic approach because to the question, you don't want to have one section running and another not running. And then we spoke briefly about the 26-day additional maintenance that needed to be done as part of the refurbishment of stacker reclaimer #3. All that I'll say is that when Vempi and the team work with Transnet, they take a holistic approach. It's the whole integrated system. Penny Himlok: Thanks, Mpumi. Katekar, just made a small -- another little add-on to that Transnet question also from an operational perspective, and that is just that your production guidance has been actually unchanged and will certainly change in 2027, 2028, it says 35 million to 37 million tonnes. Does that mean you don't really have that much confidence in the recovery of the rail and port, I guess, in the short term? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, we've taken a balanced approach to this. The independent technical assessment identified things that need to be done. And there were 2 pathways. It was either stopping the entire infrastructure and fixing everything in a couple of months. And clearly, that wasn't ideal. It would have had a significant impact, not just to our business, but to Transnet as well. And secondly, one would have needed a lot of money to do all that work. And then the second pathway was actually phasing the work, and that's exactly what the Ore Corridor Restoration program work face. We just need to be mindful that the things that are broken still need to be fixed. So, if I look at this year, they've actually added a second shut, and we support this. So, this is the annual maintenance shut. We typically talk about the maintenance shut that's normally a 10-day shut that takes place in the second half. Well, this year, we will have 2 shuts, one in the first half and one in the second half. And the good thing is that during this period, they will actually be doing catch-up on the backlog maintenance. So, Vempi, I don't know if you want to add anything to that? Unknown Executive: I think you've covered it well. Just what's standing between us or the system from where it is at the moment and getting back to the 60 million tonnes per annum that is seen before is again what you've spoken about the capital replacement. And there's 2 things that need to happen. Firstly, we need to help Transnet with the planning and the procurement that needs to take place to get all of the orders done, so that the work can take place, firstly. But secondly, we also need to find the right commercial vehicle for the money to be spent. So, we know that there's this budget facility for infrastructure that governments made available to Transnet, but they also need the vehicle for that money to be spent. So, those are the 2 things that are standing between us and getting back to 60 million tonnes per annum for the ore corridor. And that's why we're comfortable with the levels that we've guided over the next year. Nompumelelo Zikalala: And then the longer-term, it's just a recognition of the fact that this is not a quick fix and the allowance for the time to actually do the work because you run the system outside of that time. I guess maybe just one last thing. If you think about it, last one is this double the amount of the annual shut period, but we've kept the guidance the same. That actually talks about the fact that we expect to see a higher operating rate when the system is running. It's just that you'll still stop it for, I guess, 2 separate durations. And we would also support this being repeated next year simply because the work needs to be executed. Penny Himlok: Thanks, Mpumi. One question also on Transnet or the actually the PSP reform process from Thlaku from SBG Securities. He's asked that you've mentioned the PSP info reform process has somewhat slowed. Should we assume a longer time line before private operators meaningfully increase rail throughput in general? Sorry, what -- could you expand what these key bottlenecks are that's holding back the process? Nompumelelo Zikalala: Yes. I think let me take this one. So, Thlaku, if you think about it, there was the initial RFI period, then the PSP unit came to play back what they had, and this was over 700 pages. And I've got a wonderful team. So, they looked at these pages together with the rest of the Ore User's Forum, and we provided feedback. And the reason why we did that is because the last thing that any of us want is to see a release of the next phase or the RFP phase that's not bankable. So, it taking longer shouldn't be seen as a negative thing for as long as it will assist in terms of improving the quality of the output of that commercial RFP that will essentially come out. Clearly, if you track what's happening within the country as a whole, you may have seen that there's been a schedule that's been released for 3 other RFPs in other corridors. We, from our side, are waiting for the release of our RFP. But clearly, to Vempi's point, we are mindful of the fact that with that taking place at a -- within a slightly longer time frame, the work that still needs to be done needs to be done and that's why we've got the Ore Corridor Restoration program, and we continue working with Transnet. Penny Himlok: Okay. We've got another question on the Ploegfontein, Heuningkranz. There's been a question from Bruce Williamson from Integral Asset Management. He's asked, what is the early indication of the FE average grades that we are seeing at Ploegfontein and Heuningkranz and also lumpy ratios? That's from Bruce Williamson. Gerrie Nortje: So, just on Heuningkranz, firstly Heuningkranz-Kolomela combine 150 million tonnes of resources. Cutoff grade applied at Heuningkranz 61% FE doesn't speak to the average. It speaks to the cutoff grade. The average grade is about 65%. So, it's fantastic, I mean it's what we like to see, and it's actually higher than what we have at Kolomela mine. At Ploegfontein, we apply a 50% cutoff. The reason we do that is because we still have an ultra DMS at Kolomela mine that we can use to beneficiate some of the medium-grade ores. The average grade again is higher than that. Our thinking is that when we -- as we sort of progress the exploration and the studies work and we get closer to declaring reserves, we'll be able to specifically guide on that. But our thinking at the moment is that we have to come up with a blend. So, whilst Kolomela is still mining the current pits, we start mining Ploegfontein and Heuningkranz and essentially have a complex approach to it rather than depleting Kolomela mine then going to Ploegfontein then going to Heuningkranz. Now of course, that also gives us fantastic optionality at Sishen mine because, again, we look at it from an integrated perspective. So, we will now be able to rebalance the entire portfolio to ensure the life extension is material as opposed to just sort of extending by a few years every time we've done a study. Now the timeline is about 2 to 3 years to do the study work. The confidence is actually quite high for Heuningkranz, the bulk of it is already at an indicated level. So, the drilling now is focusing on essentially getting that up to a measured level. So, a few things we have to understand just in terms of permitting. It is part of the Kolomela mining right. But of course, there's a number of additional permits that we just have to revisit, make sure that we're not seeing a material change and get the drilling and confidence up. But our intention is to maintain the lump fine ratio, as well as maintain the average FE spec or improve going forward. Penny Himlok: Thanks, Gerrie. Anything to add, Mpumi? Nompumelelo Zikalala: No, I think he has covered it exceptionally well. I have to say I'm excited. I mean I look at the level of passion from all our various teams. And in this space, it's our geologists and our miners. It's good work that's been progressed. Penny Himlok: I'm mindful that we're reaching the close of our time. I just wanted to check if there's any questions on the webcast link? I see there are none. Okay. There's just one last question that we now have, and that's essentially regarding the fleet in terms of the recapitalization. That's basically from Bruce Williamson again. He's asked, with the next range of fleet purchases, will that move into the autonomous space? And what impact could that have on employment? Nompumelelo Zikalala: Yes. I think I'll take that. So, Bruce, interesting. People look at autonomous as if it's something that's far, but I'm not mindful of the fact that we've actually got a portion of our fleet that's already autonomous. So, if you go to both Sishen and Kolomela and look at our drill fleet, you'll see 2 patterns, one with blue cones, which means autonomous, fully autonomous, somebody sits at the control room and runs that fleet. And then you'll see one with normal cones, which essentially means that there's still the person that's sitting and operating that machine. So, we should never see it as something that we should be scared of looking at. And I can certainly say that we will, on a continuous basis, particularly as we look at the next wave of replacement, consider autonomous because ultimately, what you do is you look at the business case of everything. And then you look at the implications of that. But I don't ever want us to see the move towards autonomous as a negative thing. And because it's not, I mean if I look at our teams at Sishen and Kolomela just around the drill fleet, it's interesting. All of a sudden, if we have an operator who's a pregnant female, as soon as they find out they can't operate the drill. But now guess what, they continue doing their job from the control room. So, yes, I can definitely say that as we look at the next wave, we will always consider all the various options and clearly consider the implications, yes. Penny Himlok: Thanks, Mpumi. And that concludes our Q&A's for today. Thank you, everyone, for joining us today, and please stay for some refreshments. We always look forward to catching up with you. Thank you. Nompumelelo Zikalala: Thank you, Penny.
Operator: Good morning, and welcome to Alight's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] There is a presentation accompanying today's presentation available on Alight Investor Relations website. I will now read the safe harbor statement. Today's discussion includes forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current views and expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may cause such differences are described in today's earnings release and in Alight's filings with the Securities and Exchange Commission, including in the Risk Factors section of its most recent annual report on Form 10-K. The company undertakes no obligation to update any forward-looking statements, except as required by law. In addition, during today's call, the company may reference certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the earnings release available on the company's website. I will now turn the call over to Rohit Verma, Chief Executive Officer of Alight. Please go ahead. Rohit Verma: Good morning, and welcome to Alight's Fourth Quarter 2025 Earnings Call. Joining me today is Gregory Giometti, our Interim Chief Financial Officer. This is my first earnings call as Alight's CEO, and I'm pleased to have this opportunity to speak with you so early in my tenure. I joined Alight at the start of the year and over the past 30 working days, have focused on meeting with our colleagues and clients and diving into our operations. I'm extremely pleased with the very warm welcome from our colleagues as well as the support I have received from the Board and the connections I've already created with our clients. I'd like to take this moment to share why I chose to join Alight. And over the last 6 weeks have only strengthened my conviction in the opportunity ahead of our business. Alight has strong underlying DNA. Our scale, client relationships, domain expertise and operational footprint provide a significant competitive advantage and leadership position in the marketplace. We serve a wide spectrum of employers, including the majority of the Fortune 100. We offer essential and unmatched benefit solutions via platform that offers extensive flexibility to accommodate a wide range of client needs from straightforward to the most complex plans in the market. Our midsized clients benefit from simpler platforms, and we also provide specialty solutions such as leave administration to meet our clients where they are. Our vast data lake creates a proprietary advantage that enables predictive end-to-end orchestration when implementing AI, which will allow us to transform employee experiences into proactive life journeys, driving better outcomes for employers, employees and their families. And our top-tier partner network allows us to provide participants a holistic experience, putting us at the center of the benefits ecosystem. More than 30 million people and dependents rely on us in their most important moments when someone is sick and needs access to their insurance, when someone is looking to start a family and wants to better understand their health and wealth benefits or when someone is disabled and needs to understand their leave options. At the end of the day, it is about delivering a frictionless experience with empathy and care that delivers a compelling outcome. The ability to provide benefits is a fundamental offering for most organizations, yet regulatory requirements and rising costs make it challenging for organizations to do this on their own. Most employers do not have the in-house expertise, scale or technology required to manage the complexity effectively, making the outsourced administration of health, wealth and leave an essential purchase. We believe our products and solutions are needed regardless of external economic cycles. And when we execute well, we create sticky relationships with predictable revenue. Our expertise across the benefits administration landscape and our ability to provide effective plan solutions to a wide variety of employee groups is a competitive advantage. The strength of our solutions and our organizational expertise lead us to believe that the market opportunity in front of us is substantial. Not only do we see opportunity in the broader market, we believe there is meaningful white space within our existing client base. With deep penetration among large and midsized employers, we have a solid foundation from which to expand our relationships and grow market share over time. That said, we have work to do. In 2025, we did not meet our internal financial targets and new bookings and renewals did not meet our expectations, leading us to miss our forecast to the market. During my first 6 weeks at the company, I've connected with more than 35 clients, and it is clear to me that clients want to continue working with us as we play a critical role in helping them manage increasingly complex health, wealth and leaves programs. They're also clear in their requests that we bring simplicity to their participants and management by providing cutting-edge solutions. Our clients expect flawless service delivery and continued innovation in products that create better outcomes. The attractiveness of our market, our coveted position and the clarity of the asks from our clients enable us to be clear-eyed about our priorities going forward. As a result, our immediate focus is driving service and operational excellence across our unmatched portfolio of benefit solutions, innovating products enabled by AI to create a cutting-edge user experience, real value and actionable insights for clients and participants, while building relationships that result in enduring trusted partnerships with clients, participants and partners. These priorities are all things within our control, which give me great confidence in our ability to improve as does some of our recent progress. For example, during the fourth quarter, we piloted conversational AI with 2 of our largest clients during the recent annual enrollment cycle. We are very encouraged by the results where we saw a significant reduction in channel jumping, which is when a user moves from digital enrollment to calling the call center. This high reduction rate is indicative of the improved efficiency and participant efficacy experienced with the conversational AI product. Before I turn the call over to Greg, I want to provide some details on our 2025 financial performance. We generated $2.3 billion in revenue with adjusted EBITDA of $561 million and an adjusted EBITDA margin of approximately 25%. With that said, I would reiterate that we believe there is significant opportunity to improve our performance moving forward. Our adjusted EBITDA in the fourth quarter was impacted by an increase in compensation expense driven by our commitment to invest in the business with a focus on promoting service quality, strengthening relationships and positioning the business for growth. Importantly, the business generated $250 million of free cash flow in 2025, which enabled us to maintain a strong liquidity position and positions us well as we head into 2026. With that, I'll turn the call over to Greg to walk through the financials in more detail. Gregory Giometti: Thanks, Rohit, and good morning, everyone. I'll walk you through our fourth quarter and full year 2025 results. Turning to our fourth quarter results. We continue to think about revenue mix across 2 categories: recurring renewable business and nonrecurring project-based work. Revenue for the fourth quarter was $653 million. Recurring revenue of $607 million was down 1.6% compared with the prior year period. Project revenue of $46 million was down 27%. Fourth quarter adjusted gross profit was $272 million, down 9.3% from the prior year period, reflecting an adjusted gross profit margin decline of 240 basis points. Adjusted EBITDA for the fourth quarter was $178 million as compared to $217 million in the prior year period. Fourth quarter 2025 adjusted EBITDA margin was 27.3% compared to 31.9% in the prior year period. Adjusted EBITDA during the fourth quarter of 2025 was adversely impacted by increased compensation expense, which we believe is critical to executing on our priorities. This impacted adjusted EBITDA by approximately $45 million. Excluding this, adjusted EBITDA would have been within our previously communicated guidance range. Adjusted net income in the fourth quarter was $96 million with adjusted EPS of $0.18 compared to $127 million of adjusted net income and adjusted EPS of $0.24 in the fourth quarter of 2024. Looking at the full year, total revenue was approximately $2.3 billion. Recurring revenue of approximately $2.1 billion was down 2.2% compared to the prior year period. Project revenue of $154 million was down 22%. Adjusted gross profit for the full year was $883 million compared to adjusted gross profit of $942 million in 2024. Full year adjusted gross profit margin decreased 100 basis points compared to 2024. Full year adjusted EBITDA was $561 million with adjusted EBITDA margin of 24.8% compared to adjusted EBITDA of $594 million with adjusted EBITDA margin of 25.2% in 2024. Adjusted net income for the full year was $266 million with adjusted EPS of $0.50 compared to $313 million of adjusted net income and adjusted EPS of $0.57 in 2024. In the fourth quarter of 2025, we recognized a noncash goodwill impairment charge of $803 million. We have remaining goodwill of $83 million on the balance sheet. Turning to capital and liquidity. We ended the year with $273 million in cash and equivalents in addition to a $330 million fully undrawn revolving credit facility and free cash flow for the year was $250 million, providing us with significant financial flexibility. With this, we are well positioned to fund our 2026 TRA payment, which is estimated to be $156 million. Importantly, as a result of tax reform related to the one big beautiful bill, we do not expect to make a significant TRA payment in 2027 or 2028, which meaningfully increases our flexibility around capital allocation. After reviewing our capital allocation priorities with the Board, the company has decided to reallocate capital in favor of higher return priorities, including investing in the long-term growth of the business, deleveraging and opportunistic share repurchases, which will replace future dividend payments. With that, I'll turn the call back to Rohit. Rohit Verma: Thanks, Greg. Let me build on that and provide some more detail on our capital allocation. With the support of the Board, we're thinking more holistically about capital allocation. Our goal is to create the best return for our cash deployed. The current structure locks us into dividend and takes away the flexibility to be more thoughtful on our capital allocation. With our strong cash flow and anticipated TRA deferral, we believe it makes sense to take this opportunity to return value to our shareholders through a combination of reducing the company's leverage and through the opportunistic repurchase of stock rather than continuing our quarterly dividend at this time. Our existing repurchase plan has a remaining buyback authorization of $216 million, giving us the ability to reengage our repurchase activities in the near term. At the current levels, we believe our stock is undervalued and that repurposing our capital allocation towards debt reduction and share repurchases is a more efficient and effective use of capital. As I shared with you earlier, we are disappointed with our 2025 results. While we are focused on embracing a disciplined execution plan, we do believe the weakness experienced in 2025 will spill into 2026, and our performance improvement hinges on the successful execution of our priorities over the next 9 to 12 months. We will keep you up to date on our progress. We view 2026 as a launching pad for our performance inflection as we focus on positioning Alight for sustainable long-term growth. We enter 2026 with strong liquidity and a solid cash position and a portfolio of strong client relationships. We are being methodical in our approach with a focus on a small set of key operating priorities and expect to deploy more than $100 million of capital to strengthen the foundations of the business and position Alight for long-term growth. First, we are focused on delivering service and operational excellence. That includes investing in our client-facing teams by adding sales and account management professionals to increase coverage across our client base. Second, we are advancing product innovation by creating a world-class user experience using AI as an enabler to simplify user interactions and improve insight for both clients and participants. Alight's deep and highly differentiated data lake is enriched by decades of domain expertise and scale and are uniquely positioned to deliver more personalized, predictive and outcome-driven experiences that set us apart in the market. Likewise, we plan to more broadly deploy AI internally to assist with routine tasks so that our professionals can focus on providing the thoughtful expertise our clients and their employees expect. Driving innovation in our solutions from the top down is another critical priority for us. To that effect, we recently announced that Karen Frost will lead our Health and Navigation Solution and Kevin Curry will lead our Leaves Solution. We intend to announce a leader for our Wealth Solution shortly. We believe these additions will effectively align our solution strategy and heighten our ability to deliver a high-quality benefits experience for our clients. Third, we are focused on strengthening our existing relationships while adding to our client base. We have proven our ability to provide operating efficiency, consistency, reliability and execution across the complex benefits landscape, and we will leverage this success to expand our relationships with current and new clients and establish partner collaborations that allow us to serve at the front door to a holistic benefit experience. I am confident that we are at the forefront of implementing the right strategy to return the business to long-term growth, but this will take some time. Given that we missed guidance targets several times in 2025, I don't think it's prudent for me to provide full year guidance when I'm just 30 working days into my role. What I can say is that we expect first quarter 2026 revenue to be down by high single-digit percentage range. Likewise, we anticipate that our planned investments in sales, account management and user experience will create short-term adjusted EBITDA margin pressure, resulting in a decline of 500 to 750 basis points as compared to last year's first quarter. We view these investments as critical to executing on our stated priorities and meeting the expectations of our stakeholders. While our business has faced challenges, the attractive market dynamics, our strong leadership position and clear direction from our clients gives us a very achievable road map for driving margin expansion and growth in the midterm. Our strong cash flow provides us the financial flexibility to invest $100 million to drive product innovation, partner expansion and an enhanced experience for our clients and their employees. Our recent service and innovation successes leave us confident that we can further expand our already enviable market position. I'm energized by what I've seen so far and certain that we're putting the right strategy in place. I believe we can put the business back on a path to sustained profitable growth with the expertise and focus of our teams. With that, let me open the call for questions. Operator: [Operator Instructions] The first question is from Peter Christiansen from Citi. Peter Christiansen: So the messaging on the scale, the partner ecosystem, the mission-critical platform capability, this has been quite consistent with the prior execution teams here. But there's been a real gap between this sentiment in the asset value of the company and the core financial performance. It has been regular misses on client retention, pipeline conversion and any stability to growth. Recognize that you've been in the role for 30 days, but I was just -- I had 3 questions. I'm just curious, what's your take on what are -- what have been some of the drivers in some of the financial underperformance in recent periods? Second question, your experience previously CEO at Crawford, what do you bring to the table in terms of being able to turn around the company? Just curious on that perspective. And then final, I understand this is yet another transition year for the company. How should we think about measuring any milestones in the next 12 months? I appreciate it. Rohit Verma: Thank you, Peter. Great set of questions. So let me start from the top, right? What do I think are the drivers for the financial underperformance First and foremost, I had a hypothesis when I was coming into the organization. And that hypothesis was, as you stated, right, we're in a great industry. We've been here for a long time. Our brand is well recognized. We've got an enviable client base. And we have a service that if we execute well, it should be sticky. 30 days in, I have only strengthened that conviction, right, which is that those things are absolutely correct. Obviously, while coming in, I also knew that financially, we had not performed to the expectations of the organization as well as that of the Street and that also I have seen. I would say the biggest challenge for us has been on driving operational excellence, which to me is an execution piece, right? So this is not a change in the strategic direction of the company. This is a change in the execution of the company. So the biggest piece that we need to tighten is around execution. It's execution around operational excellence. It's execution around client management and relationship management, it's execution around technology and it's execution around continuing to innovate our products and services. So that, to me, are the 3 biggest pieces, right, that we have to push on. That leads me into my experience as the CEO at Crawford. When I joined Crawford, right, we had not grown for 10 years. And again, when I was there, what I realized was it was, again, in a market that was that was strong. It had an 80-year legacy. It had the expertise, but again, the execution was what was missing. So I've had several experiences of turning around execution. And turning around execution is a cultural change, a change in leadership philosophy, a leadership rhythm. It's being clear-eyed about what the priorities are and staying focused on what the priorities are continuously and consistently. And that is the experience that I had before, and I've done that 2 or 3 times, once as a CEO before that as more of an operating leader. And that is the experience that I'm going to bring here and drive that execution. In terms of measuring, I want to make sure that -- first, let me start by saying that the investor community is a very important stakeholder for us. So I want to make sure that what I'm giving you is something that is very clear, very definitive and something that I can consistently report on. So that's the reason why I want to hold back. I'm 30 days in. As you know, while Greg is doing a great job as our interim CFO, I'm in the process of appointing a full-time CEO. I want to make sure that appointment is done, and we collectively put our heads together on what are the things that we need to come back to the investor community with that we can share with you consistently and continuously so that you can measure how we're doing against our progress. Peter Christiansen: Good color. Rohit Verma: Thank you. I look forward to meeting with you soon. Operator: The next question is from Scott Schoenhaus from KeyBanc Capital Markets. Scott Schoenhaus: I guess maybe you can dive deeper into the first quarter guidance, all the moving parts, renewals, pipeline, pricing. Just walk us through what you're seeing at the start of the year here, Rohit, how you think you can manage this throughout the year, how we should expect the cadence both in the near term without providing distinct guidance? And then the longer-term targets of approaching mid-single-digit revenue growth at 30% adjusted EBITDA margins, can you recommit to that target? Rohit Verma: Scott, thank you so much for your question. I think what I would say to you is that, as I mentioned before, right, that we did not execute well in 2025, specifically on our renewals, and that's why I said that the financial underperformance of 2025 is expected to spill into 2026. There is a whole bunch of data that I'm analyzing with the team. And right now, that is the reason why I'm projecting to be high single digits lower on the revenue as well as about a 500 to 750 basis points lower on the margin. Because we had a less than stellar renewal season last year, I would say that typically, we want to target our renewals at the mid- to high 90s, we were significantly below that number. We had -- I think we had given you guys last year a revenue under contract, which was about $2.1 billion. Our revenue under contract starting 2026 is about 5% down. So -- and then the level of volatility that we've seen in the project revenue, right now, I'm just not comfortable in giving any more things just because I don't want to put something out there and then have to track back, given I'm 30 days in, there's a lot of work that I'm doing right now with the team. And I can assure you, like I said to Peter, that the investment community is a very important stakeholder for us. So as I get a more full-time CFO in place, as I get a better handle on all of the moving pieces, I will be coming back to something very definitive. Scott Schoenhaus: Great. I guess this is more of a sort of thematic AI industry question here. But are you seeing clients not renewing partly because they're testing their own AI bots and their own products themselves, their own applications internally themselves using these AI platforms? Rohit Verma: Scott, I'm so glad you asked that question because that gets asked to me all the time. Look, I think I mentioned that I have met 35 to 40 clients so far. Our client base typically tends to be on the upper end of middle market, right, and then all the way up to the Fortune 100. The level of complexity that you have in those plans, right, whether it is in terms of the various grandfathered plans that they have, whether it's in terms of the unions that they have, that it's really not possible to do this in-house by coding AI to do this work, right? If we were talking about a company that has 100 people or 200 people or maybe even 1,000 people, I think the conversation is a little bit different than the scale at which we're talking about. And I would tell you that I would put clients in 3 categories. There are clients that already have the governance structure in place in their organizations for AI, they're very open to putting AI in. In fact, I will tell you that there was a large client that I spoke to just a couple of weeks ago who said, "I don't want to enable any AI because we ourselves are trying to figure out how do we manage AI because of all the security and privacy risk that it opens up. So you have a second category of clients who are still figuring out how do they actively manage what AI is doing and what other controls that have in place and they are cautious about that. And then you have a third where they have put the infrastructure in place on AI. They want something with it, but they're still waiting to see what's the best way to deploy AI and where it's going to have the biggest impact. In fact, I think I heard one of the large bank CEOs just a couple of days quote that from their perspective, AI is not delivering what they had expected AI to deliver. So look, there's a lot of promise. I'm a computer engineer by education myself. I started AI 30 years ago in college. And obviously, AI today is very different than what it was at that time. But what I can tell you is that we have not seen a meaningful or any kind of disruption right now from an AI perspective, neither in terms of the employee base that we have. We have -- as I said before, we have about over 30 million participants on our system. We have not seen any major change in the number of employees. Now I would also tell you that several of our large employees have had very public restructuring, but also several of our large clients have had new acquisitions. So we have not seen a meaningful change in the number of employees on the platform. Hope that helps. Operator: [Operator Instructions] The next question is from Kevin McVeigh from UBS. The next question is from Peter Heckmann from D.A. Davidson. Peter Heckmann: Rohit, congrats on the new role. I think it's good to have you as the firm and look forward to working with you. I think the termination of the dividend program right after that was the right decision. And as we look into some of the initiatives here that we've just talked about, the additional comp in the fourth quarter of '25 and then the $100 million of incremental investment spend in certain areas, I guess, what portion of both of those do you view as recurring versus onetime? And in terms of the $100 million recurring, would you expect that to be front-end loaded in 2026? Rohit Verma: Great question, Peter. Thank you so much, and I look forward to meeting you as well. Peter, the way I would think about it is that the $100 million is not an additional investment. It is the CapEx that we have planned for this year. It's the capital investment we've planned for this year. Do I expect it to repeat it? I expect some part of it to repeat, right, because a lot of these things that we're trying to do aren't going to be done in 1 year. But as I had answered to Peter from Citi before that this has been an execution journey for us or this will be an execution journey for us and a large part of that depends on us doing -- bringing about changes in our processes, bringing about changes in our systems and modernizing those things to really meet the needs and asks of our clients. As far as the nature of the compensation, I do expect that to be recurring. And the reason I say that is because we are adding more horsepower from a sales management perspective. I want to make sure that individuals are incentivized for driving execution. And because I want execution to be the way we do business, I expect that part of the expense to be recurring. Peter Heckmann: Okay. Great. I'm glad I clarified that. I must have misheard kind of rushing through the press release here. Great. Great. Just second question. If I remember correctly, is -- does 2026 represent a bit of a lighter renewal cohort versus the last 2 years? Rohit Verma: Yes, you're absolutely right. 2026 is definitely lower compared to 2025, particularly, and it's lower by about 30% -- 30% to 40% compared to what it was last year. Operator: The next question is from Ross Cole from Needham & Company. Ross Cole: I was wondering if you could talk a little bit more about the internal impact of AI and if you're expecting to see any margin improvement related to that through 2026? Or if that's something that's expected in the out years? Rohit Verma: Yes. I would say that right now, there is a lot of work that we need to do on technology within the organization. And I believe that we're making a lot of progress on that. So I would say that I don't see any near-term impact on productivity improvement purely from AI. I think there are a bunch of other things that we're doing that should continue to have productivity improvement. We are leveraging AI across, I would say, 3 parts within the organization. One is -- which is also client-facing. One is on the user experience side, which obviously is going to impact more of the participants that we have from our clients. The second is in how we configure the system. So today, what happens is when we onboard a new client or when we set up a client for annual enrollment, there's a lot of manual work that happens in terms of taking the requirements from the clients, going through them and then actually configuring them in the system. We are exploring using AI to actually configure the system. As I shared before, some of the clients that we work with have 100,000, 150,000 employees and multiple classes of employees. By classes, I mean like you can have unionized, nonunionized, full-time, part-time, and all those require today a significant level of integration that we believe can be managed with AI. And that's something that we will be working on this year. And then the third thing that I would say from an AI perspective is we do a lot of file handling today. So what happens is a client sends us a file of their employees and then we send -- we take that file and then we send that over to, let's say, a carrier, we could be sending that to a financial services provider. And we expect that there is a lot of opportunity there with AI, not just from the standpoint of efficiency, but also accuracy. And then the final thing that I would say is in that, one of the most proven use cases of generative AI has been in call centers. We have a pretty large call center, and that's also something that offers an opportunity for us. But remember, for AI to be effective, the most important piece that you need is data, right? And we have tons of data, but that data has to be organized into a knowledge layer. And unless you organize into a knowledge layer, your ability to actually capitalize on that is very limited. So a big push for us in 2026 is to build that data and knowledge layer. Once we do that, we will be in a much better position to drive the efficiencies that come from AI. And that's why I expect those to be more 2027 opportunities than 2026. So I hope that helps, Ross. I know it was rather elongated answer. Ross Cole: That was very helpful. I appreciate that. Operator: [Operator Instructions] The next question is from Kevin McVeigh from UBS. Kevin McVeigh: Can you help us understand, it sounds like some of the renewals that slipped from a retention perspective. What was driving that? Because obviously, that kind of cascades into 2026 overall. But just maybe help us understand what drove some of that slippage? Was it just churn, consolidation? Like what was the main driver of that? Rohit Verma: Yes. And I think the main driver actually comes through the -- what I said in the ask or the request from the clients, right, which is driving operational excellence, being more modern with our user interface making sure that the relationships that we're building are deep and consistent. So those are the 3 things that the clients have been very clear about, and that's what I'm attributing right now from a retention perspective as the reasons why we underperformed on that. And those are the 3 things, as you heard from me, are very clear priorities that we're working on right now. Kevin McVeigh: Got it. And then just from the dividend perspective, it makes sense. I think that was about $86 million. But maybe help us understand like why are we even paying a TRA in 2026? I mean I think it's $130 million, but like it's a massive use of cash. I get to '27, '28, but is there no way to maybe manage that a little bit better just given how much the dynamics of the business have changed? Rohit Verma: Kevin, first of all, I would love that if we didn't have to. But I'll let Greg explain the mechanics of why we're doing this in 2026. Gregory Giometti: Yes. So the TRA payment in 2026 is for our 2024 tax return. And so what it includes is the gain on the sale of Strada. And so that's why the payment is so elevated. It's really around the divestiture transaction. There's just a 2-year lag in terms of when the payment actually goes out. Kevin McVeigh: Got it. And I guess with the -- I mean because obviously, you had massive impairment charges, things like that, that doesn't impact that calculation at all. Gregory Giometti: No. Because those kind of impact the 2025 tax year, which then will kind of roll into our '27 and '28 payments. Operator: There are no further questions at this time. I would like to turn the floor back over to management for closing comments. Rohit Verma: Thank you, [ Sashi. ] Thank you all for joining. I appreciate your continued interest in Alight, and I look forward to updating you on our progress in the quarters ahead. Thank you, and God bless. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Debra A. Wasser: Hi, everyone, and welcome to Etsy's Fourth Quarter and Full Year 2025 Earnings Conference Call. I'm Deb Wasser, VP of Investor Relations. Today's prepared remarks have been prerecorded. It's my pleasure to introduce Kruti Patel Goyal for her first call as CEO, and of course, to have our CFO, Lanny Baker here as well. Once we are finished with the presentation, Kruti and Lanny will take questions from our publishing sell-side analysts on video. Please keep in mind that our remarks today include forward-looking statements related to our financial guidance, our business and our operating results, as noted in the slide deck posted to our website for your reference. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release and our most recent Form 10-Q and which will be updated in future periodic reports that we file with the SEC. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today, and we disclaim any obligation to update them. Also during the call, we'll present both GAAP and non-GAAP financial measures, which are reconciled to GAAP financial measures in today's earnings press release or slide deck posted on our website, along with the replay of this call. With that, I'll turn it over to Kruti. Kruti Goyal: Thanks, Deb, and hello, everyone. I'm excited to be here with you today, 50 days into my role as Etsy's new CEO. This morning, I want to primarily focus on three things: what we're doing to improve the performance of our core marketplace, why I'm confident in these actions, and what you can expect as we go forward. But first, I'll take a few minutes to review yesterday's announcement of the definitive agreement we signed to sell Depop to eBay for $1.2 billion in cash. This transaction will allow us to focus exclusively on the compelling opportunity we see in front of us to grow the Etsy marketplace in ways that matter most to our buyers and sellers. We believe it's a great outcome for Etsy's shareholders and a positive next step for all involved. Of course, it's also a bittersweet moment for me personally given my time as Depop CEO. I am incredibly proud of what the Depop team has built, a truly differentiated brand and product grounded in clear purpose and strong community. We've been proud to support Depop's evolution, helping it reach the next generation of shoppers and become the fastest-growing fashion resale marketplace in the U.S. And we believe that eBay's desire to invest in Depop will further strengthen its position in the circular economy. Lenny will cover more specifics on the transaction a bit later. Now back to Etsy. When I returned last year as Chief Growth Officer, I conducted a deep diagnostic of the business to better understand the root causes of recent growth challenges and where our biggest opportunities are. I spent time speaking directly with buyers and sellers, listening closely to our teams and pressure testing what I was hearing with customer research, data insights and trend analysis. The #1 takeaway for me was that Etsy's value proposition for buyers and sellers remains differentiated and deeply resonant. At the same time, the diagnostic made clear that we hadn't translated that strength consistently through our customer experience. For instance, we saw that buyer appreciation for what makes Etsy special remains high, but perceptions of differentiation have softened over time. As our sellers' inventory has grown significantly in both scale and breadth, we haven't reliably help buyers understand what they're seeing, why it belongs on Etsy or how to find the right item for their intent. That clarified a major opportunity. If we get better at how we match buyers to the right items and make the human story behind our sellers more visible, we can turn our scale back into an advantage and reassert what makes Etsy distinct. As another example, we've seen our buyer demographics aging with older users growing faster than younger ones. Our research shows that's not an appeal problem, it's a presence gap. Hence, our work to improve our app and shift our marketing mix to more intentionally engage and acquire younger shoppers. We've been weighted toward lower funnel moments, showing up once a buyer already has something specific in mind. The opportunity is to move earlier and in some cases, before a mission even begins using inspirational content to spark shopping journeys, not just respond to them, in the places and formats where discovery increasingly happens, especially for younger buyers. On top of that, frequency and retention, even among our most valuable buyers have not been where we want them to be. We've become much more effective at closing a transaction but under-invested in creating reasons to return. Optimizing for conversion alone isn't enough. Long-term growth requires making Etsy a destination for inspiration, discovery and ongoing engagement. Finally, it was clear that as Etsy grew, a disproportionate share of our investment went toward improving core e-commerce table stakes, things like conversion, price competitiveness, reliability and shipping. Those investments were necessary but not sufficient. And we didn't invest enough in the aspects of Etsy that make Etsy feel special and different. I believe that trade-off helped us compete more effectively on fundamentals, but it has also limited our ability to fully capture demand for unique, meaningful commerce and unlock more of the e-commerce TAM. These learnings directly shape the strategic priorities we introduced last spring, designed to turn Etsy's strengths into more durable long-term growth. As a reminder, these 4 priorities are: showing up earlier in the shopping journey, increasingly meeting customers at the start of their missions wherever they begin; working to get much better at using machine learning to match buyers with the right items, mirroring their interests and their intent so we can turn the abundance of our marketplace into a clear advantage; deepening loyalty with our most valuable customers, so they feel seen, appreciated and genuinely valued; and leaning into the human connection that differentiates Etsy, so shoppers experience the stories, creativity and passion that make every item and every purchase feels special. Alongside these priorities, we've made important changes to how we operate to drive clearer focus and better execution. At a high level, we've reorganized the company around customer outcomes rather than functional silos. We consolidated product and engineering so that teams own end-to-end experiences and can move faster and with clear accountability. We unified the teams responsible for trust and safety and customer support under one leader, protecting our community while delivering fast, thoughtful help when it matters most. And we realigned marketing from a channel-first model to a customer-first one with teams anchored to outcomes like frequency, trust and lifetime value rather than optimizing individual channels in isolation. The result is an organization with clear ownership of customer outcomes and fewer handoffs, built to move faster and execute more consistently against our priorities. That increased focus and execution is beginning to show up in our results. Our goal last year was to return our core marketplace to growth, and we achieved that in the fourth quarter. While we still have work ahead, the trajectory is clearly improving. From the first to the fourth quarter of last year, Etsy's marketplace GMS comparisons improved by 9 percentage points. And Q4 U.S. buyer GMS grew for the first time in 4 years. As Lanny will cover in more detail, our consolidated Q4 performance met or exceeded our expectations across the board. We delivered record revenue and we did so while continuing to invest for growth at both Etsy and Depop, all while maintaining very healthy profitability. This performance reinforces our confidence that the changes we've made so far are working and that we are headed in the right direction. For example, the work we've done on our app is making it our most personalized and engaging platform with year-over-year GMS growth accelerating to 6.6% in Q4, and homepage clicks per visit increasing 14% year-over-year and GMS share continuing to grow. Our personalized own marketing programs are doing a better job engaging buyers with push and e-mail clicks up more than 25% while message volumes stayed disciplined. And satisfaction with our customer support is improving for both buyers and sellers with particularly strong gains on the seller side, up 15.5% since last year. These are all indicators that we are on the right track, which is why we're doubling down on our priorities for 2026. We have a clear plan to drive more visits, better engagement, higher conversion and spend and healthier retention. What matters now is continued discipline and execution quarter after quarter. When we do that well, we feel confident that those investments will compound into the kind of sustainable growth we all believe Etsy is capable of: growth rooted in Etsy's differentiation and unique value to our customers. Etsy began with a simple belief that technology should empower creative entrepreneurs, not replace them. Just over 20 years later, we're at an inflection point, one where the power of AI technology has the potential to make commerce on Etsy more human than ever, enhancing our differentiation and strengthening our unique customer value. On the seller side, AI is already helping to automate routine tasks. So sellers can spend more time on what only humans can do, creating, designing and connecting with customers around the globe. On the buyer side, it's making discovery easier and more relevant, helping Etsy show up in more of the moments where inspiration begins. At the same time, AI-powered and agentic shopping presents meaningful opportunities for the unique items on Etsy to shine. These tools offer deeper insights into our listings, enabling our sellers' items to starkly stand out against the sea of and personal undifferentiated mass produced goods. So we're moving fast to stay at the forefront of this inflection point. Since our last call, we've expanded our agentic shopping partnerships, adding integrations with Microsoft Copilot and Google as well as an agentic payments agreement with Stripe. While still a very small part of our overall traffic in GMS, agentic traffic to Etsy in Q4 was about 15x what it was last year, underscoring just how rapidly this channel is emerging. And early indicators support our hypothesis that agentic discovery can be additive to our ecosystem. Using ChatGPT as an example, we're seeing evidence that in addition to bringing new buyers to Etsy, a meaningful share of buyers engaging through ChatGPT have a prior relationship with us, including lapsed buyers, indicating that a genetic shopping could be a great unlock for retention and better lifetime value. Orders originating from ChatGPT also tend to skew higher value compared to some of our more mature acquisition channels. And in addition to instant checkout sales, we're seeing strong engagement with listings on Etsy resulting from ChatGPT discovery. There's a lot on our AI and agentic commerce road map. With these important partnerships as well as through the development of product experiences on Etsy and we'll keep you informed of our progress. Wrapping up, I want to be clear about what you should expect from me. We have more work to do to return Etsy to sustained durable growth. My intention is to earn your confidence over time with clear priorities and transparency about what we're learning along the way. At the same time, we'll continue to shape Etsy's longer-term direction by leaning into what makes this marketplace truly distinctive: human creativity and meaningful connection. I've been a part of two significant Etsy turnarounds already. First, starting in 2018 as Chief Product Officer, when we began to significantly up-level our shopping experiences that enable tremendous growth. And more recently running Depop, where we identified and deepen the platform's core differentiation and value proposition through improved personalization and discovery. In both cases, the biggest unlock wasn't a single bold idea or strategic initiative. It was sharp focus and strong execution, pinpointing what matters most to customers and building the operating discipline to deliver consistently. That's the muscle we've been strengthening to deliver another turnaround, one which propels Etsy to our next great chapter. With that, I'll turn it over to Lanny. Charles Baker: Thank you, Kruti. We have a lot of ground to cover today, so I'll dive right in. As we review our results, please keep in mind that we completed the sale of Reverb on June 2. We've provided Reverb's GMS and revenue for Q4 2025, so you can separate the impact of that sale from the results of our ongoing business. Fourth quarter consolidated GMS was $3.6 billion, up 2.4% year-over-year, excluding Reverb. This was above the midpoint of our guidance range and up 1.3% year-over-year on a currency-neutral basis. Consolidated revenue was $882 million, up 6.6%, excluding Reverb, a new quarterly record. Adjusted EBITDA was $222 million, representing a consolidated adjusted EBITDA margin of 25.2%. Our decision to accelerate brand marketing investment at Depop was the largest factor behind the year-to-year contraction in consolidated adjusted EBITDA margin. Etsy marketplace, adjusted EBITDA margin was slightly above 30% in the fourth quarter, our high point for the year, though slightly lower year-over-year, primarily due to higher cost of revenue as well as higher G&A expense. Etsy marketplace GMS was up 0.1% year-over-year in the fourth quarter, our first positive comparison since Q3 2023. On a currency-neutral basis, Etsy GMS was down 1% year-to-year, which is a 220 basis point improvement from the third quarter's currency-neutral comparison and extends the positive momentum established earlier in 2025. While several factors have contributed to that sequential improvement, including easier comparisons, FX tailwinds and beneficial competitive dynamics in the U.S. PLA auctions, we believe that progress on the 4 priorities Kruti described earlier is also contributing to better marketplace results. Notably, our trailing 12-month active buyer count in the United States increased slightly from Q3 to Q4 and U.S. buyer GMS grew 0.3% year-over-year, marking the first quarter positive growth in 4 years. In the details of Q4, we see further validation of the notion that when Etsy leans into its strongest points of differentiation, we win, with GMS strength concentrated in areas where we already stand apart. Etsy buyer engagement skewed toward personalized and sentiment-driven items with personalized gifts, artisanal finds, and milestone categories resonating the most with buyers. Home and Living, our largest category returned to positive year-over-year GMS growth led by strength in high average order value subcategories where Etsy has high-quality differentiated items, such as vintage home decor, rugs and lighting. Mobile app downloads grew 4% year-to-year and app GMS growth continued to accelerate in Q4. App users consistently visit more often, engage more deeply and convert at higher rates than non-app users on average. And the app's contribution to total GMS reached 46% in Q4. That's 5 percentage points higher than at the end of 2023. Importantly, as Kruti discussed, our app strategy is central to showing up earlier in the shopping journey, particularly with younger buyers. More broadly, Etsy marketplace customer metrics are also beginning to move in a healthier direction. The year-to-year rate of decline in active buyers improved for the first time in over a year with active buyers largely flat sequentially at $86.5 million. Our active buyer base benefited from improved acquisition and reactivation. We added 6.8 million new buyers and reactivated 10.4 million lapsed buyers for a combined total of 17.2 million gross additions, which is up 2.7% year-over-year and growing again for the first time in over 2 years. We had 5.9 million habitual buyers, down 8.6% year-to-year, though the sequential quarter-to-quarter decline was a more modest 1.4%. Trailing 12-month GMS per active buyer was $121, marking the third consecutive quarter of stable to improving trends and moving above the trough that we hit in the first quarter of 2025. The stabilization in GMS per buyer continues to be driven by higher average order value, while purchase frequency remained slightly lower than a year ago. On the seller side, we've begun to see healthier trends as well. We ended the period with 5.6 million active sellers, up 1.5% sequentially, reflecting an increase in both U.S. and international sellers. Additionally, the retention of active sellers improved throughout the year. Turning to Depop, we delivered another quarter of excellent growth, with Q4 2025 GMS, up nearly 38% year-over-year to a new record of $300 million. In the U.S., which is Depop's largest market, GMS grew 60% year-over-year. We saw initial wins from our surge marketing investment including Depop's Taste Recognizes Taste campaign with U.S. brand awareness accelerating even at this early stage of investment. I'll take a couple of minutes to provide additional information about our agreement to sell Depop to eBay. The sale is currently expected to close in the second quarter of 2026, subject to regulatory approval and certain closing conditions. The cash consideration to Etsy is to be paid at closing. And in keeping with our capital allocation approach, we plan to use the proceeds of the transaction for general corporate purposes, continued share repurchases and investment in the Etsy marketplace. Etsy will continue to own and operate Depop through the completion of the transaction. However, Depop will be classified as a discontinued operation and its results will be separated from those of Etsy's continuing operations in our future financial statements. For historical reference, we've provided Etsy stand-alone GMS and revenue in the appendix to today's slides. For the full year 2025, Depop generated $1.1 billion in GMS and $187 million in revenue. Depop's lower take rate and negative adjusted EBITDA margins represented a drag of 80 basis points on our consolidated take rate and 350 basis points to consolidated adjusted EBITDA margins in 2025. With the excellent offer presented to us by eBay and in light of the significant opportunity we see at Etsy, we made the decision to sell Depop and fully prioritize our core marketplace. We believe that obtaining a strong value for Depop now and focusing on Etsy, where we believe we can achieve a higher rate of return on invested capital will best enable us to maximize shareholder value in the long term. Circling back to fourth quarter consolidated financial performance. Services revenue grew 9.9% year-over-year, while Marketplace revenue grew 0.8%. Consolidated fourth quarter take rate was 24.5%, in line with our guidance. Compared to one year ago, take rate expanded by 170 basis points. As outlined on the slide, the year-over-year consolidated take rate expansion reflects a step-up from the Reverb divestiture, continued momentum in on-site advertising across Etsy and Depop and broader gains at Depop overall. Turning to fourth quarter operating expenses. I'll start with product development, where spend was largely flat as a percentage of revenue. Higher employee costs were offset by leverage in other areas. In marketing, the increase in brand spending at Depop shows up as a key driver of the deleverage you see in our consolidated marketing line. At the same time, the Etsy marketplace delivered meaningful year-over-year leverage on the marketing front. That improvement is reflective of targeted shifts in portfolio mix and efficiency, cornerstones of our priorities. We leaned into favorable paid search dynamics, shifted linear TV spending towards OTT, YouTube and TikTok and targeted our paid social spend to new and lapsed buyers to drive incrementality and higher returns. Our investment into TikTok has been very effective, both from an ROI perspective and also in targeting younger consumers. Last and definitely not least, we continue to drive stronger retention and engagement via our highly personalized owned marketing channels, which delivered meaningful incremental GMS and reinforced the effectiveness of these levers when used alongside paid channels. We plan to further these efforts with an expansion of new marketing channels in 2026. As of December 31, Etsy held $1.8 billion in cash, cash equivalents and short and long-term investments. In 2025, we generated $735 million in adjusted EBITDA converting approximately 87% of that to free cash flow and returning more than 100% of free cash flow to shareholders. During the fourth quarter, Etsy repurchased a total of $133 million in stock, bringing total share repurchases for the year to $777 million, which reduced the outstanding share count by approximately 14.4 million shares over the course of the year. Now for our outlook. As we've described, we believe that the priorities we've been executing against are beginning to turn the Etsy marketplace in the right direction. As we enter 2026, we have a focused set of product and marketing initiatives in flight and several early indicators of progress. However, we expect that the full impact of these efforts will take time to translate into stronger sustainable growth. And all of this is reflected in the outlook we are providing today. With the anticipated sale of Depop and its classification as discontinued operations in our financials as of January 1, 2026, the guidance we're providing today relates only to continuing operations or in other words, the core Etsy marketplace. We currently anticipate that first quarter 2026 GMS will be in the range of $2.38 billion to $2.43 billion, representing year-over-year growth of approximately 2% to 4% for the quarter. The anticipated step-up in Etsy GMS growth in Q1 2026 reflects the contribution of our 4 priority areas as, well as the effect of strong FX tailwinds and comparing against a particularly weak start to 2025. We expect the first quarter of 2026 take rate to be approximately 25.5%, and adjusted EBITDA margin between 28% and 30%. Looking beyond the first quarter, with a singular focus on the Etsy business, growing confidence in our operating priorities, and ongoing stabilization in customer metrics, we feel more comfortable to provide high-level commentary for the year. We've improved the Etsy marketplace's annual GMS performance from down 6% in 2024 to down 4% last year, and we expect to further improve our performance this year, achieving slight growth for 2026, with positive year-over-year GMS comparisons in each quarter of the year. We currently anticipate that Q1 2026 GMS growth may be the strongest of the year due to currency tailwinds that are likely to moderate and comparisons that get less favorable beyond the first quarter. We expect that full year take rate and adjusted EBITDA margin will be roughly consistent with the first quarter view. We've assumed that macroeconomic conditions, particularly those impacting consumer discretionary spending remained stable relative to where they are at present. Thank you all for your time today. We'll now take your questions. Operator: [Operator Instructions] Our first question will come from Trevor Young with Barclays. Trevor Young: I guess starting with the improvement in gross buyer adds, the reactivated buyers accelerating and the declines in new buyers kind of improving meaningfully. I appreciate some of that as comparison dynamics, but could you maybe unpack a little bit what changed in 4Q? And similarly, some of the actions that you alluded to here in 1Q that are driving an improvement? And just relatedly, like how durable will this improvement be? Charles Baker: Sure. Thanks for the question. Remember that the trailing 12-month buyer account is a trailing 12-month buyer view. So part of what we're looking at is trends from 12 and even 24 months ago in those comparisons. But over that period of time, we have been investing in the product experience. We've been investing in driving our app usage. We've been investing in our personalized marketing. We've been investing in the social media channel. And I think what you're seeing in those comparisons gradually getting better is the cumulative effect of all of those investments, all those product moves and marketing moves that we made. And so in our outlook and sort of where we are today, we think that those trends are sustainable. They've been building gradually over time. I think on specifics with your questions around reactivated buyers, we found the social media channels to be particularly effective for us in reactivating, reaching back out to buyers who have had great experiences with Etsy in the past. I haven't had Etsy top of mind for consideration as much as we want them to be, and using social media to get them at that moment where they're just starting their journeys and reactivate them and bring them back in. Then we try to follow up with bringing them into our app experience where we really get that strongly personalized opportunity to reach out to them through our owned media channels and keep in front of them with product suggestions, with shopping mission recommendations that are really what -- in the long term, we believe, can help drive frequency and retention. Operator: Your next question will come from Bryan Smilek with JPMorgan. Bryan Smilek: Good to see the GMS improvements. Can you just talk about the key drivers of sustaining GMS growth each quarter through 2026. And I think, like more importantly, too, how are you driving better marketplace dynamics more across sellers and buyers as well into 2026? And conversely, Lanny, I know you mentioned positive growth each quarter in 2026. 1Q could be the high point. Can you just elaborate a bit more on when we'll start to see some of these product and marketing flywheels start to impact GMS growth deeper throughout -- beyond 1Q? Charles Baker: Sure. There's a lot to go through that. Kruti Goyal: Yes. Let me start with the drivers of durable GMS growth. What you heard us say in the prepared remarks is that our entire strategy or the 4 strategic priorities that we shared are designed to work as a system to really improve the entire ecosystem to do exactly that, to drive durable growth. So we're focused on discovery, matching, loyalty and differentiation to drive visits, engagement, conversion and retention. And so I would really urge everybody to think about these priorities as a system that works together rather than one thing that's going to work -- one thing that's going to contribute more than any other. Then when you dig into that, as Lanny was saying, where we've been seeing the most traction and impact so far has been really in these first two priorities around discovery and matching. And the places that there's -- so showing up where shoppers discover, making Etsy a place, a destination for discovery through greater personalization driven by machine learning-driven matching. And there, I think it's really critical to understand that we're really leveraging the capabilities, new capabilities of AI and the advancement in LLMs to really do things that were very, very much harder to do in the past, really deeply understand our inventory, which is incredibly unique and broad-based, much more deeply understand our buyers, their interest and their taste and match that with a stronger understanding more quickly of their intent to deliver a much more personalized content, really at every touch point off Etsy and on Etsy. And so where we're seeing that show up the most right now is in our app and in our owned marketing channels, right? So in our app, what you've seen us do is really make the home screen experience much more discovery focused. We've really redesigned that experience to give you more windows and doorways into Etsy based on what we know about you. And create an entire discovery feed that is much more personalized to your interest in taste. And we're seeing that work really well with app home screen, clicks up over 14% year-over-year. And then in our owned marketing channels, what you've seen is we've made the recommendations that get you to come back to Etsy much more personalized. And not only have we done that, we've increased the coverage of those personalized recommendations, so that our push notifications and e-mails have gone from less than 1/4 of them being personalized to now over 3/4 of them being personalized. And all of that is driven by the advancements and investments that we've made in our machine learning-driven models. And so these are really durable sources of growth that we expect to continue to invest in and build on. Now loyalty and human connection are two areas that we're earlier on in our journey with and they're areas where we're starting to see encouraging signs, but I would expect those to build more over time. And particularly, you asked about the seller and buyer ecosystem. Loyalty is a really great place to think about that. We talk about recognizing, retaining and rewarding our very best customers. And that really is about, for the first time for us, focusing on both the buyers and sellers who disproportionately contribute to our marketplace and our marketplace growth. And so that's something that we're really early -- that's new for us, and we're earlier on in the journey, but we're really encouraged by, and we're really excited about. Charles Baker: And I think as you take those 4 priorities, and Kruti talked about connecting them to engagement and conversion and retention, I think you could also then think about where they come into our financial model. And the financial model is really -- it's a number of buyers, the average order value and the purchase frequency. And as you had a question about like the longer-term durable kind of growth, We've, I think, stabilized the number of buyers. You've seen U.S. buyers grow sequentially quarter-over-quarter. The grand total is down about 100,000 quarter-to-quarter. We're still down year-to-year by 3-plus percent. So there's some way to go to get to the total buyer count growing year-to-year, but we're stable. Average order value has been stronger. Average order value has been up with inflation, with probably some tariff input, certainly, FX input has lifted the average order value. And on frequency, we're also stable, still down a little bit year-to-year, but all things that Kruti just described are the efforts that we're undertaking to start to turn that frequency level as well. So where the growth formula really comes together is where there is growth across each of those. We've gone from shrinkage across each of those to stability across two and growth on one, and we're working for the other. Operator: Our next question will come from Michael Morton with MoffettNathanson. Michael Morton: Thank you for the question. a lot of really exciting things about the fundamentals this quarter. I wanted to ask Kruti about the traffic coming from the AI platforms and how these consumers are behaving, what it means for Etsy's relationship with these consumers. And it's the #1 investor question regarding marketplaces. And it's -- what does it mean for on-site ads and on-site ads are sold on a cost per click basis and as consumers get smarter, or better answers faster, there's the -- it could lead to compression in the funnel. And Etsy is really leading everybody in your adoption of working with these platforms, you're pretty much first for everything. So I know it's early, but we would love to learn what you're seeing with this consumer behavior. And then are we wrong in thinking that it could be risk to the on-site ads business? And if so, maybe some levers to offset any type of headwinds to on-site ads would be great. Kruti Goyal: Yes, it's a great question. You're right. It's the one that lots of people are talking about. And we are really excited to be proactive early movers in this space. The first thing I would say, touching on a point that you made is that it is still very, very early days in agentic platforms as they relate to commerce. I will say that we are seeing really encouraging signs that support our hypothesis that agentic can be a really valuable and incremental discovery channel for a business like Etsy. So while it's early days, we're seeing really significant increases, growth in agentic traffic. We're seeing 15x what we saw last year at this time, but it's still very, very, very small. So less than 1% of our total traffic. So what that tells us is that consumers are interested in engaging and find some value in this platform. Second, we're seeing that -- or find some value in agentic search. The second thing that we're seeing is early signals that these are really valuable customers. So higher intent, higher average order value, we're seeing engagement across both new and existing buyers, which tells us it can be both an acquisition channel and a reengagement and retention channel for us. But most importantly, what we're seeing is a lot of great flow-through. And what I mean by that is that we see a lot of that traffic that's where people are discovering Etsy items on agentic platforms flowing through to Etsy where they continue to look more and then transact. And this makes sense to us, right? Because shopping doesn't happen in all one flavor. When you're looking to buy something and you've got a very simple set of criteria around purchasing it, it's just about price or just about speed and the items are largely replaceable, giving the ability to purchase that to a third party, it's really easy to see how you do that. But the items on Etsy are higher consideration higher value in terms of meaning. And what that means is that you tend to want to -- firstly, when you're buying a gift for your mom for Mother's Day, you're more likely to want to dig in and see more about that item, understand the story behind it before you make that purchase. And so that flow-through that we're seeing, I think, is a really good indication that, that hypothesis is true. Now you mentioned being early movers. And we think this is really, really important. The world is moving quickly. And we don't think you win by sitting on the sidelines. Being an early participant, and this means a couple of things. We're able to really -- in partnership with these platforms help shape the experience in ways that we think is really helpful to buyers being able -- shoppers being able to understand what differentiates the products that they're going to be seeing on different platforms. We think that really plays to Etsy's strengths because of the differentiation of our inventory, the fact that everything has a story behind it comes from a real person. And second, it allows us to be in there really early observing and learning from shopper behavior. And this is what I think is so critically important. One of the priorities that I stated, the strategic priorities for the long term that we have is showing up where shoppers discover. So as we see this new emerging discovery platform, it is really critical for us to be there with these shoppers, learning and evolving with them as their behavior evolves. Charles Baker: Yes. And I think to the question about -- sort of the last pair of question is about what do we do with Etsy Ads while this sort of transition and learning period is going on? First, I'd go back to something we've said many times, which is right now, we are recognizing only a very small portion of what our sellers have said they would be willing to spend to on advertising to win incremental GMS. And it's on Etsy and our machine learning and our match and our ad system to do a better job of delivering customers to those folks who are willing to advertise to be at the top of the stack in the search results. So there's more opportunity for us to continue to optimize the Etsy Ads performance internally. Secondly, as Kruti indicated, the behavior that we're seeing in the agentic shopping world is a combination of sometimes hey, this convenience of being able to check out right in the midst of the agentic experience, that's wonderful. Other times, like Kruti just said, hey, that's a great idea. I hadn't really thought of that. Let me go to that source and learn more about that high considered purchase. And that bringing them on to the Etsy product services where our ads model is designed to help them navigate that journey to what arguably will be the best fit in products for them. The third thing I would say is that it's really interesting to see at a relatively early stage of the development of the agentic world, the people who operate those models starting to include advertising and trying to figure out how to bring advertising into their ecosystem. And I think that as we think about the paid search world, sort of inclusion of an advertising-driven component of the search world, has been really favorable for Etsy over time. So I think there are on-site things that we can do. There are interface things that we can do. And then there's sort of structural ecosystem things that are evolving right now. It's very early days, but we feel like we're about a very defensible position with Etsy advertising product. Kruti Goyal: There's one other thing that I just want to add on here, which is a lot of the focus is on agentic commerce, like commerce that's happening on those platforms. What we're talking about in addition to the commerce is agentic discovery. And then the third piece that we're not talking about here is agentic capabilities. And those capabilities are not proprietary or owned by those platforms. There are capabilities that any company can use. And so I think a lot of what we are thinking about where we're spending our energy today is on applying those advancements and capabilities to the experience on Etsy across the platform. So we've talked a lot about how we're using ML to power much more personalized user-aware recommendations. We're also using that to make our selling experience much better, much more efficient so that our sellers can spend their time doing what only they can do and really enhancing and amplifying the differentiation of Etsy and using it behind the scenes to make how we operate more effective, to make our support and trust and safety better, to make how we all operate day-to-day much more effective and efficient. And I think that's a really big part of the agentic story and maybe one that we should be talking about more. Debra A. Wasser: Great. Exciting topic. Operator: Our next question will come from Rick Patel with Raymond James. Rakesh Patel: Congrats on the progress. A couple of questions around buyer acquisition. First, can you talk about the commentary around acquiring younger buyers, which channels do you see as having the biggest opportunity? And what are you going to do differently in 2026 to capture that? And as a follow-up, how much room do you see to reengage lapsed buyers? You touched on social being an effective tool there, but just curious how big that opportunity is. Charles Baker: Sure. On the second point on lapsed buyers, I think there are over 100 million lapsed buyers of Etsy. And remember that about 50% of our buyers buy one time a year and so the opportunity to bring people back two times a year, that really starts to feed in not just the frequency numbers, but that actually will feed quickly into the buyer count numbers. So those are some levers that we're pulling there. You had a really specific question about where we're getting younger -- how we're going after younger audiences. Kruti, in her prepared remarks, talked about the importance of the mobile app for engaging with them. The demographics of Depop are quite a bit younger, and the GMS mix of Depop is 90% mobile app. And so we know from first-hand experience that the mobile app really is where that customer base is. So the mobile is really key to this. But there are also the social channels that we're using much -- we're really working to use the social channels to introduce Etsy more frequently to that younger bio demographic. This quarter, we -- frankly, we doubled the amount of spending that we do on TikTok to go after that audience from last quarter. And what was terrific about that is we were able to double the spending while keeping the return on spending as good or in line with where it was last quarter. It's hard to -- sometimes it's hard to take a channel like that and spend that much more into it and not have or at least for a short run, your efficiency -- lose some efficiency. That's -- and the buyers that are coming through that channel are younger. That's true, at Pinterest, that's true, of some of the other social platforms. And so I think social will be, along with the app, are probably the two biggest levers. On agentic is -- the numbers are so small that it doesn't make a difference today in terms of shifting the demographics. But those are the places in particular where we're focused. And we'll do more there in 2026. Kruti Goyal: Yes. I want to also just add to that and zooming out for a second. I talked about how this isn't an appeal gap, it's a presence gap. And so the channels that we show up on really matters. The other thing that I would add is I think there's an opportunity to really leverage our sellers and leverage influencers to really speak more directly to those younger buyers. And the content matters as well. So this is where we're focusing on more discovery-oriented content also really matters. So I just wanted to add on that it's both where we're present and what we're showing and making sure that it's more personalized and relevant to this audience. But we're really excited about all these efforts. Operator: Your next question will come from Ken Gawrelski with Wells Fargo. Kenneth Gawrelski: Could you talk -- maybe two, please, if I may. First, maybe reframing the agentic discussion. It seems to me that maybe this is a race for search and discovery on site versus in the agent, right? You have unstructured data, unstructured listings, how are you -- how do you make sure that the on-site or on app experience for search and discovery is ultimately better than the offsite, meaning the agent or search can -- externally can find the item faster or better than you can. And then one second one, too, and I realize that there's only maybe so much you can say about this, but cash uses. I mean, $1.2 billion relative to your market cap is very substantial. You're already well capitalized. How should we think about the opportunities to effectively use that cash that's coming in? And is there any kind of time frame you can give us as to when you might maybe give us a little bit more color on cash uses? Kruti Goyal: Thanks for the question, Ken. I'll take the first one, and Lanny you can take the second. I think this is exactly the right question. The insight and the data that we have should enable us to always offer a much richer and better experience when you know that you want something that Etsy can offer. And this is exactly one of the reasons that I think agentic can be a really great discovery platform. But what makes it such an appealing platform right now is they've really tapped into this conversational interface that allows us to get much deeper and richer insight into intent. And so when you look at what we are doing at Etsy, our first step is leveraging AI capabilities to pull that deeper understanding of our buyers' interests and of our inventory and to get signals of intent. But then the next step is to bring that same kind of interface to be able to capture even richer understanding of intent. And as we do that as we progress there, we should be able to do that much more effectively because we have more data points. I think for people who don't know what they're looking for or don't know they're looking for something that is available on Etsy. These third-party platforms are great to understand the world of your options, and that's where us providing really rich insight into our inventory and what buyers care about in that inventory is really important in the near term. It's a great question, and I think the right one. Charles Baker: And from a capital allocation standpoint, I think we start out with the thought that we have $1.8 billion in cash and $3 billion of debt and $650 million of free cash flow per year. And those are the those are like the raw materials of how we think about returning cash to shareholders and managing what's on our balance sheet. Now with the addition of proceeds from Depop, that will refactor that whole equation. What you've seen over the last couple of years is Etsy say, we can invest in the business through the P&L, and there aren't big acquisitions that we have thought of, there aren't big sort of capital outlays that we have been making. And so with the excess cash that we have relative to the future needs that we see from the balance sheet perspective, we've been returning that really aggressively to shareholders. I don't -- I think the amount by which the share count has come down over the last 1, 2 or 3 years is pretty striking. And that speaks to the sort of inherent profitability, scalability and capital-light nature of the core Etsy business. And that those things all remain. So as we're looking forward, I think you should expect us to run that same set of analysis, look at the cash that we hold, look at the right amount of leverage on the business, looking at returning excess cash to shareholders. And if there were to become an attractive investment opportunity that we looked at and said, hey, that is going to be a really high return on capital, we'd be open to that. But right now, the best returns that we see are investing internally in the Etsy business, and we'll continue to do that. It generates a lot of cash and where there's excess cash flow, we'll return that. Operator: Your next question will come from Jason Helfstein with Oppenheimer. Jason Helfstein: So now that you don't have to decide between allocating marketing between Depop and the core marketplace, how does that impact your strategy and outlook for '26 and beyond and maybe kind of connect that back to the prior question around new customer acquisition, reactivation and investment in technology, LLM, et cetera. Charles Baker: Let me start and say, I think it's really important to point out that while similar in nature, the conditions around Depop and the condition around Etsy are quite different. Depop had and has a tremendous product experience, the best in the business. It did not have the level of awareness across all the different audience opportunities that we saw that we thought it needed and we thought it could benefit from. And so when you want to drive awareness, the brand activity and is exactly what I think we believe one should do. And the early results from that are really encouraging. We are expanding the awareness of that product. Etsy's situation is quite different. Awareness of Etsy is very, very high. Most people have heard of Etsy, most people have bought on Etsy. The product experience, you've heard us talk about, is not where we think it should be in terms of personalization, in terms of retention. in terms of rewards for loyalty, in terms of discovery, all of those things. And so the comparison is Etsy, the investment need is more on the product side. Now we spent over $400 million last year in product development, improving that. We have some early indications of the progress and the fruits of that investment. And we will continue -- that's a lot of money to invest in that product experience. We will continue to invest in that, and we think we will continue to make progress on that product experience. So I don't think it's -- I was -- it's not -- I don't think it's currently an accurate idea to say, well, because they spend money on Depop marketing, now they're going to spend money on Etsy marketing. That just doesn't really follow. And I think the Etsy business is a position where we're making really strong product investments, they're starting to bear fruit. This whole opportunity around agentic and our internal use of ML is a whole new frontier for us to continue to move investments into that area. And right now, we feel like we're able to do that within the margin outlook that we gave to and being able to deliver this sort of combination of improving sustainable, durable growth with healthy EBITDA margins as we do that. Operator: Your next question will come from Deepak Mathivanan with Cantor. Deepak Mathivanan: Great. Just wanted to ask a follow-up to Ken's question. Kruti, can you talk about the learnings from the traffic you're seeing from agents as it pertains to potentially building the experience on Etsy with the native and conversational experiences? What signals are you watching to integrate AI native experiences in the platform? And also broadly, how should we think about Etsy's technical approach here using our own models built on top of open source to power the business logic or perhaps using all those like Gemini and GPT models? Kruti Goyal: Some of the early signals that we're seeing, like I said, are really related to these channels as strong discovery channel. So higher intent higher order value, really good engagement, really good flow-through. And so those are the biggest learnings that we're seeing that there is interest and excitement about the differentiation of our inventory as people discover it in the context of other inventory. So that's where the greatest learnings are, which they think a little bit of a different category than the learnings are more generally from these AI platforms around the value of conversational interfaces to really more deeply understand intent. And those are things that we're playing with across all parts of the experience. And really the deepest learnings are coming from those on-site experiences rather than off-site experiences. Charles Baker: I would just add one thing we're learning with our partners is that the consumers who engage with agentic shopping come back and do more agentic shopping. So there's like implicit satisfaction in that I think these services are delivering. The implicit part is that their increased usage after they try it once, they come back a second time after they do it 2 times, they keep coming back. It's -- the early indications are also that this is an experience that is working really well for customers. That's one of the reasons why when we see that from our partners, we're also really convinced that we can use agentic on Etsy to improve our experiences. And as we bring those things that Kruti has been talking to light, it will help us with retention and help us with our own product experience. Operator: Your next question will come from John Colantuoni with Jefferies. John Colantuoni: Okay. Great. I wanted to ask about channel trends. With the app up nearly 7%, it implies GMS on the website was down around 5%. And I'm curious if you see an opportunity to accelerate growth on the website and how a normalization and competition across performance marketing channels in a year ago period could impact your approach to driving this potential acceleration? Kruti Goyal: Maybe I'll start. And then Lanny can continue. Okay. Look, our app is our most valuable platform. We see that app users have a 40% higher LTV than non-app users. And that's because as Lanny was saying before, user -- when users engage with the app, they visit more, they engage more deeply and they convert more. And we think that it's really attractive to a younger audience. As we have grown app share of GMS, we have continued to see that higher level of value and engagement. So we think that there is a lot of runway to continuing to both invest in making the app more personalized, more discovery-oriented, more engaging and leveraging our own channels to drive more people to the app, and to invest in all of the channels and opportunities that we have to drive more people to the app. Remember, only 46% of our app -- our GMS comes through the app right now. And as Lanny mentioned, we know of another marketplace that has almost 90% of their GMS coming through the app. So we just think that there's a lot of headroom there to grow. Debra A. Wasser: We'll take one more question here before the bill rings. Operator: Your final question will come from Shweta Khajuria with Wolfe Research. Shweta Khajuria: I've got two, please. One is -- both are on the longer-term side, on agentic commerce, a follow-up, much of the drawdown that we've seen in Internet stocks year-to-date is in part because of this concern that some of these business models could be disrupted with the AI agents and what they can do. So for anyone who is wondering or debating about Etsy's value proposition as we think longer term, is there -- how do you think about the risk that maybe an AI agent could disrupt take rates or perhaps a seller could go directly to an AI agent, pressuring your take rates or your business model outside of advertising. This is a transaction that can happen on an AI agents platform versus on Etsy. So that's question one. And then second is how do you think about the durability or where frequency can go as the -- as you make more improvements around your app and the product and marketing investments that you do, is there any structural reason why Etsy's frequency cannot be higher than what we have seen in the past? So how do you think of that trend line? Kruti Goyal: I'll take the first one. So Shweta, like you said, we're in very early days in agentic. And what I would say is the early indicators that we're seeing are really encouraging in terms of supporting our hypothesis that this can be an incremental and powerful discovery channel. And because it's so early, no one knows at this moment in time what aspect of how things are going to evolve or what aspect of the businesses might come under pressure. What I do know is that being in there early, we have proven that as the world changes, we have been really capable and effective at adjusting really adjusting to things that are unknown and unexpected that come our way. So we're really confident that as the world evolves, we will evolve with it. But it's impossible to predict right now for every one of those situations, what might happen. Debra A. Wasser: Good. All right. That's it for today. Thank you all for joining.
Operator: Greetings. Welcome to the Avis Budget Group Q4 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to David Calabria, Senior Vice President, Corporate Finance and Treasurer. Thank you, David. You may begin. David Calabria: Good morning, everyone, and thank you for joining us. On the call with me are Brian Choi, our Chief Executive Officer; and Daniel Cunha, our Chief Financial Officer. Before we begin, I would like to remind everyone that we will be discussing forward-looking information, including potential future financial performance which is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from such forward-looking statements and information. Such risks and assumptions, uncertainties and other factors are identified in our earnings release and other periodic filings with the SEC as well as the Investor Relations section of our website. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results and any or all of our forward-looking statements may prove to be inaccurate, and we can make no guarantees about our future performance. We undertake no obligation to update or revise our forward-looking statements. On this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings press release, which is available on our website, for how we define these measures and reconciliations to the closest comparable GAAP measures. With that, I'd like to turn the call over to Brian. Brian Choi: Thanks, David, and thank you to everyone joining us today for our fourth quarter and full year 2025 earnings call. If you reviewed our earnings release and financial supplement, you'll have seen that this was a difficult quarter. I've said before that delivering on quarterly results is foundational. And when operational performance speaks for itself, we earn the right to focus on the bigger picture. This quarter, we didn't earn that right. We fell significantly short of guidance, that's unacceptable and I have no excuses to offer. What I will say is that the decisions we made were grounded in the information we had at the time. The outcomes were not what we expected but the process was disciplined, and I think that distinction matters as we look forward. What I owe you today is a clear fact-based explanation of what happened, how we're now responding and where this means we're headed as a company. I'm going to structure my remarks around 3 horizons. Horizon 1 is a backward-looking view focused on what drove our fourth quarter miss. Horizon 2 is the present, the actions we're taking now to position the business for 2026. Horizon 3 looks briefly at how this all fits into our longer-term strategy. I'll get into a fair bit of detail on Horizon 1 because that's what this quarter demands. Let's start with what we're bridging. On our October earnings call, we guided to full year adjusted EBITDA of $900 million, implying roughly $157 million in the fourth quarter. Yesterday, we reported full year adjusted EBITDA of $748 million. That means we missed our fourth quarter forecast by approximately $150 million inside the span of 3 months. I'll walk you through the specific drivers of how that happened. But first, it's important to note that this miss was entirely in our Americas segment. Our international business executed a meaningful turnaround in 2025 and performed as expected in the fourth quarter. The issues we're discussing today are concentrated in the Americas. In October, we expected Americas rental days to grow about 3% in the fourth quarter. That was consistent with third quarter trends and supported by TSA passenger growth of roughly 3% year-over-year in the month of October. So while government travel immediately declined sharply following the shutdown, overall commercial demand initially held up. That changed abruptly in November. FAA flight reductions, air traffic control disruptions and extended TSA wait times materially reduced discretionary travel as it increased both uncertainty and inconvenience. Commercial rental days went from mildly down in October to down 11% in November. December stabilized but by then, the damage to the quarter was done. As a result, instead of growing rental days by 3%, we delivered flat volume for the quarter. That whipsaw demand created our second challenge, fleet size. When demand weakens, the right response is to reduce fleet. The problem was timing. The fourth quarter is the most difficult period to sell used vehicles as dealers focus on clearing new model year inventory. Aggressive new car incentives, pressure used car pricing, which is why under normal circumstances, we defer meaningful defleeting until the first quarter of the following year. This year, we couldn't wait. Given the speed and magnitude of the demand decline, we chose to defleet in November despite unfavorable market conditions. Used vehicle prices reflected that reality. The Manheim rental index price per vehicle declined nearly $1,000 or 4.3% from October to November. That impacts us in 2 ways: lower gains on vehicles sold and a lower valuation mark on the fleet we retained. As a result, monthly net depreciation per unit in the Americas came in at $338 in the fourth quarter. Our initial estimate in October was slightly lower than $300. The silver lining is that used vehicle prices stabilized in December, recovering most of the November decline. We believe selling fleet aggressively was still the correct decision from an asset management standpoint, even though it came at a cost, not acting and carrying excess fleet into a soft demand environment would have created greater operational and financial issues. This was the right call, even though the timing made it painful. But despite us taking decisive action, industry capacity remained elevated relative to demand in the fourth quarter, which leads us to our third unforeseen factor, pricing. Through the first 3 quarters of 2025, RPD on a 2-year stack had been sequentially improving. Based on early fourth quarter trends, we expected that improvement to continue. Instead, November reversed that progress. Weakened demand and excess industry supply pressured pricing across the market. Length of rent restrictions were largely absent industry-wide and RPD deteriorated more than expected. In the Americas, RPD finished the quarter down 3.7%. When we guided in October, we thought this would be closer to 2%. I don't believe this was an Avis-specific dynamic. Industry capacity remained elevated and pricing pressure was evident across competitors as well throughout November and early December. For how this all impacted our results, let me pass it over to Daniel. Daniel Cunha: Thank you, Brian. Financial results of our business are really driven by just a few key variables. As this quarter demonstrated, these variables are often interconnected and can be difficult to predict. When rental days depreciation in RPD all move off plan at the same time, the financial impact compounds quickly. Here's the bridge. Lower rental days and weaker RPD drove approximately $40 million of the adjusted EBITDA miss on the revenue side. Higher gross depreciation and lower gains on sale accounted for an additional $60 million. The remaining approximately $50 million relates to our insurance reserves for personal liability and property damage or PLPD. As part of our actual review for year-end, we increased our PLPD reserve in December, while new incident trends are improving, we chose to reset our reserve base line conservatively as we enter 2026. This was a deliberate decision as we do not want to carry additional risk. Taking this action now puts us in a stronger position, more stable for 2026. When you step back and consider all these factors together, I find it useful to evaluate the puts and takes across 2 dimensions: macro versus micro and temporary versus structural. In my view, the majority of our underperformance this quarter falls into the macro and short-term category. Demand softness and pricing pressure were industry-wide and appear transitory based on recent trends and forward bookings. Depreciation is clearly macro driven, but the health of the used car market won't be fully known until the tax refund season later this spring. December and January trends suggest the market has stabilized, and we'll keep you updated as the months progress. As far as the operations go, my key point is this. Recall challenges aside, we do not believe the specific conditions that cause rental days, depreciation and RPD to move against us simultaneously are present today, and we're operating the business to reduce the likelihood of that alignment recurring. Demand has stabilized, fleet is better aligned with volume and pricing is slowly improving. Let's close out Horizon 1 by addressing the approximately $500 million write-down we took on our EV fleets at year-end. Our write-down is never something we welcome. We view this action as a deliberate reset that strengthened our balance sheet and reduced future risk. Following the passage of the Big Beautiful Bill in July, which made 100% bonus depreciation permanent. The outlook for tax position became much clearer that prompted us to reassess how to best monetize the Federal EV tax credits that we had limited ability to utilize internally. As a result, we completed the transaction allowed us to monetize the majority of our EV tax credits and generate $180 million of cash to date. Importantly, this also give us the opportunity to reassess the economic life of our EV vehicles. Based on market conditions and our operating experience, we concluded it was prudent to shorten the remaining useful life from 36 months to approximately 18 months. We've been depreciating these vehicles at roughly $600 per month. So exiting them earlier meaningfully reduces our exposure to residual value risk and technology obsolescence, while accelerating capital recycling. More broadly, the automotive industry is recalibrating how it thinks about EV economics, and we're doing the same. The decisive action strengthens our balance sheet, pulls cash forward and reduces future volatility and depreciation. I want to thank our tax and treasury teams for all the work they put in to allow us to take advantage of this opportunity. With that, let me turn it back to Brian for Horizon 2 to discuss what actions we're taking from the learnings of the fourth quarter and how we're planning for 2026. Brian Choi: Thanks, Daniel. 2026 will be the first year in which this management team has had the opportunity to build an annual plan from the ground up. As a result, you will see some clear philosophical differences in how we operate the business. The most important shift I want to highlight is how we define operational success when it comes to fleet availability. Coming out of the COVID recovery, the operational ambition in the Americas was to be the last provider with an available car on the lot. In a supply-constrained, high-demand environment, that strategy worked. Having the last car available meant you had pricing leverage on late rentals and that was largely the reality in 2021 and 2022. That approach does not work in a normalized environment. Carrying excess fleet requires holding more vehicles during shoulder periods, which pressures RPD. It also requires larger fleet purchases, often at less favorable economics. We've seen firsthand that prioritizing absolute availability over discipline introduces volatility into pricing, depreciation and ultimately, into earnings and balance sheet health as well. In 2026, we are prioritizing utilization over fleet growth in search of rental days. That shift is already underway. As I mentioned earlier, we sold a substantial number of vehicles in the fourth quarter into a thin buying market. Since then, buyers have returned and in the first quarter of 2026, we are actively utilizing every disposition channel available to rightsize our fleet. In January, we sold a record number of vehicles. That momentum continued into February, and we expect elevated disposition activity through the peak tax refund season in March and April. The lesson from the fourth quarter is straightforward. While we don't control macro events like government shutdowns, we can control how nimble we choose to be as a company. Running a tighter fleet reduces the risk of being caught off-footed when demand unexpectedly softens. And in scenarios where demand is stronger than expected, we will deploy fleet to the most profitable segments of the business and rely on operational execution to capture those opportunities. We are asset managers and our focus is on sweating our assets. You should see this discipline reflected in lower fleet size and higher utilization as the year progresses. Our fleet rightsizing strategy also prompted us to take a hard look at how we structure our OEM partnerships. Avis Budget Group is one of the largest vehicle purchasers in the world and replace a high value on the long-standing productive relationships we've built with our OEM partners. These relationships matter, especially in periods of stress. When our partners face challenges, we've worked through them constructively and in most cases, that approach has served both sides well. In 2025, however, recalls became a more meaningful operational and financial headwind than we anticipated. We exited Q4 with approximately 14,000 vehicles still grounded as parts availability remains constrained. The impact of recalls in the fourth quarter alone including only depreciation, interest parking and parking expenses even before factoring in lost profits and gains on sale was nearly $40 million. We operate in an asset-intensive business and returns depend on our ability to actively deploy and monetize those assets. When vehicles are sidelined for extended periods with no clear path to resolution, that directly undermines the economics of our business model. This experience has clarified something important for us going forward. Reliability and execution matter just as much as price and volume when we determine fleet purchasing decisions. As part of our 2026 planning process, we are rebalancing our OEM exposure to reflect that principle. OEMs that demonstrate consistent execution, transparency and responsiveness will continue to be core partners for us. Where those standards are not met, we will reduce exposure over time and reallocate volume accordingly. This is not about short-term pressure or one-off issues. It is about aligning our fleet strategy with dependable partners who enable us to run a more predictable, capital-efficient business. Given the scale of our fleet purchases, even modest reallocations can have meaningful economic impact. As we look ahead, our OEM strategy will be guided by a simple objective, deploy capital with partners that allow us to reliably earn attractive returns across cycles. The final strategic change I want to address for 2026 is how we think about costs. At this new Avis Budget Group, cost is not something to be cut for its own sake or simply managed quarter-to-quarter. Cost is capital. And like any capital allocator, our responsibility is to deploy that capital where it earns the highest possible return for our customers, our employees and our shareholders. Our job isn't to spend less. It's to be deliberate. When we treat costs as scarce capital, we rationalize in areas where returns are low so that we can invest with conviction in the areas that matter most. One action funds the other. We put this philosophy into practice at the start of the year. In January, we implemented a global reduction in force to reset our organizational structure to what we believe is appropriate for the business we plan to run in 2026 and beyond. This was a deliberate onetime action. Separately, we have strengthened our performance management processes, which led to exits this January. This will be an ongoing discipline going forward. The fourth quarter reinforced an important reality. This is a business with inherent volatility. Rental demand, used vehicle pricing and RPD are variables we don't fully control that makes it even more critical that we rigorously control what we can control. A lean, flexible cost base is essential to manage through uncertainty and improve earnings stability. This approach extends well beyond headcount. We are conducting a thorough review of our business portfolio to ensure each segment meets our capital return thresholds and strategic objectives. In December, we made the difficult decision to exit Zipcar U.K. In January, we restructured Zipcar's U.S. operations to put that business on a more sustainable footing. Throughout 2026, we will continue to evaluate noncore and adjacent businesses, including package delivery, ride hail and certain franchise activities to ensure capital and management attention are allocated where they create the most value. Let me be clear. This discipline does not mean we are pulling back from investment. It's not an either/or proposition. Cost rationalization is what enables investment. That capital comes from making tough intentional choices elsewhere. That's exactly how we started 2026 and how we expect to manage the years going forward. Taken together, these actions are designed to lower earnings volatility, improve margin durability and sustainably increase free cash flow generation, which brings me to Horizon 3. I'll keep this brief because our long-term strategic direction remains consistent with what we've previously communicated. We remain intensely focused on the execution of several key initiatives. Our top priority is customer experience. Over the past several years, the rental car industry has seen quality standards drift. It is not acceptable to Avis and it's something we are addressing head on. We are rearchitecting our customer experience organization from the ground up with clear ownership, defined metrics and tight accountability. Our objective is straightforward, consistently deliver the best product in the industry. It begins with our fleet. The average age of our U.S. rental car fleet will be less than a year old by the end of the first quarter. We haven't been able to say that since before the pandemic. We are also continuing to build out Avis First. What began as a leisure-focused offering will expand meaningfully into commercial accounts in 2026. Feedback from our early strategic accounts has been strong, and we see significant opportunity to deepen relationships by delivering a more differentiated premium experience. Finally, our partnership with Waymo continues to progress as planned. Our Dallas launch remains on schedule with real estate development, hiring and training and compliance certification all tracking to plan. Waymo is currently offering employees fully autonomous rides in Dallas, which is a final step ahead of welcoming public riders soon. As we announced last year, we do intend to explore additional cities with Waymo in the future and are in active conversations with them. We believe our core competencies are mission-critical to operating autonomous mobility at scale. We're working alongside Waymo to prove that in practice as additional markets come online. To close, the fourth quarter was a setback, and we treated it as a catalyst for change. We've clearly diagnosed our challenges. We've been decisive about the actions we've taken and disciplined in how we're repositioning the business. The focus now is execution, running a tighter fleet, allocating capital deliberately and raising the bar on customer experience. These actions better align the company with the operating environment and strengthen our ability to generate durable returns. With that, Daniel, David and I are happy to take your questions. Operator: [Operator Instructions] Our first question has come from the line of Andrew Percoco with Morgan Stanley. Andrew Percoco: I want to start with your 2026 guidance. Obviously, a fairly wide range for adjusted EBITDA. And I'm just hoping that you can kind of walk us through what some of your working assumptions are on some of the key inputs like RPD and DPU. I see that you guys are guiding for DPU to be up in the first quarter and then a moderation thereafter. So just hoping to get a better explanation for what's embedded in the guidance relative to kind of where you exited 2025. Thank you. Brian Choi: It's pretty important saying that we're assuming that fleet size is going to decrease into 2026, something that hasn't been the case for the past few years. We're going to focus instead on utilization and making sure that we get the right business in terms of a contribution margin perspective. Daniel, anything you want to add? Daniel Cunha: I'll just highlight that if you look at the 2025 results where we landed and you make 2 adjustments only, right, and you ignore $100 million of recall impact and the one-off impact of PLPD, you're in the middle of the range, right, and how we perform better than the range or slightly below is going to be a function of how the marketing channel on the RPD and on the fleet size perform, believe we have a path for the top of the range, but coming out of Q4, we have some significant headwinds, we're being conservative. Brian Choi: Andrew, maybe just to add over there. I realize it's a wide range. We expect to narrow that range as the year progresses. But just given what we saw in the fourth quarter, which was a large miss in itself, we want to make sure that we retain flexibility. So listen, the fourth quarter, it wasn't driven by a gradual deterioration in trends. Things happened very quickly, short term. It was a shock and we can't eliminate volatility in the industry, but by materially tightening the fleet levels and adjusting our operating posture, I think we've reduced the probability of another compounding effect like that. Andrew Percoco: Got it. Okay. That's super helpful. And maybe just to follow up on, I mean, there's continuing to be a pretty big dispersion in some of the metrics between the Americas and your international segment. So just curious, as you talk about fleet resizing and some of the actions you're taking, is that more of an Americas comment or is that global? Just trying to get a better understanding of what the differences you're seeing across geographies and maybe how you're tackling those challenges. Brian Choi: Sure, I'll start. Andy, the comments that we made around OEM repositioning and the actions we're taking around depreciation, that's entirely in the Americas segment. So the used car market in 2025 in the U.S., it was unusually volatile. So Manheim values, if you recall, they were roughly flat year-over-year in the first quarter. And then amid tariff uncertainty really spiked into the second and third quarter. And then it exited the year essentially flat again. So by year-end, pricing normalized completely relative to where it began. Given that environment, we're proactively adjusting depreciation in the fourth quarter to reflect current residual expectations rather than carrying forward prior assumptions. That's why you see that $400 number in the fourth quarter -- in the first quarter of this year. So we expect depreciation to be elevated in the near term as we normalize fleet economics, but we do see a path towards a low 300s monthly run rate as we move throughout the year. So the market today appears orderly in the U.S., seasonal strength is building into tax refund season. And we're -- our planning assumptions are not dependent on some sharp rebound in used car prices. So we're underwriting returns at levels that allow us to perform across a range of scenarios. Daniel Cunha: I'll add, Brian, a couple of things. In the Americas, we have made bigger strides in improving utilization, right? In spite of the 3-point impact of the recall in the quarter, we managed to grow utilization by about half a point which is meaningful improvement. And that's why we also have the more flexibility in reducing the fleet and still serving customers in rental days, right? On the international, if you think about the per unit cost, there is less volatility, as Brian described, the Manheim situation is American situation, but we also have a much higher share of program cars in international, which insulates them a little bit from this impact in the short term. Operator: Our next questions come from the line of John Healy with Northcoast Research. John Healy: I wanted to spend a couple of minutes on fleet cost. I think in the slides, you guys talked about $400 million in Q1 and a full year, let's call it, $325 million or so at the midpoint. I'm just trying to understand the confidence in the full year because that to me that first quarter number is awfully high, which would imply that the rest of the year is probably sub $300 million. I don't know if I'm looking at that in an incorrect way, but just trying to understand the confidence of why it steps down just so much when we've been in a period over the last 2 years where we've probably maybe underappreciated more relative to the -- underappreciated relative to the market rather than more. So just trying to understand that $325 million number for the year. Brian Choi: John, so like I said earlier, in terms of the volatility that we saw in the 2025 you'll see that our models, which we're forecasting when we sell these cars into the future. They're built off of future forecasts primarily in Black Book and Moody's. Those forward-looking economic models assume the impact of tariffs to continue throughout the life of these vehicles. As we've seen in the fourth quarter, that isn't the case anymore. So we've adjusted our internal models accordingly as well. So what you're seeing in the fourth quarter is kind of a catch-up to show up -- to show that reality and then normalizes over time. What we're seeing is for 6 months of that elevated period where we saw tariff impacts. Had we known it would evaporate, we probably wouldn't have been -- we probably would have been a little more conservative in our depreciation assumptions. What we're doing right now is we're just rectifying that in the first quarter to make sure that we reset to where we need to be. John Healy: Understood. And then just any commentary on just the pricing environment that you've seen kind of year-to-date and how you're seeing competitive pricing trends or your pricing trends into the spring season? Brian Choi: Sure. So January reflected many of the same pressures we saw exiting the fourth quarter. So industry pricing remained competitive. Commercial demand was slower to ramp given the calendar. But that said, the actions we've taken to reduce fleet are beginning to align supply more closely with demand, particularly as we move into February and March. So we're not providing month-to-month guidance, John. But pricing has stabilized relative to where we exited in January and the rate of erosion that we saw post COVID has clearly moderated. So importantly, our 2026 plan, it doesn't assume aggressive pricing recovery. It's built around disciplined fleet sizing, utilization improvement and cost control. So we're working towards achieving better RPD, but we're not dependent on it to hit our 2026 guidance. Operator: Our next questions come from the line of Chris Stathoulopoulos with SIG. Christopher Stathoulopoulos: So David, Avis has effectively missed the full year guide for 3 years now. Now I under -- this is under a different leadership here you've only recently gotten into the practice of giving explicit guide. So some of these to be fair, more on the soft guide side. But I guess how do we get comfortable with the full year guide here? And maybe if you could and I think this was the lead-off question, but the line dropped or something. If there's an EBITDA bridge you could walk us through anything on the KPIs and then perhaps if you could quantify what could be described as lost revenue or embedded demand for last year. So the impact of tariff shutdowns, FAA cancellations, weather, Zipcar, I don't think you gave any impact on what that looks like from a noncash or comparable issue. But I just want to understand here your base case assumptions for the EBITDA bridge for this year and how we should think about what, I guess, was out of your control for last year. There are a lot of items there. And maybe if you could put some numbers around that, that would help us with the modeling. Brian Choi: Let me start and I'll pass it over to David and Daniel. But in our prepared remarks, we gave a bit of guidance in terms of what happened at least in the fourth quarter relative to what we were expecting. So on the revenue side of things, roughly $100 million of impact. And from a balance sheet perspective, we took another $50 million increase to our PLPD reserves. Chris, let's be honest, like the market moves quickly over here. So anchoring on specific metrics to say this is how we're going to plan for the entire year, just really isn't feasible for us. So the metrics we gave you are the metrics we feel comfortable guiding to right now which is that depreciation will be in the range that we described. It's going to be elevated in the first quarter. It's going to come down after we have that catch-up in the low 300 level. Utilization is going to be higher and fleet is going to be lower. I understand that the past 2 years, they've been pretty volatile and consistency in delivering on guidance matters. This is the first outlook like built entirely under the current leadership framework. It reflects more conservative assumptions and a structurally tighter operating model. So our objective this year is to earn back confidence through consistent execution. Daniel. Christopher Stathoulopoulos: Okay. On Zipcar, if there are any numbers you can give us for the U.K. segment? Daniel Cunha: That has not impacted the results. Those actions were taken at the very end of the year, beginning of this year. Chris, so that has -- had no material impact. Christopher Stathoulopoulos: Okay. And then as a follow-up, Brian, I didn't hear any comments on your prepared on the -- your premium efforts. All the tech efforts. Is this on pause until you get the tactics around the fleet right? Or are you continuing to move forward with that initiative? Brian Choi: No, it's not taken on pause. And in fact, like a lot of the cost rationalization that's happening in the business is being used to fund those initiatives. So I think we said in our prepared remarks, Avis First is still a go. We're concentrated on making sure that the product is right and getting a lot more adoption in the airports it's in before we expand meaningfully, but it is going live now in Europe. I think Munich just came online. And we are going to start offering the product to our commercial customers. So we think that the Avis First aligns tightly with our core philosophical tenet, which is tying Avis to a premium customer experience. Christopher Stathoulopoulos: Okay. If I could squeeze in 1 more. Does the base case EBITDA guide here for the full year assume Americas revenue up. Daniel Cunha: It does. Christopher Stathoulopoulos: Because it's been down -- so I'm guessing if the base case -- your EBITDA guide at the enterprise level, does that assume you're growing Americas revenue for the full year? Brian Choi: Let's assume that we're modestly growing revenue, Chris. You're right. We have been declining for the past few years, given the COVID boom. The question that's been on everyone's mind is what is normalized what does a normalized environment look like? I do think that we're entering into a normalized environment here. Operator: Our next questions come from the line of Dan Levy with Barclays. Joshua Young: Josh Young on for Dan Levy. So I have 1 question and then a follow-up. Could you walk us through the puts and takes on the EV impairment and then just in terms of how we should think about sizing the potential benefit to DPU. I know you mentioned that it was previously around $600. So how should we think about that into '26. Daniel Cunha: Yes. I'll maybe start from first principles and our strategic priorities. Then we've shared in the past how we feel about the capital structure and how deleveraging has been a key priority for us, right? And when the Big Beautiful Bill came along and made the 100% bonds depreciation permanent, it really reduced our expected tax liabilities going forward, right? And as a result of that, we had no clear path to using those tax credits, and we immediately started looking for ways of monetizing on those we had a substantial amounts on our balance sheet. So when we found a path here that allowed us to monetize on $880 million of debt, we jumped on it, right? So with that decision to execute the deal and I'll ask David here to share a little bit on the structure which was a complex deal. We essentially committed to that path. And along the way, we evaluated EV strategy. I know there's a lot going on in this market, lots of OEMs rethinking how their own capital allocation, their own strategies are evolving in that space. And we thought it would be prudent, right, and reduce risk overall to shorten the economic life of those vehicles, right? So operating them for a period of time, I think will reduce the overall risk. On the DPU front, it's essentially allowing us to also cut the depreciation in half, right? So you go from about $600 with slightly north of $300 a month. That should help improve depreciation as the year develops. But David, do you want to share a bit on the structure, this was a somewhat complex in the... David Calabria: Sure, Daniel. I just want to stress this we really view this. This was not an issue. This was an opportunity and we took it. And so what we were able to do was take tax credits that had little to no value, as Daniel said, monetize that, use that against the cap cost of our vehicles to reduce the depreciation funded by a new securitization that we created, is an incredibly complex transaction that I have to give my treasury team and the tax team a lot of credit for figuring that out and getting it done in such a short time. Joshua Young: And then as a follow-up, just to circle back to the collaboration with Waymo. What are the key financial considerations there? And how soon might you see a material benefit from the partnership? Brian Choi: Yes. Josh, we're not getting into the specifics of the economics here. Like I said, Dallas is gearing up to come online, and we think that we'll be taking riders from the public pretty soon. But other than that, we're not really getting into too much of the financial details. I think from our perspective, right now, near term, Waymo is about building operational capability and not deploying outsized capital. So I do want to mention that the vehicles in Dallas are on Waymo's balance sheet today and that structure reflects the current phase of the partnership. So over time, if the economics justify it, we would consider owning vehicles ourselves, but only under the same return thresholds and balance sheet discipline that govern the rest of our fleet. And we're focused on scaling this thoughtfully. We are looking at other cities. We're going to expand our capital involvement only where returns are clearly aligned. Operator: Our next questions come from the line of Stephanie Moore with Jefferies. Stephanie Benjamin Moore: I was hoping you could talk a bit about your expectations for the first quarter. Admittedly, there's a lot of moving pieces as it relates to the impairment charge, higher fleet costs, I'm assuming probably weather is still -- weather will be an impact as well. So maybe if you could talk about the first quarter as well as some of the underlying trends you're seeing. I think you noted that underlying trends from a volume and pricing standpoint did improve as 4Q progressed. So curious, obviously, taking into account seasonality, how underlying trends have been January through February. David Calabria: So what I would just say is from our standpoint, when you think about where we were last year from a Q1 standpoint, we're sitting here talking about having a higher depreciation. Brian talked about how things are looking a little more stable from a revenue standpoint in February and March, but January did have some weather-related incidents there, too, a lot of flight cancellations. So we are looking at a lower number, lower EBITDA in the first quarter, but then easing back towards something that's more normalized in the second, third and then fourth quarter. So I would expect us to be lower in Q1. Brian Choi: Yes. Stephanie, that being lower is on an EBITDA basis. And the way that I would describe it is it's going to be kind of a tale of 2 cities situation. The actions that we're taking around the fleet rationalization, that is helping the revenue side of things. So I do think that you'll see in the first quarter that revenue is stabilizing. It's becoming much more healthy. And yes, the January storms, that was a setback. But even though we couldn't predict it because the fleet was already being reduced, we were able to absorb that demand disruption without creating the same economic imbalance we saw in November. So from our perspective, the work that we're doing around the revenue side of things, I think you're going to see that materialize in the first quarter. But like we said earlier, there is a bit of a reset that we're trying to do on the fleet side of things. We're going to absorb it all in the first quarter with that $400 DPU. So what you'll see is a healthier on the revenue side, a reset in the first quarter on the depreciation side, which will result into lower year-over-year EBITDA in the first quarter. But we think that puts things where it should be, and you'll see things improve materially going forward. Stephanie Benjamin Moore: Understood, very clear. So maybe once we get past the first quarter, maybe talk a little bit about your level of confidence in achieving the guide for the full year, specifically as it relates to actions that are within your control. And I think we all understand that this can be a very complex and dynamic industry. So maybe just speak to the actions specifically related to Avis and some of your operational improvements, productivity initiatives and the like that you think can help potentially provide an offset if what we keep seeing is general volatility in the overall industry? Daniel Cunha: Stephanie, I'll keep the bridge relatively simple, but I think if we anchor ourselves on the 2025 results, right, if you add back the impact of the recall of $100 million conservatively. And the one-off nature of the PLPD, the insurance reserve adjustment we had in Q4, you're already at the middle of the range, right? One item that we offer for 2026. One of the pillars of our plan is a continued improvement in utilizations in the Americas, right? An improvement that the team has already been delivering on during 2025. And that's worth about $100 million for us next year. So that -- with those 2 one-off unusual, you're in the middle of the range. And just with one of the initiatives, we could potentially make it all the way to the top of the range. And that's already assuming like Brian mentioned some conservatism on the rate side of the house in the Americas. So that's how we feel about it. We feel it's achievable. It's obviously a new high for the company on a non-COVID period. Brian Choi: Stephanie, I think we operate in a business with inherent volatility. So that's why it's very important to control those things that we can control, and that's reflected in how we're planning for this year. So the structural actions that we're implementing, which is tighter fleet discipline, cost rigor, capital allocation focus, that's all designed to reduce volatility and strengthen the earnings base over time. So as we move through the year, our objective is to demonstrate that the business can sustainably generate EBITDA north of $1 billion annually and then grow from that base through disciplined execution. As I said earlier, this is the first time that we're coming up with the plan that this leadership team is under this new operating philosophy. We have every intention of getting it. Operator: Thank you so much. Ladies and gentlemen, this does conclude today's question-and-answer session. And with that, the call will come to a close. We appreciate your participation. You may disconnect your lines at this time, and enjoy the rest of your day.
Operator: Good day, and thank you for standing by. Welcome to the Fiscal Year 2025 Laureate Education, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead. Adam Morse: Good morning, and thank you for joining us on today's call to discuss Laureate Education's Fourth Quarter and Year-End 2025 Results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast and a complete recording will be available after the call. I would like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission earlier this morning as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income and adjusted earnings per share, total cash and equivalents, net of total debt and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. Let me now turn the call over to Eilif. Eilif Serck-Hanssen: Thank you, Adam, and good morning, everyone. Laureate delivered another strong year of performance in 2025 with sustained revenue growth and expanding margins. Full year revenue reached $1.7 billion, and adjusted EBITDA was $519 million, both exceeding the guidance we provided last October. Throughout 2025, we continue to execute on both our growth agenda and our productivity initiatives, which resulted in top line growth of 9% and a historical high margin of 30.5% for the full year. We maintained strong financial discipline throughout the year and closed 2025 with a net cash position. Our cash accretive business model enabled us to return $217 million of capital to shareholders last year through our stock repurchase program. We remain well positioned to continue to invest in future growth and innovation while maintaining our commitment to returning excess capital to shareholders. Today, we are also pleased to announce that our Board of Directors has authorized an additional $150 million increase to our stock repurchase program, underscoring our focus on long-term value creation for shareholders. With nearly 500,000 students across Mexico and Peru, we have proven that excellence and scale can go hand-in-hand. The scale that we have achieved provides significant competitive advantages in terms of our ability to invest in growth, innovation and academic excellence. In 2025, we continue to strengthen our academic offerings and made further investments in our campus networks, including the opening of 2 new campuses for our value brands, one in Monterrey, Mexico and one in Lima's Ate District. Both projects opened on time and on budget, and they performed as expected during their first year of ramp. We also made further investments in our Health Sciences portfolio last year, including the opening of a new medical school and a new veterinary school. Health Science programs remain a key focus for our institutions given the long-term demand and workforce needs for graduates in that field of study. Laureate also continues to lead the way in innovation, both inside and outside the classroom. The significant investments we have made in online capabilities position us as the leader in online education in both markets. We now serve more than 100,000 students in our fully online programs focused on working adults. Within our back office, our innovation capabilities have been acknowledged by industry leaders such as Google, who recently recognized Laureate Mexico as the most advanced company in digital marketing maturity across all industries in Spanish-speaking Latin America. These type of recognitions highlight Laureate's deep digital expertise, which in turn has put us at a significant competitive advantage when it comes to embedding AI tools into our student life cycle journey. Our investments, combined with innovation mindset continue to drive improvements in our academic quality and student outcomes. Throughout the network, our institutions continue to be recognized as leaders in the sector. We are pleased to share the latest results from QS Stars, one of the world's leading independent university ranking and ratings organizations. For the third consecutive year, all our universities in Mexico and Peru have achieved 5-star rating, the highest rating attainable in employability, online learning and social impact. Our institutions also received strong market recognition for academic excellence and brand leadership. A few examples from this past year include: in Peru, UPC ranked the #1 education brand for the fifth consecutive year by MERCO and received a 5-star global university rating by QS Stars. In Mexico, UVM was ranked the second best private university by Reader's Digest 2025 ranking, second only to Tec de Monterrey. Our value brands in both markets, UPN in Peru and UNITEC in Mexico, were ranked in the top 10 in their respective countries by the same ranking agencies. I extend my deepest gratitude to our faculty and staff for their commitment to academic excellence and congratulate them on these outstanding recognitions. Looking ahead, we remain confident that the demand for quality higher education in both Mexico and Peru will continue to increase. This demand is fueled by rising participation rate, strong wage premiums for graduates and the affordability of our programs. Additionally, the private sector, which accounts for over 55% of the combined university seats in the 2 countries, plays a critical role in the market due to limited public resources. For 2026, our guidance called for U.S. dollar reported revenue growth of 11% to 12%, of which approximately 5 points is attributable to the more favorable FX environment. Further, we expect 50 basis points of margin expansion during 2026, reflecting continued operating leverage from growth initiatives despite some incremental costs associated with the opening of new campus locations. We see sustained growth opportunities in both markets, including building additional new campuses for our value brands in new cities and site locations over the next 5-year period and have already begun to procure land for some of these new sites. Additionally, we are expanding our addressable market through continued AI-enabled investments in digital education with a significant focus on fully online segment for working adults. Many of our AI tools that we have developed for the online portfolio are also being deployed to our face-to-face students and short course upskilling efforts. From a macroeconomic perspective, we expect Mexico's GDP growth for 2026 to be relatively modest, albeit slightly better than 2025. The key upcoming event to watch is the USMCA trade negotiations. President Sheinbaum's pragmatic approach to managing the U.S.-Mexico relationship has helped maintain a constructive tone as discussions are being kicked off. Many economists anticipate a favorable outcome and are projecting an increase in economic activity for Mexico starting in the second half of 2026, setting the stage for a more robust GDP growth in 2027. In Peru, the economy continues to perform solidly with strong domestic demand and a favorable macro environment. Supportive monetary conditions, strong commodity prices and new mining projects should continue to underpin strong economic activity throughout the year, even against the backdrop of a presidential election. From a supply and demand perspective in Peru, we continue to rapidly scale our fully online offerings, but are somewhat capacity constrained in our face-to-face campus operations. We expect that to be alleviated following the launch of our second new campus that opens in March of 2027 in South Lima with additional new campus projects beyond that already in the pipeline. That concludes my prepared remarks, and I will now turn the call over to Rick Buskirk for a more comprehensive financial overview of the fourth quarter and full year 2025 performance as well as further details on our 2026 outlook. Rick? Richard Buskirk: Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. Although the fourth quarter is not a large intake period, it represents a strong earnings quarter for the company as classes are in session for much of the period. In addition, the timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability. In 2025, the beginning of classes, particularly in Peru, started later versus 2024, extending the enrollment cycle into mid-April and beyond the first quarter cutoff. As a result, we had an intra-year shift in timing that resulted in approximately $25 million of revenue and $21 million in adjusted EBITDA to be shifted from earlier in the year to the fourth quarter. Let's start with Pages 11 and 12 of the supplementary presentation, which highlights our operating and financial performance for the fourth quarter and full year. Revenue in the fourth quarter was $541 million and adjusted EBITDA was $204 million. Both metrics were ahead of the guidance we provided 3 months ago, aided primarily by improved currency rates. On an organic constant currency basis and adjusted for the academic calendar shift discussed earlier, revenue in the fourth quarter was up 10% year-over-year and adjusted EBITDA increased by 14%. Fourth quarter net income was $172 million, resulting in earnings per share of $1.17 per share on a reported basis. Fourth quarter adjusted net income was $112 million, and adjusted earnings per share was $0.76 per share, an increase of 46% as compared to the fourth quarter of prior year. Now moving to full year results. For 2025, new enrollments increased 8% versus prior year, and total enrollments were up 5%. Full year revenue was $1.702 billion and adjusted EBITDA was $519 million. This resulted in an adjusted EBITDA margin of 30.5%, which is a new historic high for Laureate. On an organic constant currency basis, revenue for the year increased by 8% and adjusted EBITDA was up 13%, resulting in a 131 basis point improvement in margins, led by a 164 basis point increase in Mexico. Our continued focus on productivity is yielding strong results. Full year 2025 net income was $284 million, resulting in earnings per share of $1.89 per share on a reported basis. Adjusted net income was $256 million and adjusted earnings per share was $1.72 per share, an increase of 22% as compared to prior year. Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 14. Please note that all comparisons versus prior year are on an organic and constant currency basis. Let's start with Mexico. New enrollments increased 5% for the year, led by growth in fully online programs focused on working adults across both our premium and value brands. Total enrollments in 2025 increased 4% compared to the prior year or 5% same-store. As Eilif referenced earlier, Mexico's macroeconomic environment has recently been characterized by slower growth. Our results underscore the resilience of our operating model and the value proposition we offer to students and their families. Mexico's revenue for the fourth quarter increased 12% compared to the prior year period. Adjusted EBITDA for the fourth quarter was up 10% year-over-year. For full year 2025, revenue growth of 9% was driven by a 6% increase in average total enrollments and 3% of price/mix. Overall, pricing for the year was in line with our cost of inflation for our traditional face-to-face students. Adjusted EBITDA increased 17% in 2025 versus the prior year period, expanding Mexico's margins by 164 basis points to 26.1%, driven by strong operating leverage from revenue growth and productivity gains. Let's now transition to Peru on Slide 15. New enrollments increased 13% for the year, driven by double-digit growth in our fully online programs that serve working adults as we continue to scale in that segment. Total enrollments for the year increased by 7% compared to the prior year. Revenue growth for the fourth quarter was 22% and adjusted EBITDA increased 49% year-over-year, primarily due to the timing of the academic calendar I referenced earlier. When adjusted for the timing of the academic calendar, fourth quarter revenue increased 8%, while adjusted EBITDA was up 16%. For full year 2025, revenue in Peru increased 7% year-over-year, driven by a 6% increase in average total enrollments. Overall, pricing was in line with our cost of inflation for traditional face-to-face students. We are seeing a price/mix impact on average revenue per student due to the higher growth rate of our fully online programs, which are offered at a lower price point. We expect that mix impact to continue in 2026 as we scale up our online segment in Peru. Adjusted EBITDA increased 9% versus the prior year with a margin expansion of 54 basis points. Let me now briefly turn to our balance sheet. Laureate ended the year with $147 million in cash and $129 million in gross debt for a net cash position of $18 million. During 2025, we repurchased $217 million of common stock under our existing authorization. Since 2019, total capital returned to shareholders has exceeded $3 billion through share purchases, cash distributions and cash dividends. Today, we announced that our Board has authorized a $150 million increase to our share repurchase program. This authorization is supported by our strong balance sheet, cash accretive business model and disciplined capital allocation. As a result of this upsizing, a total of $181 million is available under the current authorization as of year-end 2025. We expect to continue returning excess capital to shareholders in 2026. Let's now transition to our discussion on guidance. We remain excited about the growth opportunities in Mexico and Peru and expect continued operating momentum in both markets during 2026. A little context by market before getting into the ranges, reiterating some of what Eilif discussed earlier. In Mexico, the macroeconomic conditions are expected to remain soft for much of 2026, aligned with the operating environment in 2025. We expect improved conditions in the second half of the year and as we head into 2027 following the conclusion of the renegotiated USMCA agreement. In Peru, we intend to continue to rapidly scale our fully online offerings. As we are in the process of building incremental face-to-face capacity with our series of planned new campus launches, strong fully online growth is expected to continue to create a price/mix impact on average revenue per student. Lastly, we are operating in an FX environment where the Mexican peso and the Peruvian sol have appreciated significantly against the U.S. dollar versus the same time last year. This FX environment is currently expected to create some favorable foreign currency translation effects for us as we start the year. With that context, let me now move to our guidance ranges. Based on our assumed FX rates, we expect full year 2026 results to be as follows: total enrollments to be in the range of 516,000 to 521,000 students, reflecting growth of 4% to 5% versus 2025, revenues to be in the range of $1.890 billion to $1.905 billion, reflecting growth of 11% to 12% on an as-reported basis and 6% to 7% on an organic constant currency basis versus 2025. Adjusted EBITDA to be in the range of $583 million to $593 million, reflecting growth of 12% to 14% on an as-reported basis and 7% to 9% on an organic constant currency basis versus 2025. This would result in an increase in adjusted EBITDA margins of approximately 50 basis points at the midpoint of our guidance on a reported basis. For 2026, we expect adjusted EBITDA to unlevered free cash flow conversion of approximately 50% on a reported basis, supporting our continued emphasis on return of capital to shareholders. Lastly, today, we are introducing adjusted earnings per share guidance for 2026 with adjusted earnings per share to be expected to be in the range of $1.95 to $2.03 per share, reflecting growth of 13% to 18% versus 2025 on a reported basis. This non-GAAP measure is intended to provide greater transparency into our underlying profitability and improve comparability across periods. Now turning to our first quarter guidance. As a reminder, Q1 is a seasonally low quarter as classes are largely out of session in January and much of February. In addition, in terms of the seasonality for 2026, we will have some intra-year calendar timing as outlined on Slide 22 of our presentation. For the first quarter specifically, approximately $9 million of revenue and related profitability is expected to shift out of the first quarter to later in the year. With that context, for the first quarter of 2026, we expect revenue between $261 million and $265 million and adjusted EBITDA between negative $20 million to negative $17 million, reflecting growth in fixed costs and investments in our new campuses during a largely out-of-session period. That concludes my prepared remarks. Eilif, I'm handing it back to you for closing comments. Eilif Serck-Hanssen: Thank you, Rick. 2025 was another strong year for Laureate, in which we continue to deliver on our commitments through disciplined execution, focused growth and innovation investments and sustained operational excellence. We see attractive growth opportunities across Mexico and Peru in the years to come and remain committed to executing on our growth agenda. As an established emerging market company with developed market governance, we look forward to another year of value creation for all stakeholders in 2026, guided by our mission to expand access to high-quality, affordable higher education and to positively impact the students and communities we serve. Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants. Operator: [Operator Instructions] Our first question will be coming from the line of Jeff Silber of BMO Capital Markets. Jeffrey Silber: You mentioned in your prepared remarks potential new campus openings. And I'm just curious, one, how far in advance do you have to make that decision in order to make sure that you've got the capacity? And two, how do you decide whether you're going to create your own versus potentially buying a campus that already exists? Eilif Serck-Hanssen: Jeff, this is Eilif. In terms of timing, it takes about 18 to 24 months to launch a new campus, and that includes the time to find the land, get the licenses, the permits, the zoning, build the campus and then launch [indiscernible] date. In terms of buy versus build, it really is an IRR question. Typically, we have been building, then we get it exactly to the stack. It takes a little longer to ramp versus buying. But typically, it's more economical for us to just build the campus. We have the playbook and then we get the operating model just the way that we want it. Jeffrey Silber: Okay. That's helpful. And then also, you talked about AI and how you're using it in your business. The market is very jittery these days about AI disruption. Do you see any parts of your business that might be at risk from AI disruption? Eilif Serck-Hanssen: I think AI is going to be our friend. AI is going to improve retention. It is going to improve the learning outcomes. It is going to continue for us to expand the quality -- access to quality education in the markets where we are serving. And I think the focus for us is to make sure that we are launching the programs for where tomorrow's jobs reside. And I think that is the #1 priority for us. And then that's followed closely by making sure that we are leveraging AI to continue to improve outcomes and reduce cost of education. Operator: And our next question will be coming from the line of Marcelo Santos of JPMorgan. Marcelo Santos: I have also 2. The first question is on the guidance for 2026. In terms of FX-neutral revenue growth, it implies some deceleration versus what was presented in 2025. Could you just please comment what are the sources, the ups and downs that lead to this slight deceleration in the FX neutral? That's the first question. And the second question is just asking about the expansion of distance learning in Peru. I wanted to ask about the market. Are you noticing a ticket discipline in the market? Or are you noticing like the other players who are launching being more aggressive? Just wanted your comment to see how the market is developing with this new technology. Eilif Serck-Hanssen: Great. Rick, do you want to take the guidance? And I'll take the online. Richard Buskirk: Sure. Marcelo, just to start off, we have shown a consistent ability to continue, as you know, to grow the business in both strong economic times as well as softer macroeconomic times, showing the resiliency of our business model and our ability to expand margins. Specific to 2026, in Mexico, as we noted in our opening remarks, the softer macroeconomic conditions are impacting our outlook. And as a reminder, the primary intake last September for Mexico was up 2% reported, 4% same-store, excluding closures for new enrollments and 4% for total enrollments. The results from that intake carry much of our volume for 2026 in Mexico until we hit the primary intake again in Q3 in the fall. So we do expect macro conditions to be better in the second half of the year following the conclusion of USMCA. That may benefit this year's primary intake, but it happens later in the year and be felt more in 2027. So that's Mexico. In Peru, though the macroeconomic backdrop is stronger, we've been very successful historically of filling up capacity in that market and are more capacity constrained. And as a result, we're addressing that through a series of new campus launches, including one in which we'll launch in March of next year. So those 2 factors are creating a slight deceleration year-over-year, but we're still very, very encouraged about it. And on top of that, we're expanding, as you saw, margins by 50 basis points. That 50 basis point margin expansion is including the netting effect of investments in these new campuses, which creates an offset around 25 basis points. So we're absorbing that 25 basis points within the 50 basis points margin expansion. So again, a little deceleration, but we feel great about this business and our ability to grow in good economic times and slower economic times, and that's some more clarity for you. I'll pause there, and see if you have any more questions. Marcelo Santos: And my next question is on guidance. Eilif Serck-Hanssen: Great, Marcelo. Your second question was on online or distance learning in Peru. That is accelerating really, really well for us. The market is very receptive to the innovative product portfolio that we have launched over the last couple of years. We are growing robustly in that market. And as I think I've mentioned before, it is a product that is designed for the working adult consumer. So it is very distinct and separate for the face-to-face undergraduate programs that we are selling to young students, high school leavers. And for that reason, there's very little cannibalization between these 2 product offerings. In terms of pricing, we have done our price volume elasticity studies. And so we have been a little bit more cautious in taking pricing increases in the working adult segment in favor of rapid growth in that market. So ARPS are flattish in the online segment, but the growth is very, very robust. Operator: And our next question will be coming from the line of Lucas Nagano of Morgan Stanley. Lucas Nagano: The first one is related to the adjusted EPS guidance. So the question is below the EBITDA line, there is any implied change -- material change in your assumptions versus 2025, either in capital structure or taxes? And the second question is about the capacity constraint in Peru. To what extent should it affect new enrollments and price/mix this year based on what you said these drivers should be addressed next year with the new campuses? Richard Buskirk: Yes, sure. And in terms of our adjusted EPS guidance, we're happy to provide that. Number one, it's an important metric for us as we continue to move forward. It's a high-quality company. Relative to last year, I think you'll see a small increase in G&A as we bring new campuses online. I think you will also see that taxes should be generally in line, slightly improved. And then lastly, you'll see a little bit higher interest income because of the funding of our new campuses in Peru. Sorry, I think in your second question, was related to... Eilif Serck-Hanssen: Second question on capacity constraints. We are running higher utilization in Mexico than in Peru. The same-store has a little bit more restrictions. It's not material at this point, but it's one of the reasons why we're adding more capacity with new campus launches still in Lima for our value brand as well as adding more classrooms to existing campuses in Peru. Richard Buskirk: And Lucas, just to follow on to what Eilif said, I think you saw very strong fully online growth last year in Peru. As a result, we had 7% volume growth, 7% revenue growth. If you look at average enrollment, it was 6%. So it's about 1% price/mix. I think you'll see a big impact of price/mix as well this year in Peru as we continue to really provide some leadership position in the fully online segment and go after that. That pattern should recur in 2026. Operator: And our next question will be coming from Eduardo Resende of UBS. Eduardo Resende: I got just one question from my side. Talking about the softer economic activity expected in Peru this year, especially with discussions regarding USMCA, do you see any risk of this potentially impacting the company's ongoing investment plans in the country? And how do you see tuitions evolving the scenario and your capacity to pass through the costs in Mexico this year? So that's all from my side. Eilif Serck-Hanssen: Thank you, Eduardo. So the softer economic conditions in Mexico is really a continuation of what we have seen since the second half of 2024. And it was driven by some uncertainties following the election, the uncertainty around tariffs and the trade situation between Mexico and the United States. And so that softer GDP production in 2025, it was below 1%. In 2026, it's expected to be somewhere between 1.4%, 1.5% GDP. And then the expectation is that post USMCA, there will be an uptick in direct foreign investment again into Mexico as we saw in 2023, that is going to then drive GDP growth up into the 2 to 3 percentage point range. So how I would describe 2026 is a continuation of 2025 was slightly lower. And during 2025, we saw volume production of 3% to 4% growth, and we saw pricing consistent with inflation. And it is that kind of momentum that I expect continuing into 2026 with potentially some upside in the second half of 2026 when there's clarity on USMCA and hence, the level of private investment in the country. Operator: And I am showing no further questions. I thank you for all participating on today's conference call. This concludes today's call. 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 Triple Flag Precious Metals Fourth Quarter 2025 Conference Call. [Operator Instructions] I would now like to turn the conference over to Sheldon Vanderkooy, CEO. You may begin. Sheldon Vanderkooy: Thank you, Desiree. Good morning, everyone, and thank you for joining us to discuss Triple Flag's Fourth Quarter and Full Year 2025 results. Today, I'm joined by our Chief Financial Officer, Eban Bari; and Chief Operating Officer, James Dendle. Triple Flag had an outstanding year in 2025 and is extremely well positioned in 2026. We finished the year strong in Q4, resulting in record performance for full year 2025. We achieved record production of 113,000 GEOs. This was in the upper half of our guidance range and is the ninth consecutive year-over-year increase. Higher production and higher gold prices translated into record cash flow. Cash flow per share was $1.54 per share, a 45% increase from 2024. The model is working as it is intended, directly translating higher gold prices into rising cash flow per share. We continue to benefit from rising prices in 2026. In Q4, the average gold price was $4,135 an ounce, well below current spot prices of just under $5,000 per ounce. Moving ahead to 2026, our guidance range is 95,000 to 105,000 GEOs, which reflects the well-understood mine sequencing at Northparkes. It also reflects the planned step down in the Cerro Lindo stream rate following the successful delivery of 19.5 million ounces of silver since we acquired the stream in 2016. That was Triple Flag's first investment. We continue to see a long life ahead for Cerro Lindo with strong exploration potential as well as exposure to the silver price going forward. Our portfolio has significant embedded growth. Our 2030 outlook is that production in 2030 will grow to between 140,000 to 150,000 GEOs. This is approximately a 45% growth from the midpoint of our 2026 guidance. This is driven by multiple assets advancing through construction, permitting and study stages, including Arcata, Kone, Eskay Creek, Era Dorada, and Goldfield. Importantly, it is not dependent on any one large project. Looking beyond 2030, we have meaningful GEO growth potential from a number of large-scale assets located in the best jurisdictions, Australia, the United States and Canada. First, Hope Bay is located in Northern Canada and Agnico has stated that it is progressing towards a construction decision, which is expected in May of 2026. Second, Centerra released a positive PEA on Kemess targeting potential production in 2031. Kemess is located in British Columbia. Third is the Arthur project in Nevada, where AngloGold is expected to imminently release a pre-feasibility study, which I am quite eager to see. Last and most significantly is our flagship asset, Northparkes, located in Australia, which is clearly positioned as a significant growth asset for Triple Flag. I want to congratulate Lawrie Conway and the Evolution team for all the success they have had at Northparkes since they have acquired Northparkes. It is truly impressive. A week ago, Evolution released a significant update on Northparkes, which has 3 related catalysts for Triple Flag. First, Evolution approved the development of the E22 block cave. E22 has very attractive gold grades for Triple Flag and block cave development is the value-maximizing approach for both Evolution and Triple Flag. Second, Evolution has announced that it is studying expanding Northparkes from the current 7.6 million tonnes per annum to 10 million tonnes per annum or potentially more. There is tremendous demand for copper, and Northparkes is a very large resource. So the potential value creation of an expansion is clear. This could be very beneficial to the Triple Flag stream. And last, Evolution has identified a very attractive gold-only deposit on the property named E44. We had constructive discussions with Lawrie and Kirron and their team. And together, we came to an agreement that will allow for the development of E44, which was previously not included in Evolution's life of mine plan at Northparkes. As part of that agreement, Triple Flag will receive guaranteed minimum deliveries from E44 starting in 2030. Northparkes is a byproduct stream, so the potential to also benefit from primary gold deposits is a fantastic bonus for Triple Flag and its shareholders. All of these factors together clearly position Northparkes as a growth asset for Triple Flag for the next decade to come. I'd also like to touch on our capital deployment in 2025. Triple Flag invested over $350 million in value-accretive deals. This included the Arcata restart and ramp-up in Peru, the Arthur Oxide project in Nevada, the Johnson Camp mine that is ramping up in Arizona and the Minera Florida producing mine in Chile. These transactions provide current and growing cash flow or in the case of Arthur, represent exposure to a premier development project with a clear path to production and further exploration upside. Importantly, all of these assets are also located in mining-friendly jurisdictions. Overall, Triple Flag is exceptionally well positioned to deliver long-term and organic value for our shareholders from a diversified portfolio of producing and development assets across premier mining jurisdictions. I will now turn it over to Eban to discuss our financial results for 2025. Eban Bari: Thank you, Sheldon. As you can see on this slide, 2025 was a record year across all financial metrics, driven by strong GEOs and record precious metals prices. As Sheldon noted, these record prices have since been broken by new records with spot, gold and silver well above even the Q4 average. Operating cash flow per share, the single most important metric we focus on as management, increased 45% to $1.54 per share. This metric best reflects the underlying operating performance of our core streaming and royalty business. This strong cash flow generation continued to support all of our capital allocation priorities given our high-margin business, including shareholder returns and external growth opportunities. On shareholder returns, we paid out nearly $46 million in dividends to shareholders in 2025, which reflected a progressive 5% dividend increase in the middle of the year, our fourth consecutive increase since our IPO. In addition to our dividend, we were active and accretive on our share buyback during the year. In 2025, we bought back USD 9 million of our shares in open market at approximately $17.39 per share. We expect to remain active on our NCIB opportunistically going forward. On external growth front, as Sheldon mentioned, we reinvested over $350 million into new streams and royalties in 2025. Arcata, Arthur, Johnson Camp Mine and Minera Florida all provide either immediate or near to medium-term cash flow, significant exploration potential and exposure to premier mining jurisdictions with strong operators. I'm pleased to highlight that even with this level of capital deployment and as a result of our strong cash generation, Triple Flag is debt-free at year-end with more than $70 million in cash and $1 billion available on our credit facility. We remain well positioned to deploying capital into transactions that are accretive, fit with our strategy and deliver value throughout the cycle. Moving forward to 2026 guidance. As Sheldon noted, we expect GEOs of between 95,000 and 105,000 ounces for the year. We expect these GEOs to be all derived from gold and silver and reflect a conservative gold to silver price ratio of $72 for the whole year with a lower ratio assumed in the first half. Depletion is expected to be between $65 million and $75 million, slightly lower than 2025, reflecting the sales mix we expect in 2026. G&A costs are expected to be between $30 million and $32 million, consistent with our actual expenses in 2025 that reflect the impact of Triple Flag's strong share price increase throughout the year on share-based compensation expense. Finally, our Australian cash tax rate for Australian royalties will be approximately 25%, consistent with prior year actuals. I will now pass it on to James to discuss our asset portfolio. James Dendle: Thank you, Evan. Triple Flag has achieved a consistent track record delivering long-term GEOs growth since our first full year of operation in 2017. Beyond the guidance we have set for 2026, we see further organic growth to 140,000 to 150,000 GEOs in 2030. Midpoint to midpoint, this represents ounce growth of 45% from 2026 guidance, which I'll discuss further on the following slide. Our long-term organic growth outlook of 100,000 to 150,000 GEOs in 2030 is robust and reflects the achievement of several derisking milestones delivered by our operators over the past 12 months. We are seeing meaningful progress across the portfolio, supported not only by constructive commodity price environment but also by favorable permitting regimes across the jurisdictions to which we have exposure. Arcata, Kone, Eskay Creek, Era Dorada, Goldfield, South Railroad, and DeLamar are a few examples of the many assets in our portfolio that are advancing rapidly towards production or steady-state ramp-up over the medium term. Touching on only a few of them, we were exceptionally pleased to see in 2025, the Eskay Creek project in British Columbia received full permits in less than 1 year after submission. Aura Minerals received a construction license for E Dorada within 1 year of its acquisition and Centerra's renewed focus on the Gold Field project as a straightforward heap leach operation in Nevada. Beyond 2030, our portfolio is expected to deliver further GEO's growth from Arthur, Kemess, Hope Bay as well as the growth initiatives at Northparkes, which I'll discuss in the following slides. Beyond 2030, Arthur, Kemess, Hope Bay and Northparkes represent world-class, long-life assets located in the most stable and established mining jurisdictions. They provide substantial growth potential beyond our 2030 outlook and demonstrate the quality of Triple Flag's portfolio. At Arthur, we see the imminent release of a pre-feasibility study by AngloGold as an important catalyst in providing greater insights on the potential of this district scale system, starting with the Merlin silicon deposit as straightforward oxide open pit projects. Arthur will be a cornerstone asset for Triple Flag in the 2030s. At Kemess, Triple Flag holds a 100% silver stream. The January 2026 preliminary economic assessment supports a large-scale copper gold, silver operation reaching production by 2031, leveraging existing brownfield infrastructure and permits from the previous mining operation. Notably, the PEA mine plan only represents 47% of the total indicated and inferred resources, providing potential upside for future ounces to be included in subsequent economic studies. At PFS, the Kemess is expected in 2027. At Hope Bay, our 1% NSR royalty covers a district scale gold system on an asset operated by Agnico Eagle, the premier Canadian Arctic underground miner. In their year-end results from last week, Agnico noted that annual gold production is expected to be 400,000 to 425,000 ounces with a potential construction decision in May 2026 and a potential restart in 2030. I'll go into more detail on Northparkes on the next page. Northparkes is Triple Flag's largest asset. It's an established high-quality copper gold operation in Australia operated by Evolution Mining. Numerous growth projects have recently been approved that Sheldon referred to, which unlock the value from this world-class copper gold endowment. Currently, the E48 sublevel cave is ramping up and supports near-term gold production growth. Over the medium term, the E22 ore body will be advanced as a block cave, a large, low-cost operation with initial production by 2030. During this time frame, the E44 gold dominant deposit will also be advanced production. This is an ore body not previously included in Evolution's life of mine plans. Minimum guaranteed deliveries will commence in 2030 for a period of 7 years with potential for meaningful life extensions beyond this initial period. Finally, and perhaps most importantly, is the potential for mill expansion to at least 10 million tonnes per annum, which is currently being studied over the next year. We believe that this potential expansion is the optimal path forward to unlock the value from not only the 550 million tonnes of current measured and indicated resources but other prospective and underexplored targets that could materially add to the expected production profile with the improved scale and processing optionality. These growth projects demonstrate that Northparkes is not a static asset. It's a dynamic world-class mining operation with lots of embedded optionality that will drive value for decades to come. I'll now pass back to Sheldon for closing remarks. Sheldon Vanderkooy: Thank you, James. After delivering record performance in 2025, Triple Flag is in an exceptionally strong position as we look ahead to 2026 and beyond. We have a clear and derisked pathway to robust growth of 140,000 to 150,000 GEOs in 2030. Our project pipeline progressed very well in 2025 and now in 2026. Beyond 2030, Triple Flag shareholders can expect significant additional GEO growth from long-life district scale assets, including at Northparkes, Arthur, Kemess and Hope Bay, all from projects with clear line of sight to production, a top-tier operator and located in Australia, Canada or the United States. Northparkes is our cornerstone asset and is clearly positioned as a growth asset over the next decade. On the deal front, we deployed over $350 million in 2025 across multiple accretive transactions, demonstrating our ability to source and execute on high-quality opportunities that deliver compounding per share growth from good assets, good regions and good operators. Our balance sheet remains pristine. We exited 2025 debt-free and with over $1 billion in total liquidity, providing us with substantial financial flexibility to continue pursuing accretive growth opportunities as well as to allocate capital to progressively growing returns to shareholders. That concludes our prepared remarks. Operator, please open the floor to questions. Operator: [Operator Instructions] The first question comes from the line of Cosmos Chiu with CIBC. Cosmos Chiu: Maybe my first question is at Northparkes. Great to see that you're investing more money into Northparkes at the E44 deposit. I guess my question is, are there more opportunities like that in terms of something similar to E44 gold-rich, something that would not be in the mine plan unless there's a partner coming in and hoping to put up some of the CapEx? And then maybe if you can also talk about the geological setting because it must be a very clear variety of different geological settings if there are copper-rich deposits and gold-rich deposits. I'm just trying to figure out where some of these gold-rich deposits came from. Sheldon Vanderkooy: Yes. Thanks, Cosmos. This is Sheldon. I'll start and then pass it over to James. So historically, the Northparkes property had gold deposits, kind of shallow surface gold deposits and it was very interesting. Now of course, when we came in and did the stream, we really did the stream as a byproduct stream, which works because we get about 60% of the gold revenue that Evolution gets from Northparkes. And that works if the primary revenue is the copper. But for -- but if it's gold only, we had to come to the table with Lawrie and the team and work something out. But this is really exciting for us because the idea of getting a gold-only deposit there and us also having access to that was really key. There's nothing else right now on the horizon but is there a potential there? Well, I'll let James speak to that but there have been gold dominant deposits on that property in the past. James Dendle: Yes. And Cosmos, it's James. As Sheldon noted, the first mining at Northparkes is actually, as you probably remember, in the mid-90s as a gold project, and it was actually first explored with shallow holes for gold mineralization. So there is a history there, but it's very clearly transitioned to a copper deposit for the last 25 years or so. So when you think about it geologically, yes, the gold is clearly associated with the copper, and it's a very prospective region. And I think what we're seeing with Evolution is exactly what we hoped when they acquired the asset. They think very expansively and very creatively about how to maximize value from operations. And I think that's been a big part of their success with assets like Ernest Henry. And they're applying the same approach to Northparkes, which is to say there's a large resource, let's look at expanding capacity. And then with that expanding capacity, what else can we do with it, which has caused them to really look at the gold deposits in a way that wasn't done in the past. And the short answer is E44 is the most known but there are a large number of targets across the property that are sort of known from some of the historical work that have not been tested and defined in a systematic manner, which I think really speaks to the opportunity to find more of this type of mineralization, which with the expanded mill capacity Evolution to take advantage of. Cosmos Chiu: Great. That's great to hear, James. And then maybe my next question is taking a step back here. In the royalties and streaming industry, we've now seen recently some billion-dollar deals or even multibillion-dollar deals. I know, Sheldon, you mentioned that you deployed about $300 million last year. But in terms of these $1 billion-dollar deals, multibillion-dollar deals, is that something that Triple Flag could be interested in, could be competitive in? Or is that slightly too large for you at this point in time? Sheldon Vanderkooy: We've always said that like our sweet spot is really in the $200 million to $500 million range. And I don't think that, that changes. And when you look back, Triple Flag actually is coming up on our 10th anniversary. And over the last 10 years, the vast majority of the capital deployment in the sector has been in that strike zone. So I feel really good about that. There was a large deal done earlier this week, and $4.3 billion is too big for Triple Flag. I think that's okay. But there's plenty out there, I think, that we can grow and deploy on. And again, our -- relative to our size, I think we have -- we definitely have an ability to grow because when you look at the size of Triple Flag and $350 million of deployment, that's meaningful. So if we do a $400 million deal, that is -- that moves the needle for Triple Flag, and I think that will be very well by our shareholders. Cosmos Chiu: Great. And then maybe one last question. As you talk about the different growth opportunities within your portfolio, I guess one asset you did not mention was Pumpkin Hollow. I know there's a bit of history behind it. But now it seems like Pumpkin Hollow has a new owner, Kinterra, and they seem to have be able to raise a lot of capital. So Pumpkin Hollow once again, is this something that we should start talking about? Is there something that we should start getting excited about? Or is it still too early at this point in time? Sheldon Vanderkooy: Yes. So we retain a royalty on the Pumpkin Hollow open pit. And that actually, I think, looks like a really nice royalty because that is copper in the United States, and we're a royalty and we're on title and that survived all the processes that went on there. So I am quite keen to see what Kinterra is doing there, and that represents some very nice copper exposure from the United States for Triple Flag shareholders. Triple Flag will not be investing any more money in Pumpkin Hollow. I can -- I'll say that clearly. Operator: Our next question comes from the line of Tanya Jakusconek with Scotiabank. Tanya Jakusconek: I have a couple of questions, if I could, start with a very easy one. Can I know that you use a very different ratio. I just kind of want to assume like a flat gold price, flat silver price, et cetera. Can you give us just an idea of how the year is going to look like from a quarterly perspective? We have some step downs. We have other things happening. So I'm just trying to understand how should we think first half, second half, et cetera? Sheldon Vanderkooy: Yes. Tanya, we give our annual guidance. We're not going to break it down by the quarters. And you've kind of correctly identified the one factor, which is the Cerro Lindo step-down will occur sometime in the second quarter, we believe but I can't give any more quarterly guidance over and above that. Tanya Jakusconek: Okay. What about the capital returns? I think those are -- you focus on the dividend and you like the fact that you progressively increase that dividend. How should we be thinking about it for midyear? Sheldon Vanderkooy: Yes. I think nothing's changed on our philosophy on capital allocation. So as you cited, we have a progressively increasing dividend. We've increased it every year since we've been public. I see no reason why we would change that. I think it's very -- it goes over very well with shareholders. So that's the dividend. And then we're looking to deploy capital into accretive opportunities for shareholders. It's really that simple. Tanya Jakusconek: Okay. And in terms of the opportunities, I think you mentioned that $200 million to $500 million range being your sweet spot and see some bigger deals. So I have a couple of questions on this front. The first thing is I've noticed that 2 people shopping in their own closets [indiscernible] and Wheaton. Are there any other things to do in shopping in your own closet? Any other opportunities on assets you own? Sheldon Vanderkooy: That's an analogy. I haven't heard before. I like it. I guess we just... Tanya Jakusconek: Let all the time, by the way, Sheldon. Sheldon Vanderkooy: It's natural when you have a relationship with a party or you already have a position in a property that those are the things you look to. And with Northparkes, that was obviously a natural for us. And would be looking for other opportunities like that? Yes, perhaps. But these things are -- they're never done until they're done, and I don't want to start front-running anything, but we try to engage closely with all of our partners. Tanya Jakusconek: And in terms of opportunities that are out there, would you say most of them now are focused on asset builds? Or are the royalty portfolios still available? We saw one last night as well, anything -- any color on opportunities that are out there? Sheldon Vanderkooy: It's going to be the same answer as has been received by, I think, everyone for the last little while. There's a variety. There's third-party assets that are coming up for sale. There's people looking for financing for various things, and that can be development or that could be other reasons. It's -- I wouldn't say there's any like one big thematic out there. And it's kind of our job to look at the opportunity set and try to generate some of our opportunity set as well. So I wouldn't say there is any kind of one sort of theme that I'm seeing out there. The opportunity set looks pretty robust to me. And I think we've seen not just ourselves but other people deploy. I think that bodes well for the sector as a whole. Tanya Jakusconek: Okay. And then we've seen some very big silver opportunities. Are there any smaller ones that fit that $200 million to $500 million range that you're seeing out there? Sheldon Vanderkooy: Yes. And again, I wouldn't consider $200 million to $500 million to be small for a company of Triple Flag size. That would be quite meaningful. There's silver opportunities. There's also gold opportunities out there. I think our focus is always probably gold first, silver, second but we like precious metals. And if it's a good silver asset or a good gold asset, we really want to be on good assets with good operators. Tanya Jakusconek: Yes. When I meant the smaller silver opportunities, that was relative to the $4.3 billion. So relative to... Sheldon Vanderkooy: Yes, most things are small relative to $4.3 billion. Operator: Next question comes from the line of Brian MacArthur with Raymond James. Brian MacArthur: Could you just give us an update on ATO and maybe what you -- if you assumed any contribution this year? And then as you go out to 2030, what you're thinking, i.e., expansion or baseline, if you could just give us an update on that, that would be great. Sheldon Vanderkooy: Brian, it's Sheldon. I'll answer that one. Like look, ATO is in litigation. We've been quite upfront with the market on that. We feel very confident in our position. And that process is kind of going through the court. So I can't say too much. But what I will say, and I think this is really pertinent and I'm glad you asked the question, we took it out of our 2026 guidance, and we took it out of the 2030 5-year as well. So that doesn't reflect our confidence in our position but rather, we just want to remove it as a potential distraction for investors to have to get a handle on. So when you look at those figures we put out for 2026 and for 2030, there's 0 contribution from ATO in there, and ATO is only upside, not downside relative to those figures. Operator: That concludes the question-and-answer session. I would like to turn the call back over to our CEO, Sheldon Vanderkooy. Sheldon Vanderkooy: Thank you very much. Really appreciated speaking with everyone and looking forward to a great 2026. Bye. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.
Operator: Thank you for standing by. This is the conference operator. Welcome to Torex Gold's Fourth Quarter and Full Year 2025 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead. Dan Rollins: Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our fourth quarter and full year 2025 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the Investors section of our website at www.torexgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on Page 2 of today's presentation as well as those included in the Q4 2025 MD&A. On the call today, we have Jody Kuzenko, President and CEO; and Andrew Snowden, CFO. Following the presentation, Jody and Andrew will be available for the question-and-answer period. This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on SEDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I'll now turn the call over to Jody. Jody Kuzenko: Thank you, Dan, and good morning to everyone on the line. I thought it's important to start with our strategy slide here at the outset. It underpins some of the opening comments I want to make about the CEO transition that was announced a few weeks ago. As most to follow us well know, one of the key reasons Torex has been able to deliver results so consistently over the years is that we have anchored our business and systems. Planning, scheduling and executing work in very defined, clear and thoughtful ways. And these systems are in place across all aspects of our organization, not just production and maintenance work at the operations. Succession planning within Torex is no different. This is something we plan for at all staff levels of the business. . Since Andrew joined Torex as CFO in 2021. He's been an integral part of developing and executing against the strategy that has yielded very successful results to date and beyond strategy, designing and implementing the systems that have made us successful. Certainly, certainly within finance, but well beyond that as well, including systems that touch projects and operations, maintenance and supply chain, all of this has positioned us nicely to now actually execute on the succession plan. So this transition really is a product of planning, planning that will deliver continuity for Torex and by extension, our shareholders. Our stakeholders should expect to see no less than the consistent results this team has delivered together over the past several years. This also means that there won't be a material shift from the strategic pillars outlined here on Slide 4. Our focus in 2026 will continue to be on servicing the value that now sits within our expanded portfolio. First, by demonstrating the long-term potential of Morelos through drilling, by delivering preliminary economic assessment for the Los Reyes asset by midyear, starting drilling at the early stage exploration projects acquired in Nevada and Chihuahua and with the cash flow we're now generating with Media Luna behind us aggressively returning capital to shareholders. Reflecting on the accomplishments from 2025 here on Slide 5, the year was truly a transformational one for our company. We achieved commercial production at Media Luna in May and successfully ramped up ahead plan through the year, exiting 2025 at a mining rate of 7,000 tonnes per day, well ahead of our targeted 6,500 tonnes a day. We remain on track to achieve design levels of 7,500 tonnes a day out of Media Luna by midyear 6 months ahead of the schedule outlined in the feasibility study. The success of this ramp-up can be seen on the slide. You can see strong second half production as mining rates hit stride and throughput at the process plant remains strong and stable. Production is expected to remain around these H2 '25 levels going forward, noting that in this year, production is slightly weighted to the back half, and there are a couple of reasons for this grade and what we're seeing at the mine through stope sequencing and achieving that 7,500 tonnes per day run rate by midyear. Strong 2025 production supported by a backdrop of high metal prices resulted in record annual all-in sustaining cost margin of 51%. Additionally, record quarterly free cash flow of $166 million enabled us to fully repay the debt we had accumulated through the Media Luna project. I want to take a moment to underscore this point here. Torex paid for Media Luna out of cash flow, no stream, no royalties, no equity raise. And here we are, 6 months post commercial production debt-free. Lastly, on this slide, but certainly not least, our next level safety program has been appraised across the business, which is evident in the lost time injury frequency of 0.07 per million hours worked for both employees and contractors, compared this to the most recently reported Mexican mining industry average of 3.61%. 2025 has certainly marked 1 of the safest years on record at the Morelos Complex. We expect 2026 to be no different. Slide 6 outlines our 2026 guidance, which was released last month. Gold equivalent production of 420,000 to 470,000 is markedly higher than the 383,000 ounces produced in 2025. This primarily reflects the full year of production from the processing plant and steady-state mining rates at Media Luna this year. Costs are largely in line with the all-in sustaining costs of $17.83 per ounce gold achieved in 2025. This is elevated over previous years due to the impact that significantly higher metal prices have on the taxes royalties to government and the Mexican legislative profit sharing that we pay our employees. Sustaining capital expenditures are slightly higher than the $107 million spent in 2025, as you would expect because this marks the first full year of commercial production from Media Luna. Non-sustaining capital expenditures this year include $100 million to $105 million related to Media Luna North project costs. as well as $65 million to $70 million on various projects across Morelo that are centered on optimizing and driving efficiencies. One example of a project like this is the construction of a conveyor that connects the Guajes Tunnel to the Guajes crusher. This conveyor will reduce rehandling costs by more than $1 per tonne mined from Media Luna. At our guided metal prices of $4,000 per ounce gold, $45 per ounce silver and $4.90 copper and the Mexican exchange rate at 19:1, we have forecasted generating $450 million of free cash flow this year. With where metal prices are sitting today, we're now forecasting this to be upwards of $700 million of free cash in 2026. Moving on to our 5-year outlook here on Slide 7, you'll note the stable production profile we expect to deliver through at least 2030. This outlook is also markedly improved from the previous 5-year outlook of 450,000 to 500,000 ounces of gold equivalent per year through 2029. So if you normalize this year's outlook for the 2024 reserve metal prices used in the prior outlook, production would actually be closer to 480,000 to 530,000 ounces of gold equivalent. This is a market step-up. A few factors contribute to this increase, including the Media Luna ramp-up being ahead of schedule, continued mine life extension on ELG Underground from ongoing exploration success and mill throughput consistently delivering above design levels. On the subject of mill throughput performance is outlined here on the left on Slide 8, you can see the second half performance was ahead of the design rates even when considering the 5 days of scheduled mill maintenance we had in October. The chart on the right showcases the quick ramp-up we had for gold and copper recoveries, both consistently achieving design levels of 90% and 92%, respectively, and silver recoveries are also ramping up nicely to the design level of 85%. On the mining front, mining rates at both Media Luna and ELG Underground are shown here on Slide 9. The chart on the left displays the steady ramp-up at Media Luna this year. The key to unlocking the final step-up to 7,500 tonnes a day by midyear was the successful commissioning of the final rock breaker, the final waste pass and the final waste conveyor this quarter, all of which have now been completed. ELG Underground mining rates have also been consistently ahead of the 2,800 tonnes per day we targeted last year and even delivered a new quarterly mining record in Q4. I expect to see mining rates stay around this 2,800 tonnes per day through the end of this year before reducing to more normalized levels when consistent feed is being delivered from Media Luna North at the end of 2027. Those 2 things go together. Further details on the progress of Media Luna North is provided here on Slide 10. As we announced with our annual guidance release, total project CapEx is now expected to range between $108 million and $113 million compared to the pre-feasibility study estimate of $82 million. This increase primarily reflects the decision to purchase the mining fleet outright instead of leasing it, which just made sense in the context of this record metal price environment. Underground development is progressing very well. It sits today at about 40% complete. You can see the completed development here in gray and the development planned in red. We've already started development on the North Vent Adit and have started on the haulage tunnel from the Media Luna side coming in towards Media Luna North. With the development on track and procurement sitting at 30% of orders placed, including all long lead items, we expect first mine production by year-end and then expect to quickly ramp up this new mine through 2027. Moving on to Slide 11, I'll touch on our next development project in the pipeline Los Reyes. The preliminary economic assessment is progressing nicely and is on track to be completed by mid-year. For 2026, we have budgeted $18 million to complete the PEA, commence the PSS and conduct 20,000 meters of drilling on the property. I want to note here that delivery of the PEA is not dependent on resuming drilling activities at site given the amount of drilling completed to date. That said additional drilling will be required to adequately advance the pre-feasibility study. We have to conduct more metallurgical testing, some geotechnical work, we have work to do to derisk the resource model and in certain areas, we're looking to upgrade more inferred resources to the indicated category. I want to make a comment here on security at Los Reyes. No different than the approach in Guerrero, the safety of our employees and contractors as the most important consideration of this project. We will not resume drilling at Los Reyes until we have confidence -- complete confidence that it can be done both safely and sustainably, that's key. We're working closely with local communities, and we're working closely with all 3 levels of government to create the conditions for these employees and contractors to return to their field work. Lastly, our exploration program for the year is summarized here on Slide 12. The overall budget for this program has increased to a record $77 million for 2026. Approximately $43 million of that will be attributed to Morelos as you would expect to conduct just over 113,000 meters of drilling. Similar to previous years, the program will focus on replacing reserves and expanding resources at ELG underground and Media Luna cluster, with a smaller portion of the budget set aside to explore 2 higher priority regional targets Atzcala and El Naranjo. I've already mentioned that $18 million has been earmarked for both exploration and study-related costs at Los Reyes, these coming months here will determine whether in the extent to which it will be spent. In Nevada, we expect to spend $12 million primarily on 7,500 meters of drilling at Gryphon, where we have the option to earn into 100% of the property. Additionally, 2,500 meters of drilling will be conducted at Medicine Springs, where I'm pleased to say we earned into 100% ownership as of January. Finally, $4 million of set aside for 5,000 meters of drilling at Batopilas and early-stage targeting work at GD. All in we're pretty excited about our exploration program this year. It's quite robust with plenty of high-quality targets across the entire suite of assets. In terms of news flow, you can expect our annual reserve and resource update late March per usual, and we'll look to provide an update on some of our exploration programs in Q2. With that, I'll turn the call over to Andrew to walk through our financial results. Andrew Snowden: Okay. Thank you, Jody, and good morning, everyone. So before we dive into the financial details this morning, I did want to take a moment just to acknowledge Jody's retirement announcement. I believe I share the same sentiment as everyone on the line that Jody has done an incredible job of delivering on her mandate as CEO. With the Media Luna project complete and a clear line of sight on production for at least the next 10 years, generating strong free cash flow and a return of capital program now in place the company is well set up for this next stage of growth. May I echo Jody's comments that the underlying message from my transition to CEO in June is one of continuity. And I look forward to continuing the strong relationship we've built with all of our stakeholders by building on the strategy we've been successful in executing over the past several years. . Moving now on to our Q4 financial performance here on Slide 14. Our excellent second half performance and the current metal price environment resulted in record margins of 51% for the year and a record 57% for the quarter. Q4 costs were slightly higher quarter-over-quarter, primarily reflecting the first quarter of paste backfill in Media Luna as well as the impact of higher metal prices on royalties. Given the timing of paste commissioning, we will incur some additional costs at Media Luna through until mid-2027 as we look to catch up on the backfilling backlog incurred during the 2025 year given the delays in completing the paste plant. The lower chart on this slide just shows a record free cash flow of $166 million generated in Q4 as Media Luna really came into its stride. Turning to our cash balance through the 2025 year are shown next on Slide 15, with record adjusted EBITDA of $730 million for the year enabled us to execute on a number of capital allocation priorities, including the acquisition of Reyna Silver for $27 million in cash repaying all but $30 million of our debt balance by the end of the year, and we subsequently fully repaid our debt in January. And we also returned $44 million of cash to shareholders through a combination of dividends and share buybacks. This is in addition to the over $350 million of capital expenditure for the year, most of which was related to the completion of the Media Luna project. Turning next to Slide 16. I just -- I do want to just take a moment here to remind everyone at the cash flow seasonality that we typically see year-on-year. While production is expected to be largely consistent quarter-over-quarter, albeit slightly second half weighted, the first half of the year is when our heaviest tax royalty and profit-sharing payments are made. I wanted to just walk through briefly here some of the key cash payments that we're expecting here through that first half period. You can expect to see a 1% royalty payment, which we pay in March each year, about $12 million. Our 8.5% mining tax payment is also due in March. We expect that to be about $55 million. And we also have the annual income tax true-up, which is paid in March and that's expected to be about $20 million this year. And this is all in addition to the regular quarterly tax installments of at least $60 million in Q1. And related to fiscal 2026 as well as a quarterly 2.5% royalty. Additionally, we do have several employee payments scheduled for the first half of the year. And this year, we paid about $30 million in January related to the company's long-term incentive plan. And in Q2, we'll see a $35 million payment related to the payment of our annual profit sharing in Mexico. And as usual, Q3 and Q4 are expected to be our strongest cash flow quarter of the year. Our balance sheet and liquidity position are clearly well set to fund these payments and we've laid out next on Slide 17. As of year-end, we had about $30 million of debt remaining outstanding, and we subsequently repaid that, as I mentioned, in January. So we're now sitting here debt-free. Total liquidity at the end of the year sat at $426 million, $120 million of which was in cash. And we continue to have access to our $350 million credit facility, which matures in June of 2029. As well as an accordion feature of $200 million that is available at the discretion of the lenders. Now being debt free, we expect our cash position to quickly build over the coming year, especially at current metal prices. And that to be available for capital allocation priorities. Overall, we're an excellent financial position to deliver and execute on these capital allocation priorities, and these are summarized on Slide 18. Our focus remains on deploying in 4 key areas: firstly, increasing mine life and expanding margins at Morelos, which we're doing so through the exploration program that Jody spoke to just a few moments ago. Growth through Los Reyes, our portfolio of early-stage exploration projects and value-accretive M&A, should an opportunity present itself. Thirdly, building on our balance sheet up to the minimum of $200 million cash. And finally, continuing to return capital to shareholders, which you can see summarized next on Slide 19. Just to touch on that return of capital. In the second half of 2025, we returned about $44 million to shareholders through our Phase 1 return of capital program. This is comprised of a quarterly dividend of $0.15 a share, the first of which was paid in December and coupled with some share buybacks. In total, we purchased over 800,000 shares in 2025 and at an average price of CAD 57 a share, and we've continued to be active on the NCIB in 2026, repurchasing over 400,000 shares at an average price of just under $67 a share. And that's year-to-date. We also just last night declared our second quarterly dividend at that $0.15 a share level. We expect to continue to opportunistically buy back shares this year and have just entered into an automatic share purchase plan to enable share repurchases at times when we are in blackout period. With numerous exploration targets in the pipeline for this year, operations at Morelos delivering ahead of expectations and the record free cash flow generation as well as the solid return of capital program in place or well set up to embark on our next chapter of growth. And with that, operator, I'd like to open the line for questions. Operator: [Operator Instructions] Our first question comes from Allison Carson with Desjardins. Allison Carson: First of all, I was wondering if you could discuss how the security situation at Los Reyes could impact the work you've planned for 2026 and what that could mean for the overall time line of the project? Jody Kuzenko: Yes. Thanks, Allison. That's a good question. It's certainly on everybody's mind with the incidents occurring in Sinaloa over the course of this last month. I want to start by saying how saddened we are by the incident. I mean this is a situation where the Mexican mining community really comes together. 10 men lost their lives, 10 good miners. And it's just an absolutely tragic situation. As I said in my commentary, we had plans to start drilling this year and $18 million allocated. The team here, desktop in Toronto and Vancouver is working away on the PEA that work continues. We expect to have the PEA ready and available to market by middle of the year this year. The big question on everybody's mind is, if and to the extent we're unable to get to site for a bit of a prolonged period at what point does that start to impact the pre-feasibility study? Because as I mentioned, we have to get to site to actually do the work. And the way we're thinking about it is probably about middle of the year this year. If the teams aren't on site doing environmental baseline work additional drilling, get some additional samples for the geomet work and the Hydro G work, then the pre-feasibility study will start to be shifted out from mid-2027, down towards the end of 2027. This is not like a week-for-week month-for-month shift because, of course, we'll work to compress it because we're not going to be capital constrained here. We want to get on with building this mine, but there will be some impact if we don't have the data available to us by accessing the deposits. I will say in terms of security situation more in terms of the security situation more broadly. There are state-by-state nuances in security. And even within states, there are local nuances. And so that's very much the case here in Sinaloa. I will also say that when we made the decision to acquire this project, we diligenced this issue extensively. We knew what we were getting into. And my view is that, that was deeply reflected in the purchase price. The outcome of the events of the last month is that government at all levels is now deeply involved. They have to be. And so the work we have been doing has gained some new momentum here to enable us to create the conditions to put our people to work and put them to work safely and sustainably. So we're optimistic that, that can be achieved. Allison Carson: That's great. It's very helpful to get all that color in there as well. My next question is just on Media Luna. With the strong mining rates out of Media Luna in Q4 and now that we're already partway through Q1. I was wondering if you could comment on whether we're seeing rates continue to advance ahead of schedule? And if it appears likely that the ramp-up will be completed ahead of mid-year . Jody Kuzenko: I'll take that one, too, Allison. I mean, I consider the ramp-up to be complete. The difference between 7,000, 7,500 tonnes a day isn't really that significant, it's a couple of extra loads onto the belt. The real ticket to getting it ramped up stably was bringing on that last waste path. So we have an outlet for the waste and can start campaigning waste through Guajes tunnel. The other thing that has happened over the course of the last, I would say, 5 months is that we've really broken the back of the paste plant. All of that infrastructure that supports backfilling is now working very well and to design rates. And the other thing that has happened is we've connected now the pace plant to the stable source of reliable energy, which is the low voltage power line instead of using the dead set. So all of that bodes really well for this continued accelerated ramp-up and even ramp up beyond the 7,500 tonnes a day. So feeling very confident about what we're seeing out of Media Luna from a volume perspective. . Allison Carson: Great. That's very helpful. Congratulations on the great 2025. Operator: Our next question comes from Lauren McConnell with Paradigm . Lauren McConnell: Jody, congratulations on your retirement announcement. And I think I speak for most and saying things, we'll obviously miss you on these calls and tours. You've been wonderful obviously, to work with from this side of things, but look forward obviously to continuing working with Andrew and the rest of the team. My first question comes about EPO or Media Luna North. What are sort of the critical path items to keep first production in Q4? Is it development meters, long lead procurement or infrastructure tie-ins. And where do you see sort of the highest risk in execution? . Jody Kuzenko: That's a really good question. We see Media Lunas a very low-risk project. largely because there's hardly any construction to do. Remember, it just ties back into all of the Media Luna ore handling system. So there are 3 things really on the list. One is development. I mentioned how well we're progressing on it. We have no issues with continuing at the rates we're seeing. The other is landing the long-lead electrical equipment and fans and ventilation. Both the fans and the electrical equipment have been ordered. We expect those to land here in the coming months tying them in will be orders of magnitude more simple than the electrical and ventilation tie-ins that happened at Media Luna. And so the way we are looking at it is that Q4 of 2026 for first production is a very solid forecast. We very much expect to be producing ore through the back half of this year at Media Luna North, and that will then enable us to dial back rates at ELG Underground. So in terms of the overall production profile, you should be thinking about the mill as consuming 10,800 tonnes a day, 7,500 tonnes or more of that coming from Media Luna and then the delta divided in some way that makes sense between Media Luna North and ELG underground, but feeling very good about the progress of. It's a very -- I would describe it as an uncomplicated tuck-in to the Media Luna cluster. Lauren McConnell: And then just to be clear, too, with the Media Luna North tie in. Is there any impact to Media Luna copper mining rates or processing at that time? . Jody Kuzenko: That's actually a really good question. One of the things, as we were completing a study on Media Luna North was the integrated mine planning with Media Luna, so that we didn't get in the way of taking stopes at Media Luna or material handling, what stope is going to be available as many of the Luna North comes on as we would expect with Torex, that is very, very tightly planned. Those 2 assets need to work coherently and together so that they complement one another, not get in each other's way. And so that's planned. We don't expect any impact to Media Luna production as we bring on Media Luna North. Operator: Our next question comes from Don DeMarco with National Bank Financial. Don DeMarco: Thank you, operator, and good morning to the Torex team. Congratulations on the high free cash flow and the debt-free status. So my first question on the mining rates at Media Luna. So -- now that you're on the cusp of achieving that 7,500 tonne per target and sooner than expected, is there a potential? And do you see merit in exceeding this mining rate? . Jody Kuzenko: There is potential to exceed that mining rate, Don. There will come a point in time in the not-too-distant future that we'll be talking about production from the Media Luna mine collectively, which will include Media Luna North and then eventually Media Luna East and Media Luna West. What we would do with the material is produced it laid on the ground, stock pilot and feed it through the plant in the event that we face an interruption out of the mine for whatever reason. But we will be mill constrained moving forward. And so as we start to produce more from the underground, we are actually, as a management team, turning our attention to the possibility of upsizing the flotation circuits at the mill, which will be the constraint. That could unlock some additional production from a finished ounce perspective at Morelos. And so this is an evolving increase. First, we've got to get the mines. We've got to bring EPO on and get that producing to more than 10,800 tonnes a day and concurrently do a study to see how much CapEx it would be to bring the mill back up to that 13,000 tonnes a day we used to run at when we were in open pit production, which essentially involves adding cells to the flotation circuits. So exciting times for us from a life of mine planning perspective, that I would characterize as very much as upside only here. Don DeMarco: Okay. That's great. And that's actually -- that was my next question about the mill. I mean I think now that you're in production really hitting your stride it's -- the questions turn to the levers to optimize and upsize the operations. So you mentioned 13,000 tonnes per day at the mill, and we'll look forward to more. But is that kind of an upper limit then -- or is there scenarios before that? Or is it just too early to kind of know where this might head at some point in the future? . Jody Kuzenko: I think there are scenarios to get us from the current 10,800 to 13,000 in a stepwise incremental way. It's not something that you should think about as all at once. And based on the information and the equipment and what we know today, you should be thinking about 13,000 in that range as an upside cap. Beyond that, we would need a new grinding circuit, which then you start to do through your life of mine very, very quickly, producing 450,000 to 500,000 ounces a year is already a really big mine. Don DeMarco: Okay. And then maybe just as a last question. I mean, how do you manage? you have a development team and operations team. Do the 2 teams kind of work interchangeably, whether it's on development or operations? And -- or do you kind of redeploy the development team to work on North how do you kind of manage the different skill sets and sort of that's very required on site. Jody Kuzenko: Really that's a really good question. And it will become increasingly important for us as we bring on Media Luna North and we are looking to deploy our development team and our operations team as cost efficiently as safely and as productively as possible. I don't know that interchange is the right word, but cooperatively is definitely a word. And I'm going to give you a specific example of this. We originally, when we were doing the development on Media Luna North had development reporting into the projects team, right? That's a normal thing to do. It's a new project. The project owns the project, and then we'll be handed over to the operations once it's complete at the end of the year. Because there were so many synergies available to us with equipment, with men, with material with supervision, we moved the development of Media Luna North over to be hung from the operations team so that the crews could be lined up together so that we made sure that we were maximizing productivity and minimizing costs and downtime. Just a really specific example of how we're thinking about that Media Luna deposit as a cluster. And as I said, there will come a point where we're treating it as one integrated giant mine. Don DeMarco: Okay. And congratulations again on your retirement. Operator: As appears, there are no more questions, this concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Penny Himlok: Thank you. Good morning, everyone, and thanks for joining us this morning. On behalf of Kumba's executive team, a very warm welcome to those of you here in the room with us and to everyone joining us on the line. I'm Penny Himlok, Head of Investor Relations, and I'm pleased to be joined by our CEO, Mpumi Zikalala; and our CFO, Xolani Mbambo, who will take you through our annual results shortly. Before we get started, just a quick safety note. As you know, safety is our first study. There are no safety drills today. So, if you do hear an alarm, please follow the instructions and calmly make your way back through the exit through which you entered and please meet in the front where safety Marshalls will give you further instructions. [Operator Instructions] And of course, please take and note the disclaimer, especially with going the forward-looking statements. Turning to today's agenda. We'd like to -- we'll be keeping to the usual flow. Mpumi and Xolani will walk you through our performance for the year, and then we'll open the floor for Q&A's. We also have members of our executive team today with us, and they will be available to address any questions at the end. Thank you. I'll now hand over to Mpumi. Nompumelelo Zikalala: Thank you, Penny. Good morning, everyone. It's great to see all of you again. And as Penny said, thank you for joining us this morning. 2025 was another year marked by macro volatility with geopolitical tension and trade policy uncertainty that have become, as you all know, for now at least, the new norm. Our priority has again been to limit the impact of that volatility by focusing on operational excellence to be as competitive as possible, whilst we market our product to fully realize the full value of its quality. The business reset in 2024 laid a firm foundation and disciplined execution in 2025, resulted in consistent output and reduced costs despite an increase in waste mining and thus bringing back the mining fleet that we previously parked. We also made steady progress on our UHDMS technology project, a key investment that unlocks more value from our resource base, optimizes rail capacity and strengthens our position in the premium high-grade iron ore market. I'm pleased to say that logistics performance has certainly remained stable. I know that, that question keeps coming up. There's still more work to do, but we are seeing real progress as a result of the collaboration between the National Logistics Crisis Committee, the Ore User's Forum, which Kumba is part of, Transnet and indeed our government. As we move into 2026, I believe we remain well positioned to deliver long-term value for all our stakeholders. Now moving into the results. Let me begin, as I always do, with safety, which, as you know, by now, is our first value. This year, we achieved 9 consecutive fatality 3 years of production at Sishen and as of last week Friday, 3 years at Kolomela. These are important milestones and a testament to the dedication and vigilance of our workforce shift after shift. But success can bring the risk of complacency. So, we know that we still have more work to do, particularly as the UHDMS project changes our risk profile with an increasing number of service partners, particularly at Sishen Mine. While our total recordable injury frequency rate of 0.95 remains well below the ICMM industry average of 2.29 for 2024, we must remain fully focused on our first value, which, as I said, is safety. And we made good progress embedding Kumba's safe way of work through constructive collaboration with our service partners and the implementation of our fatal risk management program, which is a program that encourages our teams to know what it is that can cause them significant harm in a simple and focused manner. On the health and wellness front, we have now passed 9 years with no significant health incidents, and this reflects the high standard of care we apply to occupational health and the safeguards we put in place across all our operations. Turning to our business overview. We benefited from a more cost-efficient base and delivered on our sales, production, as well as our cost guidance. Production was driven by strong growth from Kolomela, whilst improved rail performance helped us with slight improvement in our sales. Higher iron ore prices, lower operating expenses and a stronger exchange rate contributed to a 14% increase in our adjusted EBITDA. In addition, return on capital employed improved by 5 percentage points to 46%, reflecting more efficient use of our capital to generate earnings. On the back of the solid financial performance, we declared a final cash dividend of ZAR 5 billion. And in addition to this, ZAR 1.6 billion will go to our empowerment owners, which include the Sishen Iron Ore Company Community Development Trust and as you know, our frontline employees. This brings the total full year dividend to ZAR 10.3 billion to Kumba shareholders, and this number excludes the ZAR 3.3 billion that's the dividend towards our empowerment owners. We have a strong track record of delivering stakeholder value, and we delivered again bringing ZAR 58 billion of enduring stakeholder value, and this covers the whole range of our stakeholders. With that, moving on to sustainability. Our purpose remains for us to reimagine mining to improve people's lives. And through our sustainable mine plan, we've done exactly that. Water is a vital resource. And although we operate in a water scarce region, both of our mines are water positive, and we share this excess water that we intercept with our local communities, as well as other local businesses as well. We supplied over 16.5 billion liters of water to our communities, providing drinking water to around 200,000 people in our local communities. We also reduced our freshwater withdrawals by 4% to below 7 billion liters, contributing to an overall 19% reduction from our 2015 baseline. We've created over 800 employment opportunities outside of our mines. You know that we need to drive for efficiencies within our own mines. But when you look at the number of 800 jobs, this brings us to a cumulative number of jobs supported outside of our mines since 2018 when we started measuring this to well over 42,000 jobs. In 2024, Kumba became the first African iron ore miner to achieve the IRMA 75 standard and IRMA stands for the Initiative for Responsible Mining Assurance. And as we've said before, not everyone from the mining industry subjects themselves to this level of assurance. You do it because you want to do it. Well, I'm pleased to say that during 2025, both operations maintained IRMA 75, solidifying our position as a supplier of responsibly mined iron ore. Tomorrow, together with the rest of the Anglo American Group, we will be updating the market on our sustainability strategy. I've got to say that over the years, we have made significant progress. And we also, however, recognize that a lot has changed, both within our business as well as broader stakeholder expectations. I am very proud of the work we have done over the years and the milestones that we've achieved and look forward to sharing more details just around our refreshed strategy with you tomorrow. Now moving on to stakeholder value creation. We continue to deliver meaningful impact to our various stakeholders, as I said, through the ZAR 58 billion in shared value. We contributed ZAR 7.4 billion to the national fiscus through income taxes and mineral royalties, helping our government provide essential services and infrastructure to our fellow South Africans. Closer to home, 84% of our employees are from our mine communities, and this is in the Northern Cape province, a province that we call home, and their salaries and benefits, which they get directly benefit the local communities. We also support the local economy by ensuring resilient local supply chains. We spent ZAR 19 billion on BEE suppliers, of which ZAR 3.5 billion was with our local host community suppliers. And here, we focus significantly more on youth and women-owned businesses. For the community more broadly, we invested ZAR 485 million in direct social investment, focusing on the areas that matters the most, and that's health, education, as well as community development. Now I will take you through our operational performance. As I said earlier, it was a solid operating performance. Waste mining rose 6% with both operations gaining momentum over the year. Production was up 1% compared to 2024 and in line with our guidance of delivering between 35 million and 37 million tonnes. We took advantage of improved grade performance to reduce stocks at the mine and return our Saldanha Bay port stocks to more optimum levels of 1.8 million tonnes. And for those who followed us for some time, you know we haven't been at these levels for quite some time. The increased volumes also supported a 2% increase in sales to 37 million tonnes at the top end of our guidance. Next, looking at production in a bit more detail. The overall focus for 2025 was getting the basics right, which for us is operational excellence and cost discipline. While waste mining was at the lower end of guidance, we importantly gained operational momentum through the year, with a 6% step-up in the second half, if you just compare H1 and H2. Waste volumes are driven by Kolomela's 30% increase, while Sishen was hampered by asset reliability challenges and only increased by 2%. As we move through 2026, we continue ramping up waste mining and we will need to invest further in our mining equipment to improve asset reliability, as well as operational efficiencies, and Xolani will touch a little bit on this a little bit later in the presentation. Looking at production, Sishen was marginally lower as a result of the planned drawdown of high levels of finished stock and plant maintenance that we did in preparation for the UHDMS main tie-in that will take place in the second half of this year. This was offset by a 7% increase from Kolomela, in line with our flexible approach to production. Cost discipline remained an important focus, and we realized over ZAR 600 million in cost savings during the year, bringing our cumulative savings since we started our reconfiguration back in 2024 to now ZAR 5.1 billion. And this important work just around the drive for cost efficiencies will continue. Now turning to Transnet's logistics performance. Ore railed to the port rose by 6%, and this was despite the 4 derailments that took place during the year. And I should tell you that the rate that we are seeing outside of the derailments should tell you that, that's actually increasing. Rail performance improved to 84% of contracted volumes, which together with improved equipment availability at Saldanha Bay Port resulted in a 2% increase in our sales. It's encouraging to see the improvement in Transnet's rail performance, and this is a direct result of the joint collaboration between Transnet and the Ore User's Forum. And as you know, Kumba is very much part of the OUF or the Ore User's Forum. The Ore Corridor Restoration program and the mutual cooperation agreement have enabled edge and maintenance to be done more timelessly and also efficiently. The planned 10-day annual maintenance shut, as well as a 26-day shut to refurbish stacker reclaimer #3 in the second half of the year were all completed successfully. The recovery of the logistics network is key to unlocking value, and we are certainly moving in the right direction. However, as we've said before, there's definitely still more work that needs to be done to restore the network to previous performance levels, and this will take some time. In terms of private sector partnerships, also called PSPs, the Ore User's Forum submitted a follow-up response to the request for information in November. As you may remember, we gave our initial response in May, and this was a follow-up response requested by government. So, they played back what they had from all the submissions in May and asked people to comment on that document, and that's what we submitted in November. As we consider the way forward, our key principles for participating in the PSP are essentially as follows. Number one, government needs to retain ownership of the assets with a private consortium using, maintaining and operating the OEC. Secondly, and here, I must add, Kumba is first and foremost, a mining company. We do not have the skills to manage a logistics system. And therefore, we need to partner with the concessionaire who can deliver the right services for us, as well as other users of the line for the benefit of not just Kumba, but clearly for the benefit of other users and ultimately, the country as a whole. Number three, for the concession to work, this should cover the full integrated system. It's the rail, the port as well as freight. And this should be over an extended period to unlock Kumba's life of mine ambitions. And then last but definitely not least, and very importantly, we would want to secure a viable commercial pathway, including the syndication of capital with partners. We certainly look forward to the release of the commercial request for proposal, which is the next phase, simply because this will be a key milestone in the PSP process for the OEC or the Ore Export Corridor. Notably, we've commenced with the work to renegotiate the Sishen logistics contract, which expires at the end of 2027. We aim to substantially conclude the renegotiations by the beginning of next year, which will be well ahead of the expiry of the Sishen contract. And now it's my great pleasure to hand over to Xolani to take us through the financials. Xolani, it's certainly great to have you on board. And I don't feel like Xolani is new anymore because he's certainly already adding value. And I'm sure that this marks the first of many presentations that we'll be doing together. Thank you. Please give him a hand. Xolani Mbambo: I'm not sure if Bothwell will be pleased when he hears this, because it appears that the numbers we put into the market are positive. And I only joined in January, and I'm graving the credit. So, thank you, Mpumi, for the kind words. It's really a privilege to be here today and for you to be listening to me to present these results. Last year, I had the opportunity to spend time with the Kumba leadership team when they were launching the culture. This gave me meaningful insight into the organization. I got to understand our people, the culture and the values that actually drive us as an organization. I've also been fortunate to visit both our Sishen and Kolomela operations. Seeing the dedication of our teams on the ground has been invaluable and has reinforced my confidence in the strength of this business. So, there is no turning back as Mpumi. So, now let's take a look at the market environment. As Mpumi mentioned, the period under review reflects a complex global operating environment, I'm sure you know of that. It's one that's characterized by elevated geopolitical risks and evolving trade dynamics. This has placed pressure on regional economic conditions, resulting in shifting demands for steel and iron ore products. So, if you look at the 3 regions where we send our product, in Europe, their GDP growth was 1.6% with crude steel output falling by 2%. And that was on the back of weak demand. However, the implementation of import tariffs, CBAM and CBAM is expected to fuel recovery in steel prices in the region. China achieved its GDP growth target of 5% for 2025, although steel output fell by 4.6%. This is because property remained sluggish and infrastructure investment declined. The bright spot was industrial production up 6%, and this is linked to exports, which remained robust. If you look at Asia, their GDP grew by 3.8% and steel output rose 3.2%. Growth was driven by urbanization, infrastructure, manufacturing in countries such as India, Vietnam and Indonesia. So, on the next slide, we look at the iron ore supply and demand impact on prices and premium. Following a strong start to the year, Chinese steel mill profitability came under pressure, as raw material input prices increased. We certainly got a lot of questions in our sessions this morning on that. Additional output from Australia and Brazil resulted in lump premium dropping to record lows. I'm told that we've now put [Technical Difficulty] from Brazil and Australia. Despite the tariff uncertainty and market volatility last year, our high-quality product attracted a quality premium of $10 per ton. Price increases in the latter part of the year yielded positive timing effects and marketing premium of $1 per tonne, a sharp reversal from negative $7 per tonne that we achieved in 2024. This is all good work that's been done by the marketing team. I can see them in front of us here, and I'm hoping they will continue to deliver on that as we focus on production going forward. Consequently, our average realized iron ore price at $95 per tonne was 12% above the benchmark price. What's important is that this is ahead of what our peers have achieved in the market, and it really enforces our strategy of focusing on premium product. So, let's look at the financials in terms of what all of this means. Kumba delivered a resilient set of results. I've discussed our average realized prices on previous slide, which contributed to this uplift in our earnings. If you look at our costs, particularly on C1, they reflect the stronger rand-dollar exchange rate. We delivered solid EBITDA, and I'll talk about this in more detail later. The headline earnings per share increased by 18% to ZAR 45.97, translating into dividends that offer shareholder value, real shareholder value. If you take a look at EBITDA, we achieved ZAR 31.9 billion, which was underpinned by revenue growth, lower costs, as well as positive stock movement. This was partly offset by a stronger rand, cost inflation and lower shipping revenue. We also received a boost from other operating income for logistics underperformance, which we reported on at interim last year. I'm sure you'll recall that number over ZAR 900 million. In total, EBITDA rose by 14%, giving our EBITDA margin a positive uplift of 46%, to 46%, I wish it was 46%. Last year, we were at 41%. What's even more encouraging for me is that our EBITDA cash conversion of 102% reinforced the quality of these earnings that we've achieved. So, not only do you see EBITDA, which in some instances can be removed from cash, we actually converted it to cash for every rand of EBITDA we generated, we generated cash of over ZAR 1, which is excellent. Now let's take a closer look at our C1 unit costs. Our C1 unit cost increased to $40 per tonne, and that's really a function of a stronger rand. In the absence of that, we would be retaining the similar level. In fact, at a constant rate of $18.60, which is what we guided on to the dollar, our C1 cost would be $38 per tonne, coming in just below the guidance of $39 per tonne. So, the strengthening rand isn't helping in this instance. Benefit from positive WIP stock movements and deferred stripping costs were outweighed by stronger rand and inflationary cost increases, as you can see in the chart. We continue to focus on cost optimization to preserve and grow our margins. Now let's move on to our unit costs at the mine level. If you look at Sishen, their cash unit costs remained broadly flat at ZAR 530 per tonne, and that's within the guidance that we provided last year. Sishen's cost inflation increase was offset by lower contractor mining volumes, capitalized deferred stripping costs and positive WIP stock movement. For 2026, we are guiding slightly higher unit cost of between ZAR 530 and ZAR 560 per tonne to reflect lower production later in the year when we actually implement our UHDMS main tie-in. Kolomela's cash unit cost, on the other hand, improved by 7% to ZAR 374 per tonne, and it outperformed the guidance that we gave to the market, which is excellent. Performance was on the back of deferred stripping cost capitalization, positive stock movement and production volume uplift. I'm pleased to say that cost inflation was more than offset by our cost optimization at Kolomela. So, they did a splendid job there. For 2026, we are keeping the unit cost guidance at between ZAR 430 and ZAR 460 per tonne. Now let's turn to our cash breakeven price. As mentioned, our breakeven price reflects our all-in costs. So, when you look at, this is all-in cost -- and this includes sustaining capital net of premium and above plus 62 index. This is where I expect my colleagues on the project side to reduce the CapEx and still deliver the same and then the marketing guys to pump the premium and make sure that they reinforce our exposure to premium product. And as long as we continue to do that, of course, in conjunction with the cost reduction going forward and driving efficiencies, we will maintain that breakeven price at an acceptable level. And all it means for us is at what level as a business should the iron ore price drop before things start to fall apart. So, the lower the price, the higher the -- what I call the safety margin. Improved breakeven price was underpinned by market premium and lower freight costs. Our goal remains to enhance margins by improving breakeven price through cost reduction and improving product premium. I'm saying that product premium improvement. Now let's move on to CapEx. If you look at our capital expenditure for 2025, it was ZAR 10.4 billion. And the key driver for that was ZAR 1.7 billion, which we spent on our UHDMS project. CapEx for this project will be phased in line with implementation sequence, and Mpumi will talk about that later in her closing slides. Our stay-in business, which is key for sustaining our business operationally going forward was flat, and it was in line with our guidance. Again, that's a reflection of our discipline. If you look at our deferred waste stripping, which was mainly driven by higher stripping ratio at Kapstevel, it was relatively high in Kolomela. Over the past months, our teams have undertaken a thorough review of our operating environment, the growth pipeline and the long-term strategic positioning of this business. So, what has emerged is that our mine optimization has given us cost efficiencies and the team that I found have delivered on that. I can't claim it at the moment. As we ramp up activities, we need to drive further cost improvements. These improvements must come through operational efficiency and better supply management. We wanted to fully capture these opportunities. We also want to ensure that we remain competitive and well positioned for the next phase of growth. And for me, competition means we far from the market. Australians are closer to the market. We need to be consciously aware of our cost position all the time. To achieve this, we are stepping up our capital investment program. This will help improve productivity and strengthen our long-term value creation. So, as a result of all of this, our CapEx guidance for this year is between ZAR 13.2 billion and ZAR 14.2 billion. Expansion CapEx is largely driven by our UHDMS, which we've mentioned several times now, is an exciting project, and the balance is on the exploration and technical studies. All of this is for growth. We are refocusing this business on growth. Between ZAR 3 billion and ZAR 3.2 billion has been allocated for this year. We are investing in work to support our future pipeline of life extension projects. And again, Mpumi will talk about this in her closing presentation. The total stay-in business CapEx is between ZAR 6.6 billion and ZAR 7 billion. About 2/3 of that relates to safety, capital spares, plant and infrastructure project or upgrades. Approximately 1/3 is allocated to heavy mobile equipment, which we are recapitalizing. In fact, our equipment in some of our equipment are beyond life and therefore, the agent needs to be replaced and that replacement will result in cost efficiencies going forward, as well as operational efficiency. So, it's quite key that we do that. And as an example, some of our trucks in many cases, are now close to 120,000 hours of operations. And typically, we normally replace at 80,000 hours. And that makes them less cost efficient to operate. The deferred stripping CapEx is expected to be between ZAR 3.6 billion and ZAR 4 billion. That's critical for us to continue to ensure that we open-up enough surfaces going forward for us to continue mining. This is due to mining higher stripping ratio in some instances as well, particularly at Sishen as we access the sections that have got a higher mining stripping ratio. In the medium term, CapEx will remain at similar levels. As you know, our UHDMS CapEx will peak this year and will then continue to reduce until the project is completed in 2029. Our baseline stay-in business, which is run of the mill business as usual, will be approximately ZAR 5 billion per annum on average in the medium term. Heavy mobile equipment, replacement CapEx is about ZAR 2.5 billion per annum on average going forward. Lastly, deferred stripping CapEx will remain at around ZAR 4 billion per annum on average. Now let's look at how we've allocated our capital. Our disciplined approach to capital allocation remains unchanged as a principle. Sustaining CapEx, value-accretive expansion projects and sustainable returns to shareholders remains our priority. For the year under review, we generated cash of ZAR 17.2 billion after paying for sustaining capital. That's a good achievement. ZAR 12.2 billion was used to pay base dividends to our shareholders. That was before allocating ZAR 4.8 billion to discretionary capital. This was largely focused on the UHDMS project together with additional dividends that would have been carried over from 2024 paid in 2025. Our dividend policy remains unchanged, and that's between 50% and 75% of headline earnings that we generate. It's very important that we understand that. We delivered ZAR 12 billion of attributable free cash flow. This has underpinned our Board's decision to declare a dividend of ZAR 15.43 per share for the second half of last year. Together with ZAR 16.60 per share that was declared at interim, our total dividend is ZAR 32.3 per share. And this means 70% payout of our headline earnings for the year. And this is at a yield of 9%, which remains a respectable yield. Maintaining a resilient and efficient balance sheet, especially in this volatile environment is extremely essential. And before I hand back to Mpumi, let me take you through my key focus area as I joined the organization. So, my priorities are very clear. First is to strengthen on cost efficiency. Good discipline over the past 2 years has delivered over ZAR 5 billion in cost optimization across 2024 and 2025, which Mpumi touched on earlier. It's important to continue that focus moving forward. And I will apply a fresh perspective on the ways in which we can be more efficient, and I cannot do it alone. I will do it with the support of the team. Second, is to enhance capital discipline. Cash flow performance need to be a critical focus for this business and every rand spend needs to be strongly challenged. In that context, we clearly have important investment programs in key phases. And these are notably our UHDMS project and HME program. So, going forward, there will be an increased capital intensity in this business. So, it's quite key that we focus on that spend. There will be strong discipline and tight governance on all decisions to ensure that money is well spent. Lastly, we remain committed to paying dividends through the cycle and maintaining our strong policy as it is. A payout of 50% to 75% as a dividend policy is quite strong. On that note, I'd like to thank you for listening to me. And now back to you Mpumi. Nompumelelo Zikalala: Thank you, Xolani. It's certainly great to have you on board. You've certainly hit the ground running, and it doesn't feel like you've only been here for a couple of weeks. And I'm looking forward to us working this journey together with the rest of our Kumba team. And then back to the room, ladies and gentlemen, before we wrap up, I would like to spend a few minutes running through how we see the picture of iron ore going forward and then make some specific comments around Kumba's future and our next steps to creating value. Turning first to the iron ore market. Our long-term view on global steel demand remains positive. Structural forces including economic development, population growth and the global shift to cleaner technologies will continue to shape and support demand over time. At the same time, the steel industry is becoming more fragmented and multipolar. While Chinese demand is expected to moderate, rising demand from India and other developing regions will more than offset this. And importantly, there's simply just isn't enough scrap in the system to meet this growing requirement. That reinforces strong fundamentals for iron ore as the primary source of iron units. If we focus on lump ore, which, as you know, is our core market, we are seeing interesting dynamics. The lump premium has been under pressure due to margin compression and increased supply. But as this excess supply works its way through the system and profitability improves, we anticipate much tighter markets emerging. The data already shows how lump supply is nearing its peak with most new volumes coming only from costly replacement projects in Australia. With 2/3 of our portfolio in lump, Kumba is well positioned for the shift that we see. Additionally, our product properties are well suited for blast furnace applications. As seen on the chart on the right, our products combined alumina and silica is within the ideal blast furnace zone. And this is the sweet spot that steelmakers operators aim for. Steelmakers blend different ores to reach this zone and many mainstream ores fall outside of this zone. And as a result, our ores are used strategically to optimize these blends. So, this is beneficial for our customers. We also serve a diversified customer base. Our premium lump goes into traditional markets where steelmakers prioritize high-grade ores, while our standard products are sold largely into China where demand is more price elastic. Across the range, our products consistently offer higher iron ore content, supporting stronger blast furnace performance. And with our UHDMS technology set to triple our premium grade supply, we gained the scale and flexibility to support this growing market demand for higher quality iron ore. This is where our product, quality, our technology, as well as our long-term strategy converge. And it is a key differentiator for Kumba as the industry evolves. Now let me give you an update on the progress made on our UHDMS project. We've received quite a few questions around the project. So, 2025 has been an important and productive year for our UHDMS project at Sishen. We've now completed 37% of the overall project, with 90% of the engineering work behind us. For those who may remember, previously, we paused the project because we are not happy with where we were from an engineering design perspective. So, it's pleasing to be sitting in this position at this point of the project. All major procurement has been completed. And because we are following a modular build approach, our Jig plant will continue running during the main tie-in, which will take place later on in the year. I know people have been asking when exactly. It's in the second half of the year, in August to be specific. And during this time, we will use stockpiled material to support consistent sales as we execute the main tie-in. And that's where when we talk about guidance, you'll see the differentiator, but we've essentially said that our sales guidance will remain going forward. On capital, we remain on track to complete the project within our overall capital budget. And as a reminder, we are phasing our investment in line with the execution of the project, which follows a modular approach. Our total capital spend on the project will be ZAR 11.2 billion and in line with the overall project progress, we've invested ZAR 4 billion to date. The construction of our first coarse and fines modules has progressed steadily. In parallel, the new coarse and fines modular substations has been completed. The bulk of the construction was actually done offsite, and we then moved the constructed modular substations to the site. And these are in the process of being connected to the first modules. The construction of the first modules has been slightly slower, but this has allowed us to learn the lessons, and we will apply these into subsequent modules. We anticipated this and planned for the modular approach simply because we knew that constructing within an existing plant was going to allow us to land. So, it's great to see these lessons coming through. These lessons will also position us well as we move into the main tie-in later this year. We are on track for the main tie-in with critical milestones achieved. And what's good for us is that a portion of the work originally planned to take place during the tie-in was actually brought forward for execution ahead of the main tie-in in order to derisk the scope of the main shut where possible. So, we wanted to limit the amount of work that we'll do in the second half of this year. Our UHDMS project certainly remains one of the most exciting projects in our pipeline. The technology not only enables us to increase the volume of premium grade products, it also allows us to use low-grade material more effectively, cutting waste and improving our overall cost efficiencies. And I've spoken about this before to say we are reducing our cutoff grade from 48% to 40%. And the economics around the project speak for themselves. EBITDA margins above 50% and an IRR of over 30% means that payback from full production is just 3 years. But for me, what matters most is the long-term benefit. UHDMS gives Sishen meaningful life extension and strategic flexibility for years to come, fundamentally delivering long-term sustainable value for all our stakeholders. Next, I would like to talk about the strength of our mineral endowment. Now quite a few of you have been asking us about the future of our business. And now I'm delighted to share some exciting news around this because you've been asking us to share a little bit more. Right now, we have approximately 764 million tonnes of exclusive mineral resources, and that's a powerful foundation. 471 million tonnes of that is already confirmed from our 2024 resource cycle. And we've added another 293 million tonnes, 2/3 at Sishen and 1/3 at Kolomela, which really shows that our exploration program is doing exactly what it's meant to do. We are not slowing down. Our exploration teams are actively expanding our understanding of the ore body and building options for the future. As I've said before, the Northern Cape province is a very interesting province when it comes to iron ore. At the same time, our mine planning engineers are enhancing pit designs to optimize the extraction of the ore body. Our ore reserves now stand at around 802 million tonnes. And since 2022, we've added 175 million tonnes before depletion. Now that's a big step forward and speaks to the long-term resilience of our business. We've just added another year to both Sishen and Kolomela's life, taking their life of mine to 2041. Our ambition is to, however, increase life of mine, and we are working towards a value-accretive pathway to improve or increase or extend Kumba's life of mine. I've already spoken about our UHDMS project at Sishen, which is exciting. I'd like to zoom into Kolomela. Here, we are building on a strong foundation. We are making real progress on 2 important resource areas. Firstly, Ploegfontein, already part of our resource base is moving through further studies and additional drilling to further increase our confidence around this great resource. I'm also pleased to announce that Heuningkranz has now also been added as a new resource area and it's progressing along the same track to convert its resources into reserves. Both areas make smart use of Kolomela's existing infrastructure, which will keep capital cost down and speed up future development timelines. So, in summary, our asset base is stronger today. We're investing in the right work, the studies, the technology, the exploration, as well as the increase in our asset base through the recapitalization of our HME fleet, which Xolani spoke about earlier. All of this is aimed at unlocking high-quality iron ore tonnes, improving margins and extending the life of our mines. And key to this is that it needs to be value accretive. And we are doing this in a disciplined way that ensures long-term value for all our shareholders. And that then brings me to our full year guidance. For 2026, we expect total production of between 31 million and 33 million tonnes, reflecting the main tie-in of the UHDMS project. As you recall, we guided the same number last year, so this hasn't changed. This is linked to 22 million tonnes from Sishen and 10 million tonnes from Kolomela. We have also maintained our sales guidance of between 35 million and 37 million tonnes, as we plan to supplement production with finished stock. Our C1 unit cost guidance is $45 per tonne and remains unchanged in real terms. The move from $40 to $45 per tonne is purely an exchange rate translation effect. Previously, our guidance was based on an exchange rate of ZAR 18.60 to the dollar and using a stronger exchange rate of ZAR 16 to the dollar naturally lifts the dollar reported cost. As you've heard from Xolani, capital expenditure is expected to be between ZAR 13.2 billion and ZAR 14.2 billion for the full year. Now before moving to Q&A, I would like to remind you, as I always do, of our value proposition. As we look ahead, the message is simple. While the macro backdrop will remain uncertain, we are clear on what matters most and executing well on what we can control. My priorities and my team's priorities for 2026 are very clear. Firstly, to continue lifting and improving on operational excellence because you can never stop on that, as well as driving cost efficiencies, Xolani spoke about this and the great execution on both our UHDMS project, as well as HME investment. Secondly, working towards logistics stability and optimizing risk-adjusted returns with long-term logistics capacity through the right partnerships. And last but definitely not least, understanding and advancing our potential value-accretive pipeline of life extension options, and I've spoken about them. And these will all be aimed at meeting market demand. Now across all of these initiatives, we will keep really tight control of capital and a strong focus on cash flow performance. That stands to ultimately benefit all of our stakeholders with Kumba in the best shape it can be to deliver results today, tomorrow and beyond. I'm exceptionally grateful that we have strong teams, and these are across all the various areas of our business. We also have a very supportive Board and committed partners across our stakeholder base to achieve this. And of course, we have the privilege of working with world-class assets. And that gives me absolute confidence in our ability to deliver sustainable value for all our stakeholders. With that, I will now hand over back to Penny, who will lead the Q&A session. Penny Himlok: Thank you, Mpumi. We'll now open for questions firstly in the room. I see already a hand up. And then we'll move to the questions on the webcast line and the conference call. Thanks. I see Tim has his hand up. Unknown Analyst: Congratulations on the results. I thought the received pricing was very good and operationally very solid, so well done. I'm just interested in -- I've got 2 quick questions. The first one, just on your resource and your reserve increase and resource change or your reserve and resource change. Just wonder if there's a change to the life of mine stripping ratio, just how you see the pit shell, how we should think about stripping over the course of life out to 2041. And then you've sort of indicated that you see potential for life beyond and you've declared this big resource. Perhaps you could just speak about the process of the sort of the ore body and what that means in terms of what it would take to convert that resource into reserve? Do we need higher prices? Or is it just a drilling issue? And then lastly, just a quick one. Kolomela, the cost was a really good cost result, but a bit of a step-up in costs for this year. If you could just give us a bit more color, that would be appreciated. Nompumelelo Zikalala: Thanks, Tim. Do you want us to answer, Tim or do you want us to take a few more questions, Penny? Penny Himlok: I think we should as Tim has asked quite a few questions, let's address those. Nompumelelo Zikalala: Okay. Thank you and it seems we will not remember all the questions. Tim, starting with the first question, and I'm going to ask our Executive Head of Technical and Strategy, Gerrie, to add to this. So, in our guidance slide, you would have seen that we talk about both this year's strip ratio, as well as the life of mine strip ratio, which essentially caters for the endowment that's already been converted into reserves, and that forms part of our life of mine plans. So, when we guide on those figures, that's already, I guess, built in. And as we've said before, clearly, Sishen's strip ratio reduces if you just look at this year and the future years. And if you look at Kolomela, it's fairly flat. I mean it's a slight difference. I'm going to ask Gerrie to talk a little bit just about the phasing and to also talk about the process that will now follow for both Ploegfontein as well as Heuningkranz, just the move from resources to reserves. Thanks, Tim. Gerrie Nortje: Yes, thank you, Mpumi. Tim, some really good questions, as always. Look, I think, firstly, just on the strip ratio after 2041. Of course, we can't guide on that at this point in time. We've only declared resource. we have not yet declared a reserve and as such, it's not included in the life of mine plan yet. So, maybe I'll start with the approach that we follow in terms of how we optimize our business. So, you will see in the resource reserve statement that we apply a 0.7 revenue factor for reserves. The reason we do that is to ensure that we always have a healthy margin throughout the life of mine. Now of course, you can follow different approaches and will impact the margin. What we have changed fundamentally last year as part of the business reconfiguration is to take a cost approach. So, not to only respond to prices, but to make sure that we target the right cost position. Now if we look at the current guidance and the cost position, essentially, if you look at CBEP, we are attempting to remain within those ranges over the life of mine and even when we extend the life to maintain a similar cost position. So, our objective is to remain below the $70 per tonne. And as such, when we optimize the mine, enhance the life, we target that, and that's why we then derive the revenue factor, which will then obviously declare the reserves. Now, Ploegfontein and Heuningkranz has been in the portfolio for a number of years. Ploegfontein previously declared as a resource, Heuningkranz only declared now. The reason we declared it now is we do meet the requirements from an RRPEEE perspective, and we are comfortable that it meets the requirements to declare resource. Now it forms a really important part of the life extension of our business. What we are doing at the moment is improving the geological confidence and the study work. As soon as we get to a pre-feasibility level and the geological confidence at the required levels, we can then declare a reserve. Now typically, it takes us about 2 to 3 years to work through the study phases. It could be a bit longer, but we have time if you consider by when we have to respond to extend the life of mine. So, immediate focus now is to drill additional holes at both Ploegfontein and Heuningkranz, as well as other areas of Sishen to complete the studies, put it through the different stage gates and then, of course, declare a reserve. At that point, we will then be able to update the life of mine and we'll also then guide on the life of mine strip ratio. But we are attempting to remain at similar levels over the life of mine in terms of strip ratio. And of course, it will give us optionality of extending the life quite significantly. Now if we just look at Heuningkranz quickly, I'll just say one more thing for me. So, Heuningkranz is about 20 kilometers away from Kolomela. Ploegfontein is located on the Kolomela mining reserve, as well as Heuningkranz actually. So, we don't anticipate massive capital investment to unlock the resources and reserves in time. Reason for that being we can leverage the Kolomela infrastructure and the hub to essentially mine those areas. So, that's why we really like this. Secondly, if we look at the cutoff grade that we've applied for Heuningkranz, 61% Fe, the bulk of that will essentially be DSO. So, we will not require extensive beneficiation. Again, lots of benefits in terms of tailings requirements, as well as beneficiation requirements. So, it is essentially part of our strategy to extend the life without increasing the cost and making sure that the margins can potentially increase. So, I added quite a bit there, Tim, but... Nompumelelo Zikalala: Yes. So, Tim, as you can see, we're very sensitive not just to the excitement around the resource, but essentially how we'll ensure that whatever it is that we look at will be value accretive. And then coming back to Kolomela cost. Thanks, Xolani. Xolani Mbambo: Yes, if you look at the performance of Kolomela in 2025, there was a benefit of uplift in volume in terms of the tonnage. They actually overperformed, and that would then be a function of a lower cost per tonne. The expectation going forward is that the volumes will normalize, of course, at a similar fixed cost. And the other thing that we're addressing now through our colleagues is, if you look at the drilling machines, they're quite old. And therefore, the cost of maintaining those and operating them is becoming a challenge. And that's one of the reasons why we've now have got that replacement program going forward, which will assist in ensuring that those machines are replaced and therefore, start running efficiently, both from operational perspective, as well as from cost perspective. So that's what guided our view going forward. Nompumelelo Zikalala: Yes. And Tim, to close off on this, we actually spoke about this during the period of the reconfiguration that -- so, you would have seen a higher differential between what we said around the strip pressure for the year and the life of mine strip ratio. So, we spoke about the fact that we would see an increase in terms of the stripping that we need to do at Kolomela, still very much part of the plan that we've spoken about before, which is linked to Kapstevel South. So, we still remain on track. Penny Himlok: Brian? Nompumelelo Zikalala: Brian? Brian Morgan: It's Brian Morgan, RMB Morgan Stanley. Just a question -- 2 questions, actually. So, on the HME replacement that you've spoken about, can you just tell us, is it the '26, '27 story? Does it begin to roll off later on? Or is this a new normal? I think in the past, we've seen these sort of cycles and they last for 2 or 3 years and then they roll off. Just if you could just give us a bit of color on that. And then, just on the rail contract, I think I've asked this before, but I'm still not sure in the answer. If we're aligned third-party access onto the rail and you've got the PSP on the maintenance and everything like that, who would you be contracting with? Who are you negotiating your new rail contract with? Nompumelelo Zikalala: Thanks, Brian. Two interesting questions. I'll take the first one just for the HME replacement. Firstly, I think our teams have done a good job. So, if you consider that effect, I'll use a trucks example, and I'll talk about drills as well, Xolani spoke about that. Typically, other miners would do their replacement at around 80,000 hours, but our teams had a look at saying, could we actually extend the hours on a truck without spending significantly more because as you can imagine, it's more of an OpEx issue. But you get into a space where it becomes more expensive to run the fleet and your efficiency start reducing. So, we've stretched it, and that's why Xolani spoke about the fact that some of our trucks are now sitting at close to 120,000 hours. But clearly, we are not just opening the pockets from a capital perspective. We are still following a logical approach to say, how do we do condition monitoring, what do we replace, et cetera. Now if I use the example of drills that Xolani spoke about from a Kolomela perspective, this one is a simple one. The drills are there, the spares are obsolete, so you can no longer get them. So, what does that mean? It means that you can't maintain that fleet. And with the replacement, we are trying to do a like-for-like, which will help us with the balance of our spares that we essentially keep. So, we're following, I guess, a logical approach that ultimately says that as you replace the fleet at the right time, you get a swing in between the OpEx, which would have started going up and your CapEx clearly because you do the investment and that essentially then drops your OpEx on a go-forward basis. And then the second thing that you get is just around productivity of the fleet itself. So, what's the timing, which is your question? So, you would have seen that we guided for next year, but we essentially gave you guidance for the medium term, which is typically 3 years. And we will continue doing further optimization work. But as you can imagine, it's not as if the entire fleet is sitting with the same number of hours because we typically would have bought the fleet at different intervals. So, we'll definitely keep you updated on that part. The key is, we are following a very logical approach with regards to the replacement of the kit, and we essentially think about the life cycle cost and balancing both OpEx and CapEx. Let me just check if Xolani or Gerrie you want to add anything? Xolani Mbambo: No, go ahead, yeah. Nompumelelo Zikalala: And then on the rail contract, it's an interesting one, Brian, because as you say, there are multiple things that are taking shape. So, the reforms are taking place. And this is where you see the doors being opened around PSPs, and we are tracking that through Vempi, who heads up the space exceptionally well for us. The work around PSPs with us being clear that when we talk about PSPs, we don't necessarily want to be a concessionaire because people started saying, do you want to be a rail company? And we said, no, no, no. We just want to partner with the right people. And then secondly, what's also taking place within the reform space is exactly what you've spoken about, the train operating companies. So, we're keeping track in terms of what's happening in that space because ultimately, this is all about, I guess, the liberalization of this space. But it's just that the multiple things are taking place at the same time. At the same time, we've still got a contract. So, the other elements are maturing, but they are not yet finished. So, it is just right that we continue with the renegotiation of our contract. For us, what's been pleasing is that in engaging with Transnet, they also want to go through the renegotiation because if you think about them, they are also thinking about the fact that they want security. Clearly, the different things are happening at different timelines, but we are moving them in parallel and making sure that we are very much mindful of what's happening in the various spaces. The key, however, is that as various things taking place at the right time for the right reasons. It's just that we need to make sure that we remain on track just in terms of the various monitorings. Vempi, do you want to add anything, go for it. Unknown Executive: Good morning. Hi, Brian. Nompumelelo Zikalala: Head of Logistics. Thanks, Vempi. Unknown Executive: Brian, just a quick comment. I think there's 2 things that you need to understand. The first one is, we always thought that the PSP work will happen before the contract renegotiation takes place. We've now seen that, that is slowing down a little bit, which means that we need to renegotiate the contract now before it expires at the end of 2027. So, that's the first thing. The second thing is the regulatory reform that's happening at the moment means that we are going to renegotiate the contract with Transnet from a freight rail and a port perspective. So, our new contract is likely going to be with freight rail and ports, but it's going to exclude the infrastructure manager because Transnet is now being split up in the infrastructure manager and also the rail and port operations. What we are considering at the moment is to see whether we can move closer to TRIM, which is the infrastructure manager because the infrastructure management is going to be the critical part that takes us back from the levels that we are seeing at the moment to the design capacity that we all want to see in a couple of years' time. So, although we're contracting or potentially going to contract with Transnet freight rail and port terminals, we're also keeping the options open through the network statement to see what options there are to apply directly from slots or for slots directly from TRIM. Nompumelelo Zikalala: So, we'll stay close to all the various aspects that are moving, Brian, yes. Penny Himlok: Okay. I don't see any more hands in the room. If there are no further hands, I'll go to Chorus Call. The first question is from Shashi from Citi. He's asked, how much of the operating cost benefit can we expect from the mining fleet recapitalization program? That would be for you, Xolani. Xolani Mbambo: Yes. That's a very good question. So essentially, what we -- the way the process is going to run is that as the, as the equipment gets replaced or just before it gets replaced, there will be a business case for each of the equipment in terms of what it does on the maintenance cost in relation to its replacement. And that will start coming along as we actually execute on implementation. So -- and also because we're going to be dynamic around a choice whether we stretch some of the machines so that we've got the staggering. It's not a question of having a view at this point in time in terms of how it's going to shape the maintenance cost going forward. But certainly, as we run through the business plan, it's one of the things that I'll be looking at in terms of if you execute on a particular replacement of, let's say, the truck what are the maintenance cost of the existing truck that is being replaced and what then happens on the business plan to make sure that those savings are actually captured. And if you don't see that coming through our EBITDA going forward, then I'll be here to be challenged on it. So, we don't have a -- I wouldn't say here and say I actually do have a view of what that looks like, but I certainly will have a view as each equipment piece gets replaced. Penny Himlok: Thanks, Xolani. Nompumelelo Zikalala: Do you want to add... Gerrie Nortje: I'll just add one more thing. So, remember, there is a bit of a lag. Now of course, there's a clear cost benefit in the recapitalizing fleet. If you consider the capital required to essentially continuously replace components versus a new equipment, you have a number of years where you don't spend anything on components. So, there's a huge cost benefit. The fleet is quite large. So, it does take a bit of time to get through it. And when you start getting through it and the lag starts coming through, the cost benefit will be clear. And I think the cost benefit will be in both the CapEx as well as the OpEx. But I think just be mindful that the fleet is large. It takes time and it's got a bit of a lag, but when it comes through, it will be clear. Penny Himlok: Thanks, Gerrie. Well, maybe we should give Timo a chance. There's a question on CMRG that's also come through. That's from Anton Nolo. He's asked, how much of an impact is the dispute between the major miners and CMRG going to have in the iron ore price and the lump premium? Unknown Executive: Thank you. I was feeling a bit left out, so I'm happy to get a question. How much about the impact on the iron ore price from the CMR dispute? Well, when you talk about the dispute, I think you're referring to BSP's dispute with CMR. I should add that we are engaged in discussions with CMR. We have been for much of 2025. They are not easy discussions. They have accelerated late in 2025. They have intensified, but they are very constructive discussions, I must say. There is a bit of a shift in the power balance between buyers and sellers in the iron ore market, given that CMR represents probably 2/3 to 3/4 of overall iron ore imports into China. So, they are forced to be reckoned with. It's too early to speculate what the outcome of our discussion with CMR is going to be. We continue those discussions. In fact, Ibrahim and myself, we're on our way to Beijing next week. We were there in January. We've got our next meeting lined up for March also. So, we are in those discussions. They are in a very positive spirit being conducted, and they span many elements, the use of index. I mean, many elements are included in those discussions. So, it's too early to speculate where we're going to land with CMR. Impact on the lump premium specifically, I really don't expect much of an impact on the lump premium at all from the CMR discussions. The lump premium that you've seen for the past year, a lot of people focus on the low lump premium that we've seen recently. But keep in mind that for the year as a whole, the lump premium was pretty much in line with what it was in 2024. We've started seeing a recovery in the lump premium. It's got nothing to do with CMR. It's got to do with the fact that the lump premium was really low, mills have started using more lump. The share of lump in that burden has gone up by about 1 percentage point already. I think we would have seen a stronger recovery in the lump premium had it not been for the very strong metallurgical coal prices. So, the lump premium is on its way back, I believe, to a level of $0.15 to $0.20 per dmtu where it has been. But keep in mind, the lump premium tends to be extremely variable. So, we are starting from a low base now back to that $0.15 to $0.20 level. Longer-term, we continue to be very positive on the lump premium. And the slide that we showed indicates that we think we are nearing peak supply in lump and that from a couple of years out, we're going to see a steady reduction in the availability of lump, coupled with a continued increase in the use of lump in blast furnaces, I think that's a very, very positive picture for the lump premium. Penny Himlok: Thanks, Timo. And we have a question from Andrew Snowden from [indiscernible]. He's asked, and this would possibly be for you, Xolani, to speak about the impact on cash flow from potential working capital release in 2026 as we draw down inventory. Can we give any color on this by way of guidance? Andrew likes to ask for more information and we will have a chat with Andrew when we're down in Cape Town, but maybe we can just give him some highlights. Xolani Mbambo: Yes. Look, it's a tricky one. So, essentially, you'd have seen an uplift in our volumes on the stock side, both from WIP and to an extent from last year, you'd have seen finished goods or the saleable tonnes in terms of the mix more on the port than what we'd have seen in the prior year. And of course, all of those will wash through the income statement. And what will then happen is unless we stick to the mine plan that calls for more, we should see no impact in working capital in terms of the stock movement. But if at the moment to deviate from that, then of course, you'll see a negative effect on your income statement, as well as on your cash flow in terms of the movement. So, it's a function of us making sure that as we mine, we stick to the mine plan, so that the flow of WIP movement remains constant in terms of the cash flows. That's how I can give as a guidance in terms of what you're looking for. But on the one on one, we can perhaps go a bit more detail to understand specifically what is it that you'd be looking for on that cash flow. Penny Himlok: Thanks, Xolani. We've got a question from Katekar from Investec Bank. She's asked about the UHDMS tie-in in August, if it's been fully derisked? And if not, what are some of the aspects that could still surprise? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, I guess a couple of things around the tie-in. One is the planning of the actual tie-in has been completed. And that's fundamental because we wanted to conclude the planning and also do assurance on the plan because you typically have our own team, and we bring in additional experts to say, is there anything else that we should think about? But we're in a good place. The second thing is we spoke about where we are with regards to the procurement and also the selection of the company that will be leading the tie-in. The good thing is that we are not taking one of the companies that are working on the modules and asking them to work on the tie-in. We're going with a separate company because we don't want them juggling balls between what they are doing on the modules and what they are doing on the tie-in. We want them fully dedicated to the tie-in. We've already onboarded them, a solid company. We've had to pay slightly more, but it's okay because we want the right skills to come in and execute the tie-in. The third thing is that, our teams looked at the scope of the tie-in and looked at work that they could do -- that they could essentially do upfront, and we supported that. They started this work in 2025, and it will continue, because we want to execute as much as we can before the main tie-in because with the main tie-in, clearly, you stop everything. But if you can try and do some of the work upfront, it just reduces the level of complexity, clearly, not completely, but we've aimed at doing our best around this. And then I mean, last but definitely not least, we are also thinking about, I guess, all the various aspects around the tie-in, not just looking at work that will be happening within the project, but also the interface just around work that will be done by our own other Kumba team, so our stay-in business capital team because we want to do opportunistic maintenance. If the plant stops for a couple of months, it makes sense to try and do as much maintenance as possible because the plant is there and it's available. So, the interface of the various pieces of work has been well thought through. We've brought in a plan who's looking at all the various interfaces and how all the aspects will integrate. So, I guess that go. In terms of just front-end loading, think about it like this, it's February. We are already talking in detail on the tie-in. We will assure this plan at the end of March, rolling into the beginning of April because we want to land as much as possible. So, we're not leaving it and saying, let's just conclude the plan in June or July. No, it's a major one for us. I guess then what are the risks? I'm a realist when it comes to projects because sometimes there are some unknowns that may take place. So, how have we thought about dealing with these risks? We've thought about the level of stock that we have ahead of the tie-in. And I know people used to ask us why are you carrying these volumes of stock, so 7.5 million tonnes last year. Well, it's there not just for us to meet our production guidance this year, but it's also saying if for whatever reason something happens and the tie-in takes slightly longer, we could just continue selling out of stock. The other thing that we've also thought about is that during the tie-in, the only section that will be on full stock is the dense medium separation processes linked to our coarse and fines DMS. But the rest of Sishen actually has a jig plant. That jig plant will continue running and Kolomela will continue running as well. And that's to cater for any other eventualities that may take place, either with the tie-in itself or the commissioning phase or the ramp-up post the tie-in. So, we've had lots of thinking around this. And Gerrie, I'll check if you want to add anything? Gerrie Nortje: One thing, Katekar, so, I think Mpumi covered the front-end loading piece. What we've also done as part of the main shut is we've gone with the P90 schedule. So, we have built in contingency allowance for any sort of delays or slippages. Can it be longer than that? Yes, it's possible, probably not likely, but it's possible. And I think Mpumi covered the contingency plans that we have in place. Maybe last comment, we also have Kolomela mine, and we always consider how we can use Kolomela mine to further derisk in the event that we have to. So, essentially, again, looking at this from a portfolio point of view. So, both production as well as stockpiles, as well as additional processing capacity like the Ultra DMS at Kolomela, for example. Nompumelelo Zikalala: Maybe Gerrie, let me just add one more. So, the P50 schedule said 75 days. The P90 schedule said over 100 days. We have planned for the longer schedule. So, typically, you would go for the shortest ever possible schedule. We are saying, let's plan for the longer schedule, which assists us with derisking any eventualities that may take place. What's good is that, as I've said, we've selected the contractor that will work on this. Their days because clearly, they've got the plan, which we've then integrated into our broader plan has a shorter duration. But still, we've planned on the P90 schedule. So, Gerrie and I normally have this discussion. We talk about both sides of the risk. So, either it may take longer, but it may also take a shorter period because we may be closer to the P50 and closer to the dates that have come through from our contractors. But we are taking a very, I guess, I mean, I've never seen our teams looking at this level of detail hour-by-hour, what will be done where in which section of the plant and who will be doing it. And that's the right to do -- the right way to do it, yes. Penny Himlok: Thanks, Mpumi. Thank you. Back to our favorite topic, Transnet. We've got a question from Thobela Bixa from Nedbank. He's asked, rail to port has been up 6%, but sales only up 2%. Is there a bottleneck at the port? So that's the operational question, and we have a strategic question on logistics after this. Nompumelelo Zikalala: Yes. So, Thobela, maybe let me just take this one. So, when we spoke about the independent technical assessment, we looked at everything. We looked at rail and we looked at the port. And in as much as there's work that needs to be done on the rail side, there's also work that needs to be done on the port side. And the approach to the ore corridor restoration program takes a holistic approach because to the question, you don't want to have one section running and another not running. And then we spoke briefly about the 26-day additional maintenance that needed to be done as part of the refurbishment of stacker reclaimer #3. All that I'll say is that when Vempi and the team work with Transnet, they take a holistic approach. It's the whole integrated system. Penny Himlok: Thanks, Mpumi. Katekar, just made a small -- another little add-on to that Transnet question also from an operational perspective, and that is just that your production guidance has been actually unchanged and will certainly change in 2027, 2028, it says 35 million to 37 million tonnes. Does that mean you don't really have that much confidence in the recovery of the rail and port, I guess, in the short term? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, we've taken a balanced approach to this. The independent technical assessment identified things that need to be done. And there were 2 pathways. It was either stopping the entire infrastructure and fixing everything in a couple of months. And clearly, that wasn't ideal. It would have had a significant impact, not just to our business, but to Transnet as well. And secondly, one would have needed a lot of money to do all that work. And then the second pathway was actually phasing the work, and that's exactly what the Ore Corridor Restoration program work face. We just need to be mindful that the things that are broken still need to be fixed. So, if I look at this year, they've actually added a second shut, and we support this. So, this is the annual maintenance shut. We typically talk about the maintenance shut that's normally a 10-day shut that takes place in the second half. Well, this year, we will have 2 shuts, one in the first half and one in the second half. And the good thing is that during this period, they will actually be doing catch-up on the backlog maintenance. So, Vempi, I don't know if you want to add anything to that? Unknown Executive: I think you've covered it well. Just what's standing between us or the system from where it is at the moment and getting back to the 60 million tonnes per annum that is seen before is again what you've spoken about the capital replacement. And there's 2 things that need to happen. Firstly, we need to help Transnet with the planning and the procurement that needs to take place to get all of the orders done, so that the work can take place, firstly. But secondly, we also need to find the right commercial vehicle for the money to be spent. So, we know that there's this budget facility for infrastructure that governments made available to Transnet, but they also need the vehicle for that money to be spent. So, those are the 2 things that are standing between us and getting back to 60 million tonnes per annum for the ore corridor. And that's why we're comfortable with the levels that we've guided over the next year. Nompumelelo Zikalala: And then the longer-term, it's just a recognition of the fact that this is not a quick fix and the allowance for the time to actually do the work because you run the system outside of that time. I guess maybe just one last thing. If you think about it, last one is this double the amount of the annual shut period, but we've kept the guidance the same. That actually talks about the fact that we expect to see a higher operating rate when the system is running. It's just that you'll still stop it for, I guess, 2 separate durations. And we would also support this being repeated next year simply because the work needs to be executed. Penny Himlok: Thanks, Mpumi. One question also on Transnet or the actually the PSP reform process from Thlaku from SBG Securities. He's asked that you've mentioned the PSP info reform process has somewhat slowed. Should we assume a longer time line before private operators meaningfully increase rail throughput in general? Sorry, what -- could you expand what these key bottlenecks are that's holding back the process? Nompumelelo Zikalala: Yes. I think let me take this one. So, Thlaku, if you think about it, there was the initial RFI period, then the PSP unit came to play back what they had, and this was over 700 pages. And I've got a wonderful team. So, they looked at these pages together with the rest of the Ore User's Forum, and we provided feedback. And the reason why we did that is because the last thing that any of us want is to see a release of the next phase or the RFP phase that's not bankable. So, it taking longer shouldn't be seen as a negative thing for as long as it will assist in terms of improving the quality of the output of that commercial RFP that will essentially come out. Clearly, if you track what's happening within the country as a whole, you may have seen that there's been a schedule that's been released for 3 other RFPs in other corridors. We, from our side, are waiting for the release of our RFP. But clearly, to Vempi's point, we are mindful of the fact that with that taking place at a -- within a slightly longer time frame, the work that still needs to be done needs to be done and that's why we've got the Ore Corridor Restoration program, and we continue working with Transnet. Penny Himlok: Okay. We've got another question on the Ploegfontein, Heuningkranz. There's been a question from Bruce Williamson from Integral Asset Management. He's asked, what is the early indication of the FE average grades that we are seeing at Ploegfontein and Heuningkranz and also lumpy ratios? That's from Bruce Williamson. Gerrie Nortje: So, just on Heuningkranz, firstly Heuningkranz-Kolomela combine 150 million tonnes of resources. Cutoff grade applied at Heuningkranz 61% FE doesn't speak to the average. It speaks to the cutoff grade. The average grade is about 65%. So, it's fantastic, I mean it's what we like to see, and it's actually higher than what we have at Kolomela mine. At Ploegfontein, we apply a 50% cutoff. The reason we do that is because we still have an ultra DMS at Kolomela mine that we can use to beneficiate some of the medium-grade ores. The average grade again is higher than that. Our thinking is that when we -- as we sort of progress the exploration and the studies work and we get closer to declaring reserves, we'll be able to specifically guide on that. But our thinking at the moment is that we have to come up with a blend. So, whilst Kolomela is still mining the current pits, we start mining Ploegfontein and Heuningkranz and essentially have a complex approach to it rather than depleting Kolomela mine then going to Ploegfontein then going to Heuningkranz. Now of course, that also gives us fantastic optionality at Sishen mine because, again, we look at it from an integrated perspective. So, we will now be able to rebalance the entire portfolio to ensure the life extension is material as opposed to just sort of extending by a few years every time we've done a study. Now the timeline is about 2 to 3 years to do the study work. The confidence is actually quite high for Heuningkranz, the bulk of it is already at an indicated level. So, the drilling now is focusing on essentially getting that up to a measured level. So, a few things we have to understand just in terms of permitting. It is part of the Kolomela mining right. But of course, there's a number of additional permits that we just have to revisit, make sure that we're not seeing a material change and get the drilling and confidence up. But our intention is to maintain the lump fine ratio, as well as maintain the average FE spec or improve going forward. Penny Himlok: Thanks, Gerrie. Anything to add, Mpumi? Nompumelelo Zikalala: No, I think he has covered it exceptionally well. I have to say I'm excited. I mean I look at the level of passion from all our various teams. And in this space, it's our geologists and our miners. It's good work that's been progressed. Penny Himlok: I'm mindful that we're reaching the close of our time. I just wanted to check if there's any questions on the webcast link? I see there are none. Okay. There's just one last question that we now have, and that's essentially regarding the fleet in terms of the recapitalization. That's basically from Bruce Williamson again. He's asked, with the next range of fleet purchases, will that move into the autonomous space? And what impact could that have on employment? Nompumelelo Zikalala: Yes. I think I'll take that. So, Bruce, interesting. People look at autonomous as if it's something that's far, but I'm not mindful of the fact that we've actually got a portion of our fleet that's already autonomous. So, if you go to both Sishen and Kolomela and look at our drill fleet, you'll see 2 patterns, one with blue cones, which means autonomous, fully autonomous, somebody sits at the control room and runs that fleet. And then you'll see one with normal cones, which essentially means that there's still the person that's sitting and operating that machine. So, we should never see it as something that we should be scared of looking at. And I can certainly say that we will, on a continuous basis, particularly as we look at the next wave of replacement, consider autonomous because ultimately, what you do is you look at the business case of everything. And then you look at the implications of that. But I don't ever want us to see the move towards autonomous as a negative thing. And because it's not, I mean if I look at our teams at Sishen and Kolomela just around the drill fleet, it's interesting. All of a sudden, if we have an operator who's a pregnant female, as soon as they find out they can't operate the drill. But now guess what, they continue doing their job from the control room. So, yes, I can definitely say that as we look at the next wave, we will always consider all the various options and clearly consider the implications, yes. Penny Himlok: Thanks, Mpumi. And that concludes our Q&A's for today. Thank you, everyone, for joining us today, and please stay for some refreshments. We always look forward to catching up with you. Thank you. Nompumelelo Zikalala: Thank you, Penny.
Operator: Hello. My name is Jamie, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Fourth Quarter and Full Year 2025 Financial Results Conference Call. This call is being recorded, and a replay will be available later today. After the company's [indiscernible] question-and-answer session. At this time, I would like to turn the call over to Cyril Grandjean, Garrett's Vice President, Investor Relations and Treasurer. Cyril Grandjean: Thank you, Jamie, and good day, everyone. We appreciate you joining us to review Garrett Motion's Fourth quarter and Full Year 2025 Results. Our presentation and press release are available on the Investor Relations section of our website. Today's discussion includes forward-looking statements that involve risks and uncertainties. Please refer to our SEC filings, including our most recent annual report on Form 10-K for a discussion of factors that could cause our results to differ materially from these forward-looking statements. Today's presentation also includes certain non-GAAP metrics, which we use to help describe how we manage and operate our business. Please review the disclaimers on Slide 2 of our presentation as the content of our call will be governed by this language. With me today are Olivier Rabiller, President and CEO, and Sean Deason, Senior Vice President and CFO. Olivier will begin with highlights from another year of strong performance and strategic acceleration. Sean will then review our 2025 financial results and '26 outlook. With that, I'll turn it over to Olivier. Olivier Rabiller: Thank you, Cyril. Good morning, everyone, and welcome. 2025 was another fantastic year for Garrett. We delivered strong operational performance in a complex industry environment, and at the same time, advance our strategy, increasing share of demand, growing our portfolio, expanding margin and securing key awards and partnership across turbo, zero-emission technologies and industrial application. In Q4, net sales were $891 million and adjusted EBIT was $122 million with a 13.7% margin. For the full year, net sales reached $3.58 billion and adjusted EBIT was $510 million with a 14.2% margin. Adjusted free cash flow for the year was $403 million, once again demonstrating our disciplined execution and operational rigor. These strong results allowed us to stay firmly on track with our capital allocation framework, returning significant capital to shareholders and strengthening our balance sheet. In 2025, we voluntarily repaid $50 million of our term loan, repurchased $208 million of common stock and paid $52 million in dividends. As you will see later on, we plan for another year of strong execution for 2026, as we anticipate further share of demand gains, margin expansion and strong free cash flow. Sean will obviously provide additional details on our 2026 outlook later in the presentation. But for now, let me move to Slide 4. In 2025, we continued to strengthen our core business while accelerating our zero emission technologies. We secured a significant number of new light vehicle turbo awards driving our growing share of demand in gasoline VNT applications and increasing our traction in hybrid and range-extended electric vehicle platforms. These wins reinforce how our differentiated technologies remain central to efficiency and emissions reduction for our customers. We also won important awards in diesel applications for light commercial vehicle and trucks, where diesel remains highly valued for its lower emissions, fuel economy and high torque. And I want to pause on this point for a moment. Back in 2018, light vehicle diesel represented 41% of our revenue and many questioned whether Garrett could sustain its margin through the transition to gasoline. Today, gasoline accounts for over 44% of our sales, and diesel remains resilient at more than 23%. And as just mentioned, we delivered a 14.2% adjusted EBIT margin, once again demonstrating the strength of our business model grounded in technology leadership and operational excellence. Beyond light vehicles, we also secured numerous commercial vehicle awards across on-highway, off-highway and industrial applications. This momentum was further supported by our first series production awards for our largest turbo frame size, the MEG, as well as the first aftermarket sales for this product line as a retrofit option in the aftermarket space. Moving now to our Zero Emission and Industrial Technologies. In addition to the wins and progress we have announced in 2025, we made 2 announcements in February that are very significant when it comes to that part of our portfolio. First, we announced a series production award for mobility equaling compressors with a leading Chinese bus and truck HVAC supplier. Second, and even more important, we launched a strategic collaboration with Trane Technologies to integrate Garrett's next-generation oil-free, high-speed centrifugal compressors into Trane's commercial HVAC applications, from unitary rooftop and modular chillers to large capacity chillers, bringing the maturity, quality and scale of the products we have developed in the automotive industry into the industrial world and extensive testing in Trane's labs confirmed the clear performance benefit versus incumbent solution. Initial units from Trane will be available to select suppliers -- select customers already this year with broader series production across applications beginning in 2027. But let me spend a little bit more time on this cooling opportunity on Slide #5. We have developed an oil-free, high-speed centrifugal refrigerant compressor for HVAC applications by combining core Garrett technology, high-efficient turbomachinery, our unique oil-free foil bearings, high-speed electric motors, ultra-high frequency inverters and model-based control software. And importantly, all of this comes straight from our technologies we have already developed, validated and industrialized at automotive scale and quality. Our testing has shown that our technology can deliver more than 10% real world energy savings compared to incumbent solution. This allows HVAC operator to materially reduce the total cost of ownership and helps limit energy demand in power-intensive environments such as data centers. These benefits are even greater as customers move to ultra-low global warming potential refrigerants. Our E-Cooling compressor portfolio, introduced at the AHR HVAC Show in Las Vegas earlier this month, has already attracted strong interest from this industry. The product range spans from 7 to 500 tonnes or from 25 to 1,750 kilowatts of cooling capacity, enabling us to serve applications from rooftop and unitary system, battery energy storage cooling, computer in-room air conditioners to small and large chillers used in comfort cooling and hyperscale data center. These offerings leverage several of our key differentiated technology to address the fast-growing needs of a sector that will progressively shift to ultra-low global warming potential refrigerants. Industrial cooling represent a significant growth vector for Garrett and is expected to scale quickly to more than 5% of our revenue by the end of the decade as programs launch and ramp up. Taken together, these developments show how Garrett is executing, diversifying and expanding outside of the automotive industry, a deliberate part of our strategy. Cooling is now a tangible vector of growth on top of high-speed E-Powertrain, fuel cell compressors and alongside our core turbo business. With that, I'll turn over to Sean to discuss our Q4 and full year 2025 financial results in more details. Sean Deason: Thanks, Olivier, and good morning, everyone. I will begin my remarks on Slide 6, where we talked about our quarterly financial trends. As Olivier highlighted, we delivered another year of strong financial performance in 2025. We finished Q4 with net sales of $891 million, driven by gasoline share demand gains and a slow recovery of commercial vehicle, partially offset by continued weakness in aftermarket. We delivered $122 million of adjusted EBIT, equating to a 13.7% margin. Adjusted EBIT in Q4 was down sequentially, driven by unfavorable product mix and onetime headwinds, but in line with our 2025 full-year outlook midpoint of $510 million. Finally, adjusted free cash flow was a very strong $139 million in the quarter, as the business continues to efficiently convert earnings into cash. Now, moving to Slide 7, we show our net sales bridge by vertical as compared with the prior periods. In the fourth quarter, net sales increased by $47 million versus the prior year or 6% on a reported basis and 1% on a constant currency basis, reflecting favorable foreign exchange currency impacts. We experienced growth in commercial vehicle in diesel. Gasoline volumes declined outside of Europe, particularly in Asia. For the full year of 2025, we experienced gasoline growth across most regions through a number of new launches and ramp-ups. Our commercial vehicle off-highway sales expanded as well across regions. These gains were partially offset by lower diesel, particularly in Europe, where the industry continued to decline. Aftermarket declines were driven by lower demand for off-highway applications, particularly in North America. And finally, during Q4 and the full year, we recovered $10 million and $40 million of tariffs, respectively. Turning to Slide 8. As mentioned earlier, during the quarter, we generated $122 million of adjusted EBIT and a margin of 13.7%, which was down 100 basis points. Q4 operating performance was in line with expectations, as we absorbed several onetime charges in addition to an unfavorable mix and a 20 basis point margin dilution due to tariffs. The unfavorable mix was driven mostly by growth in small engine light vehicle diesel, partially offset by growth in commercial vehicle applications across regions. For the full-year 2025, unfavorable mix was driven by increased light vehicle gasoline and softness in the aftermarket, mostly in North America, partially offset by increased commercial vehicle. Now turning to Slide 9. I'll walk you through the full year 2025 adjusted EBIT to adjusted free cash flow bridge. We delivered strong adjusted free cash flow of $403 million for the year. We had a slight working capital benefit, which reflects the very strong fourth quarter working capital recovery of $60 million. Capital expenditures came in slightly lower than anticipated due to timing, and cash taxes, depreciation and cash interest were all in line with our expectations. Taken all together, these strong results equate to a free cash flow conversion of nearly 80% in 2025. Now moving to Slide 10. We closed the year with strong liquidity of $807 million and a very healthy balance sheet. In Q4, we repaid $50 million of our term loan bringing our net leverage ratio to approximately 1.9x as of year-end. We continue to have no significant debt maturities until 2032. Moving to Slide 11. We continue to generate strong cash flow and return capital to shareholders. In the fourth quarter, we repurchased $72 million worth of shares for total repurchases of $208 million in 2025, reducing our share count at year-end to 190 million -- to 191 million shares outstanding. We also increased and paid a dividend in Q4 of $0.08 per share and authorized a $250 million share repurchase program for 2026. As of February 13, 2026, we had 189.97 million shares outstanding. Additionally, we just declared our Q1 2026 dividend for $0.08 per share. We continue to target distribution of approximately 75% of our adjusted free cash flow to shareholders over time through dividends and share repurchases, the latter of which will vary over time and will depend on various factors, including macroeconomic and industry conditions. I'll now turn to Slide 12 to discuss our 2026 outlook. At the midpoint, industry assumptions for this outlook can play a 2% decline of the global light vehicle industry, an average BEV penetration of 19% and a slight recovery in commercial vehicle, including on and off highway of 1.5%. The financial midpoints implied in this outlook are as follows: net sales of $3.7 billion, net income of $315 million, adjusted EBIT of $545 million, implying a 14.7% margin, net cash provided by operating activities of $455 million, and finally, adjusted free cash flow of $405 million. Capital expenditures and RD&E expenses are expected to be 2.5% and 4.2% of sales, respectively, in line with our financial framework. Approximately 50% of our RD&E will be directed towards zero-emission technologies and industrial cooling. Now turning to Slide 13. We show our 2026 midpoint outlook bridge for adjusted EBIT. For 2026, as discussed on the prior slide, our midpoint outlook is $545 million with a 14.7% implied margin, up 50 basis points compared to 2025. This adjusted EBITDA improvement is expected mostly from increased volumes and our continuous focus on operating performance and productivity, which offsets unfavorable pricing, net inflation and product mix. I'll now turn the call back to Olivier for closing remarks. Olivier Rabiller: Thanks, Sean. Now, let's turn to Slide 14. Our strategic priorities remain clear and consistent. We aim to identify and deliver on our customer needs by leveraging our capabilities to develop differentiated, high-speed and highly efficient technologies. In doing so, we generate robust returns for our shareholders. Let me wrap this up on our final slide, Slide #15 with 3 takeaways. First, we delivered strong full year 2025 results in line with our guidance, including share of demand gains, margin expansion and strong cash flows. Second, our pipeline is expanding in turbo and accelerating in zero emission technologies and industrial applications. We secured our first production wins for our E-Powertrain and E-Cooling technologies, and we are now generating meaningful traction in power generation and E-Cooling technologies for industrial applications. Third, we remain disciplined in our capital allocation, investing in what wins and returning capital to shareholders. We are extremely well positioned to outperform in 2026 and beyond and look forward to welcoming you to our Investor Day planned for May 20 in New York, where we will provide additional updates on our long-term strategy and outlook. Thank you for your time. And operator, we are now ready for Q&A. Operator: [Operator Instructions] And our first question today comes from James Mulholland from Deutsche Bank. James Mulholland: So just some questions on the Trane partnership and the use of the high-speed compressor. Could you give us some sense of the economic opportunity here in the shorter term, understanding that it might get to 5% of sales in a few years? But what level of contribution would you expect in '27? And what kind of margins should we expect there? Will it be accretive at start of production? Or will there be a ramp-up? And is part of the CapEx this year going to be in preparation for that? Olivier Rabiller: That's a great question, James. And you're giving me the opportunity to precise a few points there. Yes, it's a very significant opportunity. We are introducing a technology that is unique with the leader of that space and with the broad range of portfolio of applications from small cooling to much bigger cooling needs. This is something -- and quite frankly, the uniqueness is linked to what has already matured into the automotive space. So we are uniquely positioned to provide that to this industrial sector. So that's just something I wanted to remind everyone again. We see today that we will deliver the first application in 2026 with a number of customers, but the real ramp will come for 2027. Today, we are not giving you numbers on 2027. It will be the start, but the number we are giving you and that you picked up the 5% -- in excess of 5% of revenue by the end of the decade shows the magnitude and the speed of the ramp-up that will happen between now and then. In terms of CapEx, it's all included in our plan, and that's all taken into account in the 2.5% CapEx guidance that we gave for 2026. We are still applying to this new line of product the same discipline in CapEx spend for the new product lines. And there are a number of elements, as I was mentioning before, that are the same or leveraging the scale that we have on the automotive side. So that limits the CapEx that is just specific for that business pursuit. James Mulholland: Great. Okay. And then quickly on my follow-up -- sorry, go ahead. Olivier Rabiller: There is just 1 point I did not answer your question about margin. Yes, it is accretive. James Mulholland: And so accretive on start of production essentially. Olivier Rabiller: Yes. James Mulholland: Okay. Great. And then on my follow-up, your largest competitor announced last week that it's going to be diversifying into power generation for data centers. Now, I think in the past, you've mentioned you would do about $100 million in sales for '25, and that should grow, I think, double digits this year. Outside of the HVAC opportunity, do you see other areas to increase exposure or use your tech stack to further penetrate that data center up and its growth outlook? Would you look to do inorganic acquisitions to tap into that further? Just your thoughts on that. Olivier Rabiller: Well, we are very consistent with what we said about our technology for a long time saying that we will favor verticals that are valuing the technology that we put in our products. And obviously, when you get into commercial vehicle, on-highway, off-highway and even more in industrial space, these are the spaces that are valuing where customers are valuing the technology we bring. So it's true. We've developed -- we had already a position on genset. And today, the biggest part of the demand for genset -- big genset is data center-driven. And we've developed our range. We've developed a new range of products on top, and you may have seen that we just made a few important announcements showing that in a matter of a very short amount of time, we've been able to secure OE wins with these new products and even get into retrofitting some of the products that we are already into the marketplace. So we'll keep on pushing that range of product. And yes, we are seeing a very significant growth above and beyond the $100 million that we mentioned in Q3 2025. And we expect that growth, obviously, to amplify as we get into 2026. The cooling side is very interesting. We'll keep on obviously developing our position on the genset side, but the cooling side is very interesting. It's obviously a very dynamic industry, driven by the growth of cooling across many applications, and obviously, the data center piece. And once again, we have the right building blocks into the company that allow us to propose something that is not existing there. And the fact that a lot of equipment is being ordered give us the momentum into the marketplace to adopt our technology. So yes, overall, the only thing I could say is that, yes, it's very significant. It's probably growing a bit faster than what we had anticipated at the beginning, but extremely consistent with everything we've been saying for the last few years that we would reinforce on power generation and including leveraging the building blocks that we have in the company and that are differentiated versus what's existing out there. Operator: Our next question comes from Ryan Brinkman from JPMorgan. Ryan Brinkman: Maybe a similar one. I just wanted to ask, following the announcement of the strategic collaboration with Trane, how you would compare and contrast the relative opportunity of, on the one hand, supplying industrial charges for the stationary power gensets located outside of the data centers to provide energy for their operational cooling versus on the other hand this newer opportunity to participate in cooling itself. On [ Madden's ] call the other week announcing sale of the portion of their business that includes thermal management to the stationary power gensets that you discussed that while market for data center stationary power generation will start to grow very quickly. The market momentum of [indiscernible] centers was thought to grow quite a bit faster still. So how do you see these 2 markets growing? And how should we think about the relative margin or content opportunity or competitive edge for Garrett in these 2 different relatively related markets? Olivier Rabiller: You were breaking quite a bit into the -- on the phone line. So I think, if I may, to rephrase your question that you were asking us to give a little bit of a comparison of the growth that we are seeing on the one hand with the power gen and the big turbo space, and on the other hand, the cooling, both of them being more directly or less directly liaise to the growth that we see on to the data space. Is it your question? Ryan Brinkman: Yes. Olivier Rabiller: So I would say it's difficult to compare. Both of them are growing fast. And you see that for the players that we are dealing with. On the one hand, it's Trane, obviously, that we talked about, but not only. And on the other hand, with the biggest customers we are having today and the big engines, and you know all the big names out there, whether they are in the U.S. or in Asia. So it's difficult to compare the 2. They are all driven by this. They are all driven, I would say, on the power gen side by other fundamentals that are not only directly linked to data centers when it comes to increased needs for power generation. There is a need for energy all around the world, and that is not only -- it's partly driven by data centers, but not only driven by that. And then on the cooling side, I would say not everything is driven by data center either. You have a lot of macros that are driving the demand. And also in that space, driving people to refresh the technologies that they are using because when we announced that with the equipment that we are putting on the marketplace with Trane we can save up to 10% energy compared to incumbent application. That's very significant when you combine the 2. Need for energy on the one hand. This is an underlying macro. And on the other hand, there is a need for cooling that is much more energy efficient, and this is where we play. So I think we are addressing very well those 2. I will not oppose the 2. I mean, quite frankly, when we say that, cooling we forecasted to be quickly above 5% of our revenue. And you know that the industrial world is not ramping up exactly at the speed of the automotive industry. That means a very quick ramp-up by industrial standard anyway. And we are seeing today a very quick ramp up as well on the industrial side for turbos. So we are very pleased with that. We are very pleased with the growth, and we'll keep on funding that with our disciplined approach so that we are successful with it. Ryan Brinkman: Great. And I apologize for the connection. And just lastly from me, relative to the new light vehicle turbo awards in key geographies, including diesel for light commercial vehicles and hybrid gasoline applications, is the pace of new wins relatively consistent with your past observation recent years? You have been winning on the order of magnitude of roughly 1/2 of industry turbocharger awards. And given that your current revenue share of turbochargers might be closer to 1/6, what does this imply do you think for your future multiple market in light vehicle turbos? Olivier Rabiller: So Ryan, we are very clear. We've been keeping on winning, and the way we measure that is we measure our business win rate, and we publish that once a year. It has been very consistent, above 50%, when you look at the last 5, 6 years. When we win at that level, it means that we are increasing our share of demand in the industry. And if you do the math, and I'm sure you're doing that very carefully, you will see that with the guide we have on revenue and the results we have on the revenue for 2025 versus what the industry is doing, we are obviously winning shares. And we'll keep on winning shares with what we have. The underlying drivers for that, what we explained in the past being a technology-driven consolidation, the industry needs a wide portfolio of technologies and advanced technologies, especially as we get to hybrid vehicles, where we need more viable geometry turbo, there we need more electric boosting solutions, and we are launching a number of those this year. And therefore, not everyone can provide that. And there is also another consolidation that has happened is that the carmakers and the truck-makers want to make sure that they work with players that are relevant today and will be relevant tomorrow as the industry keep on shifting towards more electrified solution. So I think we are well positioned on those 2, and that drives shares that is growing for the leaders of the industry. And there is absolutely no change. And when you look at our revenue guide, it's a good illustration of that. Operator: Our next question comes from Jake Scholl from BNP. Thomas Scholl: One more question on the train e-compressor win. Now that you've had a chance to see how the compressor performs as part of a total system, can you talk a little bit about the efficiency gains you're seeing, especially against competing oil-free compressors using magnetic foil technology instead of your -- I'm sorry, magnetic bearing technology instead of your foil bearings? Olivier Rabiller: Well, a few things. I will not get into a lot of technical details today on this call, and I'm sure we can have a very deep detail on the technical discussion when we meet for the Investor Day in May. But what we see is that our solution first is proven at scale. I mean, the industry has been looking for the most effective and efficient solutions that are oil free. And today, we are having a lot of traction even from people that are using mag bearing towards our type of bearing. It's less difficult to control in other way. It's difficult for me to get in 5 minutes into why it is less difficult to control and the efficiency gains. But clearly, we have efficiency gains. We have controllability. We have maintenance. We have all of that, that plays in favor of our solution, both for where you have mag bearing that are the big stuff, but also where we are smaller compressors that are cell compressors and that are much less efficient from an energy standpoint. Thomas Scholl: Got it. And then, I just wanted to double click on your SG&A cost savings this year. That's -- it's a pretty impressive number. Can you talk a little bit about where those are coming from? And do you see additional cost savings opportunities going forward? Olivier Rabiller: Yes, but as we've always said, we are always working on the efficiency of the company. We are always leveraging everything we can to make the company faster, more nimble, more agile, more reactive. Today, we have a number of tools at our disposal, whether it's fine-tuning the organization, developing systems. And I would not get on the famous AI stuff that everybody is using, but we are obviously having an agenda to transform the company to make it even more efficient in the future. So we are pleased with the results we are having on SG&A. But in all fairness, because we like performance, we are looking for a step improvement versus that in the coming years. Operator: Our next question comes from Nathan Jones from Stifel. Nathan Jones: I've got one on the Trane partnership as well. You talked about 5% of sales by 2030. Can you confirm that's all coming from the Trane partnership? And then, is there any exclusivity in the product with them? Or are you able to market and sell this to other suppliers in other areas? And if so, can you just comment on what the overall addressable market might be for the products? Olivier Rabiller: So first, we are very pleased to work with Trane, which are the leaders in terms of equipment, but they're also a technology leader in that industry and a company that is setting the trend. So for us, it's very important to work very closely together in the coming years, and we are very pleased with this agreement, obviously, because that's giving us very quickly the scale and the understanding of the marketplace. Quite frankly, in the long run, we'll keep on leveraging that partnership, and as opportunities are coming with other players and other segments of the cooling industry, we will certainly develop relationship with some other players. We had already a ton of people coming to us asking for questions at the show. I think I don't want to be too proud of it, but I think we had a turnout from the rest of the industry that we were not expecting. Nathan Jones: So is it fair to say then that kind of by that 2030 target, the product is going to generate more than 5% of revenue. It's 5% of revenue with Trane, but there will be other opportunities as well. Olivier Rabiller: There will be other opportunities by 2030 that go beyond Trane, that's for sure. And we are giving that as a view and that purely depends on the speed at which the industry is ramping up. That could be depending on the take of the industry that could go very, very quick and even potentially quicker. Nathan Jones: I guess, my follow-up question is going to be on your other zero emission progress. You've had a number of predevelopment contracts ongoing for the last few years. Can you talk about that progress towards getting those to awards and plans for start of production on that? And then, is the $1 billion of revenue from all of these portfolio products still a target for 2030? Olivier Rabiller: So clear, we are seeing a lot of -- it's not because we talk about Trane today that we're not seeing traction with the rest. We have an accelerated number of predevelopment programs that we are working on. Today, we are working on many more predevelopment programs than what we are doing a year ago to give you an idea, both passenger vehicle, commercial vehicle and industrial application. We've talked a lot this year about the award we got for E-powertrain for commercial vehicle, heavy duty. We will be in production already next year at this time. So it's not just a PowerPoint kind of discussion that we are having. We are talking production for heavy-duty electric axle 2027 -- beginning of 2027. And then from there, obviously, it's bringing interest about programs that we have not communicated about yet that are leveraging what we do on those vehicles to apply that to other vehicles. I'm talking about commercial vehicle space. On the passenger vehicle side, we are making very good progress now on the testing of our solutions. And we are confirming benefits of our solution versus incumbent solution in the industry, even greater than what we had seen and communicated initially. So now, it depends on the speed at which the decision-making is happening at our customers. But quite frankly, the benefits have been confirmed. And if anything, they are greater than what we are and our customers were expecting both in the passenger vehicle and in the commercial vehicle space. On the E-Cooling, we just confirmed the first few wings for E-Cooling for mobile application, same again. Obviously, it's not a surprise that we tend to win earlier in China because the industry tends to make decisions and move faster than in the rest of the world, we all know that. But at the same time, it's a very positive for us because it shows that we can win in the most competitive market you have out there. So we take it like we are moving at China speed on a lot of that stuff, and we are delivering the performance at the cost customers are willing to pay in the toughest industry around the world. So in all fairness, we have a long answer, yes, we are doing progress. And yes, I'm very pleased with it. More to come. Operator: Our next question comes from Hamed Khorsand from BWS Financial. Hamed Khorsand: First question was, could you just reconcile the 2 comments you made? And Sean, you said that you're expecting EBITDA margin to expand because unit volume would increase, but then you're giving guidance with the expectation that global units will be down this year. So are you -- where -- could you just reconcile that, please? Olivier Rabiller: And maybe before Sean picked that up, the comment we made on the industry down is for the light vehicle industry. And in the light vehicle industry that is down, we are expecting to be up despite the growth of battery electric vehicle. So that means significant share of demand gains for Garrett. Do you want to comment, Sean? Sean Deason: No, that was exactly what I was going to say, Olivier. And it's also, obviously, there's growth in commercial vehicle as well. So we're quite pleased with the guide. And of course, it's underlined by our strong productivity performance that we have demonstrated over the cycles, over various cycles, and we'll continue to do so in 2026 and going forward. Hamed Khorsand: Okay. And then, you've reported that the commercial went up this quarter, and it looks like it's going to go up again in '26 in your forecast. Is that because of what's happening in off-highway? Or is that because of the commercial on-road aspect? Olivier Rabiller: It's because of off-highway and specifically industrial turbos. So back to the question of one of your peer before, Hamed, we are seeing the growth on the industrial turbo side driven by genset. Operator: And our next question comes from Eric Gregg from Four Tree Island Advisory. Eric Gregg: First up, congratulations on a really strong Q4 and 2025 to the whole team there at Garrett. The first question, following up on the 2 -- to the caller or 2 people ago, but one is, is Trane exclusive? Or is it exclusive for a few years in commercial HVAC? And does that exclusively fall away after that? And then second of all, is that oil-free centrifugal commercial technology -- compressor technology? Is that going to be additive in HVAC to your $1 billion 2030 zero-emission sales target? Or is that -- given the zero emission vehicle penetration seems to have slowed a bit, is this just the way to kind of meet that $1 billion target that you laid out a year or 2 ago for 2030 zero emission revenues? Olivier Rabiller: So first of all, just to clarify your point, we are not developing a new line of projects just to patch a weakness that we would have on the other side of the portfolio. We make decisions on the portfolio to go where we have differentiated technology and where we see growth moving forward. So it's not like we have one investment that comes at the expense of the other or the other way around. Yes, it's part of our ambition towards the $1 billion, and that's obviously counted as part of that. Now, we will update you on that during our next investor meeting, and we'll give you more clarity about the way it goes. But we are very pleased to have not only one driver that gets us there, but several drivers and are depending on different industries, which is the best option and the best way that we can strengthen towards our ambition. Then, your point, it observes that when you work with someone like Trane, you place a lot of eggs in the basket that helps you be successful on the marketplace. So at the beginning, it's true that we'll dedicate a lot of attention with Trane. But over time, that doesn't prevent us from developing ourselves with other players. Operator: And with that, we'll be concluding today's question-and-answer session as well as today's presentation. We do thank you for joining. You may now disconnect your lines.
Operator: Welcome, everyone, to the DT Midstream Fourth Quarter and Year-end 2025 Earnings Call. I will now turn the call over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead, sir. Todd Lohrmann: Good morning, and welcome, everyone. Before we get started, I would like to remind you to read the safe harbor statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to non-GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, Executive Chairman and CEO; and Jeff Jewell, Executive Vice President and CFO. With that, I'll go ahead and turn the call over to David. David Slater: Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll discuss our 2025 accomplishments, recap the strategic milestones DTM has achieved since our spin-off approximately 5 years ago and provide an update on our organic growth project backlog and our outlook for 2026 and beyond. I'll then close with some observations on the current natural gas market fundamentals before turning it over to Jeff to review our financial performance and guidance. So with that, 2025 was another record year for DTM. Our adjusted EBITDA exceeded our increased guidance midpoint and represents a 17% increase from the prior year, driven by significant growth in the Pipeline segment, which has been a strategic focus for the company since we spun. The end of 2025 also marked 1 year since our Midwestp pipeline acquisition, and I'm very pleased to report that we have successfully completed the integration of these assets. And I'd like to take a moment to recognize and thank the team for their hard work on this effort. From a commercial perspective, last year, we advanced more than $1 billion of organic opportunities from our backlog, of which 80% is for pipeline projects. On the construction front, we continued our successful track record of project execution. Most notably, our construction team placed the LEAP Phase 4 expansion into service early and on budget, increasing the capacity of LEAP to 2.1 Bcf per day. Additionally, we placed several gathering projects into service across our footprint, which enabled us to achieve record high throughput in 2025. We also continued our disciplined financial management, prioritizing a strong balance sheet and achieved investment-grade credit ratings across all 3 rating agencies. So I am very pleased with our overall performance last year, which reflects the continued focused execution of our core strategy, pure-play natural gas, leading contribution from the pipeline segment long-term demand-based contracts and a high-quality portfolio of strategically located assets. Since we spun the company nearly 5 years ago, DTM has consistently outperformed the broader market and our midstream peers, delivering total shareholder return of approximately 280%, including 12% compounded annual adjusted EBITDA growth and a consistently growing and durable dividend. Our high-quality natural gas pipeline segment has driven this growth, increasing from 50% of our business to 70% today, the highest among our peer group. Our portfolio continues to be well contracted with 95% demand-based agreements and an average contract tenure of 8 years, which reflects how the market values these assets and our ability to continually replenish the contract tenor. We have also successfully executed focused, strategic bolt-on acquisitions that have increased our ownership in regulated pipeline assets. All of these great accomplishments could not have been achieved without the hard work and dedication from our team to whom I am forever grateful and who continue to be the foundation of our success. Their commitment to safety, performance excellence and customer service are core elements of our exceptional results, and I'm excited for the future and our ability to deliver on the tremendous opportunities ahead. Turning to 2026 and beyond. We are very well positioned within the natural gas ecosystem to serve the increasing demand across our footprint, and continue our track record of premium, high-quality natural gas pipeline growth. Supported by strong fundamentals, we are embarking upon a window of generational investment opportunities and have updated our overall organic project backlog to reflect this, increasing it by approximately 50% to $3.4 billion over the next 5 years, with pipeline projects leading the way, comprising approximately 75% of the backlog. Our growth backlog represents our FID projects and probability-adjusted future organic opportunities that we are committing to execute on and can be fully funded with our strong cash flows and healthy balance sheet. The gross backlog is much larger, which is an indicator of the extraordinary opportunity set that exists. We will continue our prudent capital allocation through this investment cycle and expect to deliver growth above our long-term growth rate guidance in the later part of the decade, driven by sizable projects being placed in service. With that, I'm pleased that 2026 is already off to a great start, and we are announcing that we've reached FID on 2 new projects in our Pipeline segment. The first is an expansion of Viking to serve low growth in Grand Forks, North Dakota, and is anchored by an investment-grade utility customer under a long-term negotiated rate contract and is expected to go into service in Q4 2027. The second is our next phase of Interstate Pipelines modernization program, which will be focused on Midwestern pipeline, and will improve the reliability of this critical capacity serving the market corridor between Chicago and Nashville. With these projects commercialized, we have approximately $1.6 billion committed out of our $3.4 billion backlog. We are also advancing additional pipeline projects towards FID. Vector Pipeline closed a successful binding open season for an expansion to increase westbound capacity into Chicago by approximately 400 million cubic feet per day and has a contractual support needed to move forward subject to final approvals from both owners and is expected to be in service in Q4 2028. Millennium Pipeline has obtained contractual support for the R2R project as the long-term agreements have been executed with 2 utilities and an existing power plant. Subject to final approvals from both owners, the project is expected to be fully in service in Q1 2027. We will provide more updates once these projects are formally approved. Turning to project construction. We placed the Stonewall Mountain Valley pipeline expansion into service early and on budget at the beginning of February, and deliveries are being made to Mountain Valley for multiple customers. In addition, our Phase III Appalachia gathering system expansion has now reached full in service, also early and on budget. All other previously announced growth investment projects remain on track and on budget. Finally, I'd like to take a moment to provide our view on the natural gas market fundamentals. Natural gas has firmly established itself as a core North American fuel, offering unmatched affordability and reliability, lower emissions and the security of a domestic resource base. It underpins the onshoring of manufacturing, rapid data center development and the continued build-out of LNG exports, all key drivers of long-term demand and foundational to America's global competitive posture. With these tailwinds, the stage is set for specific opportunities driving our strategy, and we are seeing these strong structural demand signals across our operating footprint. Demand for natural gas to serve power continues to accelerate across the Upper Midwest with approximately 35 gigawatts of coal plant generation expected to retire in the next 10 to 15 years, and increasing announcements of new large loads and data centers being cited. This demand is largely going to land with utilities in these states who have announced contracted and potential large load opportunities of approximately 50 gigawatts and are planning to invest close to $150 billion in new generation over the next 5 years to keep pace below growth. These are large numbers. And while not all power demand will be served by natural gas, we see an addressable opportunity set of up to 13 Bcf per day and a pathway that could easily result in 5 to 8 Bcf per day of potential incremental gas demand in the upper Midwest. DTM's extensive interstate gas pipeline network is uniquely located across this region and is already serving many of the utilities that will experience this low growth, positioning us to fuel many of these opportunities. On the LNG front, we saw 4 terminals reach FID in 2025 as well as international companies vertically integrating in the Haynesville to extend their natural gas value chain, both of which will support strong and sustained export demand. We expect LNG demand to grow by 11 Bcf through 2030, with 2/3 being served by the Haynesville. In our integrated system with its leading connectivity to both supply and demand markets is exceptionally well positioned to capitalize on the strengthening trends. I'd also like to address the recent cold weather. It has illuminated the tightness that exists today in the North American market, resulting in extreme price volatility across our entire footprint, a signal of capacity constraints driven by demand growth. The natural gas pipeline and storage network performed very well during the cold, demonstrating its reliability to serve its existing firm customers. However, the price volatility is a strong signal that we need to build and expand the pipeline network to bring more natural gas to serve the growing demand. For DTM, this winter, our storage complex recorded all-time high withdrawals, and many of our pipelines experienced record high peak day throughputs. Pulling this all together, today's natural gas market fundamentals makes DTM's natural gas infrastructure critically important and positioned for growth. And with that, I'll pass it over to Jeff to walk you through our financial results and outlook. Jeffrey Jewell: Thanks, David, and good morning, everyone. For 2025, DTM's adjusted EBITDA was $1.138 billion, an increase of 17% over the prior year, supported by our Pipeline segment's 27% growth, which was driven by the Midwest Pipeline acquisition and higher LEAP and storage revenue. For the fourth quarter, we delivered overall adjusted EBITDA of $293 million, a $5 million increase from the prior quarter, which was driven by increased seasonal demand on our JV pipelines and higher LEAP revenue. Our Gathering segment results were in line with the third quarter. Operationally, for the quarter, we achieved a record high in total gathering volumes with the Haynesville averaging above 1.9 Bcf per day, slightly down from the third quarter due to upstream maintenance. Average volumes in the Northeast ramped in the fourth quarter to approximately 1.3 Bcf per day, in line with our expectations of flat entry to exit for the year. In 2026, winter storm Fern drove some production curtailments, which is contemplated in our 2026 guidance range. Moving forward to our financial outlook for 2026 and beyond, as we have done in the past, we are providing the current year guidance as well as an early outlook for the following year. For 2026, our adjusted EBITDA guidance range is $1.155 million to $1.225 billion, with the midpoint representing 6% growth over our 2025 original guidance midpoint. Our 2027 early outlook range for adjusted EBITDA is $1.225 billion to $1.295 billion, with the midpoint representing a 6% increase over the 2026 guidance midpoint. Our adjusted EBITDA guidance for '26 and for '27 is supported by the incremental contribution from our organic growth investments as well as expected activity from our major producer customers. Our 2026 growth capital guidance is $420 million to $480 million, and we've increased our committed capital to reflect the new FID growth projects with approximately $390 million now committed. For 2027, we expect the level of growth investments to be above 2026. And we already have approximately $430 million committed. As David mentioned, we have reached FID on a Viking pipeline expansion, and we expect to invest a total of $30 million to $40 million for the project. We have also FID-ed Phase 2 of our Interstate modernization program, which has a planned investment range of $140 million to $160 million at an expected first half 2028 in service debt. The capital associated with this project will be included in the next rate case. From a balance sheet perspective, we are very pleased with obtaining investment-grade credit rating in 2025, which we are committed to preserving as evidenced by our 2026 year-end forecast for on-balance sheet leverage of 2.9x and proportional leverage of 3.5x. With our cash flows being strong and our healthy balance sheet, we will fully fund our project backlog with significant headroom for additional future growth opportunities. And finally, our Board has declared a quarterly dividend of $0.88 per share, which represents a 7.3% increase from the prior year and continues our track record of providing leading dividend growth. Our approach to delivering a secured dividend has not changed as we plan to grow it in line with adjusted EBITDA and are committed to maintaining a strong coverage ratio above our 2x floor, which was 2.6x for 2025. And with that, I will now pass it back over to David for closing remarks. David Slater: Thanks, Jeff. So in summary, we're highly confident in delivering on our guidance, continuing our track record of strong performance. Looking ahead, the fundamentals supporting our business are exceptionally strong, and our integrated footprint sits in the most advantaged corridors to benefit from this generational investment opportunity. Our sizable organic project backlog with potential for additional opportunities reflects our disciplined focus capital allocation to high-quality natural gas pipeline projects. We will continue our consistent execution of this strategy, which has delivered dependable best-in-class growth and will continue to create significant value for years to come. And with that, we can now open up the line for questions. Operator: [Operator Instructions] We will go first to Theresa Chen from Barclays. Theresa Chen: It's encouraging to see such a robust project backlog, the breadth and depth of the opportunities is impressive. Can you discuss the expected pace and cadence of commercialization from here, the key drivers behind that trajectory? And how it informs your outlook for capital spending beyond 2027? David Slater: Theresa, thanks for the question. And yes, we're extremely excited about the opportunity set that's presenting in our footprint right now. I'll say this. It's a very fluid market. And as we laid out all these utility announcements that have been happening over the last couple of weeks as they talked about their year-end and their outlook, the opportunity set continues to grow. So it's a very fluid market, opportunity-rich market. All of our assets, especially our Upper Midwest assets, these utilities are our current customers. So we're in detailed conversations with them about their growth trajectory and their needs. So again, I think these will move forward in a very disciplined, rational way. Many of these demands are anchored in a state regulatory framework, so they'll go through a very disciplined process with utilities as they go through their approval process. But I think it results in a very strong and durable opportunity set for us to contract into. Very -- I'd say our Guardian project last year is a really good indication of what we expect this to look like going forward. The Vector expansion into Chicago, again, anchored -- utility anchored. So we're just seeing this theme kind of rolling through our asset footprint. And if I turn to the south and talk LNG briefly, again, a really clear line of sight on LNG growth. 2/3 of the hay is expected to meet that growth. And we continue to see that demand pull, and we're in a really good position to participate in that demand growth with LEAP. Theresa Chen: And maybe specifically turning to Midwestern Gas Transmission. The potential expansion of that pipeline, how are conversations progressing at this point? What scale or scope could this ultimately reach, and how are you thinking about the opportunity generally at this stage, knowing that multiple sources of demand as well as optionality for supply connectivity here? David Slater: Yes. That's a really exciting one, Theresa. We're in deep conversations with our existing customers on Midwestern for both a northern expansion and a southern expansion and just if you can visualize the asset, REX cuts right across the [indiscernible] asset. So supply can come in from Appalachia and it can come in from the Rockies. So there's supply diversity through the REX connection and strong demand signals to bring more gas north into the Greater Chicago, Upper Midwest, but we're also seeing strong demand signals to push gas south into, what I'll call that greater Nashville region. It is also experiencing tremendous power demand growth. Operator: Up next, we'll take a question from Julian Dumolin Smith from Jefferies. Robert Mosca: It is Rob Mosca on for Julian. So pick up big update here with the 5-year growth CapEx outlook. But hopefully you could dive into how you arrive at that number, maybe how you're risk adjusting that outlook for the uncommitted CapEx. And how do you characterize the texture, the geography within that uncommitted capital outlook? I'm just hoping you could dig into that gross number a little bit more? David Slater: Sure. I mean it's really increased from our last outlook a year ago. And I think we've talked about that as the year has progressed, and that's the fluidity of the market. The backlog continues to grow. We're highly confident in the increase that we laid out for the investors. About half of that is FID already. The other half is highly probable. We look at our gross backlog, which, by the way, is multiples of this committed backlog that we're committing to execute on. So it's probability adjusted based on our kind of our historical success ratio. So we're highly confident in deploying $3.4 billion. And as I said earlier, this is an extremely fluid market with incremental ways of demand that seems to be showing up every time we talk to our customers. So we're very bullish right now. We're also very disciplined and we tend to have a conservative view on running the business, which delivers these very consistent results. So we're just really in a sweet spot right now in the market. The assets are in the right location, both in the north and in the south, and the fundamentals around our assets are very strong. So our job here is to commercialize this and do it in a really rational and prudent manner. And I expect we're going to continue to deliver great returns for the investors. Robert Mosca: I appreciate that commentary, David. And there's -- it seems like there's a large open season for pipeline right now. I would serve some of that growing Midwest demand, I think you alluded to in your prepared remarks. Just wondering how that expansion or other third-party expansions in the region could impact your ability to execute some of those planned pipeline expansions that you guys have or seeking to have FID-ed? Or should we not think about it as being mutually exclusive? David Slater: Yes, Rob, we're not afraid of competition. The projects that we FID-ed last year also had competitive tension around them, Guardian, Vector. So that's not an issue for us. I think locasionally, our assets are in the right location. It's somewhat like real estate, location matters, connectivity matters, track record matters. The other thing I'd say, in my opening remarks, I kind of laid out the addressable opportunity set of 5 to 8 Bcf a day, which is sizable in the Upper Midwest. There's plenty of room for others to participate in that and for us to have outstanding results. We don't need to get all 5 to 8 Bcf, I mean we get 1 or 2, and that's going to be outstanding results for the company. So I'm not concerned about competition. We're focused on the market right now and on those relationships and working sort of customer by customer to provide the right answer, the right solution for their growth. And talking to these utilities, they're experiencing generational growth as well. And I think that's going to -- the domino effect is going to fall across our assets. And what I'm really excited about with our assets is the connectivity that we have across multiple assets. So you sort of -- you can see it with Vector. Guardian was FID-ed last year. We're on the doorstep of FID-ing Vector. That domino effect is playing out across our asset footprint right now, and I expect that to continue. Operator: Michael Blum from Wells Fargo has the next question. Michael Blum: I wanted to ask on the backlog again. So you mentioned the gross backlog is much larger than the risk-adjusted backlog number that you provided. I'm wondering if you're willing to give us that gross number or some way to size what that is with some of your pipeline competitor peers would call the shadow backlog, so we can get a sense of the total magnitude of the opportunity set? David Slater: Michael, I was expecting someone would ask that question. I'll say it's multiples, and I'm going to leave it at that, and you guys can infer a number or a range. But it's, I use the word generational investment opportunity. It truly is. And I think for us, when I think about the sector and we're focused on -- we're just super focused on our core business right now on our pipelines in our core region and deploying capital in a really -- in a proper fashion so that the returns show up on the other side of these large capital outlays. Certainly, I recall what happened a decade ago in the sector. That didn't end well. we're committed that we will be deploying capital in a very prudent rational way as we approach another super cycle or a generational cycle of capital investment opportunity. So we're super focused on it. The -- a very robust opportunity set is a healthy backdrop for us to work within. It's going to allow us to be selective and very focused and do the right thing for the investors. Michael Blum: Got it. I appreciate that. And then just wanted to ask a question on the growth CapEx. You came in a little light versus your own guidance for '25. And I think you would even reduced that number during this past in 2025 last year. So can you just speak to what's going on there? And is that just capital efficiency on your part? Or is it timing and that CapEx is just going to show up in 2026? David Slater: Yes. Yes, you're bang on. It's performance, capital efficiency, I call it, performance, and it's timing. So it's no more complicated than that. Operator: From Goldman Sachs, John Mackay has the next question. John Mackay: David, you've talked a lot in the past about wanting to stay kind of front to meter with the utilities. We have seen kind of behind the meter pick up some momentum again recently. I'd be curious just to hear a little bit on your view there where it sits now, particularly in the context of a broader focus on affordability for the utilities? David Slater: Yes, John, we're seeing some of the Energy Island load knocking on the pipeline store, so to speak, -- and we're very happy to contract with that on the main lines, long-term contracts on the main lines. So we are seeing some of that demand manifesting across the footprint. The utilities have done an exceptional job here reeling in this market. They're doing it through a regulatory construct. When you monitor their filings. They're being very particular about explaining how it's -- it lowers the cost to their -- the rest of their customers. So there's an all-pro subsidization occurring. And these large load customers data centers really like the fact that the utilities are counterparty because they get a lot of comfort in that. They're connected to the grid. There's diversity, really strong counterparty. So there's a lot of features that the utilities are offering to this segment of the market that seems to be very attractive. And we're very happy to work closely with our existing utility customers to participate in bringing the fuel to these projects. So we like how it's playing out. It's sort of been -- we've been observing this for the last 12 months the utilities being more successful than in the past, and we really like the fact that it's going into a regulated construct, which I believe provides long-term durability to the demand. John Mackay: That's clear. Second one for me is, when you -- a lot of the projects you've been announcing are effectively brownfield expansions of existing assets. I'd be curious your view on the opportunity for anything on the greenfield side, and/or opportunities for you to do incremental kind of bolt-on M&A and try to repeat what you did with the [indiscernible] assets? David Slater: Yes. We are focusing predominantly on what I'll call in the footprint expansions. They're easier. They're typically more economic because he can scale it. and their lower risk from a execution/regulatory perspective. So I think there's a lot of features to addressing this demand through that mechanism, if you can, versus a brand new greenfield. When we did Nexus 10 years ago, that was a heavy, heavy lift to get that through. And then if you remember, there was a 1-year delay or regulatory delay on that project. So it's super big capital that, if you get any delays, can have a pretty material impact on you pretty quickly. So we like the risk profile of the brownfield. In terms of greenfield, where we are seeing greenfield, we continue to pursue greenfield storage opportunities. Some of the fundamentals that we laid out in the deck, where you see the extreme price volatility across our footprint, it's really screaming for more capacity, both pipeline and storage capacity. So that's probably where we see more of a greenfield opportunity in the near term, John? Operator: Next question comes from Jeremy Tonet from JPMorgan. Jeremy Tonet: Just want to come to Slide 10, if we could. And there's been a lot of discussion on the capital side. But just wonder if you could dial in a little bit more in the translation to EBITDA growth. The slide here says elevated organic growth and it points post 2027. I was just wondering if you could expand a bit more on what that looks like, what the quantity of this elevated growth looks like? David Slater: Sure, Jeremy. The -- well, I'll start with the backlog update, right? That's the fuel that goes into the equation that drives the EBITDA growth. And most of that capital, 75% of capital is deploying into the Pipeline segment, which is Bert regulated, which has a longer capital invest EBITDA generation cycle. It's a 2.5- to 3-year cycle, right? So it's really going to supercharge the back end of our 5-year plan. I didn't want to put a number on that. I don't want to cap that because the market is so fluid right now. The opportunity set is robust. And every time we take a fresh look at it, it seems to get more robust. So we're early in the cycle, and I think we want to let it run for a lot this before we start to try to stick the landing, so to speak, at the back of our 5-year plan. But it's green. The arrow is up. We're very bullish on the fundamentals. We laid out what those fundamentals are here in the deck for you. And I think this will be a conversation we can have as the year unfolds, Jeremy as to how we're feeling about this and how this starts to commercialize and sort of the picture will take takes shape for lack of a better word. Jeremy Tonet: Got it. That makes sense. I don't want to put a ceiling on it given all the opportunities there. I was wondering not push too much here, but could we put a floor on it? I mean, if it's 5% to 7%, you say now, and I would assume that, that elevated growth is at least 7% plus or any other way to think about what a floor might look like? David Slater: I think you just said it really well, Jeremy. I won't add anything to your comment there. Operator: Next question will come from Jean Salisbury from Bank of America. Jean Ann Salisbury: It looks like the gathering and the new backlog is up by a couple of hundred million even though several 2025 gathering projects came online. So I guess my question is versus a year ago, is this an increase in expected gathering spend? Is it primarily driven by the Haynesville or Appalachia or both? David Slater: That's a good question. I'd start with just reminding everybody that our gathering assets are all interconnected to our pipelines, right? So they feed our pipelines. The gathering -- I'm going to -- can we get back to you on that, Jean Ann because. I'm not 100% sure of the answer to your question. I don't want to guess at it. But we'll follow up with you. How does that sound to you? Jean Ann Salisbury: Yes, no problem. I'll circle back to what Todd. And then as my follow-up, there's a comment in the deck about future LEAP expansions likely being tied to the next wave of LNG in 2028 to 2030, I kind of wanted to clarify what that meant. I guess my understanding was that most of the LNG projects under construction had already kind of tied up their gas supply. I guess, maybe that's wrong or if you -- basically, if you are expecting a whole wave of new contracting to come as these projects under construction start to come online? David Slater: Yes. I think you've got 2 projects that just came online in the second half of last year, and that's getting absorbed into the market. And I think this next wave is going to be the wave that drives the next round of incremental expansion. We're in detailed conversations with numerous shippers on this topic right now. So it feels very ripe for us. So I would stay tuned. And as we commercialize these, we'll be sharing them. Operator: Keith Stanley from Wolfe Research is up. Keith Stanley: And I'd like to circle back on Slide 10. So David, no, you don't want to put a cap on the 2030 outlook, but that green bar, you can kind of figure out where it's going, if you just extrapolate the chart? I guess I'm curious in that 2030 figure, we're getting to like a 7% to 8% CAGR through 2030. Is that directionally right over a 5-year period? And when you show that green bar, is that only baking in sanctioned projects to date? Or is that including a fair amount of executing on the unsanctioned projects that you've identified as well? David Slater: Keith, that green bar boxes out to the updated backlog, the $3.4 billion. So that's kind of the way to think about it. And what I'll say is exceeding the high end of our -- and again, we're -- at this point, we're just too early in the game, and there's too much fluidity in the market right now in terms of putting a number on it. As I said, I don't want to cap it. I want to let the market unfold a little bit. And we'll be the first people to give you better clarity on that once we're confident in our execution. Keith Stanley: Got it. So just to clarify on that. The green bar is effectively the $3.4 billion divided by EBITDA build multiples that you're assuming in that outlook? David Slater: That would be the back of the envelope math, Keith, what you just said. Keith Stanley: Okay. Great. Second question, just following up on the Midwestern expansion potential any better sense of timing? You said you're in deep conversations. I assume you need an open season there. Just any sense of when you're hoping to get more clarity on that project? Is it next 6 months? Is it beyond that? Just how would you put that? David Slater: Yes, it's definitely in front of us right now, Keith, like right in front of us. So there's clearly a need for more volumes into Chicago. We commercialized the vector piece. We've turned our attention now to Midwestern. We'll turn our attention back to Vector as well for another round there. But Yes, it's front and center, and it's on everyone's mind right now. All of our customers are looking closely at all of this. As I kind of alluded to, we're in deep discussions with a lot of the shippers predominantly the regulated entities on those lines. And we're going to move at their pace. And that's what I'll say right now, but it's a hot topic right now so... Operator: Your next question is from Samantha Banergy from UBS. Unknown Analyst: I was just curious about the additional modernization opportunities that you mentioned in the deck? And is it great to see the Phase 2 interstate pipeline modernization feed. So just curious about that. David Slater: Yes. Thanks for the question. Yes, that Phase 2 is going to be focused on the Western and it's going to be focused on reliability, predominantly compression, replacing some aging end-of-life compression. And yes, that will roll through the next rate case on Midwestern. So really feel good about those investments. They're very much needed. And yes, I think it will be a pretty standard play for us to make those investments and roll them through the next rate case. Unknown Analyst: Got it. That's really helpful. And then the second question I had was just a general one on capital allocation priorities going forward, and how you're looking at balancing dividend growth versus keeping leverage maintained? David Slater: Yes. I mean, we're very focused on capital allocation. If you look at the backlog the majority of the backlog is going to be allocated into our pipeline segment, predominantly the regulated pipeline segment, so those tend to be backed by long-term 10-, 20-year contracts, again, predominantly with utilities, so investment-grade counterparties. So very strong cash flows, security of those cash flows over the long term. We've committed since we spun the company to grow the dividend in line with EBITDA growth. And I think over the last 5 years, you can see us doing that consistently. Our plan is to continue to do that going forward and maybe, Jeff, you can talk about the balance sheet and how our thoughts on managing the balance sheet and the dividend... Jeffrey Jewell: Sure can. Yes. So what our plan is, again, we've been talking about this since the spin as we fund our internal capital allocation plan with our free cash flow, we're going to naturally and have been naturally deleveraging. And so with that, we're able to fund all the projects and everything that David has been talking about and the growing dividend inside of our capital capacity or credit capacity. David Slater: And I'd say we work pretty hard to get to investment grade. And now that we've crossed that rectal, we're firmly staying on that side of the line. Jeffrey Jewell: Yes, we've got plenty of room between -- on the credit metric. So again, we're very confident in our capacity to be able to fund any and everything that we're seeing coming at us. Operator: Moving on to Zach Van Everon from TPH and Co. Zackery Van Everen: Maybe first on the Haynesville. We've continued to see the rig count step up into the beginning of '26. Curious on conversations with producers and just views on overall capacity needs in the basin. David Slater: Sure. Let me tackle that, Zack. So you've seen -- we saw a nice ramp in the Haynesville in Q3 and Q4. We're expecting to see those robust volumes going into this year. Our biggest customer is public, and I think they've just recently shared their thoughts on their ville growth for the year. So that's probably a good yardstick to measure our activity against. We do have a number of other producers that are also under experiencing growth or growing their portfolio. And we certainly are going to participate and see some activity there that will be helpful to the cause as well. But the big shipper the big anchor is [indiscernible]. So I'll point you to [indiscernible] public disclosures. Zackery Van Everen: Perfect. Appreciate that. And then maybe 1 in the Northeast. With the open season on vector and some producers up in the Northeast, talking about more growth coming into the next few years, could you maybe give an update on NEXUS and the ability to expand that? What size that could look like in any conversations going on currently around that pipe? David Slater: Sure. So it's somewhat that domino effect that I spoke of earlier. We're seeing this play out across our portfolio as what I'll call we expand the last-mile pipe. And you got to look at an expansion upstream and it keeps going upstream and eventually falls its way back to where the production is. So as we see Vector expanding pulling 400 million a day of incremental supply out of Michigan, that's going to have to get made up some ways on that. We're obviously working closely with potential shippers to utilize Nexus to do that. Nexus is easily expandable with compression and blocks of a couple of hundred million a day with compression. So that is forefront in our minds right now as this market evolves and the demand grows in the upper Midwest is how do we unlock additional, what I'll call, egress freeways out of Appalachia to sort of ramp up and bring incremental supply into this region. And again, if our fundamental assessment is accurate that there's 5 to 8 Bcf a day that is in-flight -- growth that's in-flight over the next 5 years, that's going to demand some pipelines or multiple pipelines to expand into this region -- out of the supply basins. And Appalachia is the closest basin. Rockies is right there that can come back into the Midwest. So we're really excited to work on these projects, and I really like the domino effect across the portfolio as we work our way back into the basin. Operator: [Operator Instructions] And everyone, at this time, there are no further questions. I'll hand the conference back to the company for any additional or closing remarks. David Slater: Well, thank you. I just want to thank everyone for joining us today. Thank you for your interest and support of the company, and I look forward to seeing everybody in person at one of the next conferences. Have a great day. Operator: And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.